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The following article was published in our article directory on February 12, 2011.
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Bosses Battle It Out For Workers

Article Category: Business

Author Name: xia zihui

Coastal and inland cities are fiercely competing to attract migrant workers as China's labor shortage spreads to less-developed central and western regions.

In Southwest China's Chongqing, many firms have set up booths at railway and bus stations to persuade workers to stay home instead of returning to the coast. Tens of millions of migrant laborers travel by train or bus during the Spring Festival break, which ends on Feb 17.

At the city's North Railway Station on Friday, about a dozen workers told China Daily that they will stay in their hometown if they can get similar wages.

Jiang Haitao, 21, who worked at Foxconn Technology Group's Kunshan plant in East China's Jiangsu province last year, said the corporation's Chongqing operation offers a base salary that is only "slightly less".

"I'd feel happier working in my hometown," he said, adding that earning 200 yuan ($30) more outside "cannot buy the same happiness".

Migrant workers in the east earned an average of 5 percent more than those in western regions in 2009, yet the disparity was 15 percent five years earlier, show figures from the National Bureau of Statistics.

On-site recruitment consultants from three leading manufactures in Chongqing, including Foxconn, refused to speculate on whether the municipality will face a labor shortage this year. However, on its website, the city's labor bureau on Wednesday posted an open letter urging workers to find jobs close to home.

Chongqing aims to become the world's largest laptop production hub, while Xiyong Micro-electronics Industrial Park alone needs a workforce of 400,000 by 2015, says the letter. It adds: "We have sufficient job opportunities and decent incomes, as well as low-cost rental homes and favorable policies on schooling."

Many coastal cities have strict requirements that make it difficult for migrant workers to send their children to public schools.

As of Wednesday, 71,000 of the 576,000 workers who returned to celebrate the Spring Festival in Chongqing had decided to stay, according to labor officials.

Enterprises in coastal areas are not giving up, however. Firms in Shanghai have dispatched almost 400 buses to bring in workers from Anhui, Henan and Hubei provinces.

"We've received many orders but there aren't enough workers," Hu Qiubin, a toy company boss in Shanghai, told China Central Television. He explained that, in recent years, his company has sent more than 20 buses for returning laborers, but this year two had been enough. From a peak of about 1,300 employees, only 300 now work at Hu's company.

Officials in Shaoxing, East China's Zhejiang province, reportedly contacted authorities in labor-rich Chongqing and Sichuan province for help in hiring more workers, only to be turned down.

The shortage of manpower is a major problem for the labor-intensive manufacturers on the coast. At Guangzhou Railway Station in South China's Guangdong province, many company representatives held placards on Friday to grab the attention of arriving workers.

A man surnamed Huang from a food processing firm told China Daily that many of his company's employees had called to say they will not be returning. "My boss quickly sent me here to recruit new workers so we can begin production," he said, adding that they will pay higher salaries this year.

The migrant workforce has shrunk by about 20 million people in the past three years, First Financial Daily reported.

Ou Zhenzhi, director of Guangdong's labor bureau, estimated the province will be short by about 1 million workers this year. To deal with the problem, his authority has done deals with Guizhou province and the neighboring Guangxi Zhuang autonomous region to import more migrant workers.

Zhang Yi at the Chinese Academy of Social Sciences' institute of population and labor economics, attributes the labor shortage to structural changes in China's demography. The country's family planning policy, which has been running for 30 years, resulted in decreasing numbers born in 1980s and 1990s, which is problematic, he said, as young people make up a vast proportion of the migrant workers.

"Increasingly, more young and fairly well educated workers do not want to be in labor-intensive factories that pay low wages and produce low value goods," he said, adding they want decent jobs and have higher expectations.

Another reason for the shortage, said Zhang, is that many enterprises have moved to less-developed central and western regions, causing a greater demand for workers there. Chongqing attracted $6.3 billion in foreign direct investment last year, while Chengdu, Sichuan's capital, received $6.4 billion, according to First Financial Daily.

The central government has been encouraging enterprises in coastal regions to upgrade their production process and equipment, yet low-end production still makes up a large part of the manufacture industry, said Zhang. "Firms on the coast should upgrade quicker. That way, they won't need to compete with inland cities to lure cheap labor," he said.

Moreover, if companies do not provide adequate social security and benefits, it will be harder for them to attract labor and will result in them losing their advantage in the industry, said Zhang.

Enterprises also need to offer more training to workers to improve their skills and help them to better adjust to the production upgrade, he added.

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