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Saturday, May 27, 2006

China's shifting labor model

from in the How The World Works blog, a fascinating piece on China's tight labor market "remaking" the global economy--again. I posted a few weeks ago about the 112 Chinese construction workers on my flight from Beijing to Tel Aviv, and at that point I was intrigued because I know there are also tens of millions of farmers unemployed in China. Usually they migrate to Chinese cities for work, so seeing a large crew going out of the country for work under legal supervision surprised me. This article helped connect the dots.

BY Andrew Leonard

New Economist alerts us to yet another study of labor shortages in China, this one conducted by a Japanese research institute. If I seem obsessed by this topic, well, that's because I am. I don't think it's an exaggeration to argue that a tight labor market in China will, if sustained, remake the global economy yet again. And, at this point, there appears to be little doubt that labor shortages are real and significant. The study by the Mizuho Research Institute is the most detailed I've seen, crunching reams of numbers procured directly from China's Ministry of Labor and Social Security.

Young women, prized for nimble fingers and attention to detail, are no longer flocking from the countryside to work in the apparel, restaurant and lowest-level electronics assembly industries. There are a multitude of reasons for this. Changes in agricultural tax policy have made staying on the farm more attractive. The introduction of the one-child-per-family policy in 1979 is now making itself felt in the most "desirable" cohort of young workers. Not only are there proportionally less women then men in this cohort because of the infamous "missing girl" problem -- the combination of sonogram technology with abortions to get rid of unwanted female children -- but those women who do survive tend to be more highly educated then their predecessors.

Funny thing: Educated women avoid working in sweatshops. Because the bottom line is this: The jobs that are going wanting are the lowest-paid jobs with the most abysmal working conditions. These are not necessarily the offshore facilities set up by Western corporations, but are more likely to be factories run by Taiwanese and Hong Kong entrepreneurs with long traditions of exploiting female labor in their own countries. But now, the overall boom in China's manufacturing sector since its admission to the World Trade Organization appears to be cramping their cheap labor style.

There's also this fascinating tidbit -- in the past, migrant workers, stymied by China's undeveloped telecommunications infrastructure, did not have a clear idea of just how bad factory life in the southern provinces of Guangdong or Fujian could be, or of whether there were better alternatives. Today, the widespread penetration of cellphones has given workers a far better sense of their possibilities. Talk about your smart mobs!

What does it all mean? In Taiwan, as manufacturing began to move to mainland China in the 1980s, the women who once worked assembling TVs and computers poured into the service sector, and gender wage inequality between women and men has gradually declined. (Taiwan's government historically ensured that women were paid less than men in manufacturing jobs, for global "competitiveness" reasons.)

Some analysts have suggested that the very experience of factory life was a consciousness-raising exercise for Taiwanese women that helped break them out of the constrained roles they had been consigned to by Confucian culture, and in effect, prepared them to be actors in the modern world. But the best study of women factory workers in Taiwan I've seen, a piece by Lydia Kung from the 1970s summarizing scores of interviews she conducted with women who worked for a huge electronics assembly factory near Taipei, isn't quite so optimistic about that. From her research, it was clear that the women who worked at these jobs knew they were a dead end, and didn't appear to be particularly "liberated" by them.

Still, it would seem to me a good sign that factories with the worst working conditions in China are having a hard time filling their open positions. As Hiroshi Inagaki, the author of the Mizuho Research Institute report, concludes, employers looking to attract workers should consider "raising wage levels to a level commensurate with economic growth and price movements."

Wouldn't that be something?

// posted by Ellen @  17:36   //Permalink// 
Ellen says hey
Mainer, New Yawka, Beijinger, Californian, points between. News, views and ballyhoos that piqued my interest and caused me to sigh, cry, chuckle, groan or throw something.

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