China's 'Floating Population'

As part of its ongoing five-part series on life in rural China, NPR had a story the other day that should serve as a reminder that the US isn't the only one with migration issues these days. In China's case, though, it's not international but rather internal borders that poor rural laborers are crossing, in the search for the kinds of jobs that might allow them to achieve the standard of living the past two decades of development has brought to many of their coastal-dwelling countrymen. Men and women like Wu Dexiu, profiled in the NPR piece, are major components in the engine behind that development, as they leave behind home and family to join the 'floating population' of low-paid migrant workers filling factory and construction jobs in the big cities.

The book I was given to read on this topic back in college, Strangers in the City, is currently sitting on my bookshelf back in America, but I do have a copy of China's Minorities on the Move here with me, which, while focusing specifically on the travels of non-Han Chinese minority groups, also contains some information relevant to the broader phenomenon of the floating population. Increasing productivity of farmland has brought about a large rural labor surplus, and economic development remains by and large concentrated in the coastal provinces, creating disparities of wealth that provide strong incentive for rural-to-urban internal migration. As Robyn Iredale and Fei Guo write in their introductory overview in China's Minorities on the Move,

Mobile rural and other populations are voting with their feet to seek out the superior opportunity structures and social advantages that urban and richer rural areas provide. Wide spatial variations have emerged in China in the process of economic reform, partly as a result of the government's economic policies and its emphasis on developing the east coast.

The quasi-legal status of these migrants comes from the lingering legacy of the PRC's hukou system. Together with the danwei (work unit) and Food Ticket systems, hukou permits effectively halted individual mobility by tying food, housing, work, and basic social services like healthcare and education to one's official place of residence. The hukou system was implemented to control urbanization following the rural collectivization process and the famines of Great Leap Forward, in which poor rural Chinese fled the countryside to the cities in search of food and jobs. Having recently visited Bangladesh's capital of Dhaka, I can begin to appreciate on an anecdotal level the effects of runaway urbanization in an impoverished country, with overcrowding and pollution posing a heavy strain on the state's already limited ability to deliver services to its citizenry. (The serious challenges presented to CCP rule by China's deteriorating environment is something I intend to write on separately soon, having just finished Elizabeth Economy's excellent book on the subject, The River Runs Black.) Attempts like the hukou system to freeze the urbanization process carry with them their own costs and challenges, though, and its gradual breakdown has reopened many of the issues it was set up to forestall. "Urban residents", China's Minorities on the Move notes,

have come to enjoy social welfare, security, health care, pensions, housing, and other social infrastructure provisions that are far superior to those in rural areas. ... Increased access to information and better communication now means that rural people are becoming very conscious of the inferiority of services that they are able to access, and many leave for urban areas where they hope to improve their quality of life.

Rather characteristically of the PRC's reforms to date, the emergence of private markets for housing and employment has opened new opportunities for social mobility, while the legal framework for accomodating that mobile population continues to lag behind. Education and other government services still remain tied to one's official place of residency, resulting in situations like Mrs. Wu's, whose teenage daughters continue to live in their home village with their grandparents, seeing their mother and father at best only three times in a year.

The PRC has sought to shed many features of its welfare state, devolving considerable enforcement and governance responsibilities from the central state bureaucracy to local-level authorities, but the persistent disparities of living standards between rural and urban China and the state's lagging ability to provide for the needs of a mobile population will require deft handling on the part of CCP leaders if they are to ever bridge this gap. Although it has yet to resolve the disconnect between the hukou legacy of stationary social services provision and its newly mobile labor force, the CCP does appear to be using slightly less blunt tools of leverage in its effort to cope with migrant flows these days. According to this piece from UPenn's Wharton School (via YaleGlobal), the government's recent increases in farming subsidy incentives combined with the persistently low wages offered to migrant laborers — the article notes that, on top of the absence of a social safety net, "[s]ome studies indicate that in the last 12 years, migrant workers in the Pearl River Delta have seen their monthly salaries go up only 68 yuan. If inflation is taken into account, migrant workers' income has actually declined" — may have been enough to prompt a slowdown (and maybe even some reverse flows) in the number of individuals seeking work in the cities, enough that many coastal factories are actually starting to see persistent labor shortages.

In January 2004, the first year of the labor shortage, the government issued new rules to extend the land contract time for farmers in order to improve productivity. Many migrant workers then left their jobs in cities and went back to their villages. Also that year, farmers received additional subsidies from the central government because of a short supply of grains. Over the past three years, the central government has stepped up its efforts to help farmers by lowering taxes and improving their incomes. [-- Although note that in reducing these taxes, the government is also reducing a major source of revenue for local governments; check out this Jamestown Federation brief for more on the problems this causes - mc] All those measures have helped narrow the income gap between farmers and migrant workers. As a result, says Zhong [Naiyi, a researcher at Shanghai Institute for International Studies], "it pays better to stay with" farming.

The article suggests that this process has the potential to challenge China's status as a low-cost manufacturer — which could threaten the country's rapid economic growth (and the Communist Party's legitimacy, which is now closely tied to it) should its workforce fail to make the transition to more value-added processes. But the rural labor surplus remains massive: something on the order of 150-200 million people. It's hard to imagine that farming can possibly absorb all of them, no matter what kind of incentives the government tries. Should urban worker wages rise, as the Wharton piece suggests they eventually will should coastal manufacturers continue to face local hiring shortfalls, I would expect the short-term attraction of government-subsidized farming to diminish and the movement towards the cities to renew — which, if the Chinese economy begins shifting away from labor-intensive sweatshop manufacturing to more human capital-intensive higher value services, only promises to compound existing labor surplus problems.