By Liu Shinan (China Daily)
Updated: 2008-02-27 07:24

Guangzhou, capital of Guangdong province, held its first labor fair of the lunar new year a few days ago, but the job-seekers gathered there appeared not to be as enthusiastic as their counterparts of years past. For the first time, the number of job-hunters fell far short of the number of vacancies advertised at the fair: 4,000 versus 7,000.

The employers could only raise their salary standards - on average, to 1,160 yuan ($155) a month, representing an increase of 13 percent compared with previous years.

Similar phenomena also appeared in other cities in the Pearl River Delta area, one of China's major manufacturing centers. The area has for years been the largest employer of migrant laborers from the country's rural areas.

The changes sweeping over the job-seeking public have prompted some economic commentators to cry out in alarm that China is losing its advantage in cheap labor. But some others have argued against such worries, saying that on the whole, the country's labor supply still exceeds the demand.

Though they contradict each other, the two sides share a common concern: the impact of changing labor costs on China's exports, which have been a major engine driving the nation's economic growth.

In my opinion, we should be pleased rather than worried about the situation. Manual laborers can now expect better wages, which is good for both social justice and the wellbeing of the economy.

Most of the manual workers employed by manufacturers in coastal regions are migrants from the country's impoverished rural provinces. In the past two decades or so, they have contributed greatly to our nation's economic development by working diligently, for whatever their employers would like to pay.

Their pay has been capped at too low a level for too long a time. An investigation in 2004 found that the average monthly wage for migrant workers in the Pearl River Delta region had risen only 68 yuan in 12 years.

In the past few years, that level has risen at a comparatively faster rate. The national average monthly wage for rural migrant workers rose from the 539 yuan in 2004 to 946 yuan in 2006.

The rises in pay and laborers' wage expectations can be attributed to a number of reasons. Two of them merit our notice. One is that rural residents' incomes have increased significantly in the past few years thanks to the strong economic growth and favorable government policies (the annulment of the agricultural tax, for instance). A survey by the statistics authorities late last year indicated that rural residents' per capita cash income had hit 3,321 yuan in the first three quarters of last year, up 14.8 percent year-on-year.

The low wages at manufacturing plants are no longer enough to attract rural migrant workers.

The second reason is that rural migrant workers themselves have changed. The new generation is more knowledgeable and modern-minded than their parents and less tolerant of harsh working conditions and low pay. They are more ready to change jobs. And their consumption habits inspire them to seek higher pay.

These changes are encouraging signs of the progress our society has made. Rising living standards benefit our economy because they will bolster the population's buying power, which is the most essential contributor to the growth of the economy.

Encouragingly, consumption has shown signs of growing. China's GDP grew a hefty 11.4 percent last year, with consumption contributing 4.4 percentage points, investment 4.3 percentage points and exports 2.7 percentage points. Consumption surpassed investment for the first time in several years.

E-mail: liushinan@chinadaily.com.cn

(China Daily 02/27/2008 page8)