Trends in a tighter labor market – the WTO-column

(later also at chinabiz)
Christmas is nearing fast, at least for those who are purchasing toys, textile and shoes, so it is that time of the year again stories about the tighter labor market, especially in Guangdong and Fujian, start to emerge. After three year, it has become a tradition, just like Christmas itself.
Retailers want to control costs and risks, so they order their goodies as late as possible. But this year again, factories in Southern China might not be able to attract enough migrant workers to produce enough teddy bears on time.
China is now producing 53% of the shoes in the world, 50% of the textile products and 90 percent of the toys, so shifting production to a tiny country like Vietnam is only possible of a smaller part of the production.

Some of the experts on labor in China suggested to me that the relative shortage – last year the shortage was estimated to be slightly over two million workers – is also causing some profound changes in the way migrant work is being organized.
In the 1990s, I have been trying to set straight a number of visiting journalists and TV-crews who wanted to follow a poor father, sitting under the bare bulb lightening his poor hut with wife and children, preparing to leave for a tough job as a migrant in an evil city. Those romantic scenes were pretty scarce.
In most cases, migrant work was much more organized. The decision to go or not to go, and where to, was often made by lager groups, sometimes whole villages. Migrants would travel often in groups, as you can see at railway stations and other transportation hubs. As fellow villagers or family members established themselves at factories, they would take care of recruitment among their relatives back home.
At the factory gates relatives from the current workers would often get a preferential treatment, also because they would be easier to control: they would take the social structure of their home villages partly into the sweatshops of Guangdong and Fujian.

That informal way of recruiting people has been losing its attractiveness for those employers who no longer saw their factory gates swamped with new migrant workers looking for work. Part of the recruitment process is now going through a phase of professionalizing. Brokers, often in charge of a few hundred workers, would go around hiring migrant workers. They would also negotiate wages and benefits for the people they are recruiting.
Partly that kind of labor exchange has been organized through a governmental licensing system, but not surprisingly, much of this is also done without official licensing. In both ways, that could be the beginning of an early system of collective bargaining.

The only allowed Chinese trade union, the AFCTU – the All China Federation of Trade Unions – did get recently some media coverage as it got chapters organized at stores of the firmly anti-union company Wal-Mart. Despite all that coverage, this action looks very much like window-dressing. After Wal-Mart refused to set up trade unions, it would mean severe loss of face for the AFCTU is they would not have pressed for action against Wal-Mart.
Compared to the bureaucratic Moloch of the official trade union, the grass-root organization for migrant workers seems more interesting, both for employers looking for workers, and for the government, trying to organize the labor market. At this stage it would be too early to where the migrant workers would end in the equation.

Fons Tuinstra