Are the migrant workers competing with locals in China's urban labour market?

Résumé du document

At the end of the 1970s, the Communist Party of China (CPC) acknowledged that planned economy had not managed to increase the Chinese standards of living. Consequently, it started to reform the economic system in order to modernize it. The labor market was also not been excluded from such reforms. They were aimed at transforming the state-distribution system into a market regulated one according to the principles of a market economy. Before the reform concerning the labor market took place in 1978, job distribution was completely determined by the Household Regulation System or hukou system. The hukou system was first introduced by Mao Zedong in 1958. Essentially, it divided the Chinese population into two categories: ''agricultural'' and ''non-agricultural'' (i.e. urbans). However, in the late 1970s, the super-production in agriculture resulted in the opening of Chinese borders to foreign enterprises, and the transition to a market economy triggered a strong need for workforce in urban China. On the contrary, the workforce was too important in the rural areas.

Extraits

[...] Because there is still a mix between socialist and market economy in China, it is interesting to deal with the different kind of employments separately. The labor market in China remains clearly segmented (Xiaowei Zang, 2002) according to the ownership sector and to the occupation (as we will see later, they are closely linked). Generally speaking, a division can be drawn between collective-owned sector, state-owned enterprises (SOEs), new-economy and self-employed (Fan, 2000). According to these different sectors, the income varies considerably. [...]

[...] Are the migrant workers competing with locals in China's urban labour market? At the end of the 1970s, the Communist Party of China (CPC) acknowledged that planned economy did not manage to increase the Chinese standards of living. Consequently, it started to reform the economic system in order to modernise it. The labor market has not been excluded from such reforms. They were aimed at transforming the state-distribution system into a market regulated by the principles of a market economy. [...]

[...] Thus, they do not compete with locals for ''high standards'' living areas. As Yaohui Zhao (2003) stated, . ] those who were unlucky and had no relatives or friends had to make homes on the cement floor under the sky''. Thus, permanent migrants, because of their higher level of education, their urban hukou and their strong ties to the State institutions can be seen as competing with locals in the labor market. They generally have higher incomes than locals, they benefit from the medical, education, pension and housing subsidies from the State. [...]

[...] However, in the late 1970s, the surproduction in agriculture, the opening of Chinese borders to foreign enterprises and the transition to a market economy triggered a strong need for workforce in urban China. On the contrary, the workforce was too important in rural areas. Therefore, the CPC was compelled to change the hukou system, questionned by the effects of supply and demand of labor. Even if the reforms did not remove it totally, it relaxed the criteria for migration. Temporary residence was authorised in cities in order to provide cheap labor in factories and in the private sector. The survival in cities was then possible for such migrants. [...]

[...] In fact, these two reasons rely in fine again on the resident status; the urban hukou allows them to access to these more prestigious jobs. Thanks to their high level of education and their skills, they have an easier access to the labor market. What is more, they are also the category who took the most advantage of the economic liberalisation and privatisation, as they have great skills to gain success in self-employment and amass wealth (Fan, 2000). In addition, having a urban hukou also allows one to benefit from the state subsidies related to food, pension, medical expenses, rent and home purchase. [...]