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People, people everywhere in China, and not enough to work

How can China be facing a labor shortage? In the big manufacturing hubs, employers are scrambling.

March 28, 2010|By Barbara Demick and David Pierson

Meanwhile, minimum wages -- which are set locally and vary by province and municipality -- began rising in February. Crothall said he expected them to grow 10% this year.

Economists theorize that China may be reaching what they call a "Lewisian turning point," named for the late Nobel Prize-winning economist Arthur Lewis, who observed that most developing countries eventually exhaust their labor pool from the countryside and must make the transition to a more developed economy.

China is also facing a demographic crisis. Because of the nation's one-child policy, the number of working-age adults is shrinking rapidly. By 2050, a third of China's population will be 60 or older, compared with 26% then in the United States.

At the Shanghai train station early this month, when migrant workers on holiday should have been returning from the countryside, it appeared that just as many were heading in the other direction.

"Why should I stay here when I can do the same work back home?" said Xin Peiyi, a 56-year-old construction worker waiting for a train to Hebei province after only 11 days in Shanghai. He said he was earning $300 a month in Shanghai working with a road crew, but he could make $15 a day at home and enjoy a more comfortable life.

"I can't stand all the rain here. It makes my back hurt," Xin said.

barbara.demick @latimes.com

david.pierson@latimes.com

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