China's Unemployed Disperse to Villages

Covid-19 has reversed China's rural migrant flow, as at least 50 million people returned to their villages in 2020. The countryside is once again serving its historic role as a reservoir for underemployed people.

China's national urban unemployment rate was reported to be 6.2 percent in February 2020 and 5.9 percent in March, at the peak of the country's covid lockdown. However, much of China's unemployment may be hidden after a significant proportion of the labor force dispersed to the countryside.

China's first quarter 2020 statistics showed that the rural migrant workforce was estimated at 122.5 million at the end of February 2020, nearly 52 million less than the 2019 total reported by the National Bureau of Statistics in its annual migrant worker statistics released April 30, 2020.

Wages were also down. The average monthly earnings for migrant workers reported for Q1 2020 was 3,680 yuan, 747 yuan less than the 2019 average. Multiplying these figures suggests that the migrant workforce lost 321 billion yuan (about $46 billion) in aggregate earnings per month, a 41.5-percent decrease.

China's rural migrant workforce losses in Q1 2020
Item	Unit	2019	Q1 2020	Change
Rural migrant workforce	Million	174.3	122.5	-51.7
Average monthly earnings	Yuan	4,427	3,680	-747
Total earnings	Bil. Yuan	771	451	-321
Source: Calculated from China National Bureau of Statistics data.

The employment situation for rural migrants remained grim as the economy reopened in March, and many of the migrants appear to remain in their villages.

An April 1 article noted an unusual "tide" of rural migrants returning to villages after the end of the covid lockdown in March--described as a common phenomenon across the country. Netizens had noticed that many workers had returned to their villages a few days after the lockdown was lifted because jobs were hard to find. The article observed that factories had nothing for workers to do because they had no orders, so many laborers returned home. The article said construction work had also slowed after the coronavirus, and many workers feared for their health if they stayed in crowded dormitories at construction sites. Poor sanitation and high costs in cities, and competition for dirty jobs for low pay also repelled rural migrants who would normally be drawn to cities.

Officials have mentioned concerns about employment for both rural migrants and a record 8.5 million seniors graduating college in China this year.

On March 30, the Ministries of Human Resources and Agriculture jointly announced a program to "guide" enterprises to hire returned migrants and other rural people through subsidies, tax breaks, and credit support to counter the employment impacts of the covid-19 virus. The Ministry of Human Resources and Social Security called an unusual press conference to put a positive spin on the first quarter employment situation and to assure the public that the government is supporting unemployed workers. On May 9, the Ministry announced a "black list" of 30 companies that failed to pay workers their wages.

There have been some hints dropped that a new initiative to subsidize production of the labor-intensive early rice crop this spring was meant at least in part to create employment for migrants that returned to their villages.