China Faces Labor Shortage in 2011

February 17, 2011 1:31 am Last Updated: February 18, 2011 1:12 pm

Usually the period after the Chinese New Year is a busy hiring season for corporations. But this year could be different, according to recently released statistics and analysis.

The labor shortage coupled with the trend of moving business inland has become a nightmare for corporations in mainland China's coastal regions.

“It will be much more difficult to hire people in 2011,” said Zhang Yi, researcher at the Institute of Population and Labor Economics at China Academy of Social Sciences.

According to a report by China National Textile and Apparel Council, the Pearl River Delta Region is currently short two million workers, contradicting authorities’ claim that the shortage is only one million. Shandong Province is short of over 700,000 workers.

An article published by New Express last December revealed that corporations in Dongguan City of Guangdong Province have a 40 percent labor shortage.

Inland provinces also report a lack of workers. The administration committee of Dongmeng Economic Development Park in Nanning City, Guangxi Province reported a labor shortage of approximately 30,000 workers.

Recently interviewed by Chendu Business Weekly, Guo Xiaoming, Deputy Dean of Sichuan Social Science Academy said that another inland province, Sichuan, is also suffering from a labor shortage in certain areas. At the end of 2009, 21 corporations in Suining city had a 20 percent labor shortage.

According to data published in Xinhua Digest’s second issue this year in the article, Reasons of Shortage of Migrant Workers, Resolution and Outlook of Labor Market Revolution, the migrant worker reserve is six million less than last year. The numbers have been down for three consecutive years, resulting in approximately 20 million fewer people than three years ago.

Zhang Yi told China Broadcasting Net on Feb. 8 that inflation in the coastal regions is even worse than in central and western regions; in particular the cost of food and housing has quickly increased. Moreover, transportation problems during Chinese New Year and other factors discourage migrant workers from working far away from home.

Li Mengzhou, manager of said that many young people want white collar jobs and feel that wearing a suit and earning less is better than dressing as a laborer. Many who were born after the 1980s would rather work at McDonald’s or KFC (desirable jobs in China) and feel better about themselves.

Another set of data provided by the National Bureau of Statistic shows that in 2009 the average monthly income of a laborer who works in east China was 1,455 yuan (US$220), and 1,382 yuan (US$110) for people who work in western China. The income in the eastern region is only five percent higher than that of western regions. Five years ago, however, the salary paid in the eastern regions was 15 percent more than that of the west. Now the advantage of higher salaries paid in the east no longer exists.

The lack of labor has already led to jobs being sent out of China. Textile Technology network reported on Feb. 2 that some Taiwan companies had initially placed orders with Chinese factories. However, due to labor shortages, limits on electricity usage, as well as increases in raw materials prices, fulfillment of orders has become a problem. To guarantee a timely delivery of products they have decided to begin bringing some of their orders back to Taiwan.

Ma Guangyuan, researcher at Beijing University and public policy expert, said the cheap labor provided by the countryside has been dwindling. The reality in China is that the expectations and ideals of the younger generation of farmer laborers have dramatically changed, he said.

“What we are facing is the second generation of farmer laborers. They have more knowledge and ideals and they want to stay in the city, which is different from their parents who only wanted to go to the city to make money in order to better their lives, and then quickly return to the country.

“How corporations treat the relationship between themselves and farmer laborers is a big issue. Do they treat them as long term partners or merely as temporary workers? Do they treat them according to same standards of people who are from the city, eliminate discrimination in providing benefits including medical care, housing, and whether their children can be sent to school close to them instead of to the so called ‘Schools for Migrant Workers’ where the education quality has been an issue. Whether the above can be achieved shows whether they are taken seriously and given due dignity.” Ma added.

Ma said that overall the potential labor supply is still greater than the demand in China. If corporations provide farmer workers dignity, China won’t have any difficulty hiring people within the next ten years.

Read the original Chinese article.

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