China's rural migration stream has slowed to a trickle and wage growth has slowed sharply, according to the latest annual survey of migrant workers conducted by the National Bureau of Statistics.
The Statistics Bureau has estimated the number of rural people employed off-farm (农民工)each year from 2008 to 2016. The figures include those working near their permanent residence and those working away from their residence (migrants), but the survey excludes people working exclusively on farms. Note that farm employment and off-farm employment are not mutually exclusive: farming is now largely a part-time phenomenon in China. Many of the people counted by these employment estimates probably also spent some time farming. (The survey figures show that rural employees worked an average of 10 months during 2016.)
According to the survey, 281.7 million rural people were employed off-farm during 2016, an increase of 4.24 million from 2015. The number of rural people employed was equal to 36 percent of national employment in China during 2016, up from 30 percent during 2008 and 2009. The increasing percentage reflects millions of rural people moving from subsistence farming to paid employment.
Most of the rural residents' job growth during 2016 reflected increased employment near home; the number of migrants working away from home increased by only 500,000. Growth has slowed from the torrid pace set during 2009-2012 when employment grew 10-to-12 million annually. During those years of rapid growth, most employment gains were among migrants. The number of people working near home has been less volatile.
While there are some structural changes reflected in these numbers, the slower growth in employment largely reflects the cooling economy since 2012. The countryside has always been a
reservoir of rural labor: migration to cities surges when the economy is in a
growth cycle, and slows--or even reverses--when the economy tanks. Employment declined last year in two procyclical sectors--manufacturing and construction. Services employment increased.
Wage growth remains strong. The average monthly income of 3,275 yuan ($493) earned by employed rural residents during 2016 grew 6.6 percent from the previous year. Again, that was much slower than the double-digit growth posted from 2009 to 2013. Last year's wage growth was the slowest since the 5.7-percent growth in wages during the 2008-09 financial crisis. During 2016, the average wage earned by rural workers in northeastern provinces--the region hardest hit by the economic slowdown--actually declined.
While wages paid in Chinese currency went up 6.6 percent, the value of those wages in U.S. dollars increased less than 1 percent because the Chinese currency depreciated against the U.S. dollar. Calculations show that the average wage of rural Chinese workers was $2.25 per hour in 2016.
The peak in rural wage growth was during 2010-11 when rising wages and currency appreciation combined to boost the dollar-value of rural Chinese wages by over 25 percent. As nominal wage growth tailed off and the Chinese currency depreciated over the last three years, the dollar value of wage growth in China has plunged.
The slowdown in job creation is bad news for the planned structural adjustment of China's agricultural economy. The farming sector needs to shed labor in order to raise labor productivity, reduce unit costs of farm production, and increase earnings per farmer to make farming a viable career. To do this they need to entice more villagers to turn their land over to the new generation of scaled-up farmers, but a slowdown in job growth makes it harder to move people off the land. To make matters worse, crop prices have been stagnant or declining, and production of pork and poultry is down. Poor conditions in the farm economy depress rural income and reduce the rents that scaled-up farmers are willing to pay villagers for their land.
It's probably no coincidence that government officials are injecting large sums of cash into the countryside this year through a massive rural poverty alleviation push and initiatives to build high-standard farms and boost processing of farm products.
The Statistics Bureau has estimated the number of rural people employed off-farm (农民工)each year from 2008 to 2016. The figures include those working near their permanent residence and those working away from their residence (migrants), but the survey excludes people working exclusively on farms. Note that farm employment and off-farm employment are not mutually exclusive: farming is now largely a part-time phenomenon in China. Many of the people counted by these employment estimates probably also spent some time farming. (The survey figures show that rural employees worked an average of 10 months during 2016.)
Most of the rural residents' job growth during 2016 reflected increased employment near home; the number of migrants working away from home increased by only 500,000. Growth has slowed from the torrid pace set during 2009-2012 when employment grew 10-to-12 million annually. During those years of rapid growth, most employment gains were among migrants. The number of people working near home has been less volatile.
Wage growth remains strong. The average monthly income of 3,275 yuan ($493) earned by employed rural residents during 2016 grew 6.6 percent from the previous year. Again, that was much slower than the double-digit growth posted from 2009 to 2013. Last year's wage growth was the slowest since the 5.7-percent growth in wages during the 2008-09 financial crisis. During 2016, the average wage earned by rural workers in northeastern provinces--the region hardest hit by the economic slowdown--actually declined.
The peak in rural wage growth was during 2010-11 when rising wages and currency appreciation combined to boost the dollar-value of rural Chinese wages by over 25 percent. As nominal wage growth tailed off and the Chinese currency depreciated over the last three years, the dollar value of wage growth in China has plunged.
The slowdown in job creation is bad news for the planned structural adjustment of China's agricultural economy. The farming sector needs to shed labor in order to raise labor productivity, reduce unit costs of farm production, and increase earnings per farmer to make farming a viable career. To do this they need to entice more villagers to turn their land over to the new generation of scaled-up farmers, but a slowdown in job growth makes it harder to move people off the land. To make matters worse, crop prices have been stagnant or declining, and production of pork and poultry is down. Poor conditions in the farm economy depress rural income and reduce the rents that scaled-up farmers are willing to pay villagers for their land.
It's probably no coincidence that government officials are injecting large sums of cash into the countryside this year through a massive rural poverty alleviation push and initiatives to build high-standard farms and boost processing of farm products.
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