China's migrant workers -- usually rural residents who travel to the cities to find work -- numbered about 99 million in 2003. Still, in 2004 Guangdong, Fujian and Zhejiang provinces began to suffer from a shortage of labor.

In the middle of 2004, the Ministry of Labor and Social Security (MOLSS) sent teams to the three provinces to look into the problem. It also directed several labor-providing provinces like Anhui, Sichuan, Jiangxi and Hunan to investigate from their end. The ministry completed its report in September.

It confirmed that shortages of migrant workers did exist in some areas, with young female workers particularly scarce. Enterprises offering low wages and bad working conditions, or where work is physically challenging, were having the greatest problems.

Of the three provinces investigated, Guangdong was suffering the greatest shortage even though it employed some 19 million migrant workers, most of them in the Pearl River Delta region. The local labor department estimates that nearly 2 million more workers are needed in the province.

Labor-intensive enterprises, which usually offer low wages for hard work in bad conditions, are feeling the pinch rather painfully. Those whose monthly wages are below 700 yuan (US$85) are also having recruiting problems.

A MOLSS official says that the worker shortage began to appear two or three years ago, but was sufficiently isolated to escape attention until 2004.

Shoemakers, toy makers, electronics assembly plants, garment factories and plastic manufacturers face fierce competition. To keep customers coming they must set their prices low, and to expand their profit margins they try to cut labor costs.

Employees in these enterprises work at least 10 to 12 hours each day for a monthly salary of just 600 to 700 yuan (US$72.50 to 84.50). To prevent job-hopping, the companies usually take the workers' ID cards or withhold a month or two of wages. Policies like these make it difficult to recruit employees.

The MOLSS report notes that the worker shortage is a result of market adjustment rather than policy issues. Companies offering monthly wages -- including overtime pay -- below 700 yuan have difficulty finding anyone to hire. Those that pay 700 to 1,000 yuan (US$84.50 to 120.80) per month have trouble recruiting skilled technicians, but no problems hiring line employees. Those offering more than 1,000 yuan per month have no recruitment problems at all.

The migrant worker shortage is the natural result of manipulation of the workers' pay, said Long Yongtu, secretary-general of the Boao Forum for Asia, in November.

The World Manufacturing Association reported in 2003 that the hourly wage for Chinese manufacturing workers was only a quarter those of Mexico and Malaysia and a mere one-fortieth those in the US and Japan.

Rural migrant workers in southeast China, in interviews with Caijing magazine, said that they hope to work for a maximum of 10 hours each day and earn a minimum of 600 yuan (US$72.50) per month. But even those humble requests are not satisfied.

China's Labor Law limits work hours to 40 each week, with overtime work each month not to exceed 36 hours. Overtime on regular workdays, rest days and official holidays is to be compensated at one and a half times, two times and three times normal wages, respectively. But employees in some southeast China companies are required to work 130 hours of overtime each month with no extra pay. Many workers have no rest days or holidays.

At the end of last year, Shenzhen, a city in Guangdong Province adjacent to Hong Kong, found that 653 enterprises -- 40 percent of the total -- had defaulted on wage payments. The total amount in arrears was over 100 million yuan (US$12 million) and involved hundreds of thousands of employees.

Bad conditions, excessive overtime, no contracts and no social security are a recipe for job-hopping. Nearly 10 percent of the workers in Dongguan, another industrial boomtown in Guangdong, are estimated to leave for other jobs annually, while the proportions in the textile and toy sectors are as high as 20 percent.

Female workers between the ages of 18 and 25 and skilled workers are in extremely short supply. Young people are considered energetic and often without domestic obligations, so they can endure long hours. Women workers, it is believed, have lively minds and deft hands. They are considered to be more obedient to management. These characteristics make them much sought-after in the processing and manufacturing sectors.

National family planning policies are also having an effect. The abundant labor force of the 1990s was a result of the baby boom in the 1960s and early 1970s. The one-child policy implemented since the late 1970s has taken a toll on the labor supply, especially in the 18-to-25 group.

The technician shortage is a problem that spreads far beyond the southeastern manufacturing centers. Through a questionnaire distributed in 40 cities nationwide in April 2004, the MOLSS found that technicians and senior technicians account for less than 4 percent of total skilled workers. Employers believe the proportion should be above 14 percent.

"One of the major reasons for the skilled worker shortage is the current educational system, which emphasizes academic degrees but ignores skill training," the MOLSS pointed out in a report. Currently, there are over 200 vocational schools nationwide, ostensibly to train senior skilled workers. But these schools have small budgets, limited enrollment and obsolete equipment, making it virtually impossible to train enough technicians to meet the robust demand.

The companies themselves do little to correct the problem. The MOLSS found that in 2003, average expenditure on training per employee was only 195 yuan (US$23.50). The total input is only 1.4 percent of the total wage bill, less than the minimum of 1.5 percent required by government regulation.

In the first half of 2004, the MOLSS conducted a survey of more than 2,000 enterprises in 26 cities nationwide. Rural migrant workers accounted for 59.8 percent of employees nationwide. In central and western China, they made up 43 percent of the workforce; in the Pan-Bohai Sea region, 49 percent; and 59 percent in the Yangtze River Delta region. But the proportions leapt to 74 percent in the Pearl River Delta region and 71 percent in southeastern Fujian Province. Rural migrant workers are inarguably a major force.

Guo Hong, a researcher at the Sichuan Provincial Academy of Social Sciences, believes that mechanisms that separate the nation into urban and rural sectors and the resulting unequal social status exacerbate the problem. Basically, city folks are treated by nationally accepted standards; country people are not.

"Those who cannot enjoy equal treatment vote with their feet. That is the fundamental cause for the migrant worker shortage," said Guo.

The southeast was the first to develop when China embarked on its economic reforms, but rural laborers now have more choices. Many who once worked in the Pearl River or Yangtze River delta regions are now moving to inland provinces like Jiangxi and Anhui.

And the employers are beginning to follow the workers. For example, an underwear manufacturer based in Shenzhen has now set up a factory in Jiangxi, recruiting over 6,000 workers. Although the salary is a little lower than in its Guangdong operation, so are costs of living, and many employees are able to live at or near their own homes.

The shortage that began to appear last year is the result of the ages-old game between labor and management, and an indicator of market forces at work. China's factory workers and laborers have begun to understand that they now have bargaining power, and the days of unfair exploitation appear to be numbered.

(China.org.cn by Tang Fuchun, January 14, 2005)