Yes, as soon as I read the title of this article, an old, tired joke immediately ran through my mind. As dumb as the joke is, I am nonetheless having a hard time not repeating it.
That off my mind, Tom Orlik’s short piece, ‘China’s Workers are Revolting,’ adds a critical factor to our thinking about the future of the Chinese economy.
Not long ago, when manufacturing costs in China were soaring, many pundits predicted that both foreign and Chinese companies would flee in mass for lower cost countries. During this discussion, I heard one of the smartest things: Costs may be going up on the East Coast, but China has its own third-world country with lower-cost production, the Central and Western Provinces. And, to some extent, that’s is happening.
But, considering the idea of China’s very own third-world country, I wondered if that ‘country’ had enough surplus labor to realize the idea. Now, Mr. Orlick has cleared this issue up”
Xin Meng, an expert on China’s labor market at Australian National University, calculates that most rural migrants spend only seven years away from the farm. They arrive in the city in their late teens and return to the country aged around 25 to raise children.
Of the 380 million-strong rural population aged 16 to 40, just 100 million are working in the cities.
Here’s the chart that sums this up:
Mr. Orlick spends time on the well-known problems of migrant workers toiling in urban
areas, ending with ‘[M]igrant workers built China’s cities; now they have to be allowed to live in them.’ Good luck with that.
But, the most important revelation is that there is plenty of excess rural labor. Now, China just has to persuade them to leave the farms and into the factories, preferably near their third-world homes.