Recent research in the job market shows that contrary to popular belief, there is actually a shortage of labour in some areas in China, and not a surplus.

These areas are claiming that up to 10 per cent of their job needs are not being met.

Dreadful working conditions and meagre pay drive many farmer-turned-urban-labourers away.

Migrant workers in Guangdong's Pearl River Delta, for example, have witnessed an increase of just 68 yuan (US$8) a month in the past 12 years. When measured next to inflation, it means the true level of their incomes has either stayed the same or even fallen over the years.

The average wages of migrant workers in Guangdong Province are 160 yuan (US$19.3) lower than those in Jiangsu Province. The lowest earnings in the Pearl River Delta are only 510 yuan (US$61.4) a month, 10 yuan less even than workers' in Jiangxi and Shanxi provinces, which are considered to be less developed.

Meanwhile, employers in central and western regions are now offering higher pay. Returns from farming have also increased.

As farmers begin to see wage rises at home, they are only willing to travel in search of work in cities if the price and working conditions there are right.

Unregulated working contracts and frequent violations of labour rights are other causes of the falling number of migrant workers.

Last year, more than 40 per cent of all companies surveyed in Shenzhen, South China's Guangdong Province, were found to be late paying wages.

The attitude of employers to their workers is something that needs to be addressed. Terrible working conditions, unbearably long hours and a complete disregard for contracts and social insurance benefits often characterize building firms in the cities.

No wonder staff are choosing to down tools when met with such indifference, or even cruelty.

Many of these firms are doing well, making profits and expanding their businesses. But they are not passing on any of their new-found wealth to the people who have really earned it for them -- the workers.

This year's Spring Fair for Chinese Export Commodities brought in a surge of orders from foreign companies, especially labour-intensive ones, in Guangdong Province.

Production lines were lengthened, more workers were needed and in fact, in the past three years, Shenzhen's demand for non-native workers has grown by 10 per cent a year.

As more and more development zones are set up across China, there is more choice of destination for migrant workers.

Many who used to work in the Pearl River Delta are now being attracted to work in the Yangtze River Delta, where they are better paid and better treated. Central and Northeast China are particularly seeing growth in the number of companies operating there. The start-ups mean a lot of workers can actually stay in their home towns, another factor decreasing the number of workers shifting around.

Some companies have become spoilt for choice by the predominant surplus of workers, selecting younger and more energetic workers and paying them next to nothing.

But there is not an endless supply of youth: they are becoming more streetwise and aware of their legal rights, and if employers fail to respond to rising expectations of their workers, they could soon also find themselves understaffed. A more in-depth analysis of this case shows that the switching economic development pattern has exerted profound influences on this shortage of migrant workers. Coastal enterprises used to focus on labour-intensive industries, which could only promise them low earnings and dim prospects. Such firms may intend to show more generosity to their employees, but are financially not able to do so. If they write bigger wage cheques, their business will fail; if they continue to pay low salaries, their employees will leave them.

Current thinking is that the shortage of jobs will keep companies in labour for the time being.

But as China's population stabilizes and fewer workers are willing to accept shoddy conditions, wages should start to steadily increase and low profit-making coastal industries will be forced to move to areas in the north and west in search of employees, rather than the other way around.

Labour shortage now in the southeast coastal area is the result of market choice and not government policies. From now on, the government should stick more closely to the market-oriented employment mechanism and be cautious about any administrative intervention. Government is supposed to help in the release of information while keeping an eye on protecting workers' rights.

(China Daily September 17, 2004)