Hangzhou’s migrant workers differ markedly from those in Wuhan both in terms of salaries, and industries that they are employed in. This is unsurprising – Hangzhou’s GDP / capita is approximately ~70,000RMB, almost twice as much as Wuhan’s (~40,000RMB). In Hangzhou, migrants are employed in jobs slightly higher in the wage chain (notably, tourism – taxi and bus drivers, masseuses, cooks…) Locals tend to occupy higher wage positions – the same pattern is true in Wuhan, but much less pronounced, due to a fewer relative number of high wage opportunities.
One of the biggest problem that faces migrants everywhere in China is that of delayed or unpaid wages. Either as a result rapacious bosses, or problems with payment systems (for example, it is common for construction projects to begin before complete financing has been secured), many migrants have at one time or another been faced with illegally garnished or held wages. This has been as much a problem of enforceable contracts (often employees simply weren’t given any – I’m told the situation has improved) and with the knowledge of, and means to proper legal recourse.
Hangzhou is notable among mid/small cities in China in being fairly proactive towards issues of migrant labor. Here’s an unsurprisingly glowing report about Hangzhou’s naturalization policies towards migrants, from 2005. Hangzhou also has a fairly well developed ‘account prepayment’ regulatory system, whereby firms employing migrants must pre-furnish a bank account to automatically pay out to migrants in the event of financial difficulties for the firm.
Such wage payment schemes were first introduced in the Pearl River Delta. Mandating ‘reserve salary accounts’ for firms may discourage investment that might otherwise take place, since operating costs are higher (commensurate with however secure local officials want workers to be). This argument, however, ignores whatever path dependency the migrants themselves might be engaged in. To the extent that migrants count on having a particular job, there are certain sunk costs in travel and arranging their households while they are away, which most commonly means renting out whatever agricultural land they have. These sorts of commitments would seem to make short term transitions more difficult – if you’re pay is getting garnished, you could return home (and do nothing on your rented farm), or remain in the city hoping your garnished wages will come to you. If you’re laid off, better to find almost any job than return home to idle.
These costs are likely more significant when migrants come from a greater distance, as is the case in wealthier cities like Hangzhou and Shanghai, where labor needs are greater than the local populace can support. In Wuhan, the vast majority (87%) of migrant laborers come from within Hubei province, and many are seasonal rather than year round, and as such do not rent out their land, or if they do, do it for shorter terms (3-6 months) rather than a full year.*
Conjecture: it makes sense that more prosperous cities have more rigorous rules on wage prepayment schemes – the firms that are entering these areas are more likely to be able to afford it, and labor tends to be much less fluid insofar as it is more difficult for these migrants to find profitable means to return home.
The effectiveness of wage prepayment laws for firms employing migrants therefore would seem highly dependent upon the particular context, with special consideration for labor mobility in that area. To the extent they help, they provide a context wherein workers can be assured of wages, and thus better form long-term plans; but also introduce a barrier in the form of higher costs to firms seeking to employ them.
Whether these systems can be easily exported from 1st tier cities like Shanghai and Hangzhou to poorer, developing areas is a very relevant question, and one that (so far as I’m aware) there is sufficient, available data to address. More inquiry required.
* From 民权与民生:中国农民权益实证调查,一西安 :西北大学出版社,2008.5 (中国农村调查书系)