Editorials

An arduous job

(China Daily)
Updated: 2011-03-22 07:56

The labor shortages in more and more coastal areas in recent years have caught the public's attention as a sign that the world's most populous country is finally bidding farewell to its once seemingly unlimited supply of cheap labor, one of the key driving forces behind China's rise as a global manufacturing power.

Had not the country's long-term oversupply of cheap labor been coming to an end, it is hard to imagine why Chinese policymakers would make double-digit wage hikes a key economic target for the coming five years.

The proposed annual rise in minimum wages by no less than 13 percent on average provides a clue to the employment situation China expects in the 12th Five-Year Plan (2011-2015) period.

However, the demographic change that is producing a gradual decline in the supply of new laborers does not mean that the Chinese government can be slack at job creation.

With a population expected to reach about 1.39 billion in five years, Chinese policymakers have ample reasons to take a long hard look at the whole picture of employment.

Yin Weimin, minister of Human Resources and Social Security, stressed on Sunday that the country still faces the situation where labor supply outnumbers demand, and easing the pressure of employment is still a priority.

According to the minister, the country will need to create about 25 million new urban jobs annually between 2011 and 2015 to absorb 14 million college and high school graduates and 10 million new laborers every year. But the actual new openings stand about 12 million a year.

There is also a workforce surplus of about 8 million people in rural areas who need to find a job in the cities every year.

All these numbers explain why policymakers cannot afford to remain idle despite the currently stable employment situation.

It is true that robust economic growth and job creation have enabled more ordinary people to share the benefits of development. But the country's plan to pursue lower but more sustainable economic growth while substantially raising minimum wage levels will only make it more difficult than ever to create enough decent jobs.

Moreover, as labor shortages continue to affect manufacturing and service sectors in the eastern coastal areas, Chinese workers will have higher expectations for their pay and working conditions.

Distinguishing a regional labor shortage from a fundamental change in the national oversupply of laborers is very important for policymaking. But the more demanding task is to come up with targeted employment measures to address both the structural problem and the overall oversupply of laborers.

(China Daily 03/22/2011 page8)