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New employment patterns begin to emerge for migrant workers in China

After the Chinese New Year holiday, migrant workers seem to have more bargaining power than ever before at their disposal and a great deal more options as to where they’d like to work.

According to some media reports, migrant workers in different age groups now have their own preferences. Generally speaking, young migrant workers born after 1980 prefer working in big cities like Shenzhen and Guangzhou; those born in the 1970s like working in towns and cities closer to home, so that they can still farm during the Spring and Autumn; while those born in 1960s tend to work in small-scale local workshops etc. which gives them the flexibility to look after elderly relatives and also work on their own land.

And even younger workers have started to join the flow of migrants seeking work in their home provinces. This is partly because both Chinese and foreign manufacturers are shifting their production bases to China’s central provinces, which boast relatively low labour cost, an increasingly sophisticated infrastructure and lucrative investment initiatives provided by local governments. Statistics show that in 2011, 12.7 million migrant workers from Henan, one of the biggest labour exporting provinces in China, chose to work inside the province, while 11.9 million chose to work outside. This was the first time the number of migrant workers employed in the province has exceeded the number of those employed outside.

Foxconn set up a new facility in Zhengzhou, the provincial capital of Henan, in August, 2010. By the end of 2011, it already had a total of 130,000 workers, 123,000 of whom were from Henan. The total monthly salary for an ordinary factory worker at Zhengzhou Foxconn is said to be between 2,000 yuan to 3,600 yuan, nearly the same level as that in Shenzhen. So whilst enjoying the same salary as those in first-tier cities, workers can also enjoy the benefits of reduced living expenses.

But Foxconn is probably the exception rather than the rule. Salaries at a number of other inland cities are reported to be 30-40 percent lower than that of coastal provinces. A migrant worker from Anhui said in his blog that if the pay at home is not as good, migrant workers will still be willing to migrate to big cities regardless of the distance:

"We won’t buy it if the local government is using the ‘lower labour cost’ to attract business from outside. Skilled workers are taken good care of in coastal provinces. Their bosses pick them up at train station every year when they return to work from Spring Festival. What’s more, migrant workers are highly adaptive. They are physically and mentally tough. They are willing to travel long distances to work in Guangdong for a monthly salary that is only 100 yuan or 200 yuan higher than that in their hometown. If the government has truly realized the economic loss incurred by the outflow of migrant workers, they really need to take ‘effective’ measures to retain us."

Given the fact that industrial upgrading in coastal regions still has a long way to go, the battle over migrant workers between economically developed regions and inland provinces is likely to continue. Factories in Guangdong are deploying various innovative tactics to attract migrant workers, such as dishing out red envelopes at New Year and rewarding workers who introduce new workers to the factory. The “recommendation fee” at the Galanz factory in Zhongshan, for example, is reported to be 600 yuan.

Finally, it seems the labour shortage in coastal provinces is not as severe as previously depicted. The supply and demand in the labour market in Guangdong seems relatively stable at present. Various surveys show there are roughly 100 applicants for 115-118 job vacancies. And the gap is expected to shrink to 100:110 in February, when most migrant workers will have returned to work after the Lantern Festival. Also, the labour shortage is still essentially structural rather than absolute. Factory workers and skilled technicians are always in greater demand than other job positions.