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2017 Year of Change
In 2017, across the globe, governments and municipalities are mandating increased minimum wages for employees in all sectors which will prove a catalyst for warehouse and production operations to force change. These government mandated changes are going to place a large amount of stress on supply chain where the increases are to be double digits. Already in the U.S. 21 states have implemented these increases as of Jan 1, 2017, and in states such as Arizona, Washington and Maine where the increases are in excess of 15%, radical changes are going to be needed to run profitable operations. Additionally, at least 5 other states are running by federal minimum wage guidelines and the charge to increase the current standard of $7.25/hr. to close to $10.00 has begun in earnest.
The USA is not the only country to be placed under such pressure, both Canada and Mexico are seeing wage increases averaging around 7%, which again will affect all types of operations across the borders.
In Europe and Asia, we are seeing additional increases in traditionally low cost markets such as Thailand (4%), Indonesia (8%), Cambodia (9%), and late last year 9% in China.
The challenge now will be for the operations to do more with less, though the clock started ticking more than 2 weeks ago at the beginning of the new year. With little room for capitalinjection, the typical warehouse operation must look at the way labor is planned, and the operation is planned to drive out these costs. Download our White paper