Manufacturing Nations Are Facing a Generation Gap

By: James Flippin · August 08, 2023 · Reading Time: 2 minutes

Assembly Line Ambivalence

For the last three decades, Asia has been the world’s manufacturing leader and Americans have enjoyed affordable pricing on everything from furniture to running shoes. This status quo could be in jeopardy, however, given an emerging generational shift in which fewer younger workers are showing interest in pursuing factory work.

In general, younger workers are searching for jobs that offer the potential for a better work-life balance. Specifically, in countries like China, Vietnam, and Malaysia, the younger generation is gravitating away from factory work and alternatively seeking jobs as store clerks, hotel front desks, and gig workers. While these roles don’t guarantee better pay, they are typically viewed as providing less stressful work conditions.

End of Cheap Goods?

If this generational shift persists, it could impact the globalization model that has allowed Americans to enjoy more affordable goods over the past few decades. In fact, many companies have already started to point to the overseas labor shortage as a reason for higher prices.

Children’s toy makers Hasbro (HAS) and Barbie (MAT) have both cited labor shortages in Vietnam and China for higher costs. Nike, which has most of its factories in Asia, has also raised prices as a result of higher labor expenses.

Luring in Workers

In the past, factories in overseas countries weren’t faced with such workforce challenges. But, it seems the younger generations are playing a little bit harder-to-get.

In response, many Asian factories are offering more perks to attract young twenty-somethings. A few of the most common benefits include higher wages, floor-to-ceiling windows, better cafeteria food, yoga classes, and team building sessions.

Will these perks be enough to lure younger workers back to factory roles? Only time will tell. In the meantime, Americans might need to consider a shift in their consumer habits and adjust to paying more for fashion and electronics.

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