Dec 07, 2016
In China, local governments have long held back reforms aimed at making life fairer for the migrant workers who fueled the country’s economic boom but have had little opportunity to enjoy the fruits of their labor or live in the cities they helped build.
On Saturday, high-ranking officials and labor and social security experts spoke at a Beijing forum organized by government-affiliated think tank Chinese Academy of Social Sciences (CASS). The annual event has taken place every year since 2012, and this year’s forum centered around finding a solution to the plight of China’s 270 million migrant workers. Because they are effectively barred from changing their rural household registration documents to many urban locales, migrant workers cannot take full advantage of public services such as education, health care, and social security.
Migrants nonetheless contribute to the welfare funds of their adoptive hometowns, but when they leave the city to go back to their villages — as many do around age 40, when they become too old for backbreaking work, their parents need looking after, and their children have difficulties enrolling in city schools — they are practically unable to take the money they contributed to their communities back with them.
For example, contributions made to another city’s pension fund are difficult to transfer back to the contributor’s hometown. And the situation becomes even more complicated for people who regularly work in different cities: According to official data, in 2014 some 48 million people stopped making pension payments altogether.
Zhu Hengpeng, deputy director of the Institute of Economics at CASS, said that the social security system as it currently exists — that is, run by local governments — doesn’t fit migrants’ needs. “Migrant workers are being exploited,” he said. “City residents know that migrant workers contribute to social security when they are young but are unable to benefit from it when they go back home. This notion is either shameless or ignorant.” Zhu likened the current household registration to “a Great Wall” that separates rural and urban citizens.
Instead, Zhu is advocating for a national pension and health care insurance system that includes basic protections and allows all citizens to enjoy equitable treatment nationwide.
Household registration reform has been on the government’s agenda for years, but China’s biggest cities fear that loosening their strict rules will result in an influx of millions of migrant workers and their families. Cai Fang, a labor economist and vice president of CASS, said that after years of discussion, there is a public consensus for household registration reform. The whole of society would reap the benefits, he said, but because the burden of creating change is solely on heel-dragging local governments, progress is slow.
When the central government required all cities to increase their urban populations, Cai explained, local governments found a “clever and costless solution” to this request: By upgrading the administrative level of outlying regions, some of the city’s rural population became urban without any actual migration taking place. According to national census data from 2010, this so-called local transfer accounted for 53 percent of the newly increased urban populations, Cai said.
Cai argued that to overcome resistance from local governments, the cost of the reforms should be shared by the central and local governments.
“Some people think the household registration reform is a process that requires short-term sacrifice of economic growth, but actually it’s not,” Cai said. “Rather, it encourages a higher labor participation rate, and the consumption potential of migrant workers is enormous. The benefits would be instantaneous.”
(Header image: Migrant workers wait at the end of their shift at a construction site in Beijing, Dec. 9, 2014. Kevin Frayer/Getty Images/VCG)