The Implications of Mass Unemployment Amongst China's Migrant Workers for State Political Stability

Social unrest; it is a topic that is broached in nearly all newspaper articles and academic publications detailing mass unemployment among China's migrant laborers. Most feature roughly the same structure, beginning with an overview of the financial crisis’s effect on China, moving on to a few quotes from migrant workers on the jobs they have lost and the challenges they now face, and finishing up with a scintillating paragraph that ties the piece together and either explicitly or implicitly notes that the mass-layoffs may pose a systemic threat to the continued leadership of the Chinese Communist Party. While the Washington Post’s Ariana Cha and the New York Times’ Keith Bradsher are certainly not the only journalists utilizing this style, their recent pieces epitomize this approach to writing about the nongmingong: Ariana Cha's "As China's Jobless Numbers Mount, Protests Grow Bolder;" Keith Bradsher's "China's Unemployment Swells as Exports Falter."

One can’t blame Cha, Bradsher or any other journalist for composing their articles in this way. It’s what sells. Amongst both America’s masses and its elites, the idea that the CCP’s leadership is unsustainable, a belief largely inspired by the “end of history” mindset that Western liberalism will eventually spread across the globe, remains extremely sexy. But are these writers on to something? Do China’s unemployed migrant workers really threaten state political stability?

I don’t believe they do. Though social unrest is certainly a possible consequence of mass unemployment among China’s nongmingong, it isn't likely to manifest in any sort of systemic threat to the continued leadership of the CCP; at least not anytime soon. So why are so many people concerned about the potential for migrant laborers to engage in collective political violence? Are their worries completely unfounded?

It is easy to see why one may believe that China's migrant workers present a serious threat to state political stability. Prior to the fall of 2008, China’s floating population was already a potential source of social unrest. For years, the nongmingong have been mistreated and underpaid; this while their urban counterparts continually reaped the benefits of economic development. Some researchers, including myself, were already looking into the likelihood of China's migrant workers disrupting the status quo, engaging in collective political action aimed at bettering their condition. The advent of mass unemployment within the migrant worker class upped the ante, adding further hardship to the lives of the nongmingong and creating a general state of agitation that would seem conducive for various forms of social unrest. The multitude of protests that erupted in southern factory towns as factories closed in the lead-up to Chinese New Year seemed to offer a preview of things to come, lending further credence to the idea that migrant workers may now present a legitimate threat to state social stability.

Concern over the possible negative ramifications of unemployment within the migrant labor class has only been heightened by the dour tone employed by some of China's own officials when discussing the issue. A lengthy article recently published in “Outlook,” a weekly magazine produced by the state-run New China News Agency, identified 2009 as a potentially extremely challenging year, likely to feature a high tide of “mass incidents” (quntixing shijian) and the threat of large-scale protest movements composed of disaffected migrant workers and unemployed recent college graduates. (Outlook article; Chinese only)

There are several reasons, however, to doubt that such a mass movement will develop. Three of the most important were recently expounded by Han Dongfang, director of Hong Kong’s China Labor Bulletin: “first, they [China’s migrant laborers] are not together; second, they are not organized; and third, they are (busy) looking for jobs.” Han has a point. A disparately located, unorganized, generally occupied group of people hardly makes for a potential mass movement.

There are other reasons, as well, to question the idea that China’s migrant workers represent a major threat to state political stability. One lies in the fact that the lay-offs aren’t likely to create a widely felt sense of desperation among the nongmingong. As noted in a report recently released by China’s Bureau of Statistics, the vast majority of those who were laid-off still have land at home that they can farm. My own experience in a small Henan village over chun jie (Spring Festival/Chinese New Year) reinforces the survey’s findings. Laid-off migrant workers there weren't delighted to be jobless, but neither were they completely devastated. One young nongmingong's comment on the matter sums up the way most of China's migrant workers seem to be approaching their newfound unemployment: “job or no job, as long as I have land to farm there is no problem.”

For some, the reality that the economic crisis has led to far fewer job opportunities for migrant workers still hasn’t set in. “Sure, it was the direct cause of my being laid off, but there must be opportunities in other cities,” they think. This thought process may seem naïve, but it is entirely understandable when placed within the context of the typical nongmingong’s life. Migrant work is, by nature, both transitory and nomadic. The disappearance and reappearance of jobs is a part of the migrant worker’s reality; one that rarely has a conspicuous underlying logic. Those in the floating population who haven’t quite come to terms with the full effect of the economic crisis won’t be overly frustrated until they have traveled to several cities, exhausted their list of contacts, and find themselves still unable to locate a job. Only at that point will they realize that their inability to find employment isn’t due to a run of bad luck, but rather due to the breakdown of the global financial system. By then, months, maybe even years, will have passed, the economy will (according to projections by Ben Bernanke and the Federal Reserve) be on the upswing, and the Chinese government will have had ample time to react to the crisis.

Indeed, the Chinese government has already begun to respond to the issue of mass unemployment within the migrant labor class. Its method of doing so is the topic of our next post, so I won’t go into great detail here. I will, though, report that it seems to have struck the right chord with the nongmingong. My own research has yielded countless examples of migrant workers who find hope in Beijing’s attention to their plight. Hope, of course, is not necessarily eternal. Ultimately, the government will have to make good on its promises or face the prospect of millions of migrant workers who are not only jobless but also frustrated at the inability of their leaders to aid them. As long, however, as the nongmingong believe the government is doing its best to address their needs, they aren’t likely to engage in any form of collective political violence.

There are, without a doubt, reasons for the world at-large, and the Chinese central government in particular, to be concerned about the implications of large-scale migrant unemployment for state political stability. The likelihood of the nongmingong presenting a viable threat to the continued leadership of the CCP, however, is extremely minimal. There will be more “mass incidents” this year than last, social unrest in general will rise, and there is the distinct possibility that migrant workers may “piggy-back” onto other protests initiated by college students or other dissatisfied Chinese citizens. None of this bodes well for the Chinese government. Neither, though, does it equate to a political doomsday for the CCP.

Fulbright Scholar Ray Deng on China's Hukou System

There are currently several Fulbright Scholars working on migrant labor issues. In addition to my research, there is work being done on the education of migrant children, legal aid and healthcare for migrant families, and the role that migrant workers play in transforming China's modern urban landscapes. Over the course of the next several months, I hope to feature a post by each of these scholars on this blog. Many of them have been focused on migrant issues for years and have been in the field carrying out their research for several months. Their insights will doubtless prove invaluable in increasing our understanding of China's floating population.

Ray Deng's current research is not focused on China's migrant laborers. Rather, he is looking at government plans to reform a currently decrepit rural healthcare system. Nevertheless, a recent visit to a school in Beijing set up for the children of migrant workers inspired him to write a thoughtful and informative post on the challenges China's hukou system pose to the nongmingong. That post can be accessed here: "Thoughts on China's Hukou System."

Response to Comments on "Chinese Government Releases Treasure Trove of Statistics on 农民工 (Nongmingong)"

Since I posted "Chinese Government Releases Treasure Trove of Statistics on 农民工 (Nongmingong)," many people have approached me with the same question - "should we believe what the Chinese government is telling us about unemployment amongst the domestic migrant labor force?"

The answer is yes and no.

Yes - From the research I have conducted thus far as well as the literature that is coming out on the floating population, these numbers seem quite plausible. While the statistics released by the government don't indicate that the situation is mind-blowingly bad, they do paint a pretty solemn picture. At this point, we have no reason to believe that the Bureau of Statistics is misleading us in any major way.

No - As mentioned in previous postings, generating an accurate number for the size of the floating population, let alone its sub-components, is next to impossible. Anyone who works with, knows, and/or researches China's migrant workers is aware of the fact that many of them, especially those who are younger, don't officially exist. Their parents, for a variety of different reasons (more often than not associated with the One Child Policy), never registered their birth with the government. Though this is most common among young children, I have run into some teenagers and young-adults who still haven't applied for a hukou (residency permit). With all these "invisible" men and women floating around (I have read that there could be as many as 80 million), it is impossible to get a perfectly accurate look at the scale of current migrant labor unemployment.

Ultimately, I think we should accept the numbers released by the Bureau of Statistics at face value, but do so recognizing that they are far from perfect. Anyone who has studied economics knows that though GDP and the unemployment rate feature many flaws, they are still useful as measures that can be used to assess a situation and react to it with sound public policy. I recommend viewing the recently released statistics on migrant unemployment in China in the same light.

Chinese Government Releases Treasure Trove of Statistics on 农民工 (Nongmingong)

Two days ago, the Chinese Bureau of Statistics released its most comprehensive report to date on how the economic crisis is affecting the country’s migrant worker populace. The document can be seen in its original Chinese form here: “2008 Year End Survey of Migrant Workers.”

The press release, titled “2008 Year End National Total of Migrant Laborers is 225.42 Million,” starts off by noting that “in order to fully understand the phenomenon of migrant workers returning home [due to being laid-off], the National Bureau of Statistics used the opportunity inherent in the nongmingong going home for the holidays to conduct a nationwide, 31 province, 857 county, 7100 village, 68,000 household large-scale survey.” Having laid out the bureau’s goals and methodology, it goes on to list the main findings.

According to the survey results, there are currently 225.42 million migrant laborers in China, with 140.41 million, or 62.3 percent, living outside their local township (ben xiang zhen). 37.6 percent of those who have left home hail from China’s central provinces, with 32.7 percent coming from the west and 29.7 percent from the east. Conversely, the east attracts 71 percent of migrant workers outside their ben xiang zhen, with the west attracting 15.4 percent and the central provinces attracting 13.2 percent. (Note: while the press release doesn’t define which provinces fall under the categories of “east,” “central,” and “west,” it is safe to assume that “east” refers to coastal provinces, “central” refers to all those provinces that border coastal provinces, and “west” refers to all other provinces in the Chinese interior.)

Approximately 70 million, or 50 percent of the migrant workers outside the boundaries of their local township, returned home for Chinese New Year. 80 percent of them have now re-entered the cities, with the remaining 20 percent, or 14 million nongmingong, choosing to stay at home to farm the land or seek out other forms of employment. Of those who have returned to the city, 45 million have already found work and 11 million are still searching.

In a previous post, I stated that the migrant laborers working in the manufacturing and construction sectors have been most adversely affected by the economic crisis ("China's Migrant Workers in the Wake of the Global Economic Crisis: An Overview"). This observation was based on my own (largely anecdotal) research. This survey's findings, however, provide empirical evidence to support my claim. Of all the migrant workers who returned home, 36.1 percent were previously working in manufacturing and 28.2 percent worked in construction. These numbers explain why a high percentage of those who were laid-off in the lead up to the holidays, 24.6 percent and 17.2 percent, respectively, had been living and working in Guangdong Province and the Yangtze River Delta, two areas known for their large industrial bases and rapid rate of expansion.

The final section of the press release delves into statistics that are important when assessing the socio-political implications of the economic crisis (the topic of this blog’s next post). 5.8 percent of those migrant workers who were laid-off are owed back pay and 2.2 percent of all those who returned to the countryside jobless this last holiday season have no land to farm. Among the still unemployed, the percentage of those lacking arable land rises to 6.6 percent.

As is to be expected from a press release, particularly one issued by the far from transparent Chinese government, this document was heavy on statistics and extremely light on analysis. The one analytical note it does include, however, offers significant insight into how the CCP plans to deal with the issue of migrant unemployment. Towards the end of the document, the author notes that that the lower the education level of the migrant worker, the more likely they were to fall victim to the crisis. Thus, “strengthening the training of the nongmingong will be beneficial in increasing the stability of their employment.” What, exactly, does this mean in the long-term? Look for a thorough examination in next Wednesday’s post.

From this document, it is clear that the Chinese government understands the scale of migrant labor unemployment. Now, the challenge lies in implementing policies that address the heart of the problem and prevent the outbreak of social unrest.

China's Migrant Workers in the Wake of the Global Economic Crisis: An Overview

On September 15th, 2008 Lehman Brothers Inc. filed for bankruptcy, transforming an already precarious financial situation into a worldwide economic crisis. Since that day, economic development in the United States and across the globe has slowed significantly, with nearly all measures of economic well being, from unemployment statistics to GDP growth, indicating that the world is facing a crisis of a magnitude not seen since The Great Depression. While nowhere near 25 percent of America's population is jobless and few “Bushvilles” have been erected, there are certainly parallels between the current recession and the greatest worldwide economic downturn in modern history. Indeed, just days ago World Bank President Robert Zoellick announced that global GDP will decline by 1 to 2 percent in 2009, a level of contraction not seen since the dark years of the late 1920s and early 1930s ("World Bank: Global Downturn is WWII-like").

Although China’s economy continues to grow, it is no longer the juggernaut it was just a short time ago. A tightly regulated and insulated financial market kept the PRC from suffering through the first order effects of the economic downturn, but it has been slammed by the second order effects. With exports comprising 40 percent of China’s GDP and major markets such as the U.S., Japan and Europe drying up, the “middle kingdom” has been deeply scarred by the financial crisis. In December, the New York Times reported that “Chinese exports registered their largest drop in nearly a decade last month.” ("Unexpected Drop in China's Imports and Exports," New York Times) A few weeks later, Jing Ulrich, the Chairwoman of China Equities at JP Morgan, predicted that China’s exports would continue to shrink in the first few months of 2009 and would, in aggregate, not grow at all over the course of the year. ("Trade Losses Rise in China, Threatening Jobs," NYT) As for overall GDP growth, The Hong Kong-Shanghai Banking Corporation (HSBC) is predicting that China’s GDP expansion will fall to 7.8 percent in 2009, a tick below the 8 percent that is widely considered essential to stem social unrest and a far cry from the 12 percent that was recorded in 2007. (“China’s Slowdown Raises Concerns about 2009,” NYT) Some believe that even 7.8 percent will be unattainable, proclaiming that growth could fall below 6 percent. (“China Warns Against Protests and Unemployment Rises,” The Telegraph, UK).

What does this all mean for China’s migrant workers? The answer: a lot.

China’s nongmingong are typically employed in either the manufacturing, construction or service sectors. All three have been detrimentally affected by the crisis.

With exports in a free-fall, China’s industrial production belt has come to a virtual standstill. The result has been the closure of many factories and lay-offs on an unthinkable scale. Guangdong, the province that is home to many of the country’s manufacturing centers, is so concerned about the possible negative implications of the number of jobless currently residing there for social stability that the provincial labor bureau has “begun offering numerous subsidies for workers willing to leave the cities and go to rural areas.” (“China’s Unemployment Swells as Exports Falter,” NYT)

Like manufacturing, the previously thriving construction sector has slowed significantly, sending many workers home. Large sites under development in cities ranging from Shanghai to Chengdu are now stagnant, abandoned until economic conditions improve. The service sector, while not quite as badly hit as the former two industries, has also suffered. On a recent trip to Macao, China’s version of Las Vegas, I was shocked to find myself walking around in a ghost town. The Macao Venetian, the world’s largest casino, was almost completely empty.

So, what is the total number of migrant workers that have lost their job in the wake of the economic crisis? 20 million as of the Chinese New Year according to Chen Xiwen, director of the Central Rural Work Leading Group Office. (“China’s Migrant Workers Face Bleak Outlook,” Financial Times). The government has since revised that figure down to 11 million, noting that some workers were able to find employment after returning to the cities in mid-February. ("Wen Firm on Reserve Priorities," Asia Times) Many, however, remain incredulous of such a revision, pointing out that the Chinese themselves have issued several reports indicating that they expect the number of unemployed nongmingong to reach 26 million, the size of Texas’ population, sometime this year. (“Return of Jobless Strains China,” USA Today). The actual total probably won’t be available until a national survey of the Chinese labor market recently launched by Beijing is completed, first in the big cities this year, then nationwide in 2010. ("China to Launch Survey on True Jobless Picture,” Reuters). Even then, calculating the number of migrant workers alone has proven nearly impossible; figuring out how many are out of work will doubtless be even more difficult.

Ultimately, however, what matters is not the exact number of jobless migrant laborers, but rather the implications of such unemployment for the workers themselves and the Chinese state as a whole. What are they and how does the government plan deal with them? These questions will be the primary foci of the following two posts.

Who Are the 农民工 (Nongmingong)

Boasting a population of between 110-210 million, many different types of people fall under the classification of nongmingong, or migrant laborer. Despite the group’s size and diversity, however, there are some general characteristics that are prevalent among its constituents.

The vast majority of China’s migrant workers are farmers from the country’s interior and western provinces who were inspired to leave their home villages by a series of factors: push – general economic need, environmental degradation, land repossession by the government; and pull – economic want, the excitement associated with urban life, and freedom from family obligations. The first wave of migrant workers, those who left home in the early 1980s, sought employment primarily in China’s major cities and special economic zones, located in the south and east of the country. While these areas are still attractive destinations, the development of numerous cities in traditionally poor provinces, often municipalities targeted by the “Develop the West” (xibu da kaifa) campaigns initiated by Beijing, has led an increasing number of farmers to migrate to places closer to home. As a result, urban centers such as Chongqing and Zhengzhou are now full to brim with low-wage laborers hailing from the large, impoverished areas that surround them.

For most members of the floating population, moving from the countryside to the cities is made possible by an informal migrant network. Unlike their predecessors, today’s nongmingong don’t typically set off in search of work on their own. Rather, they follow in the footsteps of family members or friends, contacting them ahead of time to inquire as to the availability of jobs in the city and/or staying with them while looking for employment. People from the same village often migrate together, work together, and live together. Some even go into business together, starting small enterprises selling produce, cutting hair, or doing tailor work. The result is a series of urban migrant colonies that are diverse in terms the overall geographic origin of their residents, but that are often organized into mini-provinces, with one block occupied by people from Hebei, another by people from Anhui, etc.

Few nongmingong are sentimentally or otherwise attached to anywhere other than their hometown. Thus, once they have left the village their movement becomes very fluid – frequent and unpredictable. As opportunities materialize and disappear, they will move from city-to-city and province-to-province, often on short notice. Within cities themselves movement is even more common. Indeed, many small-scale enterprises are mobile, designed to be easily moved from neighborhood to neighborhood depending on the business trends of the day.

The floating population has been an integral component of Chinese development, providing the cheap labor needed to invigorate the Chinese economy. Nevertheless, its members are far from welcomed with open arms by city governments and the established urban residency. As one scholar noted in a 2006 article, “[r]ural migrants in cities are institutionally inferior and socially marginalized.” Their rural hukou inhibits access to state provided or subsidized goods and services such as health care, housing, pensions, and education for their children, limiting their ability to advance in society. Moreover, rather than assimilating into the social networks of urban areas, migrant workers typically find themselves inhabiting a component of society completely abandoned by city residents. Such social isolation lends itself to discrimination, making it easy for urbanites to blame the invading “country bumpkins” for society’s ills. Among the litany of problems urban residents attribute to the arrival of migrant workers are traffic jams, high population density, and general crime. As scholars Wang Feng and Xuejin Zuo aptly noted, “[t]he stereotype of rural migrants is that they are uneducated, ignorant, dirty, and also have high propensities to be criminals.”

Intra-class discrimination, where migrant workers from different provinces discriminate against each other, is also quite prevalent. Though they occupy the same socio-economic sphere, someone from Sichuan may criticize someone from Guangdong for their failure to speak standard Mandarin while someone from Hubei may vehemently assert that everyone from Henan is uncivilized. Intra-class discrimination is not quite as detrimental to the welfare of migrant workers as inter-class discrimination is, but it can be the cause of social conflict and general unrest.

Despite their low social standing within the cities, migrant workers are typically among the elite in their home villages. On average, they are better educated than their rural peers, often having obtained high school degrees, a rarity in the countryside. They are also the source of a significant portion of their village’s income (up to 40 percent), and sometimes the sole source of their family’s income. Walking through many of China’s more impoverished rural townships, one will undoubtedly bump into a few houses that are surprisingly modern, especially when compared to the drab structures that neighbor them. Striking up a conversation with the owner will typically reveal that they have several children working in the cities and sending remittances home. Such remittances have become so integral to rural development that the China Post branches in most cities now have a window designed specifically for those looking to send money back to the countryside.

The pressure of saving money coupled with the relatively low (sometimes extremely low) wages obtained by migrant workers leads them to live in housing that ranges from draconic to decrepit. Some are provided lodging by the factory, restaurant or company they work at while others reside in the aforementioned urban migrant villages. Regardless of where they live, personal space and comfort are virtually non-existent and hygiene is often tough to maintain.

China’s migrant workers are a diverse and dynamic group. It is impossible to detail who they are, what they do, where they come from, etc. in such a short blog post. Nevertheless, the above information provides a sufficient foundation of knowledge on the nongmingong. Having established such a foundation, we can begin our analysis of how the floating population is being affected by the global economic crisis.

The Origins of China's Floating Population

As is the case with much that colors contemporary China, the country’s floating population, its nongmingong, has its origins in the advent of “reform and opening.” Prior to the beginning of economic liberalization in 1978, domestic population movement was restricted by the hukou, or household registration system. The hukou was established by the Chinese government during the mid-1950s, during a period in which urban organization and rural collectivization were occurring in mass and a meticulously calculated population distribution was the key to optimizing the utility of government allocated resources. One’s hukou was, in effect, a residency permit, delineating one’s primary domicile as well as whether or not that domicile was in an “agricultural” (rural) or “non-agricultural” (urban) region. Transferring one’s hukou was possible, but extremely rare, virtually restricted to all except those being sought out by large state-owned enterprises for their technical and/or managerial skills.

In mid-twentieth century China, the state monopolized the distribution of important goods, including staple food products. Thus, limiting the individual’s right to enjoy the basic goods and services provided by the government to the geographic confines of one’s officially designated residence cut off nearly all rural to urban migration. Indeed, the sparse existence of markets where such goods and services could be procured at an affordable price created a situation in which citizens of the PRC found it extremely difficult, if not impossible, to live anywhere outside of the area designated by his or her hukou.

Since reform and opening, however, China’s once rigid system of population control has slowly deteriorated. Beginning in the early 1980s, booming urban economies as well as the flood of foreign direct investment into China, especially into the Special Economic Zones, created a market for low-wage labor, or as one report noted, “low-paid jobs that were unlikely to tempt urban people but that provided opportunities for poor farmers.” Although these poor farmers and their rural colleagues would lose the rights and privileges granted by their hukou by migrating to the city, free markets offered, for the first time, the opportunity to purchase staple goods and services at reasonably affordable prices. Thus, with few prospects for individual economic betterment at home and the dream of profiting off the advancement of Chinese cities looming large, millions of laborers began to abandon the countryside in favor of rapidly developing urban municipalities. Termed “the floating population” due to the fact that they were residing outside their hukou location, these rural migrants have dramatically changed the face of Chinese cities.

Generating accurate statistical measures of China’s floating population is difficult. After all, these individuals are residing outside their hukou, a system established in part in order to ease the census process and make it possible to keep track of population growth and movement. Further, many members of the floating population attempt to avoid being counted. Their reasons vary from not having the proper paperwork to reside in the city to having more than one child (in violation of Chinese law). C. Cindy Fan, a scholar who has devoted much of her career to examining the floating population, compiled estimates calculated by several notable specialists in the field, ultimately asserting that there were 30 million individuals living outside of their hukou in the early 1980s, 70-80 million in the early to mid-1990s, 100-140 million in the late 1990s, and approximately 150 million as of 2005. The Chinese government, for their part, has published numerous conflicting reports, some indicating that the floating population is 130 million strong with others proclaiming that it has exceed 200 million. Regardless of its current size, it will almost certainly continue growing as long as interregional inequality remains vast.