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Shenzhen wage hike causes supply chain jitters

Chinese tech hub and boom town Shenzhen is set to increase the minimum wage of workers there by 13.3 per cent in early 2013, causing a few sweaty palms in the technology supply chain. Shenzhen and the wider Pearl River Delta area in southern China is one of the most concentrated technology manufacturing hubs in the world. Samsung, Apple, HP, Dell and Nokia all have kit built here by the big Taiwanese ODMs such as Foxconn and Wistron. Now the word in Shenzhen is that the local authorities are planning to raise the monthly minimum wage from 1,500 to 1,700 yuan (£149-169) sometime during early 2013, according to Digitimes. The paper’s sources added that once insurance and benefits are included, actual monthly employment costs are as high as 2,700-2,800 yuan (£268-278). This won’t affect Foxconn — which is one of the most generous employers of its kind in China, offering an entry-level wage of 1,800 yuan — but it may have an impact on the smaller manufacturers further down in the supply chain, which operate at tighter margins. As for whether the wage hikes will result in more expensive products, labour is still a small percentage of a gadget’s final cost. However, tech firms HP and Dell have voiced concerns in the past over salary increases. More…

News selected by Covalence | Country: China | Company: Samsung, Apple, HP, Dell, Nokia, Hon-Hai-Precision-Industry  | Source: The Register

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