Tuesday, May 5, 2015

China's Migrant Workforce Growth Slows

While China's economy and living standards appear to be approaching first-world levels, the economy still relies on a rootless army of migrants from the countryside. The flood of migrants has slowed and is getting older, but wages still rose nearly 10 percent during 2014.
The annual survey of rural workers by China's National Bureau of Statistics reports that 274 million rural people had nonfarm employment in 2014. Most of those workers--168 million--were migrants who left their place of official residence in the countryside to find work. Separately, the Bureau reported that the "floating population" (people who live in a city other than the place where they are officially registered) was 253 million--18 percent of the population.

The 168 million migrants equal more than a fourth of China's workforce: 28% of the 778 million people reported employed in China during 2014. Of the migrants, 36 million have made a permanent move, and 132 million maintain their residence in the countryside. 79 million worked in a different province from their registered residence.

Most of the migrants work in small cities and towns. Only 42 million worked in megacities like Beijing and Shanghai or in provincial capitals, while 59 million worked in prefecture-level cities (地级市), and 58 million worked in "small towns" (小城镇).

The growth in the migrant workforce is slowing. The Bureau's report says that the number of migrant workers grew 1.3% in 2014. This is about a third of the torrid 5.5-percent pace during 2010, half the 3% growth during 2011 and 2012, and slower than the 1.7% growth in 2013. The number of rural people employed near their home has grown at a faster pace than migrants in the last three years, but growth in this group also slowed to 2.8% during 2014.

Wages are relatively low, but still growing rapidly. The average monthly earnings of rural nonfarm workers were 2864 yuan ($464) in 2014, up 9.8% from the previous year. With CPI growth of 2 percent, that translates to a 7.8% growth in real wages. This is less than half the rate of growth in 2010-11, but faster than during the recovery year of 2009 and still robust wage-growth for a slowing economy.
Note: annual growth in income for rural nonfarm workers
from annual China National Bureau of Statistics surveys.

Rural workers live a bare bones existence and don't consume much. Their average monthly living expenditure was only 944 yuan ($153), which implies that they saved two-thirds of their income. Nearly half of their expenditures were for housing. About 27% received housing from employers in dorms or temporary structures on construction sites, and 36% rented housing. Only 1% of migrants working away from their residence owned a home, but 49% of those working in a "small town" owned their home. 

More than half of rural people are employed in manufacturing (31%) and construction (22%) sectors. Construction wages averaged $534 per month, and manufacturing wages averaged $459. Wages in both sectors grew over 11% during 2014.
Source: National Bureau of Statistics survey.

83% of rural workers were employed by someone else; only 17% were self-employed. (This excludes self-employed farmers.)

The rural migrant work force is gradually getting older. The share of rural nonfarm workers ages 30 or younger fell from 42% in 2010 to 33% in 2014. The share age 50 or older rose from 13% to 17% over those years.

About 60 percent of rural employees have a junior middle school education (8 years), while 17 percent have completed high school, and 7% have a vocational degree or other higher education.

Few workers receive technical training. 32% received nonagricultural technical training and less than 10% received agricultural technical training. Agricultural training is especially rare among the youngest rural workers.
Source: analysis of National Bureau of Statistics surveys.

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