Vietnam’s Cheap Labor Image Starting to Fade

Labor disputes in Vietnam appear to be causing some manufacturers looking for cheap labor to look elsewhere.  Some factories are being disrupted by striking workers demanding higher pay to cope with Asia’s highest inflation rate.  Even though Vietnam wages are typically about half the wages in China, foreign investment into Vietnam is down sharply so far this year to less than $5 billion. 

Among Asian companies that are growing wary of Vietnam are a Thai tableware-maker that is moving expansion plans to Laos; a Taiwanese firm that boosted salaries 13% this year; Yamaha, Panasonic, Adidas, and several South Korean companies that have experienced some of Vietnam’s 336 strikes through April of this year.

 Vietnam’s minimum wage went up 14% last month and its average salary is expected to nearly double the regional average.

Even so, companies continue to make major bets on Vietnam, including cell-phone maker Nokia and First Solar, the world’s largest producer of thin-film solar panels.ets.

More on Vietnam’s cheap labor image

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