Low Wages and Poor Working Conditions Result in Migrant Labor Shortages In Several Provinces

December 16, 2005

Migrant labor is in short supply in Kunming, the capital of Yunnan province, according to a December 3 China Radio International article, affecting the local construction, smelting, and mining industries. More generally, low wages and harsh working conditions contributed to shortages of migrant labor throughout China in 2004, according to the analysis of scholar Mo Rong that appeared in a book entitled "An Analysis and Projection of China's Social Situation in 2005" [2005 nian: Zhongguo shehui xingshi fenxi yu yuce], (Beijing: Social Sciences Data Press, 2004), 260-272. These shortages may be increasing pressure on employers to pay greater attention to worker rights, according to testimony at a November 3 Commission roundtable, "Working Conditions in China: Just and Favorable?"

Migrant labor shortages are most acute at present in the Pearl River Delta region and southeastern Fujian and Zhejiang provinces, according to Mo's article. Local labor bureau studies report that the Pearl River Delta region needs about 2 million more workers, about 10 percent of the region's labor needs. One of these studies notes that the Shenzhen Special Economic Zone, which has a labor force currently totaling about 4.2 million, needs about 400,000 additional workers to meet its needs.

Mo cites low wages as the primary cause of migrant labor shortages, saying that companies that offer monthly wages of less than 700 yuan generally have difficulty finding workers. By comparison, he says, companies that pay between 700 and 1000 yuan a month generally have few problems attracting workers, and those paying more than 1000 yuan a month have no recruitment problems at all. One study showed that the average monthly wage for migrant workers in the Pearl River Delta region has risen only 68 yuan in the past 12 years, and that migrant workers in Jiangsu province make about 160 yuan more per month than workers in Guangdong province. In many areas where wages are low, such as Guangdong and Fujian provinces, modest wage increases have not matched increases in the cost of living.

Mo also cites harsh working conditions, long overtime hours, inadequate overtime compensation, overdue wage payments, and the absence of labor contracts as important contributors to worker outflow. One Shenzhen survey found that 40 percent of companies surveyed owed back pay to workers. In addition, many companies deny workers overtime pay.

To address these labor shortages, Mo recommends three steps to the Chinese government: (1) give migrant workers and their families the same social services as urban residents; (2) establish services to help companies better understand the concerns of migrant workers so that managers can improve working conditions; and (3) ensure that unions and government bureaus regularly inspect and report on working conditions for migrant laborers. Mo's recommendations, however, do not address the wage issue directly.