Jobs Aplenty in Chinese Factories

Dongguan, a city at the heart of China's $1.2 trillion export machine, is built on an apparently endless supply of cheap labor.

Except today, factory owner Frank Jaeger has a problem.

"We have a huge labor shortage here in Dongguan," Jaeger said.

Jaeger, a German who has been making electrical cables in China for 16 years, has 220 workers today - but he needs 300.

As Americans struggle with pink slips, CBS News correspondent Terry McCarthy reports Chinese factories are putting up red signs, seeking workers. The government's $586-billion economic stimulus program created new jobs in the inland provinces - so fewer workers are willing to migrate to the assembly plants in the south, which have 2 million vacancies.

With a population of 1.3 billion, China is not actually running out of labor - but what is changing is that workers are becoming more selective about where they work, and - most importantly - they expect higher wages.

Better pay is what keeps Zhu Zike working at a lighting manufacturer. With 13 years experience in factories, Zhu is a supervisor and earns $410 a month, double the average wage - and the company gives him a subsidized apartment for his family.

"It's really up to each individual", he says, "to decide where they work."

Migrant workers who do come south can pick and choose.

If you're a Chinese worker, things are getting better, said Ben Schwall an exporter. "But everything has a price."

For factory owners that price is rising wages - which means their products will gradually become more expensive in the U.S. For thirty years China's labor costs were unbeatable. China still has a large work force - but it is getting less cheap, and it is no longer endless.