Spend Matters Friday Latte

North Korea = the new "cheap labor"?
North Koreans Meet Chinese Demand For Cheap Labor - Report -- Rising labor costs in China have hit some companies hard, particularly in low-end manufacturing. Cheap labor fueled China's initial wave of exports, just as it did in other Asian economies. But China's future prosperity hinges on producing more sophisticated, value-added products like cars and excavators, not just filling the shelves of Wal-Marts. That's the theory, anyway. In practice, most Chinese business owners still want to keep costs down, and this includes their wage bill. How to square this circle? Along China's land border with North Korea, the answer is migrant labor. Economic Observer News, a weekly newspaper in Beijing, reports in its latest issue on the reliance on 'foreign workers' in Dandong, a border town. They work in hotels, construction, factories and restaurants, doing long hours for low wages. One employer told the newspaper that he can slash his wage bill by one-third if he hires North Koreans for construction projects.

Let's hope they have better luck than Walmart.
Rolls-Royce Sets Up Supply Chain Office in Mexico -- Looking to strengthen its collaboration with key suppliers in a region that is widely recognized as the leading aerospace industry cluster in Mexico, Rolls Royce (IW 1000/229) announced on April 24 that it will open a new supply chain office in Guaymas, Sonora, Mexico. "Nearly a third of advanced manufacturing companies in the Mexican aerospace industry are based in the state of Sonora," said Beverly J. Gaskin, Rolls-Royce, executive vice president, Supply Chain Management, North America. "Locating staff in the center of this cluster will help us improve supplier relationships and performance."

Looking to buy a house this summer?
Stunned Home Buyers Find the Bidding Wars Are Back -- A new development is catching home buyers off guard as the spring sales season gets under way: Bidding wars are back. From California to Florida, many buyers are increasingly competing for the same house. Unlike the bidding wars that typified the go-go years and largely reflected surging sales, today's are a result of supply shortages. "It's a little surprising because we thought bidding wars were done with," said Andy Aley, who is looking to buy his first home in Seattle's Beacon Hill neighborhood. The 31-year-old attorney was outbid this year when he offered up to $23,000 above the $357,000 listing price and agreed to waive inspections and other closing conditions.

Some thoughts on Pentagon procurement.
Why To Cancel A Pentagon Procurement Program -- What makes it particularly difficult is that systems in development tend to accumulate hordes of advocates willing to swear on a stack of Constitutions that the republic will not survive without this particular piece of gear. These true believers are inevitably countered by critics who insist with equal enthusiasm that spending another dime on the thing will push our nation into bankruptcy. Each side of the debate is well-armed with stacks of competing data, various assumptions (stated and unstated) and detailed analyses which prove they are right and their opponents are stupid. So yes, it can be difficult to determine the right answer. But the difficulty should not prevent us from continually asking the questions.

- Sheena Moore

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