China’s migrant workers seek a better life

Editor’s note: In the previous edition of BizTimes, the first part of this discussion covered the labor shortage China is facing and what the Chinese government is doing about it. The second part of the discussion focuses on the dynamics of China’s migrant workforce.

China has 130 to 230 million migrant workers who have built its cities and products. Estimates are murky at best, but it would seem more realistic to rely on the higher estimates.

You may notice that these articles contain a lot of unsubstantiated numbers and references. While it would be preferable to have sources, it is nearly impossible to get good data in China. Numbers are bandied about on the Internet and in the media, but few cite sources, and those that do; the sources cited have no discernable methodology that can be examined.

Unfortunately, even the supposedly unbiased international reports are little more than hashed over estimates based on unreliable data, so the best that can be done is to give broad ranges, based on what seems to be most repeated.

Getting back to the point; as a cheap source of labor, migrant workers have been pivotal in China’s economic rise, but as times change so has the nature of the workforce. After the 2010 Spring Holiday in February (Chinese New Year), media outlets within and then outside China started reporting labor shortages.

Traditionally, migrant workers go back to their hometowns during a frenetic holiday period which sees 1 billion people using planes, trains and automobiles to go to and from their holiday destinations. The problem was that when the holiday music ended, there were more chairs than people, leaving factories struggling to find workers. Over the last few months there have been dramatic changes as the seesaw between labor and industry has teetered in favor of labor.

Even in 2009, to get a job at a major name factory you would have had to pay a placement agency to receive a minimum wage job. Today, wage rates are rising and workers and unions are much more aggressive about their demands. Is it comparable to the United States and other Western countries? Not by any stretch of the imagination. “Aggressive” means that workers and unions are insisting on being paid wages they are owed and asking for cost-of-living increases.

What is a “migrant worker”?

In China, a migrant worker is anyone who is working outside their registered hometown. The Hukow (registration) system is China’s means of organizing its vast population. In past Dispatches, I have discussed the system, which is part historical and part mechanical. Bottom line, it means that while you can live and work anywhere in China, you are only entitled to receive state benefits, free schooling, health care etc… in the place you are registered. It is one of the issues that seems to have been on the minds of China’s leaders for the last 15 years, but it is an enormous logistical and financial issue that would change China’s landscape politically, socially and economically.

One guess is that it explains in part why China is trying to push urbanization. The hope is that the energy which creates and sustains cities will be able to absorb the immigrant workers who build and service them.

What is different today as opposed to before? There are several factors which seem to be pushing and sustaining these changes in attitudes.

Generational change

There are new generations of migrant workers who are much more ambitious and demanding than their parents were. Instead of poorly educated farmers the new generations are tech savvy mobile phone/computer denizens. They are better-educated and they have seen and developed a taste for the popularized luxuries they view every day on TV and the Net. They are not content with the tedious minimum wage jobs their parents were willing to do anything to get.

Cost-of-living increases

In addition to increased expectations, the rapid rise in the cost of living in terms of housing and food costs are eroding the incentive to work in the cities. Ironically, the central government’s rural reforms are making country living more attractive; free school tuition, better subsidized medical care, rural investment strategies and support of local government initiatives are changing rural conditions. There is still a long way to go but people are weighing whether it is worth it to live in a factory dorm for 11 months isolated from their families and friends vs. taking a local job which might pay less but comes with familiar surroundings, the comforts of home and a much lower cost of living.

Respect

Migrant manual workers are at the bottom of the social ladder. Often dark and weather-beaten from exposure to the outdoors, both from their lives in the farm and their urban jobs, they are looked down upon by their urban neighbors. There is almost a complete invisible wall which you can see when construction workers gather in the evening to wait for the buses which will take them to their makeshift dorms outside the city. Although they talk amongst themselves there is no communication between them and passersby. It is ironic that China is a socialist society whose people are more conscious about social and financial status than in more developed countries. In their villages, these workers would have their own standing but in the cities they are just part of a faceless mass of migrant workers who feel despised by the very people they work for.

Self-selectors

In every place there are: those who will go if they can; those who will go if they have to; and those who will not go. With as many as 25 to 50 percent of the able rural working population having made the decision to go, the remaining pool is increasingly made up of those who cannot go, for physical or mental reasons, or are part of the group who will not go. Invariably, this will become a greater challenge as time goes forward.

Conclusion

While economic changes could reverse the dynamics of China’s migrant workforce industry balance, it is more probable that this will continue to be a long-term issue. The suicides at Foxcom are part of the daily media fodder, as are social concerns about the living conditions of migrant workers and their children. In the future, manufacturers who operate in China will have to have better strategies, not only to attract and retain valuable managerial and technical staff, but also the workers who power the production lines.

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