By Saurabh Mukherjea and Ritika Mankar-Mukherjee of Ambit Capital
Indian newspapers paint a gloomy picture of the state of the nation. They point to the 5 percentage-point drop over the last five years in the country’s once-feted economic growth rate. They bemoan the depressed stock market which has delivered negative returns over the last five years. And they point to the stagnant incomes of their readers who are, generally, white-collar workers and businessmen.
What the newspapers don’t do is discuss the remarkable surge over the last five years in the fortunes of less privileged workers – wages for blue-collar workers have been growing at a staggering 15 per cent or more annually. Continue reading »
And in the middle of all this, new data has been released predicting that wage growth in 2013 will be the slowest India has seen in a decade – excluding 2009, the height of the sub-prime crisis. Continue reading »
So the stock markets appeared to be saying for the past few months. The Chinese government released a slew of positive data in January — ranging from strong exports in December to faster GDP growth in the fourth quarter to the news on the weekend that industrial profits were up 17 per cent.
But Diana Choyleva, a persistent bear on China at Lombard Street Research, wants none of it and is now trying to take away the punch ladle just as the party was getting started.
Workers in emerging markets hoping for a pay rise this year might be in for disappointment. A new survey from Grant Thornton shows only 11 per cent of businesses operating in the BRICs are expecting to offer their staff above-inflation pay rises in 2013 – down from 21 per cent this time last year. Continue reading »
The battle over factory pay in Indonesia is intensifying, with vocal local trade unions joining hands with a US non-governmental organisation to pressure Nike suppliers into paying minimum wages.
A yawning gap is opening up between employers, who argue that hefty minimum wage increases are destroying their profitability, and trade unions, who argue that wages must rise further and employment conditions be improved. Continue reading »
The Thai government, known for its string of populist policies including rice and fuel subsidies, is delighting working class voters (those with a job, anyway) with the introduction of a national minimum wage, which kicked in on January 1.
The policy has already triggered fierce criticism in business circles and reports of job losses, particularly in rural provinces. Yet, some experts argue that despite short term pain, a hefty national minimum wage increase will raise both living standards and productivity. Continue reading »
While average wages in emerging markets have increased in many countries, especially China, they are still well behind those in developed nations.
But not at the top. Over the last decade, senior salaries in EMs have caught up with those in the west, and in many cases surpassed them, according to a report by management consultancy Hay Group. Continue reading »
The threat to stability in the Arab world posed by youth unemployment is such that governments old and new must urgently address the worsening economic environment. If a solution is not found soon, the whole region risks instability or even secondary revolutions. Continue reading »
Idris Jala, the Malaysian minister in charge of economic development, tells the FT’s Sarah Mishkin how his department is seeking to lift Malaysia out of the so called middle income trap through economic and labour market reform
Happy labour day, labourers in Malaysia. On Tuesday the country got its first ever minimum wage, part of prime minister Najib Razak’s ambitious plans to make the country work smarter, not just harder, and double per capita income by 2020. Continue reading »
Alexander Lukashenko wants average salaries in Belarus to go up – and what the authoritarian leader wants, he usually gets, which is likely to mean more trouble for the ex-Soviet republic’s battered economy.
Hon Hai has announced it is raising the base salary of its 1m-plus workers by between 16 to 25 per cent, the first major pay hike since it doubled pay for operators and line managers in 2010 following a tragic series of suicides at its plants.
With Hon Hai, the Foxconn parent, and other Apple suppliers’ plants currently undergoing an audit by the Fair Labour Association, that’s good news, isn’t it? Not so for investors, according to HSBC head of Taiwan research Jenny Lai. Continue reading »
As business confidence in many western countries is once again being hammered, staying in work is the first thing on many managers’ and professionals’ minds.
But not so in Asia. As the regional economy remains resilient, employers will continue to hire, and the only question for executives and other white-collar staff , especially in China, is how much their salaries will rise, says Hays, the recruitment agency. Continue reading »
It’s a new year, but for Foxconn, the old problems seem to be coming back all over again. It turns out that early last week, at least 150 workers at the Taiwanese group’s factory in the Central Chinese city of Wuhan threatened collective suicide in a pay dispute gone wrong.
After a Chinese internet post with pictures was picked up by Taiwanese media and then by Western blogs this week, Foxconn hurried to say late Wednesday that the dispute had been settled “peacefully” the same day, and Microsoft, one of the companies whose products are manufactured at the Wuhan plant, said it was looking into working conditions there. Continue reading »
The macro uncertainties for 2012 remain daunting. The prospects for the next phase of the eurozone crisis still looms large, while an ongoing Chinese real estate crash (and a prospective banking crisis) and the sharp decline in the Indian Rupee suggest that Asia EM may not be the counterbalance growth optimists would hope for. US consumer confidence has been surprisingly resilient but fiscal reality and housing gloom is likely to re-assert itself.
So the balance of risks remains for the global economy to slow significantly more than consensus. Against this backdrop, investors may wish to consider increasing exposure in the less correlated frontier markets such as Bangladesh. Continue reading »