Sunday, 10 May 2015

Migrant Labour Crossroads

Young people in rural areas are lured into factories hoping for good pay
When I lived in Beijing from 2007-2010, there was a lot of work for people with little education -- restaurants, factories, security guards, retail. But there didn't seem to be enough work for educated people.

Millions of graduates out of universities were keen to start their careers and wean themselves off of their parents, only to find their wages hardly matched their expectations. They were soon ground down psychologically and for some physically by the monotony of their work. Many were depressed to find they were a tiny cog in a massive machine that kept churning mindlessly in one direction.

When I first arrived in the Chinese capital, my boss enthusiastically said China's economy would continue to boom for sometime because there was a limitless supply of migrant workers from the countryside who would be lured to the city to work.

Many migrant workers find it hard to move up in society
They really are the ones doing the mundane work. There is a steep learning curve in the beginning, not only in how to do their job, but adjusting to city life and hoping not to be taken advantage of. But once they understand the lay of the land and where they fit in society (near the bottom), it's a near impossible climb up.

My boss' prediction was completely false as I predicted, and these days fewer migrants are taking the gamble of moving to the cities. The good thing for them is that factory wages have increased significantly in the last few years, but can migrant workers keep up with factory work becoming less labour intensive and more mechanized?

Do they have enough education to keep up with labour demands?

Development economist Scott Rozelle at Stanford is concerned about this issue.

He and other co-authors have written a paper and found that China does not have a very well educated workforce. From analyzing census data, Rozelle found far fewer migrant workers completed secondary education, contrary to Ministry of Education official figures.

One of the reasons they may be dropping out of school is because the lure of getting a relatively high-paying job, and also many kids of migrant parents living in cities are unable to get a decent education because of hukou or residency permit issues.

Development economist Scott Rozelle
As a result the next generation of migrant workers are going to miss out on job opportunities because there will be a demand for more educated workers.

The paper says:

Wages are rising and low-wage manufacturing is moving out. China is already making plans to become an economy that will be based on higher value-added, high-wage industries. This will mean, of course, that there will be a high demand for skilled labour. International experience demonstrates that individuals will need to have to have acquired skills taught at the level of high school or above if they hope to be competitive in these higher value-added industries. If China fails to endow its labour force with such skills, not only will many individuals have a difficult time finding employment, the newly emerging industries may also falter from a short supply of skilled labour. The whole economy may experience slower development.

This may not be a prediction China's leaders want to come true, but they have not done anything to help migrant workers and their families get a leg-up on society through education and other social benefits.

The authorities seem to purposely keep this segment of the population at the bottom rung of the ladder, thinking China always needs to have cheap labour. They close down schools for migrant children and because of hukou issues, they cannot go to the same schools as Beijing residents, thus creating an even greater social and economic divide.

But if Beijing wants the economy to develop, then its people need to have the right tools to progress along with it. And if migrant workers are left behind in the next step of China's economic development, there will be lots of unhappy people who could spark civil unrest -- the last thing senior officials want to hear.

So why not give migrant workers a chance? It's a win-win situation.

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