Cost of Labor in China

In the past two weeks there have been two stories about major pay increases for laborers in China. The first was Honda, whose workers held a strike and gained a 35% pay increase. The second was Foxconn (parent company is Hon Hai) who makes electronic parts for Apple, Dell, Sony, Motorola and HP. Foxconn raised its wages by 30%. Walmart has offered an 8% increase and Chinese unions are pushing KFC (Yum Brands) for a 5% increase.

These pay raises are well above inflation rates and may indicate a rapid leveling of salaries between US and other international manufacturers.

I noted that pay rates in India have also gone through a similar increase for certain types of labor. It now costs over $20 per hour to hire help through Brickworks, an outsourcing firm made public in Timothy Ferriss' book The 4-Hour Work-week.

While these rates, even with 30%+ increases are well below US rates of pay, we have seen a downward pressure on US pay rates.

A friend recently shared that she placed an ad for hard labor at $10 per hour in Craig's List here in Boulder and received over forty responses in less than an hour. Many of those responders had years of experience and/or college degrees.

What are the implications of a more rapid than expected leveling of labor costs in Asia and the US? Which industries are most likely to be impacted? What opportunities present themselves and at what rates of parity in wages?