Lessons from “worker shortage”

by Jason Lee on February 12, 2014

The shortage of migrant workers in the manufacturing industry in East China indicates a big change ofChina’s employment structure and the fast-changing comparative advantages for laborers between big and small cities.

Many manufacturing enterprises inEast Chinaworry they cannot employ enough migrant workers after the Spring Festival, as more and more migrant workers prefer to work in smaller inland cities not far from their hometown.

Statistics showGuangzhouis short of 123,300 labor workers this month.

Frankly speaking, the shortage of workers is a good thing, because it means the unemployment issue has not become headache-maker for the government, despite the weak economic growth.

The worker shortage mainly concentrates in the labor-intensive manufacturing industries of ferment, machine and electronics.

The third and fourth-layer cities absorb more migrant workers than before because of their fast improvement of infrastructure and public services. The service sectors in these smaller cities and counties grow into big employers and attract many young migrant workers, who dislike the repetitive and tiresome assembly line work, from the traditional manufacturing industries.

The payment of service sectors has neared or even surpassed the manufacturing industries in some cities.

In this sense, some big manufacturing enterprises are forced to improve their welfare for workers, such as providing workers with better bonus, better living conditions and even helping their children find good schools.

The competition for labor workers between cities of difference levels and between difference industries can promote a more balanced development of the country and the national industrial structure transformation.

However, a pressing issue forChina’s labor market structure is the lack of technicians for cutting-edge manufacturing industries.

And the unemployment of college graduates also indicates the necessity of recalibrating the higher education system to better serve the needs of national development.Chinaneeds more applied talents in finance, cultural industry, telecommunication and laws.

The government should also encourage a stronger middle class to grow in the cities. This has been proved by many developed countries’ experience the way for urbanization and industrial restructuring.

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