With respect to manufacturing, global wage arbitrage has a long way to run. I received an email from In-Stat, a market research company, summarizing a report they are pitching titled "Vietnam Emerging as Key Electronics Manufacturing Base" that states:
"Vietnam is emerging as an important electronics manufacturing destination...Driven by low-cost labor, low-cost operations, favorable government policies, and a strong work ethic, global EMS/ODM companies are increasing their activities in the country. Although Vietnam's current EMS/ODM revenues are just a fraction of China's and much lower than countries like Malaysia or Singapore, the country is experiencing very high growth rates. Aside from EMS/ODM players, Vietnam's high tech manufacturing sector also hosts manufacturing operations of the world's leading OEM companies like Canon, Fujitsu, LG, Samsung, and Sony.
* Semiconductor consumption in Vietnam is projected to grow at a Compound Annual Growth Rate (CAGR) of 23.6% from 2007 to 2012 to reach US$1.9 billion by 2012.
* Computing and consumer electronics accounted for 48.8% and 30.5%, respectively, of total Vietnamese semiconductor consumption in 2007.
* EMS/ODM revenues in Vietnam are expected to grow at a CAGR of 63.1% from 2007 to 2012 to reach US$1.5 billion by 2012."
The way it looks to me is that companies that were relying on China for low cost labor are shifting to other countries rather than further into China's labor pool. In any case, we here in the US need to increase our productivity if we want to see real wage increases. There are a lot of folks throughout the world who are willing to work for a lot less to do the same old, same old kind of jobs.