The two-way difficulty of migrant worker employment and recruitment has become the norm, with two million people returning home to start businesses

At the State Council policy regular briefing held on February 28, Yang Zhiming, director of the Office of the State Council Leading Group on Migrant Workers and vice minister of Human Resources and Social Security, said that the scale of employment for migrant workers in China has continued to expand, vocational skills have steadily improved, and wage income has risen steadily. However, the growth rates of the total number of migrant workers, the number going out to work, and wage income have shown a “three declines,” and the structural contradiction of the “two-way difficulty” in employment and recruitment will become the norm.

The national total of migrant workers is 274 million

In 2014, the national total of migrant workers reached 274 million, an increase of 5.01 million over the previous year, up 1.9%, with the year-on-year growth rate falling by 0.5 percentage points; among them, 168 million were migrant workers working away from home, an increase of 2.11 million over the previous year, up 1.3%, with the year-on-year growth rate falling by 0.4 percentage points.

“Looking at the situation in recent years, the total number of migrant workers has grown while the growth rate has declined, and there have been new changes in distribution. Migrant workers are shifting from unlimited supply to limited supply; it can be said that they are no longer an inexhaustible reservoir.” Yang Zhiming pointed out that the number of new migrant workers has declined year by year since reaching 12.45 million in 2010.

In addition, from the perspective of regional distribution of employment, growth in the central and western regions is faster than in the eastern region; from the perspective of industry distribution, the proportion of migrant workers is 81.8% in construction, 73.6% in manufacturing, and 67.4% in the catering service industry, and the proportion of migrant workers in general service industries is rising. Yang Zhiming said that the slowdown in economic growth has put pressure on the growth of total employment for migrant workers, and the structural contradiction of the “two-way difficulty” in employment and recruitment will become the norm.

“Migrant worker employment is shifting from being mainly about a large total to the employment contradiction of the ‘two-way difficulty’ of difficult employment and difficult recruitment. This ‘two-way difficulty’ is the result of market demand. The difficulty of recruiting ordinary workers reflects the limited supply of migrant workers, while the difficulty of recruiting skilled workers reflects the shortage of skilled talent in the process of transformation and upgrading.” Yang Zhiming said.

Wage income growth is slowing

Data show that in 2014, the average monthly income of migrant workers working away from home in China was 2,864 yuan, an increase of 255 yuan over the previous year, up 9.8%. While the wage level of migrant workers has continued to rise, there has also been a trend of slowing income growth. From unlimited supply to limited supply, why has the income growth rate of migrant workers fallen instead of risen?

“For many years, the wage income of migrant workers grew at double-digit rates. In the first two years after entering the ‘12th Five-Year Plan’ period, growth still reached around 20%, and then gradually declined in the middle and later periods, with growth of 13.9% in 2013 and 9.8% in 2014.” Yang Zhiming said that with the improvement of labor productivity, the wage income of migrant workers has moved from the previous sharp growth toward steady growth.

Statistics from the Ministry of Human Resources and Social Security show that the number of skilled workers accounts for only about 19% of the total number of employed people nationwide, and the number of highly skilled talent accounts for only 5%, so the total number of skilled workers is severely insufficient. From the labor market perspective, the job vacancy-to-applicant ratio for skilled workers (the ratio of job openings to job seekers) has remained above 1.5:1, and the job vacancy-to-applicant ratio for senior skilled workers has reached above 2:1. The shortage of skilled workers is very prominent.

Promoting employment through skills

“Under the new normal, migrant workers have entered a stage of promoting employment through skills. Without mastering skills, migrant workers are often passersby in the city; with skills mastered, solving the migrant worker issue can be fully activated.” Yang Zhiming said.

Yang Zhiming believes that the optimization and upgrading of the industrial structure calls for the improvement of migrant workers’ skills. At present, the vocational skills and employment stability of migrant workers still need to be further improved. Strengthening skills training for migrant workers will be a strategic project in China’s economic structural adjustment, and it is also an urgent task for migrant workers to adapt to the new normal and achieve stable employment.

“By 2020, the new generation of migrant workers can each receive one government-subsidized employment skills training. Nationwide, the average subsidy is 800 yuan per person, which can basically eliminate the phenomenon of newly growing labor forces taking jobs without skills, thereby generally alleviating the structural contradiction of the ‘two-way difficulty’ in migrant worker employment and recruitment caused by the lack of skills.” Yang Zhiming said. In 2014, the Chinese government implemented the migrant worker skills improvement plan, training 20 million migrant workers annually.

In addition, China will vigorously develop the tertiary industry, small and medium-sized enterprises, and labor-intensive enterprises, which have a large capacity for migrant worker employment, and implement supportive measures such as tax and fee reductions to promote the continued expansion of the scale of migrant worker employment. According to statistics from the China Household Services Association, there are nearly 500,000 enterprises and outlets in the national household service industry, with 20 million employees. The rapid development of e-commerce has driven new business forms such as the express delivery industry to absorb a large number of the new generation of migrant workers for employment and entrepreneurship, and businesses such as online stores and express delivery have absorbed millions of migrant workers for employment.

“At present, a new situation has emerged in migrant worker employment. After being tempered by working in cities, migrant workers who have some skills, some funds, some marketing channels, some ability to run factories, and some attachment to rural areas are returning home to start businesses. Now the national total has reached about 2 million.” Yang Zhiming said.