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Returning migrants need skills, loans ?? not just discount TVs
By Ashok Sethi |
March 24, 2009, Tuesday
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Print Edition
Print Edition
SOME of the migrant workers from the Chinese countryside who have lost their jobs in the aftermath of the global financial crisis do not wish to go home.
Driven by the export boom, nearly 130 million rural Chinese had left their farms to toil in urban workshops and on construction sites, sending money home to supplement the meager agricultural income.
Unfortunately, last year the Wall Street brought down the Main Street, which in turn resulted in the closure of factories in China that churned out products enjoyed by American consumers with borrowed money.
Last month the Chinese government revealed that 20 million of these workers have lost their jobs and will possibly need to return to their rural homes.
Some do not want to go home as their income from tilling their small farms is woefully inadequate to provide them with a comfortable existence and even a modicum of savings and security.
The per capita rural income in 2007 was less than one third of what the urban Chinese enjoyed.
Despite the harsh conditions of working and living in the cities and the emotional pain of living apart from their loved ones, they willingly accepted this existence to be able to provide their families with a better quality of life.
But the euphoria generated by a decade-long galloping economy has evaporated and officials are seeking ways to keep the economy moving and provide jobs for the jobless migrants, as well as the new workforce entering the market (including 5.5 million university graduates every year).
The languishing countryside and the widening urban-rural income gap was always an area of anxiety.
Guided by this concern, the Party leadership in the past raised slogans like "the new socialistic countryside," accompanied by support such as abolishing the tax on agricultural income. It has been clearly recognized that more needs to be done.
Research done by TNS (a consulting company) in the cities indicates that the urban Chinese though fearful of the global crisis remain staunchly optimistic.
However the rural folks - particularly the migrant workers - are already in distress.
The workers are obviously not happy to lose an income they will never able to match with digging the small piece of land back home.
They will perhaps be willing to work for even less, driving down the labor prices, and undoing some of the strength they had gained since the adoption of the Labor Contract Law last year.
The government is helping out by infrastructure spending in the 4 trillion yuan (US$585.2 billion) stimulus package - including expansion of railways, building roads and housing - much of which will go to rural areas and small towns.
It is also trying to boost domestic consumption and cheer the rural masses by offering a 13 percent subsidy on a range of home appliances ranging from washing machines to mobile phones.
While a new DVD player and a color television may serve as a temporary palliative and help the returned workers while away their time (of which there is no scarcity now) a more lasting smile on their faces can only be achieved through alternate meaningful employment.
The workers need an alternative to miserable though lucrative toil in the cities and leisurely but penurious existence at home.
More needs to be done to equip the laid-off workers with new skills that make them eligible for other employment opportunities in and around their homes.
Equally important will be to offer them advice, guidance as well as small loans to start village-level enterprises that could offer a sustained source of income.
Micro-credit, the business of giving small, mortgage-free loans in rural communities, which has transformed the lives of millions of peasants in many countries, possibly has a major role to play in China too.
The new motorcycle that a rural resident may buy, aided by a newly introduced 13 percent discount, needs to become a vehicle for entrepreneurship and its engine should also serve as an engine for rural growth.
(The author is regional director, Methodology, TNS ALM [Asia, Latin America, and Mediterranean] of TNS China. The views expressed are his own.)
Driven by the export boom, nearly 130 million rural Chinese had left their farms to toil in urban workshops and on construction sites, sending money home to supplement the meager agricultural income.
Unfortunately, last year the Wall Street brought down the Main Street, which in turn resulted in the closure of factories in China that churned out products enjoyed by American consumers with borrowed money.
Last month the Chinese government revealed that 20 million of these workers have lost their jobs and will possibly need to return to their rural homes.
Some do not want to go home as their income from tilling their small farms is woefully inadequate to provide them with a comfortable existence and even a modicum of savings and security.
The per capita rural income in 2007 was less than one third of what the urban Chinese enjoyed.
Despite the harsh conditions of working and living in the cities and the emotional pain of living apart from their loved ones, they willingly accepted this existence to be able to provide their families with a better quality of life.
But the euphoria generated by a decade-long galloping economy has evaporated and officials are seeking ways to keep the economy moving and provide jobs for the jobless migrants, as well as the new workforce entering the market (including 5.5 million university graduates every year).
The languishing countryside and the widening urban-rural income gap was always an area of anxiety.
Guided by this concern, the Party leadership in the past raised slogans like "the new socialistic countryside," accompanied by support such as abolishing the tax on agricultural income. It has been clearly recognized that more needs to be done.
Research done by TNS (a consulting company) in the cities indicates that the urban Chinese though fearful of the global crisis remain staunchly optimistic.
However the rural folks - particularly the migrant workers - are already in distress.
The workers are obviously not happy to lose an income they will never able to match with digging the small piece of land back home.
They will perhaps be willing to work for even less, driving down the labor prices, and undoing some of the strength they had gained since the adoption of the Labor Contract Law last year.
The government is helping out by infrastructure spending in the 4 trillion yuan (US$585.2 billion) stimulus package - including expansion of railways, building roads and housing - much of which will go to rural areas and small towns.
It is also trying to boost domestic consumption and cheer the rural masses by offering a 13 percent subsidy on a range of home appliances ranging from washing machines to mobile phones.
While a new DVD player and a color television may serve as a temporary palliative and help the returned workers while away their time (of which there is no scarcity now) a more lasting smile on their faces can only be achieved through alternate meaningful employment.
The workers need an alternative to miserable though lucrative toil in the cities and leisurely but penurious existence at home.
More needs to be done to equip the laid-off workers with new skills that make them eligible for other employment opportunities in and around their homes.
Equally important will be to offer them advice, guidance as well as small loans to start village-level enterprises that could offer a sustained source of income.
Micro-credit, the business of giving small, mortgage-free loans in rural communities, which has transformed the lives of millions of peasants in many countries, possibly has a major role to play in China too.
The new motorcycle that a rural resident may buy, aided by a newly introduced 13 percent discount, needs to become a vehicle for entrepreneurship and its engine should also serve as an engine for rural growth.
(The author is regional director, Methodology, TNS ALM [Asia, Latin America, and Mediterranean] of TNS China. The views expressed are his own.)
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