Labor shortage prompts industrial upgrade


It is way past the Spring Festival, the most important traditional holiday in China, yet many enterprises are still hiring as their busy season is just around the corner. And almost all of them are reeling from a labour shortage. Although they are crying out for migrant workers, their cries seem to have fallen on deaf ears.

The labour squeeze that has hit China can be classified into two categories.

Many employers in construction and labour-intensive industries find it hard to recruit large numbers of migrant workers, especially for jobs combining a high degree of labour intensity with barely decent conditions, even though they offer wages higher than the average pay of urban workers. Others are struggling to find the right people because many jobseekers do not possess the skills and qualifications required.

This labour crunch has been corroborated by the National Bureau of Statistics of China. The new generation of migrant workers aged 30 and under are usually a prime component on the manufacturing assembly line. Yet the share of this age group in the country’s total migrant labour force fell from 46% in 2008 to 36.8% in 2012.

In the meantime,  the education level of young migrant  workers has risen significantly. At present, more than one-third of migrant workers in this age bracket –  roughly 35 million –  have received high school education or above. Of these, over 10 million hold college degrees. They will represent a vital new force in China’ s manufacturing industry. No longer content with the sheer mind-numbing monotony of work on the assembly line, they will not be enticed by the promise of higher pay to do manual work on construction sites either. They would rather seek to further their career development.

Twenty years ago, in the space of a short period of time, China became the “world’s factory”largely because of its huge labour pool. The country’s labour-intensive enterprises thrived on labour that was low in cost and indeed quality. However, in the not too distant future,  with  both  labour  costs  and labourers ’  qualifications on the rise, the pool of migrant labour will dry up. The sheer number of migrant workers will  no  longer  satisfy  the  needs  of labour-intensive enterprises which, for their part, will find it hard to lure a new generation  of  migrant  workers  who hold  high  expectations  in  terms  of salaries and career prospects. Tremendous changes in the composition of the migrant workforce together with slow industrial upgrading account for the imbalances between labour demand and supply.

However, it is notable that as well as enterprises that are both labour- and technology-intensive, technology- and capital-intensive enterprises have also found themselves unable to hire enough migrant workers who meet their requirements. One significant reason is that only 31.6% of the new generation of migrant workers have received vocational training. What they have learned is theoretical knowledge that has nothing to do with practical experience.

This explains the broad gap between the work expectations they hold and the practical skills they have mastered. How to narrow that gap should set the whole of society thinking.

High-calibre workers are one of the essential conditions that must be met for industrial upgrading. In 2012, the number of students signing up for vocational training programmes was 4.5 million less than the previous year.

During the same period, training organizations and technical schools also experienced a sharp decline in numbers.

Obviously, more training should be delivered to migrant workers for roles in technology-intensive enterprises.

Employers should try to meet the job expectations of new-generation migrant workers by, for instance, offering them a comprehensive benefits package, building up their skills and advancing their careers. Only in this way can they attract and retain workers.

If the jobs and employment patterns provided by employers fail to meet the needs of migrant workers, they will be “knocked out of the market”. In this sense, it is the new generation of migrant workers who have forced the country to upgrade its industry.

  Source: ACFTU  2014-06-10

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