A trend is brewing in Chinese society. Workers are now demanding higher wages at a Honda plant. China’s economy is relentlessly moving in favor of their workers. The economy’s growth has favored business owners but it is slowly moving in a new direction. Labor shortages are seen to increase and the law of supply and demand will adjust in the worker’s favor.

This is a good trend especially for China’s export industry. The transition is not that easy though and if various companies’ management aren’t careful, they will most likely face the same problem as Honda.

In a country of over a billion people, labor supply should be far from running out. This is not what is happening though. The very reason for this shortage is China’s one-child policy. Studies have shown that the population of young people, ages 20 to 39, has drastically fallen by 22%.

Another thing aggravating the job market is that the economic program of Beijing has drawn labor away from the east coast. The cost of housing in that region also discourages people from working in that area. With these factors, wages would need to be very high to attract laborers.

Economists think the entire scenario is a good thing as well. Once families get higher incomes, they could spend more and in turn help out the economy thru paying more taxes. The economy really needs this boost to lessen the need to depend on exports. This, in turn, can help them keep their products for their own consumption.