China’s Rising Wages Offer Big Education Opportunity for Latin America

We’re hopeful about the potential for education improvements in Latin America.  And, it all has to do with China.  Let us explain.

As China’s population gets older its labor force will start to shrink dramatically. Even if China was to repeal its one-child policy, things would not change. Fertility rates are dropping significantly. What is rising however, are wage rates.

Increasing wage rates offer Latin American countries the opportunity to develop technology and service industries, two of the most important tools for long-term growth, economists remark. Due to the increasing wage rates multinational companies will be tempted to move their export-oriented plants to Latin America.

Many U.S. car companies and other manufacturing industries have already moved from China to Mexico, due to its close proximity to the United States.

To continue to lure foreign manufacturing plants to Latin America, many countries will have to lower their violence rates, and dramatically improve their education systems.  Seizing this opportunity to reduce crime and advance education may prove to be a great leap forward for the region.

Creative Commons Love: Abe Kleinfeld on Flickr.com

 

Written by Marliz Calleja