Wednesday, April 11, 2007

Romania Looks to China to Fill Labor Needs

Source: Romania's economy threatened by worker shortage -

Romania’s admission to the EU last January 1 intensified a wave of emigration from Romania to other Western European nations. Most leave Romania to seek employment—legally or illegally—for higher wages, albeit lower wages than their Western European counterparts. The exodus has created a labor shortage in Romania, where foreign investment has sparked economic growth, but factories are unable to attract enough labor.

To solve the labor shortages, Romanian businesses are importing Chinese workers en masse. Although this solution creates additional expenses for Romanian businesses, such as the cost of providing room and board, it enables Romanian factories to keep costs competitive. At the same time, the system benefits the Chinese workers, as well. The Chinese workers agree that the working conditions and pay are better in the Romanian factories than in their homeland. In fact, labor is in such demand that one textile factory pays its Chinese workers twice the legal minimum wage.


Should Romania make greater efforts to entice its labor force to stay in the country, such as raising the minimum wage? What are the possible social or economic ramifications of importing foreign labor to fill industrial jobs?

No comments: