How to Look at the “Migrant Worker Shortage” from an Economic Perspective

ZHENG Bingwen

Director of Institute of Latin American Studies, Chinese Academy of Social Sciences
Abstract:

The “migrant worker shortage” which occurred several years ago and the recent “labor shortage” were both caused by an imbalance between the supply and demand of migrant workers. It is a periodical outcome of spontaneous adjustment by the migrant labor market. As rural welfare was greatly enhanced in 2009, migrant workers’ opportunity cost of working outside their hometowns was raised. The connotation of migrant workers’ “market price” is changing. The new generation of migrant workers, namely, those born after 1980, are becoming the mainstay of enterprises’ employment. Being better educated, they have different lifestyles than previous generations. “Leisure and entertainment” have become part of their opportunity cost and reduced their labor supply. “Labor shortage” is an endogenous force that helps transform China’s growth pattern, upgrade the industrial structure and promote urbanization. The seasonal “return of migrant workers” and the “labor shortage” which appears around China’s Spring Festival each year have grown into a unique but effective collective bargaining mechanism that helps increase migrant workers’ wages. Facing labor shortages, governments should regulate the labor market pricing and orientate labor-intensive enterprises towards transition, continue to enhance the social security system for migrant workers and those in rural areas, and make an accurate forecast of the population trend and adjust population policies.

Key Words:

labor shortage, migrant workers’ wages, market pricing of migrant workers, labor supply, transition of the growth pattern

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