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August 23, 2010 in The China Beat


Copyright August 23, 2010 Mary E. Gallagher. Used by permission.


This spring, a series of well-coordinated and successful strikes in foreign-invested enterprises in China made headlines all around the world. Young migrant workers openly and forcefully articulated demands for higher wages, better representation, and more consideration of their “spiritual” and mental well-being. These demands have led to increased speculation that China’s current economic boom is winding down, as its growth strategy founded in part on cheap migrant labor from rural areas faces domestic and international difficulties.

This is not the first time that Chinese workers have openly protested for higher wages, better treatment, and more job security. What makes this period more important and potentially much more consequential is the confluence of demographic, social and political trends that have increased the bargaining power of employees for the first time in two decades. Workers are now protesting in a position of relative strength after a long period of perceiving that the economic and political trends were against them.

Travelling to China three different times this summer has offered me some time to observe this phenomenon from different locations, different perspectives, and in different points of time – when large strikes were still occurring in June to now in late August where strike activity has quieted down. Foxconn’s management just unleashed their 50,000 strong “worker party” with domestic and international media showing bizarre photos of underpaid workers holding up posters of Terry Guo that say “Love Me, Love You, Love Terry.” New Life Movement ideology combines with the CCP’s “your factory is home” propaganda to create a mishmash of capitalist company-driven paternalism and “work-unit socialism:” low pay, Taylorist work organization, company control and oversight of a worker’s life, but without the security and benefits of the now quaint “iron-rice bowl.”

Demographic change

“The virtually limitless supply” of Chinese workers dries up

A key underlying factor in the rising wages and increased demands of China’s migrant workers are the labor shortages now evident in many coastal manufacturing regions, especially the Pearl River Delta. According to the Institute of Population and Labor Economics at the Chinese Academy of Social Sciences, labor shortages were first apparent in Guangdong in 2003. [1] They have now appeared in other major industrial regions, including the Yangtze River Delta around Shanghai and even in central China. There are a number of reasons for the labor shortage. First, the share of the working population is falling due to the effects of the one-child policy that began in the 1970s. This long-term demographic shift has important implications for the Chinese economy and for the sustainability of China’s ambitious social welfare programs. Second, policy changes and increased investment in agriculture have made migration to industrial jobs less attractive for some rural residents. Large-scale, government-sponsored infrastructure projects inland and the domestic stimulus package of 2009 are also providing jobs and opportunities closer to home. These changes inland have adjusted the calculus of migration.