Unemployment Problems in China
Strikes and labor protests in China are almost all illegal unless they take place with the consent of the government, but they’re actually pretty common. First, I’ll talk a little bit about labor in China.
China officially has an unemployment rate of around 4-5%, but others estimate that it is at least 10% or higher. Competition for jobs has kept wages low for unskilled workers and with the recent flood of college graduates, wage pressure has been relatively low for the skilled sector as well. When China first opened up its markets, it was the people in the countryside who benefited the most as wages were still fixed in the industrial sectors. Reform eventually spread to the urban areas and with the rise of the Special Economic Zones, the wealth once again shifted back to the cities and led to the sudden fallout of Township-Village Enterprises that were driving China’s growth in the 1980s. Despite all these fluctuations, low wages have been a constant, which is the main driving force for China’s growth.
Recently, with inflation rising this past year or so (though it’s nothing compared to the hyperinflation that the Nationalists had before 1949), most workers with relatively fixed incomes have seen their purchasing power diminish. For example, back in mid-2006, I was able to buy one jin (about a pound) of pork for 5 RMB at the local market. Now, the cheapest pork I could find is around 9 RMB. Since this is just me going out to buy stuff for dinner, I wouldn’t exactly call this an extensive study, but it does do well enough to illustrate my point.
Anyways. My wage as a teacher was fixed at 6400 RMB for the first year and then 7100 the second year. For a normal Chinese teacher, their wage would be fixed at a much lower wage for an extended period of time. Let’s say that Teacher Li, this old middle school teacher I met in Guangdong, makes 2000 RMB a year and gets a wage of 10% increase every other year. At low inflation rates of 3-5%, he’ll be making a pretty decent living. However, with inflation currently at 11% a year, he’s actually making less money each year. With no possibility of collective bargaining, there’s no way to get a raise unless he’s got connections with the local officials. As a result…
There has also been a factory strike in Guangdong, though this is in demand of withheld wages. So one of the main complaint of migrant workers (I got this from one section of the book ‘The Consumer Revolution in Urban China’) is that their wages are not paid on time. The reason for this is to prevent the workers from taking off. I mean if you’re a migrant worker in a factory and your wages are two months behind, you wouldn’t risk causing trouble which might get you terminated before you get those two months wages. Sometimes anger over delayed wages boiled over and this happens…
Factory Workers Strike in Panyu
And here is a pretty interesting article on coal miners from China Digital Times:
Have a nice day!
Nice anecdotes on the inflation.