MIGRATION AND SOCIAL PROTECTION IN CHINA (Series on Contemporary China)

MIGRATION AND SOCIAL PROTECTION IN CHINA

Series on Contemporary China

(ISSN: 1793-0847)

Series Editors: Joseph Fewsmith (Boston University) Zheng Yongnian (University of Nottingham)

Published* Vol. 2

China Under Hu Jintao: Opportunities, Dangers, and Dilemmas edited by Tun-jen Cheng, Jacques deLisle & Deborah Brown

Vol. 3

China’s Compliance in Global Affairs: Trade, Arms Control, Environmental Protection, Human Rights by Gerald Chan

Vol. 4

Political Civilization and Modernization in China: The Political Context of China’s Transformation edited by Yang Zhong and Shiping Hua

Vol. 5

China into the Hu-Wen Era: Policy Initiatives and Challenges edited by John Wong & Lai Hongyi

Vol. 6

Water and Development in China: The Political Economy of Shanghai Water Policy by Seungho Lee

Vol. 7

De Facto Federalism in China: Reforms and Dynamics of Central-Local Relations by Zheng Yongnian

Vol. 8

China’s Elite Politics: Political Transition and Power Balancing by Bo Zhiyue

Vol. 9

Economic Reform and Cross-Strait Relations: Taiwan and China in the WTO edited by Julian Chang & Steven M Goldstein

Vol. 10 Discontented Miracle: Growth, Conflict, and Institutional Adaptations in China edited by Dali Yang Vol. 11 China’s Surging Economy: Adjusting for More Balanced Development edited by John Wong & Wei Liu Vol. 12 Tobacco Control Policy Analysis in China: Economics and Health edited by Teh-Wei Hu Vol. 13 China's Science and Technology Sector and the Forces of Globalisation edited by Elspeth Thomson & Jon Sigurdson Vol. 14 Migration and Social Protection in China edited by Ingrid Nielsen & Russell Symth *To view the complete list of the published volumes in the series, please visit: http://www.worldscibooks.com/series/scc_series.shtml

Shalini - Migration and Social.pmd

2

8/11/2008, 5:46 PM

Series on Contemporary China – Vol. 14

MIGRATION AND SOCIAL PROTECTION IN CHINA editors

Ingrid Nielsen & Russell Smyth Monash University, Australia

World Scientific NEW JERSEY

•

LONDON

•

SINGAPORE

•

BEIJING

•

SHANGHAI

•

HONG KONG

•

TA I P E I

•

CHENNAI

Published by World Scientific Publishing Co. Pte. Ltd. 5 Toh Tuck Link, Singapore 596224 USA office: 27 Warren Street, Suite 401-402, Hackensack, NJ 07601 UK office: 57 Shelton Street, Covent Garden, London WC2H 9HE

British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library.

MIGRATION AND SOCIAL PROTECTION IN CHINA Series on Contemporary China — Vol. 14 Copyright © 2008 by World Scientific Publishing Co. Pte. Ltd. All rights reserved. This book, or parts thereof, may not be reproduced in any form or by any means, electronic or mechanical, including photocopying, recording or any information storage and retrieval system now known or to be invented, without written permission from the Publisher.

For photocopying of material in this volume, please pay a copying fee through the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA. In this case permission to photocopy is not required from the publisher.

ISBN-13 978-981-279-049-1 ISBN-10 981-279-049-7

Printed in Singapore.

Shalini - Migration and Social.pmd

1

8/11/2008, 5:46 PM

CONTENTS

SECTION 1: INTRODUCTION Chapter 1

The Rhetoric and the Reality of Social Protection for China’s Migrant Workers Ingrid Nielsen and Russell Smyth

3

SECTION 2: SOCIAL PROTECTION AND SOCIAL JUSTICE Chapter 2

Chapter 3

Reincorporating the Mingong: Dilemmas of Citizen Status David Kelly Righting Wrongs: The Language of Policy Reform and China’s Migrant Workers Gloria Davies and Scott Grant

17

31

SECTION 3: MIGRANT PARTICIPATION IN SOCIAL PROTECTION SCHEMES Chapter 4

Chapter 5

Chapter 6

The Design of a Social Security System for Rural Migrant Workers in China Dewen Wang Correct Ideas and Social Security Reform in China: The Case of Shanghai’s Township Insurance Gloria Davies, Ingrid Nielsen and Russell Smyth Why Do Migrant Workers Not Participate in Urban Social Security Schemes? The Case of the Construction and Service Sectors in Tianjin Bingqin Li

v

51

65

92

vi

Chapter 7

Chapter 8

Contents

What Determines the Welfare and Social Security Entitlements of Rural Migrants in Chinese Cities? Fei Guo and Wenshu Gao Social Protection and Migration in China: What Can Protect Migrants from Economic Uncertainty? Lina Song and Simon Appleton

118

138

SECTION 4: THE ROLE OF THE HOUSEHOLD, STATE AND MARKET IN PROVIDING SOCIAL PROTECTION Chapter 9

Getting By Without State-Sponsored Social Insurance Linda Wong and Zheng Gongcheng Chapter 10 Household Strategies and Migrant Housing Quality in Tianjin Mark Duda, Bingqin Li and Huamin Peng Chapter 11 The Household as Security: Strategies of Rural– Urban Migrants in China C. Cindy Fan and Wenfei Winnie Wang

155

184

205

SECTION 5: CONCLUSIONS AND FUTURE DIRECTIONS Chapter 12 Towards a Harmonious Society: Challenges for China in the Pursuit of Social-Protection-as-SocialJustice Ingrid Nielsen and Russell Smyth Index

247

257

LIST OF TABLES

CHAPTER 4 Table 1 Table 2

Table 3

Social Insurance Coverage for Local Residents and Migrants in 2005 (%) Demographic Characteristics of Rural Migrant Workers Who Participated in Social Insurance Schemes in 2005 Employment and Wage Characteristics of Rural Migrant Workers Who participated in Social Insurance Schemes in 2005

53

54

57

CHAPTER 5 Table 1

Table 2

Table 3 Table 4

Table 5

Table 6

Cumulative Percentages Across Levels of Perceived Seriousness of Social Insurance as a Social Problem in 2002 The Effects of Gender, Age, Income and Location on Perceived Seriousness of Social Insurance as a Social Problem in 2002 Percentages of Respondents Who Endorsed a Strengthening of Each Type of Social Insurance The Effects of Gender, Age, Income and Location on Perceptions that Aged Pension Insurance Should be Strengthened The Effects of Gender, Age, Income and Location on Perceptions that Medical Insurance Should be Strengthened The Effects of Gender, Age, Income and Location on Perceptions that Unemployment Insurance Should be Strengthened vii

77

78 78

80

80

81

viii

Table 7

Table 8

Table 9

List of Tables

The Effects on Perceptions of Change in Social Insurance as a Function of Gender, Age, Income and Location Land Rights, Social Insurance and Other ‘Benefits’ Positions of All Individuals Both Prior to and After Their Inclusion in the Town Insurance Scheme Human Capital and Demographic Characteristics of X1 Component Recipients

82

85 88

CHAPTER 6 Table 1 Table 2

Characteristics of the Interviewees How Long Have You Been in Tianjin? — By Sector unit: year(s) Table 3 How Do You Survive When You Lose Your Job? Table 4 How Will You Survive After You Retire? — by Age group Table 5 Have You Heard of the Following Social Insurance Schemes? Table 6 Where Did You Hear About the Following Social Insurance Schemes? Table 7 Source of Information and Understanding of Social Insurance Schemes Table 8 Why Do You Not Want To Participate in Unemployment Social Insurance? Table 9 Why Do You Not Want To Participate in Health Social Insurance? Table 10 Why Do You Not Want To Participate in Pension Insurance?

103 104 105 108 109 109 110 112 113 113

CHAPTER 7 Table 1 Table 2

Percentage Distribution of the Respondents in the Five Cities Percentage Distribution of Those Participating in the Three Main Insurance Programs

121 128

List of Tables

Table 3

Odd Ratios of Participating in Old Age Pension, Health Care and Work-related Injury Insurance Programs (participating=1)

ix

130

CHAPTER 8 Table 1 Table 2 Table 3 Table 4 Table 5 Table 6

Percentage of Households with Security Coverage by Types of Households’ Residential Status Among Those Who are Covered: Percentage by Types of Households Anticipated Sources of Economic Resources in Dealing with Uncertainties (%) Comparing Job-search Methods between Migrants in 1999 and 2002 CASS Surveys (%) Probit Model for inclusion in Social protection: All Sampled Households (2002 CHIP Surveys) Safety Net Coverage by Job-search Method (%)

143 143 145 145 148 150

CHAPTER 9 Table 1 Table 2 Table 3 Table 4 Table 5 Table 6 Table 7 Table 8 Table 9

Pension Schemes for Migrants in Various Cities and Provinces Experiments with Medical Insurance for Migrant Workers in Shenzhen What Do Migrants Do When They Become Ill? Migrants’ Rating of Treatment Costs in the City Measures Taken to Forestall Inability to Meet Medical Costs Willingness to Join Various Health Insurance Schemes Migrant Responses to ‘Have You Taken Measures to Support Yourself in Old Age?’ Measures Taken by Migrants Who Have Taken Action to Protect Livelihood in Old Age Migrant Responses to ‘Are You Willing to Join a Retirement Insurance Scheme with individual and Pooled Accounts?’

163 164 168 168 169 169 171 171

172

x

List of Tables

Table 10 Migrant Responses to ‘How Do You Survive When Unemployed?’ Table 11 Migrant Responses to ‘Is Your Current Job Dangerous, Poisonous and Hazardous?’ Table 12 Migrant Responses to ‘Have You Experienced Work Related Injury or Illness?’ Table 13 Treatment for Work Injury or Occupational Illness for Migrants Table 14 Migrant Responses to ‘What is Your Top Concern as the Present Time?’ Table 15 Migrant Responses to ‘Who Do You Approach First When Having Difficulties?’ Table 16 Migrant Responses to ‘What is the Most Important Role of Government/Public Agencies in Solving Migrant Problems?’ Table 17 Migrant Responses to ‘What is the Most Urgently Needed Insurance Scheme?’

172 173 173 173 175 175

176 176

CHAPTER 10 Table 1 Table 2 Table 3 Table 4 Table 5 Table 6

Migrant Employment Distribution by Industry Sector Housing Quality Indicators and Index Values Family Structure and Housing Outcomes Housing Conditions by Stated Migration Intention Mean Values for Housing Quality Model Regression Variables OLS Regression of Housing Quality

193 195 197 197 199 201

CHAPTER 11 Table 1 Table 2 Table 3

The Inside–Outside Model The Dual Migrants Model The Second Generation Model

219 226 232

LIST OF FIGURES

CHAPTER 5 Figure 1 Previous Land Rights and Social Insurance Positions of the Current Town Insurance Population

xi

84

This page intentionally left blank

SECTION 1 INTRODUCTION

1

This page intentionally left blank

CHAPTER 1 THE RHETORIC AND THE REALITY OF SOCIAL PROTECTION FOR CHINA’S MIGRANT WORKERS

Ingrid Nielsen Monash University Russell Smyth Monash University

1. Introduction There are estimated to be between 120 million and 200 million internal migrants in China. These people, who constitute 80 per cent of the workforce in the construction sector and 50 per cent of the workforce in the service sector, have made China the world’s factory. Simply put, migrants have been the engine room that has driven China’s high growth rate and positioned China to overtake the United States as the world’s largest economy by 2020. However, the returns that migrants have received have not been commensurate with the contributions that they have made to China’s economic success. Migrants receive low wages, endure long hours and are often confronted with poor working conditions. A survey administered by the All-China Federation of Trade Unions (ACFTU) in 2006 found that 65 per cent of migrants were working in so-called ‘Three D jobs’ (dirty, dangerous and demeaning).1 Migrants also face social discrimination. Confronted with a city of strangers, often physically demanding jobs and few comforts, migrants often experience 1 Tao Zhiyong, Deputy Division Chief, Department of Social Security, All-China Federation of Trade Unions, National Social Insurance Administration Workshop, Beijing, August 2006.

3

4

I. Nielsen and R. Smyth

‘psychological poverty’ (China Daily, 2003) due to isolation, loneliness and social exclusion. Few migrants participate in social insurance schemes. There are five social insurance schemes in China: industrial injury insurance, maternity insurance medical insurance, pension insurance and unemployment insurance. At a workshop organized by the National Social Insurance Administration in Beijing in 2006, Pi Dehai, the Deputy Director General of the Social Insurance Administration Centre, stated that as of June 2006 16 million migrants were participating in industrial injury insurance; 11 million migrants were participating in pension insurance and 10 million migrants were participating in medical insurance nationally.2 Based on the most conservative estimate of 120 million migrants in China, these figures mean that 13 per cent of migrants participate in industrial injury insurance; 9 per cent of migrants participate in pension insurance and 8 per cent of migrants participate in medical insurance. In addition to rural-urban migrants, China’s urban expansion has generated large numbers of displaced farmers. Developing an adequate social security scheme for these people will have an important impact on the pace of urbanization in China. Reflecting the low rate of migrant participation in social insurance schemes, recently the social protection of migrants has been at the forefront of the Chinese government’s reform agenda. The promotion of coordinated development between rural and urban areas and between regions comprises one of the five principles of the Scientific Concept of Development that underpins China’s 11th Five Year Plan (2006–2010). In 2007, five cities (Shanghai’s Pudong New Area, Shenzhen, Tianjin’s Binhai New Area, Chengdu and Chongqing) were selected to establish comprehensive rural-urban equity reform pilots. The pilots will be used to explore a coordinated rural-urban development model. The ultimate aim, as espoused by the National Development and Reform Commission, is to ensure that farmers and migrants receive the same rights and access to public services as urban residents (China Daily, 2007). The State Council’s Document No.5, issued in April 2006, contains a number of measures designed to improve the position of migrant workers including ensuring wage arrears are paid, improved monitoring of 2 Pi Dehai, Deputy Director General of the Social Insurance Administration Centre, National Social Insurance Administration Workshop, Beijing, August 2006.

The Rhetoric and the Reality of Social Protection

5

minimum wage laws and working conditions, improved housing conditions for migrants, improved migrant access to urban public services and enlarged social security coverage for migrants. The latter reflects a longterm objective of establishing a unified social insurance scheme, which will be uniform as to eligibility criteria, but exhibit regional variation in available benefits and services, depending on economic development and capacity. The State Council Document No.5 placed most emphasis on increasing coverage for industrial injuries and occupational diseases, while increasing pension coverage was given less importance. The reason is that providing protection for industrial injuries and occupational diseases is considered to represent the most pressing need, while old-age security is of less immediate relevance. Supporting this position, according to one report, migrants account for more than 90 per cent of the deaths due to workplace injuries and 50 per cent of those with occupational diseases (XHN, 2006). One form of social insurance that deserves more attention is maternity insurance. Most female migrants are in the fertile age group 18–30. The same ACFTU survey as was cited above found that in 2006, less than 10 per cent of migrant women in Shanghai had maternity insurance and that many female migrant workers were fired if they became pregnant.3 Migrant women have trouble getting access to public hospitals, meaning that they are either forced to return to their hometown or give birth in illegal clinics. In 2007 the National People’s Congress passed the Labor Contract and Employment Promotions Law which came into operation in 2008. These laws require employers to sign contracts with their workers including migrants and stipulate that migrants have the same workplace rights as urban workers including rights to social protection. The essays in this edited volume collectively provide an overview of the challenges facing China in extending social protection to its migrant workers and the extent to which it has been successful in realizing this objective. The next section, which consists of the next two chapters, examines the relationship between social protection for China’s migrant workers and social justice. The chapters in this section explore the implications of the hukou (residential registration) scheme for migrant entitlements, the implications of migrant responses to disenfranchisement 3 Tao Zhiyong, Deputy Division Chief, Department of Social Security, All-China Federation of Trade Unions, National Social Insurance Administration Workshop, Beijing, August 2006.

6

I. Nielsen and R. Smyth

and how the Chinese authorities ‘spin’ the language of migrant policy reform Section III, which spans chapters four to eight, shifts the focus to examine migrant participation in social insurance schemes. The chapters in this section consider the level of migrant participation, the characteristics of those migrants who do and do not participate and, for those migrants who do not participate, the reasons for them not doing so. Section four, covering chapters nine to eleven, considers alternatives to state-sponsored social protection. The chapters in this section consider migrant coping strategies for those who do not participate in social insurance, the role of the household and circular migration as a source of economic and social security and migrant housing conditions. 2. Social Protection and Social Justice Through the development of the ideal of a harmonious society Hu Jintao has made social justice (shehui gongzheng) a centerpiece of his reform agenda. The concepts of social justice and social security (shehui baozheng) are being promoted in official discourse as being inextricably linked. According to leading Party theorist, Wu Zhongmin “the system of social security is a basic institutional arrangement that embodies social justice” (Wu, 2006). Championing the link between social protection and social justice permits the Hu-Wen administration to sell the evolution of ‘capitalism with Chinese characteristics’ as a socialist market regime developed on behalf of the people. While Deng Xiaoping said that to get rich is glorious, Hu wants his regime to be seen as being committed to the disenfranchised and disadvantaged. This is the whole rhetoric behind the establishment of a harmonious society. In the next chapter David Kelly examines the implications of the hukou system for migrant entitlements. Much has been written on the economic implications of the hukou system. The hukou system has been shown to contribute to rural-urban income inequality (Liu, 2005; Whalley & Zhang, 2007) and impede agglomeration and productivity (Au & Henderson, 2006). Kelly goes beyond the economic implications and considers the effects of the hukou system for the social contract between migrants and the Chinese State. He argues that the hukou system has impinged on migrants’ sense of entitlements, which has disenfranchised migrants as citizens. The

The Rhetoric and the Reality of Social Protection

7

manifestation of this lack of entitlements has been that migrants have had to endure poor living and working conditions. The migrant response has been to vote with their feet. Stripped of their rights as citizens, migrants commenced the withdrawal of their labor along China’s coastal seaboard in 2004. Of course, the shortage of migrant labor has distinct economic implications (Shao et al., 2007). While China’s economy remains buoyant, employers can afford to pay higher wages. However, in the future it is likely that China will lose its competitive advantage in low cost manufacturing and be forced to move into higher value added production. This process has already started with some firms moving offshore to lower wage countries such as Vietnam. Kelly places these economic implications in the broader context of entitlements. He sees the dearth of migrant labor as a struggle for citizens’ rights—a migrant plea to President Hu to be true to the rhetoric of the importance of social justice. In Chapter 3 Gloria Davies and Scott Grant examine the language of policy reform. As they point out the language of policy reform under Hu Jintao paints migrants as citizens who have been discriminated against and on whose behalf the government is now acting to correct previous injustices. The official media now regularly lauds the contribution migrants have made to China’s economic success. In the 11th Five Year Plan and in policy positions such as the State Council’s Document No.5, the Chinese government sets out an agenda for improving migrants rights. However, drawing on the results of a joint survey funded by the Institute of Labor Studies in Beijing and Monash University, administered in 2005, Davies and Grant argue that there is a big gap between the rhetoric of social justice and the implementation of reforms on the ground. While there are increasing numbers of regulations that are designed to protect migrant workers, these regulations are enforced, at best, in a spasmodic manner (Yin, 2003). As discussed by Davies and Grant, the findings of the 2005 Institute of Labor Studies– Monash project were that improvements in local governance were extremely limited and that discrimination and exploitation of migrants was prevalent. 3. Migrant Participation in Social Protection Schemes Wang Dewen outlines various social insurance schemes designed for migrant workers and considers some of their strengths and weaknesses

8

I. Nielsen and R. Smyth

in Chapter 4. As discussed by Wang, at the provincial level there are three models of migrant social insurance. Beijing, Guangdong and part of Jiangsu have an integrated model in which rural-urban migrants join the urban social security system. The strength of the integrated model is that it is simple to administer. However, the weakness is that the urban contribution rate is higher than ‘stand alone’ migration schemes, which acts as a disincentive for migrants to contribute. Thus, the participation rate among migrants is low. Chengdu and Shanghai have dedicated social insurance schemes for migrant workers. The advantage is that because such schemes are specifically for migrant workers, the contribution rate can be set lower and the scheme tailored to the needs of migrant workers. The disadvantage is that it is more complex to administer. A third model operates in parts of Jiangsu and Zhejiang where there is well-established rural industrialization. In these areas migrant social insurance is integrated with the rural social insurance scheme. The advantage is that such schemes seem well suited to the needs of the migrants. The disadvantage is that there needs to be well-developed rural social security coupled with rural industrialization which is of limited scope geographically, so this approach has little potential for replication in other areas. In Chapter 5, Gloria Davies, Ingrid Nielsen and Russell Smyth use the specific example of Shanghai’s township insurance (colloquially known as 25+X) to illustrate the argument in Davies and Grant that there is a big gap between the rhetoric and implementation of the reform. The plight of China’s displaced farmers has been at the top of the Hu-Wen agenda to build a harmonious society (Tao & Xu, 2007). This reflects Hu Jintao’s recognition that growing rural income inequality, coupled with rural land tenure insecurity is threatening China’s fragile instability. At the 17th Party Congress in October 2007, 12,000 petitioners issued an open letter to Hu ‘seeking an end to illegal land grabs’ (The Age, 2007). Shanghai’s 25+X scheme has been at the forefront of the State’s attempts to extend social security to land-deprived peasants in the suburbs surrounding Shanghai. The rhetoric is that the reforms represent a significant extension of social security coverage, making those farmers who have lost their land much better off. However, as Davies, Nielsen and Smyth show, the reality is rather different. Many of those who are now covered by the

The Rhetoric and the Reality of Social Protection

9

25+X scheme, were previously receiving a higher level of coverage under Shanghai’s urban social insurance scheme, so there has actually been a dilution in the level of benefits. Chapter 6 by Bingqin Li, Chapter 7 by Fei Guo and Wenshu Gao and Chapter 8 by Lina Song and Simon Appleton each address different aspects of the question: why (or why not) do migrants participate in social insurance schemes? Based on interviews with 70 migrant workers in Tianjin conducted in 2006, Li examines why migrants do not participate in social insurance. Based on data collected in five cities in 2003 Guo and Gao complement Li’s chapter by using quantitative analysis to examine the factors determining participation in old age insurance, health insurance and industrial injury insurance among both migrant workers and urban workers. Song and Appleton extend on both the Li and Guo & Gao chapters by examining social protection coverage across three groups—rural residents, urban residents and rural-urban migrants—using data from the Chinese Household Income Project collected in 2002. Together the chapters in this section suggest several conclusions. First, migrant workers have low levels of participation in social insurance, reinforcing the national figures cited above, and that participation rates of migrant workers are much lower than urban workers. Guo and Gao found that only 5 per cent to 7 per cent of migrant workers participated in each of industrial injury, medical and pension insurance, while participation rates for migrant workers in any one of the three schemes was at best 25%. In contrast two-thirds of urban workers participated in medical insurance and three-quarters in pension insurance. Song and Appleton found that only 0.2% of rural households and 5% of migrant households were covered by some sort of social protection program, compared with 64% of urban households. Second, participation rates are related to the demographic characteristics of migrants. Those who do not have coverage are those who need it most. Wang’s descriptive statistics suggest that females, those with low human capital, the self-employed, and the middle-aged and elderly are less likely to participate in social insurance schemes. Guo and Gao found that males are more likely to participate in industrial injury insurance and that migrants with a higher level of human capital are more likely to participate in industrial injury, medical and pension insurance. Song and

10

I. Nielsen and R. Smyth

Appleton found that higher income, being better educated, communist party membership, working in the state sector, being employed and being married increases the likelihood of receiving social protection. Third, there are several reasons for low levels of participation. These include low enterprise and migrant awareness of the schemes and that migrants do not consider the contribution rates affordable. Benefits are usually not portable, particularly if contributions are made at the county level and contributions are generally for a minimum of fi fteen years before workers become eligible. Less than 20 per cent of migrants remain with the one enterprise for more than three years and few would be in a position to contribute for a minimum period of fifteen years. Thus, migrants are concerned about whether they will get their contributions back when they move to another locale or return to their hometown. In those coastal provinces, where migrants are allowed to withdraw their contributions, such as Guangdong, according to figures collected by the ACFTU, approximately 90 per cent of migrants withdraw their contributions when changing jobs.4 4. The Role of the Household, State and Market in Providing Social Protection Given the low level of migrant participation in state-sponsored social protection schemes, an important issue concerns the coping strategies of those migrants who are not enrolled in state-sponsored social insurance schemes in times of hardship. Li examined this issue and found that most migrants draw on their own savings, turn to their social networks or return to their home village. Song and Appleton found that often feeling isolated in the big cities, migrants tend to rely on themselves much more than social networks. In this respect, they make the point that migrants lack the social networks in the cities of their urban counterparts. In Chapter 9 Linda Wong and Zheng Gongcheng echo these sentiments suggesting, in their words, that the ‘state has been an absent partner’ in assisting migrants to cope in the cities. Based on a survey of over 2600 migrants in Beijing, Chengdu, Shenzhen and Suzhou administered in 2005, Wong and Zheng found that less than a quarter of respondents 4 Ibid.

The Rhetoric and the Reality of Social Protection

11

participated in industrial injury, medical, pension or unemployment insurance. Wong and Zheng found that 78 per cent relied on family and 28 per cent relied on friendship and local ties while less than 10 per cent turned to fellow employees or their employer. Migrant access to state-sponsored public housing is extremely limited and even when migrants live in public housing, more often than not they are renting from urban households that purchased from work units, meaning that migrants are paying market rates. In Chapter 10 Mark Duda, Bingqin Li and Huamin Peng examine the extent to which housing conditions differ between households pursuing differing migration strategies based on a survey of 800 migrants administered in Tianjin in 2007. They fi nd support for their hypothesis that housing quality is linked to migration strategies and that, in particular, intention to commit to remaining in the city, evidenced by bringing school-aged children, is associated with higher housing quality. In Chapter 11 Cindy Fan and Winfei Winnie Wang examine the role of gender and intergenerational division of labor within the household and circularity as a means to provide economic and social security. Based on in-depth interviews with households in a village in Sichuan conducted in 1995 and 2005, Fan and Wang argue that gender and intergenerational division of labor enables migrants to straddle the city and the countryside, obtain the best of both worlds, and preserve their valued economic and social infrastructure in the countryside. Economically, the countryside provides security because of access to farmland, housing, and low cost of living. Consistent with Wong and Zheng’s fi ndings, Fan and Wang argue that socially the household and extended family constitute a reliable support system. Migrants see the city primarily as a place to work, but it does not offer the type of economic and social security that can give them a sense of permanence, protection and belonging. 5. Conclusion China’s internal migrants have been central to China’s spectacular economic success over the last three decades. However, in spite of their enormous economic contribution to China, they remain marginalized in China’s cities. In their everyday lives they face both economic and social

12

I. Nielsen and R. Smyth

discrimination from their urban cousins. Few migrants participate in social insurance schemes or receive other forms of social protection. For too long, their plight has been largely ignored by the Chinese government. This situation is now beginning to change in official discourse. The contribution of migrants is being ‘talked up’ in the official media. Official position statements such as the State Council’s Document No.5 evidence an intention on paper at least to implement measures to improve the living and working conditions of migrants including their access to adequate social protection measures. That the contribution of migrants is being recognized in the official media and in policy statements is a positive step. However, in itself, this is not enough. When it comes to improving the lot of migrant workers China is coming off a low base. Migrant participation rates in social insurance are extremely low and certainly much lower than that amongst urbanites. Migrant working conditions are poor and their wages are low, although there has been some improvement since the fi rst appearance of a shortage of migrant labor following Spring Festival in 2004. More worrying than the fact China is coming off a low base is that a growing divide is emerging between the rhetoric of reform and what is happening in practice. This raises the concern that the Chinese government may be more concerned with window dressing than making a real difference in the lives of its migrant workers. From an economic perspective, it is in the interests of the Chinese government to keep wages and non-wage costs such as employer social security contributions as low as possible so that China retains its competitive advantage in low wage manufacturing. This creates an incentive to enact regulations in order to be seen to be improving the conditions of migrant workers, while paying at best lip service to monitoring and enforcing those regulations. At the regional and municipal level where governments compete with each other for investment, there is much evidence that governments turn a blind eye if fi rms do not comply with regulations in order to retain investment. This is true for municipalities such as Shanghai where the local state has enormous power (see Maitra et al., 2007) and it is especially true for cities which do not have the same resources as Shanghai. Seen at its worst, this results in a ‘race to the bottom’ where economic growth is promoted at the expense of basic economic and social rights, which is

The Rhetoric and the Reality of Social Protection

13

the complete antipathy of Hu Jintao’s harmonious society. Hu Jintao has been vocal in repeating his commitment to China’s migrant workers and the rural poor. One can only hope that the recent official discourse on the need to improve the living and working conditions of China’s migrant workers, including their social protection position, is carried through on the ground and that in time the practice comes closer to the rhetoric. China’s migrant workers and displaced farmers deserve this much. References Au, CC & Henderson, JV (2006). How Migration Restrictions Limit Agglomeration and Productivity in China. Journal of Development Economics, 80(2), 350–388. China Daily (2003). Helping Migrants Belong in Cities. China Daily, November 28, p.1. China Daily (2007). Chongqing, Chengdu Lead Wealth Distribution Reform. China Daily, June 11, p. 1. Liu, Z (2005). Institution and Inequality: The hukou system in China. Journal of Comparative Economics, 33(1), 133–157. Maitra, P., Smyth, R., Nielsen, I., Nyland, C & Zhu, C (2007). Firm Compliance with Social Insurance Obligations Where There is a Weak Surveillance and Enforcement Mechanism: Empirical Evidence from Shanghai. Pacifi c Economic Review, 12(5), 577–596. Shao, S., Nielsen, I., Nyland, C., Smyth, R., Zhang, M & Zhu, C (2007). Migrants as Homo Economicus: Explaining the Emerging Phenomenon of a Shortage of Migrant Labor in China’s Coastal Provinces. China Information, 21(1), 7–41. Tao, R. & Xu, Z (2007). Urbanization, Rural Land System and Social Security for Migrants in China. Journal of Development Studies, 43(7), 1301–1320. The Age (2007). Farmer’s Grievances Test China’s Fragile Stability. The Age, October 13.p.12. Whalley, J & Zhang, S (2007). A Numerical Simulation Analysis of (Hukou) Labour Mobility Restrictions in China. Journal of Development Economics, 83(2), 392– 410. Wu, Z (2006). Ruhe lijie shehui gongzheng [How to understand social justice]. http:// theory.people.com.cn/GB/40764/68330/68333/68334/4638343.html [11 June 2006]. Xinhua Net (XHN) (2006). Rural Migrant Workers Exceed 90% of Deaths by Labor Injuries. http://news.xinhuanet.com.photos/2005-10/26/content_3687827.htm [10 June 2006]. Yin, M (2003). An Investigation into Employer–Employee Relations in Private Enterprises in Western China: Serious Violation of Rights and Very Few Disputes. http://www.china.com.cn/chinese/EC-c/268278.htm [13 December 2007].

This page intentionally left blank

SECTION 2 SOCIAL PROTECTION AND SOCIAL JUSTICE

15

This page intentionally left blank

CHAPTER 2 REINCORPORATING THE MINGONG: DILEMMAS OF CITIZEN STATUS

David Kelly East Asian Institute, National University of Singapore

1. Introduction The phenomenon of a mingong huang (a “dearth” or shortage of rural migrant labor) is widely accepted as an empirical fact. While a great amount of controversy remains, the arguments seem largely concerned with classifying it. The main issue then is whether the widely reported shortages are transitional or deep-structural, in the sense of the inflection point theory associated with the work of W.A. Lewis (see Cai, 2007; Huo, 2007). While (to confess a bias) I tend to take the deep structural interpretation as given, we should perhaps consider a third argument, namely that “with the hukou-based institutional exclusion…the PRC so far appears to have circumvented if not replaced the Lewis transition” (Wang, 2007, p. 64). In my view, this striking statement by Fei-Ling Wang represents an extreme point on the spectrum. But on any of these interpretations there are bound to be a number of common points of reference. However the economists decide the issue, there are major questions of the surrounding non-economic institutional settings and their history which need to be considered. The most important of these are well-known. First is the collective ownership of land, then the hukou or household registration system. These are complementary aspects of the wider segregation of the society into urban and rural sectors. While not as rigid as in the heyday of the Maoist command economy, or even most of the reform period, this social order set up intricate path

17

18

D. Kelly

dependencies. Coming down to the present as a series of interlocking institutional arrangements, they create considerable inertia.1 Following some recent theoretical exploration, I shall refer to this wider framework as the hierarchical rent sharing model (dengji fenzu moshi). While the literature on many of the component institutional arrangements is extensive, there is reason to believe the entire extent of this wider framework is yet to be mapped. Much of the mingong huang phenomenon results, arguably, from institutional inertia summed up in the hierarchical rent sharing model. Hence, policy remedies may well depend on measures which take stock of this entire complex. Another body of theory which becomes important at this point is the sociological notion of citizenship associated with Marshall (1949). While the hierarchical rent sharing model is largely a Chinese intellectual product, Marshall’s focus was squarely on British history. 2 Integrating such different frameworks may seem daunting. Yet clearly the former, with its emphasis on entitlements, and the latter, with its emphasis on positive rights, are complementary, and are both in constant use in the Chinese descriptive literature. Fitting them together in an ultimate sense is a bit like solving Rubik’s cube, and will not be attempted here. But a description of the problem may prove to be of use. 2. The Hierarchical Rent-Sharing Model3 With the failure of the Great Leap Forward and communization, Mao recognized that unless the stimulus of property rights was to some extent restored, the economy as a whole could not be maintained. How, then, was a limited restoration of property incentives to be man aged given the “integration of political and social affairs”? The leadership formed the concept of a hierarchy of property rights. At that time, the 1 The Chinese literature on this topic is huge. See the clear, critical view of noted agrarian expert Wen Tiejun, in Wen (2007). 2 Citizenship a la Marshall was pioneered in the Chinese context by Solinger (1999). 3 The following section relies on the work of Luo Xiaopeng, of the China Academy for Rural Development at Zhejiang University—see Luo and Qian (2007). I have relied on my own earlier translation of this paper.

Reincorporating the Mingong: Dilemmas of Citizen Status

19

design of property rights for people’s communes was “three levels of ownership, based on the team,” i.e., the People’s Commune was a unified administrative and economic entity within which a three-level hierarchy of ownership of all ec onomic resources would operate, and in which land was the main asset. Mao initially attempted to build the most basic economic unit at the dadui (brigade) level, which was that of the original township and higher cooperative. Later however, taking into account the need to resume agricult ural production as soon as possible after the Great Famine, Mao was forced once again to retreat, deciding that the production team would be the most basic unit of agricultural production and land ownership. In the concept of the hierarchy of property rights, commune and brigade-level organizations had a higher level of ownership of a brigade’s land and other resources. With economic development, land ownership should be upgraded from the production team to the brigade, thence up to the commune, ultimately realizing Mao’s ideal of eliminating property rights. After the Great Famine, leaders of some localities where mortality had been serious, such as in Anhui Province, supported household production contracting, i.e., what was later to become the “Household Responsibility System” (HRS). “Household production contracting” meant allowing the household farming of publicly owned land in return for payment of a fi xed amount of rent in kind. In regions where household production contracting was implemented, agricultural production recovered quickly, but Mao noting the political subversiveness of the arrangement, resolutely put an end to it. As a compromise, he accepted the family plot arrangement, but kept its management within the commune hierarchy. Even today, most collective property rights in agricultural land still reflect the priority of land ownership by the production teams, even though they have ceased to exist. In the system of hierarchical property rights, there is by defi nition inequality between higher and lower levels in the hierarchy. This may be summarized as a relationship of “hierarchical rent-sharing” (or rent sharing through hierarchy). It consists of two layers. First, the higher level has certain rights, directly deriving some economic rents from the proceeds of lower level operations. Of course, the central government must prevent excessive exactions being placed on the lower levels by

20

D. Kelly

the upper ones. The second layer is that every level has the right to operate autonomously at its level. Higher levels therefore have the right to uncompensated transfer of a certain amount of resources, human in particular, from lower levels to their own operating level, from which they may derive revenue. Proceeds of operations at each level must in the fi rst instance be shared with those higher, but not necessarily with those lower. Below the hierarchical rent-sharing system, a social contract formed that was extremely unfair and detrimental to the peasantry. The peasants’ ownership of land became a coercive institutional arrangement defi ning their social status. If the mother of a newborn child happened to have a rural hukou, then he or she automatically had rights in land belonging to the mother’s production team. These rights would at the same time give the child the lowest social status, which was no easy task to cast off. A basic principle of the system was that the peasantry had no share in urban land rents—all non-agricultural land and natural resources belonged to the state. The peasants had no freedom of movement to the city and thus were deprived of rights to share in urban land rents. The basic principle of the hierarchical rent-sharing and status systems also applied to urb an residents. In the urban economy, enterprise ownership was ranked according to administrative regions. These were divided into central state-owned, provincial, prefectural and county stateowned. Below state-owned enterprises, there were also large and small urban collective enterprises. Employees of fi rms of different property ranks also differed in status, and could not move freely. As regards market entitlements however, higher-grade units had more restrictions than low grade ones, while the latter had relatively greater rights to autonomy in disposing of resources. In other words, units with fewer entitlements and resources generally had greater market entitlements and more social entitlements, while units receiving more government resources were more constrained in their market entitlements. In China’s pre-reform command economy, this substitutive relationship between social and market entitlements comprised the core rules of the hierarchical rent-sharing game. The function of this substitutive relationship was to achieve a balance between economic incentives and political control; it was also useful in

Reincorporating the Mingong: Dilemmas of Citizen Status

21

reducing pressure on the central planning capability. For lower-level units, increasing their market entitlements, for example, rights to independent sales and price setting, was conducive to encouraging self-reliance, and made up for the deficiencies that its lack of social entitlements brought. But whenever output levels greatly exceeded basic subsistence levels under the incentives of market entitlements, external ities would be produced that were not conducive to the stability of the hierarchical order. The state would then enhance social entitlements in order to reduce market entitlements and thus achieve control. Conversely, if a unit with very high social entitlements had revenues that were too low; the government could reduce its ownership status and expand its market entitlements in order to reduce its social entitlements, thereby reducing the government’s obligations. Hierarchical property rights and rent-sharing were to have quite profound effects on China’s economic development. First, they provided basic economic security for the great majority. All individuals were integrated into a social pyramid, ensuring their most basic survival needs. While under this system the social entitlements of people of different status were unequal, as an institutional arrangement it reduced demands on the central govern ment’s admin istrative capacity and the localities’ judicial capacity, giving local governments greater discretion and inheriting China’s tradition of grand unity (da yitong) in governance. Second, the hierarchy of property rights also stimulated local governments to develop industries under their own control. Under the hierarchy, the larger the scale of local state-owned industry, the greater would be its urban-employed population, and the greater would be the allocation of resources of all kinds from the state. Hence prior to reform local governments had a strong motivation to expand the scale of the local urban industrial population. This meant increasing the numbers of people with high social entitlements, enabling the entire local pyramid to gain more rent-sharing rights. Local industrial development had but a limited effect on average urban income levels. Because under the unified central social entitlement criteria, urban residents shared urban and peasant-supplied agricultural land rents mainly in the form of rationed consumer goods, the gap between the incomes of urban residents was very small. The incomes and welfare of rural residents,

22

D. Kelly

however, depended on the collectives and the level of agricultural land rents in their location, and opportunities to develop rural industrial enterprises. Hence differences in the incomes of rural residents were relatively large. In 1980 Deng Xiaoping encouraged local leaders to respect the wishes of the peasants and to promote rural reforms according to specific local conditions. Inducing the spread of rural reform competition into various regions of China, propelled China’s reforms onto a rapid development path. In rural areas long trapped in the “collective poverty trap”, household contracting quickly led to substantial increases in food production. The peasantry gained more economic and personal freedom with household contracting, but it was not a threat to the existing political and economic order. On the contrary, the peasantry gave strong support and gratitude to the reform leadership for the rapid improvements in their lives. As household contracting developed from a policy practiced in some regions to a mainstream national policy, the central government also implemented two important reform measures, which not only further promoted agricultural decollectivization, but also had far-reaching effects on the evolution of the social contract in China’s reform process. Prior to the reforms, danwei (production units) of the same rank, had different entitlements, due to the restraints on market mechanisms. The difference in entitlements between danwei due to differing exchange values of resources was also limited as a result. Following household contracting and local fiscal decentralization, especially after the twotrack pricing system was put in place, hierarchical rent-sharing became a universal incentive system. As a result regional and sectoral disparities in rent-sharing rights of danwei of the same rank widened. Thus hierarchical social entitlements were highly “territorialized,” i.e., differentiated by locality or sector. The essence of reform measures such as household contracting, fiscal decentralization and the two-track pricing system was to introduce increasing market entitlements into the rent-sharing system. But these reforms did not, critically, change the inequality of rights between actors in the Chinese economy, particularly the unequal social entitlements, by merely expanding their market entitlements.

Reincorporating the Mingong: Dilemmas of Citizen Status

23

3. Hierarchical Rent-Sharing and the Mingong The prerequisite of such a system-preserving reform was that the “territory” or immovable property of the danwei must not be freely transferable. Otherwise, people’s social entitlements would lose their basis, threatening the stability of the entire hierarchical order. China’s first major institutional constraint on the redistribution of peasants’ ownership of land hence was that they could only redistribute land within the already defined borders of collectively owned land. Peasants did not have the right to freely sell, rent or mortgage their property rights in land.4 At present, China has over 150 million rural workers, engaged far from home in various jobs demanding less skills in coastal industrial zones and urban construction, processing and service industries. If something were to happen forcing them to go home, not only would the overall economy collapse, but consumers around the world, especially in North America and Europe, would pay a very high price. China’s SARS crisis in 2003 proved such a possibility existed, because rural workers from outside with no local resident status found it hard to get the local government’s full protection, and their instinctive reaction in such a situation was to go home (Luo and Kelly, 2006). The contribution of China’s rural migrant workers to the Chinese and world economy needs no elaboration. But their share of the pie is pitiful. According to national statistics, the net income of rural residents accounted for only about 10% of GDP, while the wages of migrant workers is less than 10% of GDP. In other words, the rural population with no urban residential status accounts for nearly 80% of China’s population but shares less than 20% of GDP. This situation is also an important factor leading to extreme economic imbalance in the Chinese and indeed the world economy. Chinese policy makers believe that because the ability of state-owned capital to provide employment is poor, to keep as many migrant workers as possible employed, it is necessary to maintain a low exchange rate to support export growth, and thus the abnormal state of China’s long-term trade surplus. The fundamental reason for China’s economic imbalance is that wages and social security for unskilled labor—who are mainly migrant 4 For recent exploration of this broad theme, see also Dang (2007).

24

D. Kelly

workers—are too low. This is an indisputable fact: wages of China’s migrant workers are less than a tenth of those in developed countries, and only a quarter of comparable wages of urban residents. As discussed in detail in the next section of this volume, migrant workers’ social security is still lower than urban residents, and the majority is without any security at all. Wages are regularly paid in arrears, and they receive no compensation for injuries. Such poor treatment of the migrant workers originates in the rules of the social contract: they have no direct share in the social entitlements of urban governments’ rent-sharing. What they need to maintain their family lives in the city can be dismissed when determining their wages. Hence, migrant workers in cities for a long time are unable to send their children to school, and as discussed in the chapter by Mark Duda, Bingqin Li and Huamin Peng, it is even more out of the question for them to gain stable housing rights in the city. In short, the migrant workers’ land rights in the countryside, have become a pretext to limit their access to equal social entitlement in the cities, and are a major institutional factor in depressing China’s labor costs. Determining the social status and entitlements of the peasantry on the basis of their owner ship of cultivated land is an anachronistic arrangement. Such an arrangement causes enormous difficulties for the rational use of China’s agricultural land as well as its modern agricultural development. In China’s current land system, this historical plight has reappeared, making it difficult to develop capitalist modes of agricultural operation, because the capitalization of land is once again constrained by the surplus population settled in the countryside. The land distribution system perpetuates China’s historical traditions under modern tech nological conditions, which is to use state power to maintain structures of agricultural organization and rural society based on the small peasant. Allowing peasants to seek jobs in cities but not allowing them to become equal urban citizens, is an important arrangement maintaining China’s current land system. Another key arrangement is to restrict privatization and capitalization of property in land. For precisely this reason, there is a view that as soon as agricultural land is privatized, the economic, social and political logic it entails would

Reincorporating the Mingong: Dilemmas of Citizen Status

25

effortlessly solve the various difficulties facing China’s land system. But this is oversimplified. China’s genuine problem is its unique governance philosophy and structure which excludes autonomy and the rule of law. This philosophy leads legitimacy to be concentrated in the Centre, while that of local governments and grassroots, together with the cultural and social resources for their autonomy, are grossly inadequate. In such a situation, not only is it difficult to create social consensus for privatizing land, even if adopted, whether it could be effectively protected and enforced is a real problem. In order to strike a balance between the requirements of highly centralized political power and economic decentralized decision-making, China has formed governance traditions and tech niques that are highly dependent on unified hierarchical social status and entitlements. China’s current land system is a part of the modern system of social entitlements. This perpetuates a tradition of state rule dependent on hierarchical status entitlements rather than on autonomy and the rule of law. China’s current leaders are aware of the drawbacks in the land and social entitlement systems, and have begun to raise the social entitlements of the peasantry. To go beyond a philosophy of state rule formed over millennia—and in crucial respects reinforced in the command economy and market reform eras—is not something that can be done in a short time. A key factor determining how long it will take is the potential for, and risk of, continuing to develop the economy given the social entitlement system. 4. Rural Migrant Workers and Citizen Movements5 The entitlements discussed above include “village citizenship,” which refers to entitlement to membership of one’s village community, with implications for “local identity politics” as well as for formal democratic participation (He, 2005). But even those who qualify fully as village citizens generally enjoy a reduced package of the rights pertaining to citizenship at the national level. As is often pointed out, not least in China, the peasantry as a whole lack full citizen status. Rural villagers have been 5 The following section relies broadly on Kelly (2006).

26

D. Kelly

described as occupying an intermediate position between subjects and citizens. The citizen status of urban dwellers is also highly variable, as shall be described below. As Qin Hui makes clear, while peasants were decitizenised with the rest of the population in the early post-liberation years, the reforms of the late 1970s and early 1980s, in particular the household responsibility system allowed them to effect a partial re-citizenization in advance of the urban residents. These gains were then lost as the limitations of the household responsibility system revealed themselves: increasingly fragmented holdings, declining agricultural vis à vis nonagricultural incomes, and greater wealth disparities (Qin, 2005). The emergence of the mingong (rural migrant workers) created a pool of people with even lower status and citizen rights. They are liable to be technically excluded from both village and urban community citizenship on the basis of residence. This pariah status is structurally induced and is at the root of the discrimination they face in making their livelihood, even though it is their labor which drives the export processing industries to which China owes its high rates of economic growth. Citizen movements among the mingong include clear demands for either village or urban citizen status. The latter is particularly contentious, because the city and regional governments involved are politically beholden to local constituencies who feel deeply threatened by any major concessions to waidiren [“outlanders,” also referred to as wailai de laodongli, “the external workforce”]. The Central government has attempted to lessen the tensions by extending improved packages of rights to the mingong, and indeed abolished the formal barriers of the traditional hukou system. There are many ways for local governments to carry on discriminatory practices against the outsiders, however, such as demolition of their housing, which is of necessity cheap and low quality, on environmental or preservationist grounds.6 4.1 Mingong huang: the dearth of migrant workers There are clear (if controversial) economic explanations for the current migrant labor shortage—the affected industries in China are moving 6 The “sorting out” (shuli) of housing in Shenzhen in 2004 is a case in point; see Liang (2004) and more generally Dang (2007a).

Reincorporating the Mingong: Dilemmas of Citizen Status

27

up the technological ladder, and a true labor market is emerging which is pushing the demand for workers of certain types and levels of skill beyond the existing supply. But a broader set of factors is evident as well. The “dearth” reflected, in economic terms, overall assessments made by potential migrants as to the opportunity cost of leaving their places of origin. The opportunity cost was kept low by a series of structural factors, includ ing central and regional policies and the constitutional status of the peasants’ land ownership rights (Luo and Kelly, 2006). If for any reason these opportunity costs were to rise, more mingong would tend to stay at home and a “dearth” is bound to appear. This can be restated in terms of mingong labor being artificially cheap, but in sociological and political terms it is critically a matter of the citizenship entitlement packages being too poor. If village citizenship were to be made more valuable, the mingong would have more reason to stay and fight for it. Qin Hui has argued incisively along these lines: the shortage of migrant labor in 2004 in particular clearly showed that there were non-economic factors behind the “price of labor being on the low side.” In my opinion there are three such factors: (i) A lack of collective bargaining rights: in recent years the system of chambers of commerce has lagged far behind that of labor unions. (ii) The low comparative advantage of China’s agriculture is surely an artificially induced factor. Generally speaking, in the present stage of development, agriculture is indisputably a disadvantaged sector. But in the last few years at least, it has been even more disadvantaged than it normally would be; the main reason being that since the tax reforms, the most obvious tax barrier, the farmers’ burden, has been heavier than that of most other people. That’s why there was some mitigation of the abandonment of arable land after the tax-for-fees reform. (iii) Barriers to entering the market: at present only a few places [in the labor market] are open to entry by migrant workers (Qin, 2005a, my translation). The “dearth” is thus an expression of the struggle for citizen rights. In tactical terms, the method of struggle is “exit” or “voting with their feet”.

28

D. Kelly

Many of the core issues of the politics of migrant worker status were made public by the well-known Sun Zhigang case.7 5. Conclusion The migrant labor shortage may be explained in economic terms, but behind these lie some wider institutional settings that should not be taken for granted. Best known is the hukou system, which allows “fast and easy capital accumulation in the urban sector and in the hands of the state” (Wang, 2007, p.65). Many studies of the rural-urban divide show that this system is persistent despite a series of efforts to relax it. Behind this persistence lies the wider institutional framework referred to as hierarchical rent sharing. The hukou system was itself created to serve this, and it in turn has supported a series of vested interests which are apt to use any means at hand to continue the hierarchical arrangement. Is this not a formula for unchanging rigidity? How can change be imagined? Economic measures are discussed elsewhere in this volume, but I would suggest that the theory of citizenship based on the ideas of Marshall is of lasting significance, for they addressed a strikingly similar set of institutional rigidities in the age-old status society of Britain. To be sure, the development of modern citizenship took approximately three centuries to come to fruition. China, arguably, does not have the luxury of such a length of time. Against this backdrop it should be noted that demonstration effects count for a lot in social development. What was for the Western world a long period of trial and error, punctuated by reversals, may not be necessary for a nation that is willing to draw on the experience of others, and to avail itself of the best efforts of its scholars and policy intellectuals to integrate this experience to the local environment. In Marshall’s scheme, the extensions of citizenship in the 18th, 19 th and 20th centuries were accompanied by gradual and measured political 7 Sun, who came from rural Hubei, had a college education but failing to find work had in 2002 gone to Guangzhou as a mingong. Picked up by the police on one occasion, he failed to produce his identity documents and was held under powers of “custody and repatriation” (shourong shencha) widely and arbitrarily used by the public security authorities as a catch-all measure to control “urban vagrants and beggars”—i.e., rural migrants. See “China: migrant worker dies in custody,” The Wire, 1 July 2003, http://web.amnesty. org/wire/July2003/China.

Reincorporating the Mingong: Dilemmas of Citizen Status

29

reform. Why should China’s leadership take such a risky course? This is a question endlessly debated in China (and Chinese studies) today. I wish to add one aspect that is something of a road less traveled. China is not the greatest source of uncertainty in today’s world, but a source of uncertainty it nonetheless is. In Qin Hui’s memorable phrase “only China can destroy socialism” (Qin, 2007). By “socialism” he clearly, if ironically meant the welfare systems of developed nations, including contemporary USA and Australia. His argument was that the mode of production which has been a fantastic success for China, based on export industries employing massive amounts of cheap rural migrant labor, threatened to undermine the economic and social institutions of other countries. The risk is that this uncertainty may at some time soon “blow back” and deliver major risks to China. It is thus in the long-term interests of China’s economic and political elites to move from what Qin (2007) pungently calls its “low human rights advantage.” This, rather than a low wage advantage, lies at the core of China’s comparative advantage. To change this requires changing the implicit contract currently underpinning hierarchical rent sharing and its subsystems like the hukou and migrant labor. (Also required is what Qin terms “the globalization of human rights”; this may be left aside in the present discussion). Such considerations may indeed have been at the back of the recent adoption of “social equity and justice” as policy objectives of the Chinese Communist Party (Kelly, 2006a). As to how this is done in concrete terms, I leave to a subsequent discussion. References Cai, F (2007). Zhongguo jingji mianlin de zhuanzhe jiqi dui fazhan de tiaozhan [A turning point facing the Chinese economy and its challenge to development and reform], Zhongguo shehui kexue [Social Sciences in China], 3. Dang, G (2007). Shenhua nongcun tudi gaige biyaoxing yu lujing xuanze [Necessity for deepening rural land reform and path selection]. http://www.cq.xinhuanet.com/ zhengwu/2007-10/24/content_11482308.htm [25 October 2007]. Dang, G (2007a). Huji gaige yinggai bimian langmanzhuyi [Don’t be too romantic about hukou reform]. http://news.xinhuanet.com/comments/2007-04/04/content_5932689. htm [4 April 2007]. He, B (2005). Village Citizenship in China: A Case Study of Zhejiang. Citizenship Studies, 9(2), 205–219.

30

D. Kelly

Huo D (2007). Laodongli shengyude mingong huang [Migrant shortage under surplus labour]. (http://fi nance.sina.com.cn/review/20070605/02113660192.shtml ) [5 June 2007]. Kelly, D (2006). Public Intellectuals and Citizen Movements in China in the Hu-Wen Era. Pacific Affairs, 79(2), 183–204. Kelly, D (2006a). Social Justice: Emerging Focus of Ideology and Policy in China. Contemporary Chinese Thought, 37(4) (special issue with guest editorial introduction and translations). Liang, J (2004). Shenzhen de ‘shuli xingdong’ ling qiongren hechu anshen liming? [Shenzhen’s ‘sorting out moves’—Where can a poor man settles down in peace?]. http://ncn.org/asp/zwginfo/da.asp?ID=59201&ad=8/23/2004 [28 August 2004]. Luo, XHZ & Qian, W (2007). China’s Land (re)Distribution and Economic Development. Paper presented at “Land Redistribution: Towards a Common Vision, Regional Course, Southern Africa, 9–13 July 2007,” (online at http://www.sarpn.org.za/ documents/d0002690/index.php). Luo, X & Kelly, D (2006). SARS and China’s Rural Migrant Labour: Roots of a Governance Crisis. In Population Dynamics and Infectious Diseases in Asia, A Sleigh., CH Leng., B Yeoh., PK Hong & R Safman (eds.), Singapore: World Scientific. Marshall, TH (1949). Citizenship and Social Class. London: Pluto Press. Qin, H (2005). The Common Baseline of Modern Thought. In The Mystery of the Chinese Economy: Selected Writings of Qin Hui, D Kelly (ed.), The Chinese Economy, 38(4), pp. 12–22. Qin, H (2005a). Polarisation is caused by land’s inability to be privatised. http://fi nance. sina.com.cn/economist/jingjixueren/20050121/18301313626.shtml [21 January 2007]. Qin, H (2007). Zhiyou Zhongguo neng hui shehuizhuyi ma? [Only China can destroy socialism?]. Paper presented at Monash University, 14 September. Translation available from D.A. Kelly. Solinger, D (1999). Contesting Citizenship in Urban China: Peasant Migrants, the State, and the Logic of the Market. Berkeley: University of California Press. Wang, FL (2007). Brewing tensions while maintaining stabilities: the dual role of the hukou system in Contemporary China. In Discontented Miracle: Growth, Conflict and Institutional Adaptation in China, DL Yang (ed.), pp. 49–87. Singapore, Hackensack: New Scientific. Wen, T (2007). Chengxiang eryuan jiegou de changqixing [Long-term nature of the urban–rural duality]. In Xiangtu Zhongguo yu wenhua zijue [Earthbound China and Cultural Awareness], H Ping (ed.), pp. 135–140. Beijing: Sanlian chubanshe.

CHAPTER 3 RIGHTING WRONGS: THE LANGUAGE OF POLICY REFORM AND CHINA’S MIGRANT WORKERS

Gloria Davies Monash University Scott Grant Monash University

1. Introduction In recent years, China’s central government has sought to redress the inequalities and injustices encountered by China’s rural migrant workers in their adoptive cities and workplaces. In particular, the government has pushed for the reform of labor relations and social security as interrelated aspects of socially responsible governance (Gu, 2001; Leung, 2003; Saunders and Shang, 2001; Zhu, 2002). Using the title “righting wrongs” to describe the language of policy reform in China since the turn of the century we seek to achieve two aims in this chapter: fi rst, to provide an analysis of the types of reforms being proposed; second, to explore whether the language of policy reform has produced positive outcomes. In other words, has the introduction of new regulations actually improved the situation of migrant workers? Our chapter is divided into three parts. The first provides a brief account of social stability as the key objective of China’s policy reform in recent years. The second examines key arguments presented in policy reform towards improving the situation of migrant workers and the third provides an assessment of the gap that remains between the

31

32

G. Davies and S. Grant

rhetoric of reform and the actual righting of wrongs. The language of policy reform to which we refer extends across all levels of government and NGOs. It is the language used in the production and dissemination of official directives as well as restricted and publicly available policy papers. In part two, we discuss, as an example of that language, a lengthy policy paper, China’s Labor Relations in Transition (Guo, 2004) produced by Institute of Labor Science (ILS) researchers in 2004 to assist MOLSS in its policymaking. The full version of that report remains unpublished as its readership was restricted to senior staff in ILS and MOLSS. A modified version, however, was posted on the Chinese Internet by late 2004 and remained in circulation. Our analysis is based on the publicly available version of that report. Part three draws on the field findings of a collaborative research project on migrant workers, undertaken in 2005 between Monash University in Australia and the ILS, Beijing, an affiliate body of the national Ministry of Labor and Social Security (MOLSS). 2. Responsible Governance in Aid of Stability Since the turn of the century, the central government’s use of the language of socially responsible governance has increased in direct proportion to the rising incidence of social unrest and public protests across China. As Shirk (2007) puts it: From the Communist Party leaders’ perch in Beijing, Chinese society looks like a cauldron boiling over with unrest. The leaders follow closely—and nervously—the increasing frequency, scale, and violence of protests throughout the country. Under their direction, the sociologists and public security bureaucracies have undertaken remarkably frank scholarship on the incidence and underlying causes of social protest. Everything they do—in both foreign and domestic policy—is aimed at trying to keep the lid on.

In China, the gap between rich and poor has become worryingly huge. Citing official Chinese sources, Shirk observes that, in the mid-2000s, China’s Gini coefficient is “somewhere between .46 and .49 and

Righting Wrongs: The Language of Policy Reform

33

approaching .50.” By comparison, she notes that “the U.S. Gini is .41, the United Kingdom’s is .36, and Germany’s is .28” (Shirk, 2007).1 Of particular concern to the central government is the risk of unrest among China’s migrant workers who now number over 150 million. Most earn a lowly wage (with wage arrears being a common occurrence) and are subjected to harsh working conditions and discriminatory treatment in the towns and cities where they have settled. A large part of that treatment takes the form of local regulations arbitrarily imposed by municipal authorities on migrant workers. Throughout the 1990s and since, these regulations have had the effect of normalizing the treatment of migrant workers as second-class citizens, rendering them ineligible for the range of public goods (including access to state-funded or subsidized education, housing, health and social security benefits, and a minimum living allowance) that urban residents assume as their right. Moreover, municipal governments have also grown rich from special fees and levies arbitrarily imposed on migrant workers for a range of services, including the issuing of temporary residential permits (Deng and Smyth, 2000; Zhong, 2004).2 This form of institutionalized discrimination is based on China’s household registration (hukou) system. Originally designed to control the flow of resources (including labor) between urban and rural China during the planned economy era, the hukou system provided urban residents with substantial social security entitlements while offering rural residents only the right to work the land, with limited access to subsidized health services. In the post-Maoist era, the hukou system has effectively created a situation of rural-urban “apartheid,” facilitating the discrimination and exploitation of rural residents when they become migrant workers in the urban sector (Chan and Buckingham, 2007). 1 In measuring income inequality, zero corresponds to complete equality and one to a single person having all the income. 2 As Zhong (2004) observes, local governments have demanded that migrant workers obtain various official documents, including “an identification card, a migrant identity card, a temporary resident card, an employment registration card, and so on,” in order to control migration via extending the inequalities of the hukou system. He adds, “It usually takes months and hundreds of yuan for a migrant worker to get a single piece of paper. This system has become a cash cow for governments at various levels.” The significance of these fees and levies as part of the “non-tax” revenue of local governments is discussed by Deng and Smyth (2000).

34

G. Davies and S. Grant

To date, however, the government has sought to modify, rather than to abandon that system. It has introduced numerous regulations to facilitate the movement of rural residents into towns and cities but the net effect has been less than promising. In some cases, movement has become even more difficult (Chan and Buckingham, 2007). The difficulties of managing a restive population are implicit in the tension between the central government’s willingness to issue regulations aimed at achieving equality for migrant workers and its reluctance to abolish the hukou system as the root cause of inequality. On the one hand, the central government is keen to redress the injustices migrant workers have suffered because it fears that, if left unchecked, these injustices will lead to the further widening of unrest. On the other hand, enormous resistance among urban citizens and municipal governments makes it extremely difficult for the central government to abolish the hukou system. In dealing with these competing interests, the central government has sought to promote the message of responsible governance to local government officials. It issues directives from its various branches (including MOLSS) with the aim of achieving compliance from local governments. It is thus important to recognize that policy reform in relation to migrant workers is aimed, first and foremost, at effecting a positive change in local governance. This is evident in the key directive, Circular No. 1 issued by the State Council Office in January 2003, which provided the basis on which different central government agencies have since issued related policy directives. Subtitled Circular on the Good Management and Provision of Services for Rural Migrant Workers, (Guanyu zuohao nongmin jincheng wugong jiuye guanli he fuwu gongzuode tongzhi), the document consists of six key items: 1) the abolition of restrictions (imposed by the former “administrative approval system”) on the employment of rural migrant workers in urban areas; 2) the abolition of all fees and levies previously imposed on migrant workers by various government agencies; 3) the introduction of penalties for enterprises that default on migrant worker wages and/or impose arbitrary wage deductions, together with the introduction of compulsory labor contracts for all migrant workers that stipulate such items as the term of the contract, duties, salary and mode of payment; 4) the introduction of work safety measures (including work safety

Righting Wrongs: The Language of Policy Reform

35

training for migrant workers, preventive measures for specific occupational health hazards, and inspection of work premises) to be undertaken by local governments at all levels, as well as adequate compensation for those injured or killed in the course of performing their duties; 5) information campaigns for migrant workers on preventive medicine and health education to be conducted by health departments at all levels, the adoption of appropriate “concrete measures” to provide migrant workers with medical insurance if conditions permit, as well as the inspection of dormitories and sanitation facilities set up by enterprises for migrant workers to ensure that health standards are met; and 6) the implementation of compulsory education for the children of migrant workers, responsibility for which is assigned to local governments to enroll such children in public primary and junior middle schools. The circular also stipulates that local schools are prohibited from charging additional fees for the enrolment of migrant workers’ children. Moreover, local governments are urged to specifically allocate funds to the education of these children. From this list, it is clear that the State Council Office’s Circular No. 1 is directed in the fi rst instance towards local governance reform. In a situation where local governments have habitually manipulated the hukou system to issue discriminatory regulations against migrant workers, policy reform cannot proceed without effective governance reform: the two are intertwined. A 2005 UNESCO-funded study of China’s migrant labor notes that three conditions must be met for the effective implementation of “a good policy”: the specific government agencies involved in policy implementation must be clearly identified; the identified agencies must be able to cooperate with other related agencies; and migrant workers must be brought into the process of policy implementation as active participants to avoid the risk of their ultimate rejection or indifference to the policy in question (Zhan, 2005). In the central government’s public communications, social stability is writ large as the overarching goal of policy reform. Thus it is not surprising to find the same goal being invoked in the policy recommendations of state agencies and NGOs alike. For instance, the same UNESCO study notes that to facilitate effective implementation, new policies must be framed to reflect the “New Paradigm for Development” the central government launched in October 2003, which sets out the general argument for “more

36

G. Davies and S. Grant

balanced, comprehensive and sustainable development.” The report then notes the new policies must also be identified “as indispensable components in building a harmonious society” (Zhan, 2005). In the 2004 ILS report, China’s Labor Relations in Transition, discussed below, stability is also emphasized as the overarching goal of policy reform. For instance, the ILS report includes such warnings as: If the current situation [of entrenched urban–rural inequalities] is allowed to continue, then it will undoubtedly result in a society where the wealth of a small group of people is built on the exploitation and oppression of workers…a society characterized by intense conflict and endless turbulence. This is not only incompatible with our goal of achieving common prosperity for everyone in a socialist market economy, it will also lead to the collapse of our grand project of building a thriving, powerful and civilized democratic nation.

Produced in 2004, the ILS report describes social stability in a variety of ways but does not refer to a “harmonious society” because this phrase had not yet appeared in mainland public discourse. It became the watchword of social stability only after February 2005, when Hu Jintao fi rst declared it as the nation’s goal. In this regard, we should note that the orchestrated uniformity of official statements about policy reform is a legacy of the Party-state’s well-established strategies of propagandization. These strategies, fi rst developed during the planned economy era for political campaigns and mass mobilization, have now been adapted to disseminate information about policy reforms to local governments and the general public. Thus, different branches of the central government utilize the same vocabulary to create the semblance of a collective determination to achieve stability as well as to reinforce the message that the reforms being proposed are correct and vital. For instance, the State Council Office’s January 2003 Circular No. 1 translated key issues raised in the 2002 White Paper on Labor and Social Security in China (The Information Office of the State Council, 2002) into a series of practical stipulations and is, in turn, reflected in the tenor of the Party Congress’s October 2003 “New Paradigm for Development.” Both the “New Paradigm” and Circular No.1 are also given further

Righting Wrongs: The Language of Policy Reform

37

elaboration in the 2004 ILS report. In this regard, the ILS report supplied both theoretical and practical formulations for the reforms that were then in the process of being implemented. As a leaked classified document, the ILS report has attracted public attention, with one website advising readers to note “its important content and the views expressed” (Guo, 2004). So far, the report has appeared only on non-official sites. Despite the fact its wider circulation was not officially endorsed, the government has clearly not taken steps to have the document removed from those sites where it now appears. This is most likely because the ILS report serves as good propaganda: through its numerous criticisms of current flaws in governance together with its robust policy recommendations, the report helps to promote the view that the central government is making a determined effort to implement socially responsible governance. 3. Making the Case for Protecting Migrant Workers’ Rights The 2004 ILS report, China’s Labor Relations in Transition, offers a general survey of existing and entrenched problems of labor relations in China, together with several practical recommendations for labor reform. It identifies and prioritizes its policy concerns as follows: fi rst, the achievement of equality between urban workers and rural migrant workers through the elimination of all existing inequalities (including numerous references to the hukou system as the root cause of problems); second, the resolution of labor problems and difficulties encountered by the employees of state-owned enterprises. In this section, we confine our analysis to the report’s discussion of remedies for problems that migrant workers currently face. The report presents these problems under the three headings of urban and local protectionism; inadequate social security; and the exploitation of rural residents in the process of land transfer. In urging for the elimination of urban and local protectionism, the report identifies as its key task the dismantling of local “vested interests” (liyi geju) that have benefited from the discriminatory treatment of migrant workers, regarding the range of discriminatory local regulations as synonymous with these vested interests. It notes that there would be significant resistance to any reform of the status quo insofar as “urban

38

G. Davies and S. Grant

authorities would not only lose benefits gained through charges imposed on migrant rural workers, they would actually have to provide services, thus directly increasing the government’s expenditure and financial burden.” Moreover, “urbanites would face even stronger competition from migrant rural workers in the labor market, with an especially significant impact on ordinary urban workers. Even larger numbers of urban residents would join the ranks of the unemployed and the poor, which in turn would make the task of finding employment for and supporting the poor in urban areas even more difficult, indirectly increasing the fi nancial burden of these areas, and so on.” The report also notes that resistance to policy and governance reform would be strongest in those places with the largest populations of migrant workers. Thus the report urges the central government to regard the elimination of urban and local protectionism as a long-term project that would not reap immediate benefits. It recommends the formulation and implementation of employment laws for migrant workers in accordance with the national constitution and the Labor Law, such that it would become clear to all migrant workers that they enjoy the same rights as urban workers, including the right to fair employment, the right to enjoy social security and community services, and that they understand these rights are “safeguarded and guaranteed.” In relation to improving social security for migrant rural workers, the report urges the central government to regard social security as fundamental to “the establishment of a unified rural-urban labor market” and to “equal employment prospects for the rural population.” The hukou system is identified in several places as the root cause of entrenched inequalities and numerous examples are provided of how that system had been manipulated to exploit migrant workers. For instance, the report notes that: Even though old-age pensions were ‘broadened’ to include migrant rural workers, in fact in the majority of cities, participation in pension schemes is still limited to residents with local household registration.

The report then urges the government to take into account the complexity of the status quo when implementing old-age pensions for migrant

Righting Wrongs: The Language of Policy Reform

39

workers. It cites the example of the common practice among municipal governments to allow migrant workers already enrolled in social insurance schemes to take their paid contributions with them when they leave the area, thus defeating the purpose of setting up pensions for these workers in the fi rst place. The report also notes: a common phenomenon that has arisen from this kind of situation is that migrant rural workers are not interested in old-age pensions, and even conspire with their employers to avoid the payment of the insurance contributions.

The report then identifies two measures to be adopted in addressing the problem of inadequate or non-existent social security: first, it argues more migrant workers would enroll in social insurance schemes if the high level of contributions mandated by existing schemes could be significantly reduced, noting this would mean that new entrants to social insurance would be entitled to a level of benefits lower than that currently enjoyed by urban retirees. Second, the report recommends a significant (but unspecified) increase in the government’s social insurance expenditure to ensure a situation of stability. The additional expenditure, it claims, would help to fund the benefits that retired urban employees expect to receive but without disruption to the extension of social security to migrant workers and rural residents previously not covered. In brief, the report calls for policy reform that would lead to the: establishment of a system for social security transfer and payment suited to the national characteristics of labor flows. By this means, the rights and interests of mobile workers (including migrant rural workers) would be protected, enabling the development of a more open household registration system and assisting in the formation of a nationally unified labor market.

In relation to eliminating the exploitation of rural residents in land transfers, the report states that “income from the sale of rural land is an important source of funds for rural people moving to urban areas to establish themselves in those new areas,” adding the current system of rural land transfer in China discourages the urbanization of the rural population. It explains that because compensation paid to peasants for the

40

G. Davies and S. Grant

transfer of their land is determined in advance by village cadres or senior local officials, the amounts paid are characteristically low and “seriously at odds” with the market value of the land. Thus: rural residents moving to urban areas are deprived of the rightful income from the transfer of their land and the modest compensation that they actually receive is insufficient to assist in their resettlement in the urban areas.

The report also notes this form of entrenched exploitation and corruption has resulted in migrant workers being generally “unwilling to give up their contractual and commercial rights over the land, even if they are engaged in long-term employment in urban areas.” The result, accordingly, is that cultivable land is either left uncultivated or inefficiently used for “part-time farming” and “subsidiary farming.” The report thus recommends the establishment of a system wherein the compensation for land transfer is determined by the land’s market value, with the added benefit of establishing and strengthening the rights of peasants over the land they have contracted to cultivate, including rights of possession, commercial use, and inheritance. The report also urges the government to explore the “exchanging of land for social security.” In several places, the report emphasizes that its recommendations should be regarded as part of an integrated plan of policy reform aimed at the achievement of three inter-related broader objectives: the establishment of a unified and fair labor market, the elimination of urban–rural inequalities, and the achievement of equal employment for all citizens. Having outlined the types of reforms required, the report then draws attention to the need for active consolidation of the “New Paradigm for Development” and the policy directives adopted in October 2003 during the Third Plenary Session of the CCP’s 16th Central Committee.3 The report argues that the shared predicament of migrant workers and laidoff workers at SOEs is indicative of the prevalence of “primitive and

3 The report reiterates in three places the importance of formulating policy in accordance with the “Decision by the Central Committee of the Communist Party of China on a Number of Issues Regarding the Improvement and Perfection of the Socialist Market Economy,” issued as part of that Sixteenth Party Congress.

Righting Wrongs: The Language of Policy Reform

41

uncivilized labor relations” in China and warns of dire consequences if the status quo remains unchanged. The report devotes several pages to a descriptive account of three developmental stages of labor relations within a market economy, with “primitive capital accumulation” and “free-contracting labor relations” as the fi rst stage, the “collective bargaining model” as the second stage, and the “human resources model” as the third stage. The report also notes these are: not three clearly delineated stages of development. On the whole, they more often than not co-exist in a mixed state within the boundaries of a single country…generally speaking the fi rst and second types of labor relations prevail in developing countries, while the second and third types are dominant in developed countries.

The report’s substantial description of these three stages of labor relations would appear to be an exercise in providing policy makers with a developmental framework for viewing the “human resources model” as the ultimate goal of policy reform. It describes the “human resources model” as the most equitable of the three models and the one that best meets the needs of both employers and employees. With reference to the three models as reflecting three different stages of industrial development, the report states that China’s labor relations remain mostly at the fi rst stage and requires urgent reform to achieve a model that incorporates features of both the “collective bargaining” and the “human resources” models. It argues that for both these models to be effective in practice, the government must foster the development of unions capable of “truly representing the interests of workers” in accordance with China’s Trade Union Law and Trade Union Constitution. Comparing China’s labor relations unfavorably with those of developed capitalist market economies, the report recommends that: because China’s civil society is underdeveloped and collective bargaining largely relies on government facilitation, China must set out clear regulations regarding collective bargaining.

42

G. Davies and S. Grant

The second half of the report addresses the problems of labor dispute, the inadequacy of trade unions and workplace supervision as well as the inadequate enforcement of the Labor Law and regulations pertaining to wages, working hours and work conditions. It cites Japan’s labor relations as an exemplar in this regard. The report ends by stressing that “the current system for handling labor disputes is gravely flawed…and has reached the point where major surgery is urgently required.” Recommendations raised throughout the report are then reiterated, with particular reference to the need for better enforcement of the regulations on labor supervision, singling out for special mention the “strengthening of supervision of lower levels by higher levels” (meaning, closer supervision of local governments by the central government). There is a striking resemblance between the language of this 2004 ILS report and the critical discourse on unsustainable development fi rst popularized by public intellectuals like He Qinglian and Qin Hui in the late 1990s. Indeed, the report’s account of “primitive capital accumulation” and “rent-seeking” on the part of local officialdom is heavily reliant on He Qinglian’s acclaimed 1998 exposé of official corruption, The Pitfalls of China’s Modernization. Commentators have noted that, despite He’s critical candor, the authoritarian Party-state approved her book for publication in an attempt to show that it was heeding public concern about endemic official corruption (Liu and Link, 1998). The ILS report, however, does not acknowledge its use of He’s work. This is understandable given that, by 2000, He’s criticisms no longer suited the government’s purpose. Subjected to constant scrutiny, she soon chose to resettle in the United States. It is evident that the authors of the ILS report were aware that their policy recommendations were tantamount to an extensive wishlist, and that the process of policy implementation was fraught with difficulties. For instance, when recommending the “human resources model” as the best type of labor relations for China, or when urging for the establishment of an effective and independent industrial relations tribunal, the authors hasten to add that these entities should be regarded as “ideal types of institutions.” The implication is that the central government must persist with long-term reforms that do not appear to deliver immediate gains.

Righting Wrongs: The Language of Policy Reform

43

4. Have Wrongs Been Righted? In several places, the 2004 ILS report uses concrete examples to illustrate the enormous gap that remains between the language and the implementation of policy reform. As noted earlier, much of the policy reform in relation to migrant workers is directed, fi rst and foremost, at the reform of local governance. The ILS report cites the falling wages of migrant workers in Shenzhen as reflecting a troubled economy in which crony capitalism had allowed a minority of local elites to reap enormous profits at the expense of the majority of workers. It notes that the average monthly wage of Shenzhen’s migrant workers had risen throughout the 1980s to reach a level between RMB800 to RMB1000 by the early 1990s—thereby attracting many workers to that city—but that the average migrant worker wage then fell over the next decade to less than RMB600 by 2002. The report also cites the pessimistic findings of the Shenzhen Institute of Contemporary Observation (Shenzhen shehui guancha yanjiusuo). On the basis of numerous field surveys, the Shenzhen Institute found that there was a very high incidence of illegal workplace practices being suppressed by township governments. In fact, researchers from the Shenzhen Institute noted the indifference of local labor officials to the complaints of migrant workers and related that when they sought to investigate the sudden death of a female worker from overwork, they were “abused by the staff [of the local labor bureau] for attempting ‘to cause trouble’.” Thus, the ILS report asks: “In an environment where entrepreneurs (capital) large and small are seeking connections with government officials at all levels to act as their ‘patrons’; where employers need only outlay a trifling amount to ensure ‘certainty’ and ‘fairness’ for their schemes, how can one speak of impartial law enforcement?” A subsequent field survey of local governance practice in Harbin, Changsha and Ningbo (conducted as part of the aforementioned 2005 Monash University-ILS project) found that there were significant obstacles to the implementation of policy reform. In investigating the extent to which central government directives mandating the eradication of discriminatory regulations had been successfully implemented, the ILS researchers found that all three cities showed some degree of improved efficiency in the

44

G. Davies and S. Grant

issuing of temporary residence certificates for migrant workers, together with the abolition of fees. Nonetheless, it remained extremely difficult for migrant workers to attain urban hukou registration. New criteria of property ownership and substantial personal assets had been introduced to prevent migrant workers from becoming fully-fledged urban residents. In relation to the provision of social security and employment-related services for migrant workers, the ILS researchers found, in all three cities, only a minority of migrant workers were enrolled in social insurance schemes. They also found the local labor bureau in Ningbo (a major “receiver” of migrant workers) kept the best records of migrant workers; that there were huge gaps in the records of the Changsha Labor Bureau and that such record-keeping was largely absent in Harbin. They also noted that local labor officials complained of the enormous increases in workload caused by the new and largely unfunded central government directives of showing “impartiality and equal favour” (yishi tongren) to migrant workers. In particular, the ILS researchers noted local officials from various government agencies in all three cities expressed concern that the central government’s new policies would have the effect of further exacerbating already widespread resentment among urban citizens towards migrant workers. A key finding of the 2005 Monash-ILS field survey is that, in the absence of adequate funding, local implementation of central government policy cannot be effective. Similarly, the 2004 ILS report emphasizes the importance of central funding for nation-wide labor supervision, social security reform and reform of the rural sector. The government has clearly taken heed of this advice and has spent generously in its efforts to speed up policy implementation in recent years but the magnitude of the problems far exceeds the current levels of state expenditure. For instance, according to official figures, a sum of more than RMB 100 billion (US$12.5 billion) was set aside in 2006 for rural reforms (with contributions from central, provincial and municipal governments) (Wen, 2006). Because the central government had abolished agricultural taxes as part of rural poverty alleviation, most of that amount was already earmarked as replacement funds for lost tax income (to support the work of local governments) rather than to fund much-needed health, educational and social services. A 2006 the Asia

Righting Wrongs: The Language of Policy Reform

45

Times report noted, “Total debts of township and village governments alone may amount to well over one trillion yuan (US$125 billion), or more than 5% of gross domestic product (GDP). To put things in perspective, Argentina’s total external debt is $119 billion” (Kundu, 2006). In the case of social security reform, a 2006 KPMG/Reuters report placed China’s pension assets at about 5 to 7% of GDP, against 33% in South Korea and 50% in Japan. The problem of low pension assets is further complicated by large unfunded pension liabilities that the government incurred from the collapse of SOEs. Zhou Xiaochuan, governor of the People’s Bank of China, thus called for the urgent overhaul of the welfare system “while the government has the fi nancial resources” to tackle the problems of healthcare and pension insurance for China’s aging population (McGregor, 2006). In relation to the ILS recommendation of the “exchanging of land for social security”, in late October 2004, the Shanghai municipal government pioneered a new town insurance scheme (zhenbao) designed, among other things, as compensation for land-deprived peasants in the city’s outer areas. The scheme has proven quite successful, with some 1.31 million people enrolled by August 2006.4 The new town insurance scheme in Shanghai is discussed in more detail by Gloria Davies, Ingrid Nielsen and Russell Smyth in Chapter 5. In relation to the improvement of labor supervision, the draft Labor Contract Law (laodong hetong fa cao’an), aimed at expanding the powers of existing trade unions to protect the rights of workers in the workplace, was introduced in 2006.5 Since the draft law is directed mainly towards protecting the rights of workers in large foreign-owned companies or companies that supply foreign fi rms, it has received international media attention (Barboza, 2006). Yet, as the 2004 ILS report points out, large foreign enterprises and joint-venture enterprises “basically comply with the labor laws” and “treat their workers far more humanely than 4 See “Hu mi zhi she hui bao zhang wang, 9 xiang cuo shi shi bu tong qun ti ge you bao zhang” (Shanghai spreads social security net, 9 policies benefit different groups), posted December 13, 2006 at http://www.china.com.cn/policy/txt/2006-12/13/content_7499280.htm 5 Zhonghua renmin gonghe guo laodong hetong fa (cao an) (The People’s Republic of China Labor Contract Law (Draft)), posted on Xinhuanet 20 March 2006, at news.xinhuanet.com/ politics/2006-03/20/content_4324373.htm

46

G. Davies and S. Grant

middle and small enterprises.” Abuse of migrant workers and labor violations tend to occur in the mostly unregulated small to medium size enterprises. In fact, against its own policy reform recommendations, the ILS report notes that: The government can’t be expected to regulate every single aspect of every single individual enterprise’s labor relations. A city, a county and even a township often has thousands of enterprises. Totally relying on the small number of enforcement personnel from the relevant government agencies to supervise such a vast number of enterprises is unthinkable. Even if the government decided to enforce the regulations, the cost would inevitably outweigh the benefits.

To conclude, the language of policy reform presents rural migrant workers as citizens who have been wrongly subjected to exploitation and discrimination, on whose behalf the government now seeks redress through such remedies as social security provisions and the abolition of local fees and taxes. In the official media, migrant workers are now regularly portrayed as citizens who have made significant contributions to China’s economic growth and must be accorded the same status as urban residents. To the extent that the rhetoric of protecting the rights of migrant workers now pervades mainland public discourse through the state-run media, the language of policy reform has acquired the status of politically correct speech. It remains unclear, however, as to whether the dissemination of that language has produced actual positive outcomes for migrant workers. The fi ndings of the 2005 Monash-ILS project indicate that improvements in local governance were very limited and that discrimination and exploitation of migrant workers continued to prevail. Moreover, despite the robust reforms outlined in the 2004 ILS report, labor supervision and regulation remain very weak. In this regard, the frequency of Chinese and foreign news reports about the abuse and exploitation of migrant workers provides ample evidence of little progress on labor reforms. One of the most poignant reports published in 2007 on the abuse of migrant workers concerns the plight of laborers working seven-day weeks,

Righting Wrongs: The Language of Policy Reform

47

without basic safety equipment, at Olympics construction sites in Beijing. Six died in March 2007 and: the state-owned company carrying out the project was accused of a cover-up after the six were buried in a partial collapse of the tunnel, waiting eight hours to report the accident while carrying out its own rescue attempt.

It was also reported that supervisors confiscated workers’ mobile phones to prevent word leaking out (Pouille, 2007). Thus, while Beijing-based researchers and senior policy makers continue to produce fine words about equal treatment for migrant workers and the enforcement of labor regulations, abuse of migrant workers and violations of labor standards are happening not only in the provinces but right under their noses. Against the daily affirmations of a “harmonious society” that pervade the official airwaves, there are also disharmonious sayings like “the central government invites the guests, the local government pays the bill” (zhongyang qing ke, difang mai dan) as well as such disturbing neologisms as “death by overwork” (guolao si). A Shanghai-based analyst observed, “The Communist Party once boasted of throwing off the three mountains on people’s back—‘imperialism, feudalism, cronyism and capitalism’—with the success of its 1949 revolution. Now poor social-security, public-health and education systems are called the new ‘three new mountains’ on people’s backs” (Zhou, 2007). The popularity of such formulations indicates that the language of policy reform remains less than credible among the wider public. Moreover, while local officials may maintain the appearance of “singing in tune” with central government policies, ineffective top-down supervision has also enabled them to protect their vested interests undetected. References Barboza, D (2006). New York Times. China Drafts Law to Empower Unions and End Labor Abuse. http://topics.nytimes.com/top/news/international/countriesandterritories/china/ index.html?query=UNFAIR%20LABOR%20PRACTICES&field=des&match=exact [13 October 2007]. Chan, KW & W. Buckingham (2007). UW Faculty Web Server. Is China Abolishing the Hukou System? http://faculty.washington.edu/kwchan/AbolishHukou-final.pdf [September 2007].

48

G. Davies and S. Grant

Deng. X & Smyth, R (2000). Non-Tax Levies in China: Sources, Problems and Suggestions for Reform. Development Policy Review, 18(4), 391–411. Gu, EX (2001). Beyond the Property Rights Approach: Welfare Policy and the Reform of State-Owned Enterprises in China. Development and Change, 32(1), 129–150. Guo, Y (2004). Beijing Dajun Centre for Economic Observation and Studies. China’s Labour Relations in Transition. http://www.dajun.com.cn/laodongguanxi.htm [9 January 2007]. Information Office of the State Council, The (2002) Labor and Social Security in China, “ II. Formation of New Labour Relations”, white paper released by the Information Office of the State Council, April 29, at http://english.peopledaily.com.cn/features/ lsspaper/lss2.html Kundu, SL (2006). Asia Times. Rural China: Too Little, Too Late. http://www.atimes. com/atimes/China_Business/HG19Cb01.html [19 June 2007]. Leung, JCB (2003). Social Security reforms in China: Issues and Prospects. International Journal of Social Welfare, 12(2), 73–85. Liu, B & P, Link (1998). The New York Review of Books, 45(15). A Great Leap Backward? www.nybooks.com/articles/717 . McGregor, R (2006). Financial Times. Beijing urged to overhaul welfare system. http:// www.ft.com/cms/s/dbc11f02-7904-11db-8743-0000779e2340.html [21 November 2007]. Pouille, J (2007). The Independent. Beijing labourers dying in race for Olympic deadline. http://news.independent.co.uk/world/asia/article2449969.ece [15 April 2007]. Saunders, P & Shang, X (2001). Social Security Reform in China’s Transition to a Market Economy. Social Policy and Administration, 35(3), 274–289. Shirk, SL (2007). China: Fragile Superpower. Oxford: Oxford University Press. Wen, J (2006). China Daily. Rural Reforms Entered New Stage. http://www.chinadaily. com.cn/china/2006-09/04/content_680354.htm [9 April 2007]. Zhan, Z (2005). Rural Labour Migration in China: Challenges for Policies (Paris: UNESCO). http://www.unesdoc.unesco.org/images/0014/001402/140242e.pdf . Zhong, Z (2004). Migration, Labor Market Flexibility and Wage Determination. The Developing Economies, 43(2), 4–22. Zhou, J (2007). Asia Times. Cash-rich Beijing to set up rainy day fund. http://www. atimes.com/atimes/China_Business/IB24Cb02.html [24 February 2007]. Zhu, Y (2002). Recent Developments in China’s Social Security Reforms. International Social Security Review, 55(4), 39–54.

SECTION 3 MIGRANT PARTICIPATION IN SOCIAL PROTECTION SCHEMES

49

This page intentionally left blank

CHAPTER 4 THE DESIGN OF A SOCIAL SECURITY SYSTEM FOR RURAL MIGRANT WORKERS IN CHINA

Dewen Wang Institute of Population and Labor Economics, CASS

1. Introduction Rural-urban migration has been one of the important forces accelerating the pace of urbanization in China. As the economist Joseph E. Stiglitz has pointed out, urbanization in China will have a profound effect on the lives of human beings in the 21st century (Stiglitz, 2006). Empirical evidence shows that the majority of rural migrant workers will choose to live in cities in the future. Compared with urban local workers, however, social security coverage is very low for rural migrant workers. The issue of rural migrant workers’ low social protection by social insurance schemes will inevitably threaten the sound development of urbanization and social stability in China. At present, the Chinese government is making efforts to extend the coverage of social insurance schemes to rural migrant workers so as to narrow the advantage gap between local and migrant workers. This chapter discusses the issues of social insurance coverage for rural migrant workers. First, results from the second-round China Urban Labor Survey (CULS), 2005 are summarized to describe rural migrant workers’ current social security coverage and the characteristics of rural migrant workers who participate in social insurance schemes. Second, the chapter discusses why rural migrant workers’ participation in social insurance schemes is so low. Third, pilot experiments conducted in several Chinese provinces and cities are described and the reform

51

52

D. Wang

progress in recent years in China is discussed. The final section concludes with policy implications. 2. Data In 2005, the Institute of Population and Labor Economics (IPLE) of the Chinese Academy of Social Sciences (CASS) conducted the second round of the China Urban Labor Survey (CULS) in five large cities (all provincial capitals) in different parts of the country. The surveys were conducted in collaboration with faculty at the University of Michigan and Michigan State University, and supported by the World Bank. The CULS surveyed migrant and local resident households in each city. The 2005 CULS also surveyed migrants in five small cities located near the five large cities. In the small cities local resident households had been surveyed the previous year by IPLE as part of the China Urban Social Protection Survey (CUSP). The CULS also surveyed one resources-based city (Daqing City) and one new-emerging city (Shenzhen City). Therefore, there were 12 cities in total in the second-round CULS survey. In each city, representative samples of local residents and migrants were independently selected in a two-stage procedure. Using recent data on the local resident population of each neighborhood, a fixed number of neighborhoods were selected in each city using probability proportionate to size (PPS) sampling. In each selected neighborhood, a sampling frame (list of households) was constructed in consultation with staff of neighborhood offices. Using the constructed sampling frame for each neighborhood, a fi xed number of households was randomly sampled in each neighborhood. In large cities, about 500 local resident households and 500 migrant households were sampled. In the other cities the sample sizes were 400 or 500 of each household type. In all, the survey collected data on 6324 local resident households and 5521 migrant households. The strengths of the CULS are that it surveys migrants (including rural migrants and urban migrants) and local residents in an identical fashion; it collects very detailed information on income and expenditure; and, it collects sufficient data on each city to calculate city-level aggregates.1 1 For a detailed description of the CULS survey, see Park and Wang (2007).

Designing a Social Security System for China’s Migrants

53

3. Social Security Coverage and Characteristics of Rural Migrant Workers The information on rural migrant workers’ current coverage by a social security system is very important to both policy assessment and policy formation. According to the 2005 CULS survey (See Table 1), the participation rates of migrants in pension, unemployment, work injury and medical insurances is very low compared with urban residents and urban migrant workers. The coverage rates for pension, unemployment, work injury and medical insurances for rural migrant workers were 6.0%, 3.4%, 6.0% and 4.0%, respectively. The results in Table 1 also show small cities are more open to providing social insurance for rural migrants. In small cities, the participation rates of rural migrant workers in pension insurance, unemployment insurance, work injury insurance and medical insurance Table 1. Social Insurance Coverage for Local Residents and Migrants in 2005 (%). Local resident workers

Migrant workers

Rural migrant Urban workers migrant workers

Pension insurance Large cities

59.3

5.5

2.7

19.7

Small cities

62.0

16.3

11.2

35.8

12 cities

59.8

10.7

6.0

26.3

Unemployment insurance Large cities

20.8

1.8

1.3

4.1

Small cities

29.7

12.5

8.8

25.9

12 cities

22.8

5.5

3.4

12.2

Large cities

17.4

3.6

2.4

9.8

Small cities

15.6

11.8

29.5

8.8

6.0

17.3

Work injury insurance

12 cities Medical insurance Large cities

48.1

3.7

1.8

13.5

Small cities

57.0

15.8

11.0

33.4

12 cities

50.0

9.8

5.6

23.6

Source: IPLE-CASS, The 2005 China Urban Labor Survey.

54

D. Wang

Table 2. Demographic Characteristics of Rural Migrant Workers Who Participated in Social Insurance Schemes in 2005. Participation Rates (%)

Participation Composition (%)

UnemployUnemployPension ment Injury Medical Pension ment Injury Medical

Age Group 16 to 29

7.3

5.2

8.3

7.6

48.1

60.0

54.7

53.4

30 to 39

5.7

40 to 49

3.2

2.8

5.3

5.4

39.2

33.0

36.6

39.6

0.9

2.7

1.9

7.9

3.9

6.7

50 to 59

5.0

6.2

2.4

2.7

2.5

4.8

3.2

2.1

2.0

Female

4.4

3.0

4.6

4.7

35.9

42.7

38.3

41.2

Male

7.6

3.9

7.3

6.6

64.1

57.3

61.7

58.8

Gender

Education Primary school

2.6

0.9

2.0

1.8

9.0

5.4

6.8

6.7

Middle school

4.6

2.9

5.1

5.0

42.3

45.8

46.3

48.8

High school College

7.9

4.0

7.7

6.8

24.9

21.8

24.4

23.1

21.2

13.9

20.0

17.9

23.8

27.0

22.5

21.4

Health status Very good

6.6

3.8

6.9

6.3

70.8

70.1

73.9

71.6

Good

5.0

3.3

5.0

4.5

22.0

25.1

21.9

21.2

Normal

4.7

1.6

2.7

4.4

6.8

4.0

3.8

6.7

Bad

3.9

3.9

3.9

4.5

0.4

0.7

0.4

0.5

Very Bad

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Source: IPLE-CASS, The 2005 China Urban Labor Survey.

were 11.2%, 8.8%, 11.8% and 11.0% respectively. These participation rates are considerably higher than those in large cities, where more attention is paid to the provision of social insurance for urban local residents. It is not surprising that the participation rates of rural migrant workers are much lower than those of urban migrant workers because hukou status is an important determinant of entitlement for social security. As shown in Table 2, young rural migrant workers have (as of 2005) higher participation rates in social security schemes. The participation

Designing a Social Security System for China’s Migrants

55

rates across all four insurance types trends downwards with age. The highest rates of participation in pension insurance, unemployment insurance, work injury insurance and medical insurance are in the 16 to 29 age group. In 2005, participation rates for this age group in these four insurance types are 7.3%, 5.2%, 8.3% and 7.6% respectively. The participation rates for pension insurance, unemployment insurance, work injury insurance and medical insurance in the 30 to 39 age group are 1.6 to 2.4 percentage points lower than those for the 16 to 29 age group. Participation in pension schemes is most concentrated in the 16 to 39 age group: 87.3% participation in pension insurance, 90% in unemployment insurance, work injury insurance and medical insurance. There is a gender difference in participation rates in social insurance schemes. Men have higher participation rates than women: the participation rates for pension insurance, unemployment insurance, work injury insurance and medical insurance for men were 7.6%, 3.9%, 7.3% and 6.6%, 0.9–3.4 percentage points higher than for women. The number of men with at least one type of social insurance is 1.3–1.8 times that of women. The participation rates are highly related to educational attainment. With an increase in years of schooling, the participation rates increase dramatically. For those who attended college and higher levels of education, the participation rates for pension insurance, unemployment insurance, work injury insurance and medical insurance are 21.25%, 13.9%, 20.0% and 17.9%, 8–15 times the participation rates for those with primary school and below education. As rural migrant workers who have middle school education account for more than half of the total rural migrant workers, their participation rate in a social insurance scheme is more than 40%. Health status is also a demographic factor that affects participation in social insurance schemes. Rural migrant workers who have good health status tend to have high participation rates in social insurance schemes. For example, rural migrant workers who have very good health have the highest rates, while those who have very bad health status are not covered by any social insurance schemes. Although the proportion of rural migrant workers who have bad and very bad health status is less than 1% , in order that they might continue to live and work in cities, their support needs are, however, greatest.

56

D. Wang

As shown in Table 3, human capital directly determines the workers’ labor market performance, such that the participation rates of rural migrant workers in social insurance schemes are positively related to their earnings. For the lowest wage group, the participation rates for pension insurance, unemployment insurance, work injury insurance and medical insurance are 0.9%, 0.5%, 1.6% and 1.4%, respectively. For those on contracts, participation rates are 13.45%, 5.9%, 12.0% and 11.2%, respectively. High education and good health represent high human capital, so the social insurance participation rate for rural migrant workers with high human capital is also comparatively high. Employment status is also an important factor affecting participation in social insurance schemes. In Table 3, the participation rates of the selfemployed are extremely low, with most participants in social insurance schemes being employees. The status of the labor contract is another important factor affecting participation in social insurance schemes. Rural migrant workers who signed labor contracts have the highest participation rates: 34.8%, 21.2%, 35.7%, and 34.8%, respectively. The participation rates also vary across industries. Manufacturing is the largest industry that absorbs rural migrant workers. Relatively, it is easier to monitor and regulate, so the participation rates of rural migrant workers in social insurance schemes in manufacturing are higher. 4. Why participation Rates in Social Security Schemes among Rural Migrant Workers are so Low Although the participation rates in social security schemes of rural migrant workers vary between individuals, employment and industries, their aggregate participation rates are extremely low compared with urban local workers. The underlying reason for this is the institutional segregation rooted in the hukou system. As discussed elsewhere in this volume, the hukou system is a man-made institutional arrangement designed to impose strict controls on population migration between rural and urban areas and across regions in the command economy—an “internal passport”, as Davies and Grant put it in Chapter 3 of this volume. While the most obvious function of the hukou system is as a residential registration system, in reality its functions go considerably

Designing a Social Security System for China’s Migrants

57

Table 3. Employment and Wage Characteristics of Rural Migrant Workers Who Participated in Social Insurance Schemes in 2005. Participation Rates (%)

Participation Composition (%)

UnemployUnemployPension ment Injury Medical Pension ment Injury Medical

Employment Self-employed

1.3

0.3

0.6

0.6

11.8

4.6

5.6

6.2

14.6

8.9

15.7

14.6

88.2

95.4

94.4

93.8

Signed

34.8

21.2

35.7

34.8

80.8

87.3

82.3

85.8

No sign

1.7

1.1

3.2

1.9

7.0

8.0

13.1

8.1

Non applicable

1.4

0.3

0.5

0.7

12.2

4.7

4.6

6.1

Employed Contract status

Industry Manufacturing

26.2

17.4

23.0

23.2

36.1

42.9

31.3

33.8

Construction

7.9

0.4

9.8

3.5

5.5

0.5

6.7

2.6

Sales

2.7

1.8

3.4

3.2

20.2

24.7

25.1

25.7

Social services

5.1

1.7

4.0

3.8

16.5

9.6

12.6

12.8

Others

8.7

5.0

9.9

9.5

21.7

22.3

24.2

25.1

Lowest

0.9

0.5

1.6

1.4

3.5

3.4

5.8

5.7

The second

6.6

5.0

7.1

6.2

17.6

23.9

19.0

17.7

The third

5.7

2.3

4.3

4.8

17.6

12.3

13.3

15.6

The Fourth

8.7

6.6

10.7

9.7

23.1

31.0

28.1

27.2

13.4

5.9

12.0

11.2

38.2

29.5

33.8

33.7

Wage group

Highest

Source: IPLE-CASS, The 2005 China Urban Labor Survey.

beyond simple registration. Embedded in the hukou system are a series of hidden entitlements, including guaranteed employment, basic social security and social welfare, subsidized public services and housing. Since the commencement of economic reform, the hukou system has gradually been relaxed and reformed, but progress on these reforms is still slow. As a result of the hukou system, the labor market is segregated into two tiers in urban China. The primary labor market has better protection and offers higher salaries, stable employment, and better working conditions. By contrast, the secondary labor market is more competitive,

58

D. Wang

offering low salaries, unstable employment, poorer working conditions and insufficient protection for workers. The dual labor markets divide the Chinese urban economy into formal and informal sectors. Urban local workers are often employed in the formal sectors with better protection while rural migrants are mainly employed in the informal sectors with less protection. Most rural migrant workers can only fi nd jobs that are temporary, dirty, and dangerous and physically demanding (Roberts, 2001). Some experience problems with delays in receipt of wages. Suffering from social exclusion in the urban labor market, rural migrants do not consider themselves as urbanites, even after having lived in cities for many years (Solinger, 1999). As discussed more fully in David Kelly’s chapter, the hukou system impinges on migrants’ sense of entitlement. The hukou system has shaped biased social security policies that favor urban households and workers. Since the late 1990s, China has undertaken a radical reform of its urban social security system. For example, the State Council established a unified basic pension insurance system for enterprise workers in 1997, a basic medical insurance system for urban workers in 1998 and unemployment insurance for urban workers in 1998. During this reform process, policy design paid much attention to urban local workers and did not take into account the fact that rural migrant workers had become the new blood of the urban labor force, as each of these aforementioned initiatives targeted urban workers, excluding rural migrant workers. The State Council in 2003 also introduced the requirement of work injury insurance for all enterprises, including private enterprises. However, in practice no effective work injury protection was provided to rural migrant workers. Therefore, the institutional segregation that follows from the hukou system has hindered the participation of rural migrant workers in social insurance schemes in cities. Furthermore, the cost of integrating rural migrant workers into social insurance schemes has created huge fi nancial pressure. This pressure has led to the postponement of the drafting of a national policy initiative to provide social insurance schemes for rural migrant workers, with the alternative strategy of integrating rural migrant workers into the existing urban social security system being favored for fi nancial reasons. Current pilot experiments to achieve such integration have been

Designing a Social Security System for China’s Migrants

59

implemented locally, causing large variations in participation rates of rural migrant workers across cities. A national, unified system of social security for rural migrant workers has also caused difficulties in terms of articulating the specific responsibilities of the central government, local governments and enterprises. As there is no compulsory requirement for extending social insurance schemes to rural migrant workers, local governments and enterprises have no obligation to do so. Furthermore, local governments will face an additional fi nancial burden as a result of extending social insurance schemes to rural migrant workers. The high mobility of rural migrant workers also presents management difficulties and high management costs for the extension of social insurance schemes to rural migrant workers. Some local governments may also worry about discouraging investment by extending social insurance schemes to rural migrant workers, which is equivalent to a tax. For enterprises, the contribution payments to social insurance schemes for rural migrant workers would be more than 40% of total wage payments, leading to a decline in profits and competitive advantage. The interests of local governments and enterprises have brought about a consensus where local governments and enterprises do not take any action to provide social protection for rural migrant workers. The primary objective of rural migrants is to earn money and maximize their take-home pay, but their earnings are lower than urban workers. Assuming the average monthly earnings are 1000 RMB, they should deduct 8% for pension insurance, 1% for unemployment insurance, and 2% for medical insurance, i.e., they should contribute 110 RMB to social insurance funds. The average monthly living expenditure is approximately 300 RMB, so the contribution is equivalent to one-third of monthly expenditure, which, it would appear, is higher than what rural migrant workers are willing to pay. Two additional factors discourage rural migrant workers from participating in social insurance schemes: namely, their youth and good health, leading to a perception that social insurance is unnecessary; and, the perceived problem of transferring to a new scheme after a worker has moved from one city to another. At present, the policy measures are designed and implemented so that rural migrant workers are able to get

60

D. Wang

benefits from their individual accounts. However, they cannot get any benefits from pooling accounts even though their employees have already contributed a matching proportion of funds. Therefore, both supply and demand side factors contribute to the low social security coverage for rural migrant workers. 5. Reform Progress and Outlook for a Social Security System for Rural Migrant Workers In recent years, some provinces in the coastal region have adopted experimental measures to establish a social insurance system for their migrant workers. One of the incentives for local governments to take this action is to use social insurance as a proxy tool of welfare benefits to attract the inflow of rural surplus labor into their territories when their local enterprises face difficulties in recruiting rural migrant workers. There are three types of social security schemes for migrants in practice (Liu, 2006): (i) Equal Contribution and Equal Benefits. This scheme is mainly implemented in Guangdong province and Shenzhen City. Migrants are asked to deliver the same contributions and will receive the same benefits as urban residents with a local hukou. In 1994, Guangdong province took the lead to integrate migrants into an urban social insurance system. In 1998, Guangdong province promulgated relevant regulations on old age pension, work injury insurance and unemployment insurance, and requested that migrants participate in those schemes. By the end of 2003, the number of rural migrant workers was around 25 million in Guangdong province. Among them, the number of rural migrant workers who joined an old-age pension, unemployment insurance, medical care insurance and work injury insurance was 4.11 million, 3.3 million, 1.57 million and 5 million, accounting for 16%, 13%, 6% and 20%, respectively. However, these workers cannot get their pensions until they retire and the insurance payments cannot be transferred back to their home provinces. (ii) Low Thresholds and Low Benefits. This scheme is mainly restricted to Zhejiang province. The required contributions of migrants and enterprises are 4% of their wage bills and 12% of total payroll,

Designing a Social Security System for China’s Migrants

61

respectively. These are lower than the contributions of urban residents, where those holding a local hukou are required to pay 8% of individual wage bills and enterprises are required to pay 22% of total payroll. (iii) Separate Social Security Schemes. In Shanghai and Chengdu, a comprehensive, separate insurance package scheme for migrants has been set up that includes old age pension, work injury insurance, hospitalization and medical insurance. The comprehensive insurance cost is paid for by the contributions of enterprises. The baseline for enterprise contributions is 60% of the previous year’s average wage at the city level, and the rate of its contributions is 12.5%, which is equivalent to one-quarter of enterprise contributions for urban residents with a local hukou. There are both advantages and disadvantages for migrants with each of the above social security schemes. The fi rst type—Equal Contributions and Equal Benefits—has the advantage that the social security systems of urban residents with a local hukou and migrants are well integrated at the city level. However, the major disadvantage of this scheme is that migrants have to wait for years to receive their pension benefits when they are old and the matched pooling funds are not portable and transferable between schemes. The second type—Low Thresholds and Low Benefits— can easily encourage migrants to participate in social security schemes through the incentives of low thresholds and relatively high benefits that are slightly lower than urban residents with a local hukou. However, the extension of its coverage will build pressure to deliver benefits beyond the scope of its financing capacity. The third type—Separate Social Security Schemes– is managed by commercial companies under the supervision of the bureaus of Labor and Social Security, and is advantaged by there being no government burden and individual accounts being portable and transferable. This type of social security scheme for migrants can be viewed as a transitional one that needs to be integrated with the urban social security system in the long run. Recognizing the importance of the provision of social protection for rural migrant workers, the Chinese central government has taken a series of active policy measures to improve public services and protect the rights of rural migrants. In 2002 and 2003 two landmark policy documents from the State Council Document Number 2 of 2002 and Document Number 1

62

D. Wang

of 2003, called for “fair treatment, reasonable guidance, improvement of management, and better services” for migrant workers and triggered a proliferation of workplace regulations and social security provisions over the following few years. In March 2006, the State Council promulgated a milestone policy document—Document Number 5 of 2006 – the Directives on the Matters of Rural Migrant Workers, detailing a series of policy measures to further protect the rights and interests of rural workers. The contents of this important policy document include: (1) discussion around guaranteeing the minimum wage for migrant workers and resolving the issue of defaulting wages for migrant workers by setting up a system to monitor the delivery of wages; (2) enforcing the labor contract system and regulating the labor administration of rural workers; (3) providing employment services and job training to migrant workers and removing discriminatory restrictions; (4) making an effort to broaden rural workers’ social security coverage including employment injury, medical care and pension schemes; (5) providing access to urban public services and improving migrants’ housing conditions; (6) improving the mechanism to protect migrants’ democratic political rights and land contract ownership; and (7) promoting local economic development and township and village enterprises (TVEs) to encourage the local transfer of the surplus rural labor force (Wang, 2007). In April 2006, the Ministry of Labor and Social Security (MOLSS) issued a policy document on how to implement State Council Document Number 5 of 2006, which prioritizes the extension of work injury insurance and medical insurance for serious illness for rural migrant workers. In May 2006, the MOLSS issued a notice to extend medical insurance schemes for rural migrant workers, aiming to cover 20 million rural migrant workers who were employed in manufacturing, construction, mining and social services by the end of 2006. In December 2006, the MOLSS and the Ministry of Public Security jointly issued a notice and asked construction companies to comply with the regulation for work-related injury insurance so as to extend this scheme to rural migrant workers. In 2007, the National People’s Congress promulgated the Labor Contract Law and the Employment Promotion Law. Both laws came into practice in 2008. The Labor Contract Law requires that all employers, including private

Designing a Social Security System for China’s Migrants

63

and individual employers, have to sign contracts with their workers. The Employment Promotion Law stipulates that rural migrant workers enjoy equal labor rights with urban workers and the same access to training and public services. With the implementation of those policies, regulations and laws, the social security coverage for rural migrant workers will be largely improved. 6. Conclusion This chapter documents the existence of rural migrant workers of low social security coverage, discusses the underlying reasons for this and presents an overview of the social security reform process in recent years. The low participation rates of pension insurance, unemployment insurance, work injury insurance and medical insurance for rural migrant workers are determined by the interaction of both supply and demand factors including the hukou system, urban policy biases, the lack of a national institutional design, local government and enterprises’ lack of social responsibility and inadequate incentives for rural migrant workers to participate in social insurance schemes. However, rural to urban migration is an inevitable trend in the urbanization of China. The United Nations predicts that 53.2% of China’s total population will live in urban areas by 2020. The vast majority (more than 70%) of migrants surveyed by the CULS desired to stay in the city, with less than 20% wanting to return home. The survey also found that about one third of migrants definitely expect to live in a city permanently; half report a likelihood of living in a city in the future, and only 15.5% expect to live in a rural area. This suggests that the nature of migration in China is quickly shifting from temporary, individual migration to permanent, family-based migration (Park and Wang, 2007). As a response to this trend, the Chinese government has initiated a series of policy measures to improve public services and to protect the rights and interests of rural migrant workers. From the perspective of policy formation, the future policy measures should place more emphasis on how to effectively implement current policies and to design a unified social security system for rural migrant workers.

64

D. Wang

References Liu, W (2006). A Study on Local Pilot Experiments on the Provision of Social Insurances for Rural Migrant Workers. In State Council Research Team (ed.), Chinese Migrant Workers’ Research Report (Beijing: China Publishing House) pp. 53–69. Park, A & Wang, D (2007). Migration and Urban Poverty and Income Inequality in China, the World Bank. Roberts, K (2001). The determinants of job choice by rural labour migrants in Shanghai. China Economic Review, 12(1), 15–39. Solinger, D. (1999). Contesting Citizenship in Urban China: Peasant migrants, the State, and the logic of the Market. Berkley: University of California Press. Stiglitz, J (2006). China and the Global Economy: Challenges, Opportunities, Responsibilities. In China, Hong Kong, and the World Economy, LS Ho & R Ash, (eds.), pp.17–30. Hampshire, UK: Palgrave MacMillan. Wang, D (2007). Rural Urban Migration and Policy Responses in China: Issues and Solutions. Proc. Of the ILO/SMU Regional Symposium on Managing Labour Migration in East Asia: Policies and Outcomes, 16–18 May 2007, Singapore.

CHAPTER 5 CORRECT IDEAS AND SOCIAL SECURITY REFORM IN CHINA: THE CASE OF SHANGHAI’S TOWNSHIP INSURANCE

Gloria Davies Monash University Ingrid Nielsen Monash University Russell Smyth Monash University

1. Introduction A diverse range of social security, social insurance and social protection schemes have emerged in China in recent years. International Labor Organization definitions for these terms are as follows: Social security refers to the protection which society provides its members through a series of public measures: (a) to offset the absence of substantial reduction of income from work resulting from various contingencies (notably sickness, maternity, employment injury, invalidity and old age); (b) to provide people with healthcare; and (c) to provide benefits for families with children. This definition of social security includes social insurance (i.e., contributory schemes), social assistance (i.e., tax-fi nanced benefits provided only to those on low incomes) and universal benefits (i.e., tax-financed benefits, provided without being income tested). Social protection includes not only public social security schemes, but also private or non-statutory schemes

65

66

G. Davies, I. Nielsen and R. Smyth

with a similar objective, such as mutual benefit schemes and occupational pension schemes (ILO, 2000, pp.29–30). In China, the diversity of schemes results from the fact that the central government provides guidelines on social policy which it allows provincial, city or county officials to modify in accordance with local needs and capacities (Frazier, 2004; Whiteford, 2003).1 Since 2003, the central government has sought to stress the importance of extending social security coverage to all Chinese citizens. It has done so using the rhetoric of social justice. In this chapter we begin with a general discussion of that rhetoric before analyzing its use in media coverage of a new social insurance scheme, town insurance (zhenbao), designed primarily to provide benefits for land-deprived peasants (in the form of “exchanging land for social security”) and low-income earners. It was first introduced by the Shanghai municipal government in November 2003 to residents living in towns surrounding Shanghai. Following our analysis of the social justice rhetoric, we consider the attitudes of people living in Shanghai to social security and compare them with the attitudes of people living in three other major cities; namely, Beijing, Guangzhou and Chengdu, using data from surveys undertaken across the major cities of China in 2002 and 2003. That survey, which reveals significant concerns over social security, provides an important context for understanding the government’s interest in convincing the Chinese people that its policies are improving their social and personal security. Finally, we examine the extent to which people in the towns surrounding Shanghai are actually made better-off by the introduction of town insurance in 2004. Our analysis illustrates the argument developed in Gloria Davies and Scott Grant’s chapter that there is a big gap between the rhetoric and reality of reform. To make our argument we draw on three unique datasets for our analysis: two surveys administered in September 2002 and 2003 by the China Mainland Marketing Research Company (CMMRC) of 10,000 urban residents 1 We have used the word “guidelines” in describing the central government’s policy because while there is an ostensibly unified pension policy (in the form of regulations issued under a 1997 State Council Decision or jueding that sought to standardize pension collection and administration), the task of setting and enforcing payroll contribution rates remained very much with local governments.

Correct Ideas and Social Security Reform in China

67

across China’s 32 major cities; and data provided by Shanghai’s Bureau of Labor and Social Security (BOLSS) on the social security position of 103,095 people participating in the town insurance scheme in one district of Shanghai at the end of 2004. 2. Social Justice as a Correct Idea We derive our title from Mao Zedong’s 1963 essay, Where Do Correct Ideas Come From? Mao’s question was rhetorical because he had already provided the answer in the same Central Committee document in which his Correct Ideas essay appeared. 2 He named three kinds of social practice that can generate “correct ideas”: “the struggle for production, the class struggle and scientific experiment.” Some 40 years later, the same party-state (transformed under the post-1978 aegis of Deng Xiaoping’s leadership), is once again seeking to defi ne a new set of correct ideas. Ironically, it now finds itself (under the leadership of President Hu Jintao) in the contrary position of having to deal with threats posed by “class struggle” on the part of those disadvantaged by the forces of capitalist production (whether in the form of mass protests, acts of civil disobedience, or the numerous petitions and cases of injustice or unfair treatment brought by citizens before the courts and government bureaus). That President Hu has sought to praise Mao in public, which has led at least some mainland Chinese intellectuals to note his distinct departure from the Party rhetoric produced under Deng Xiaoping’s and Jiang Zemin’s leadership.3 Hu has espoused an oft-repeated public commitment to improving the lives of peasants, while, at the same time, the government he leads continues to impose severe restrictions on freedom of speech. This has led one Western journalist to publish under the headline “Hu Jintao—bad for intellectuals, good for peasants” to 2 Produced in May 1963 under Mao’s personal supervision, A Draft Directive on Some Problems in Current Rural Work came to be known colloquially as The First Ten Points on agricultural work. Most scholars regard it as presaging the turn towards class struggle that encouraged peasants to identify and expose capitalist elements as “enemies of the people”. 3 See for instance, Hu Jintao’s speech of December 2003, commemorating the 100th anniversary of Mao’s birth, posted at the Sohu.com website at

68

G. Davies, I. Nielsen and R. Smyth

typify the kind of socially responsible dictatorship that the party-state currently practices (Mooney, 2005). Given the untold instances of official corruption and injustices that have accompanied China’s economic development, it is not surprising that, in recent years, Party theorists have resorted to promoting “social justice” (shehui gongzheng) as the kind of correct idea to guide further development. Social security (shehui baozhang) is now frequently affi rmed as social justice in the official discourse, in part, to assuage a restive public that had previously relied on the Communist state for such protection. For instance, leading Party theorist Wu Zhongmin emphasizes that “the system of social security is a basic institutional arrangement that embodies social justice” while linking social justice to the marketoriented ideal of “social distributions based on middle income earners as the dominant social group” (Wu, 2006). In this regard, Wu argues that China’s present-day social structure is “neither healthy nor conducive to the establishment of a harmonious society” since “more than 80% of the urban population is comprised of low or low-to-middle income earners while middle income earners make up only around 10 to 15% of the population.” Wu’s understanding of social justice is specifically tied to the marketoriented goal of achieving an ideal social distribution that is “small at either end and big in the middle,” that is, with middle income earners as the vast majority and tiny minorities of the very rich and very poor at either end. What he also implies is that social security will remain inadequate as long as the majority of China’s urban population, as members of the working poor, is unable to afford the costs of such security. Rhetoric aimed at demonstrating the government’s commitment to the construction of a socialist market regime on behalf of “the people” (as opposed to a re-emergent capitalist class) has increased as socioeconomic inequalities have sharpened in the 2000s. In using the rhetoric of social justice, the Party-state seeks to reassure “the people” that it is using correct ideas to respond to the social problems and injustices that have resulted from inequalities as well as corruption that have accompanied China’s rapid economic growth. This is partly because aggrieved citizens have also become much more vocal in reminding the state of its socialist claim to legitimacy and of promises

Correct Ideas and Social Security Reform in China

69

of egalitarianism made during the Maoist past. One famous example is the case of Wang Shanbao, a retrenched 55 year-old worker whose protest in 2001 took the form of drawing sketches of Chairman Mao on the pavement outside his factory, which drew daily crowds until the factory managers gave him back his job (Forney, 2003). Most recently, President Hu Jintao’s report to the Seventeenth Party Congress in October 2007 was praised in an editorial for displaying exemplary concern with social justice. The editorial noted that social justice was “embodied” in five sentences featured in Hu’s report: namely, students get taught, workers get paid, diseases get treated, the aged get cared for, and residents have somewhere to live (Gao, 2007). 3. Promoting Town Insurance as Social Justice The state-controlled media’s promotion of Shanghai’s town insurance scheme reflects a deliberate attempt to legitimize market-oriented social security as socialist justice at work. When the central government shifted responsibility for social security from the “work unit” to “society” in 1991, it effectively signaled the replacement of its former state-funded collectivist pooling scheme with market oriented models that draw on both individual accounts and existing city- and county-level pools. The new approach was formalized in the 1991 State Council Decision on Pension System Reform for Workers and Staff of Urban Enterprises. This meant that the five key items in China’s “social insurance” regime—pension, industrial injury, maternity, medical and unemployment insurance –were being shifted from the state to employers (in the form of payroll tax) and employees (in the form of wage deductions) (Frazier, 2004, pp. 102–103; Whiteford, 2003, pp. 49–51). Over time, the difficulties that local governments encountered in ensuring compliance from enterprises led the central government to transfer the fi nancial and administrative responsibilities of managing social insurance contributions from enterprise managers to city officials.4 4 This transfer of authority was introduced through a government document of 1998, “State Council Circular on the Relevant Issues in implementing Provincial-Level Basic Pension Insurance pools for Enterprise Workers and Staff and the Transfer of Sector Pools to Local Management” (State Council Document No. 28—see Frazier 2004, p.105).

70

G. Davies, I. Nielsen and R. Smyth

This enabled China’s various municipal governments to each produce its own social insurance schemes. Shanghai’s Interim Social Insurance Procedures for Small Cities and Townships within Shanghai Municipality, known in popular parlance as Shanghai’s town insurance (zhenbao) scheme or simply as the 25+X model, has been publicized in the Chinese media as an exemplary scheme in this highly decentralized approach to social security reform.5 Relative to other cities, Shanghai has better prospects of effective policy implement ation because its administrative structure has evolved in the last two decades towards the goal of making the city into an international metropolis (Yusuf and Wu, 2001). The successful implementation of Shanghai’s town insurance scheme quickly led other Chinese cities to adopt similar models, with the Tianjin government announcing in April 2005, just eighteen months after Shanghai’s town insurance was launched, that it would implement its own town insurance scheme.6 Prior to the introduction of Shanghai’s town insurance in late 2003, the urban insurance scheme or city insurance (chengbao) introduced in 1986 was the major social insurance scheme in Shanghai. Under city insurance, employees receive mandated contributions equal to 48% of the employee’s wage (paid to a state insurance fund), with 37% from the employer and 11% from the employee, and with both employer and worker being offered tax incentives to induce them to top up the mandated rate. Those eligible for city insurance include all employees working in a fi rm registered in Shanghai proper as well as employees with a nonagricultural household registration (hukou) working in state or public bodies registered in rural areas surrounding Shanghai proper. Prior to the introduction of town insurance, some non-state employers in the rural areas surrounding Shanghai voluntarily offered some of their employees coverage under the urban insurance scheme in order to attract and retain good staff. This, however, did not apply to all employees. 5 This policy began its life as “24.5+X” in 2003, with the 0.5% top-up to make it the “25+X” policy occurring only in late 2004. 6 ‘Tianjin: Nongcun shebao jinnian dongzuo da’ (Tianjin: Big Moves on Rural Social Insurance This Year) (posted 11 April 2005).

Correct Ideas and Social Security Reform in China

71

The town insurance scheme commenced in November 2003 to offer basic social security to land-deprived peasants and to provide social insurance coverage to those in the outer areas or suburbs of Shanghai who were not covered by the urban social insurance scheme. As of August 2006, there were 1.31 million people enrolled in the town insurance scheme.7 The town insurance scheme is also known as 25+X for the following reasons. The 25% base consists of 17% for pension, 2% for unemployment, 5% for medical treatment and 0.5% each for maternity and industrial injury insurance. The X component consists of X1 for commercial pensions, X2 for medical insurance and X3, which is a two-year allowance for farmers who have lost their land. Under the 25+X scheme employees are not compelled to pay anything unless a minimum contribution is required by the local council for medical treatment. Both employers and employees are encouraged to top up the 25% contribution through the X1 component by the use of tax incentives with the magnitude of the X1 to be negotiated between employer and employee. X3 is mandated for companies that have appropriated land and is used to compensate those farmers who have lost their land as part of Shanghai’s urban expansion. Such persons are entitled to the basic 25% insurance in the form of a 15-year lump-sum that is placed in an account managed by the BOLSS in Shanghai, a non-agricultural hukou and the X3 allowance of 290 RMB per month for 24 months that is intended to assist in fi nding a new job. Designed as a multipurpose scheme, town insurance was nonetheless focused on compensating land-deprived peasants with social security benefits both to expedite the process of urbanization and to prevent social unrest. For instance, at the workshop Urbanization should be accompanied by the proper treatment of land-deprived peasants (Chengshihua xu shandai shidi nongmin) held on 18 September 2003 by the party newspaper Jiceng dang jian (Grass-Roots Party Construction) and involving five directors of Chinese research institutions that deal with rural socio-economic problems, Shanghai’s town insurance scheme was highly commended well over a month before its actual 7 See “Hu mi zhi she hui bao zhang wang, 9 xiang cuo shi shi bu tong qun ti ge you bao zhang” (Shanghai spreads social security net, 9 policies benefit different groups), posted December 13, 2006 at http://www.china.com.cn/policy/txt/2006-12/13/content_7499280.htm

72

G. Davies, I. Nielsen and R. Smyth

implementation.8 As an example of municipal governments’ recourse to the mass media in disseminating their policies, that workshop gave town insurance its stamp of expert (not merely official) approval. Media reports about the scheme have consistently emphasized the benefits it will provide for Shanghai’s poor. The following news report that appeared in the 9 May 2004 issue of the Party organ Liberation Daily (Jiefang ribao) is a typical example. Entitled “500,000 people in Shanghai’s suburbs to join social security scheme by year’s end,” the report begins as follows: Even on the days when she is not due to collect her pension under the town insurance scheme, Hua Xinfang, a 61 year-old peasant whose land was requisitioned for Fengxian Bay’s tourist site, will often take out her ‘social security card’ (shehui baozhang ka) to have a look at it. She said, ‘I’ve waited for this for a very long time. This card now gives me the same form of protection as urban residents.’ According to statistics, Shanghai peasants like Hua Xinfang who have joined the town insurance scheme now number over 210,000. By year’s end, this number will further increase to 500,000.9

The report then explains that although the scheme is commonly known as “town insurance” (zhenbao), it is also referred to as 25+X because the mandated 25% contribution rate provided by a social pooling fund is supplemented by an ‘X’ factor to which enterprises and individuals can contribute in a “f lexible” (linghuo) manner, using variable rates and levels of contribution. The report then quotes an unnamed official from the city’s Agricultural Committee as saying, approvingly, that the policy’s “basic minimal platform [you di pingtai], its flexibility [you tanxing] and extensive coverage [guang fugai]”, are features that will “progressively reduce the difference in social security for peasants and urbanites.” Having quoted this official endorsement, the report returns to the human aspect of the policy: 8 A Chinese transcript of this workshop is available at 9 All quotations in these paragraphs are from the Liberation Daily article “Shanghai jiaoqu canbaozhe jinnina niandi jiang dadao 50 wan ren” re-published at Zuixin dongtai at .

Correct Ideas and Social Security Reform in China

73

Hua Xinfeng is very happy because she has signed up for town insurance. Pointing to the new trousers she was wearing, she said, ‘With town insurance, I feel that my life will be protected from now on. I made a point of buying cloth, at a cost of 67 RMB per meter, to make these trousers. Before I signed up for town insurance, I simply would not have bought this cloth’.

The report further notes that whereas the former “rural pension” (nongbao) paid an average of 80 RMB a month to each recipient, the town insurance (zhenbao) scheme would enable recipients to each receive over 300 RMB a month. It claims that the implementation of town insurance has been “welcomed by vast numbers of peasants whose land had been requisitioned,” quoting another recipient, 68-year-old Zhang Mingzhang as “praising it profusely,” noting how he and his wife now receive “a total of 664 RMB in pensions,” “along with refunds for medical and hospital expenses.” Zhang is also reported to have said that “everyone in the family says that this is a very good thing [yijian da hao shi), an enormously practical thing [da shishi] that the government is doing on behalf of the peasants.” The report also quotes a representative from the BOLSS as emphasizing that the implementation of the town insurance scheme is designed to ensure that all citizens are adequately protected, regardless of their hukou status. Since the publication of that news report, numerous others have appeared that typically feature endorsements of Shanghai’s town insurance by peasants, workers and official spokespersons. The often repeated virtues of a “basic minimal platform,” “f lexibility” and “extensive coverage” claimed on behalf of town insurance resonate with Wu Zhongmin’s description of social justice as embodied in “the principles of baseline subsistence and basic respect, principles of equal opportunity and of fair distribution according to contribution as well as principles of social adjustment” (Wu, 2006). As state propaganda, these news reports about town insurance are intended to educate the reading public about the market-oriented aspect of social security, with the social justice aspect being fleshed out in the story’s human angle. But what is conspicuously absent from these “feel good” reports about town insurance is the undesirable impact the scheme can have and has had on those workers who previously received coverage under the urban

74

G. Davies, I. Nielsen and R. Smyth

insurance model and whose employers are now providing coverage under the town insurance scheme. In numerous positive reports about town insurance, significant disparities between the new scheme and the existing urban scheme are simply not discussed. We have only been able to locate one article that actually examines some of these disparities. Published in The Bund in March 2004, the article reported that three hundred local employees of the Shanghai-based Haoyouduo Management Consulting Service Co. Ltd (a subsidiary of Taiwan’s Haoyouduo Group) were told in 2004 that they would keep their jobs on condition that they enroll in town insurance.10 As these employees previously received coverage under the urban scheme, the coerced shift to town insurance meant that their social insurance was greatly diminished. For the company, however, enrolling its employees in town insurance meant a huge saving in social insurance expenditure. The article reported that the slight salary increase that was the trade-off for these employees was regarded by many as insufficient compensation and that, as a consequence, some 30 to 40 of these employees chose to resign than to enroll for town insurance. Ready access to useful and reliable information about town insurance has undoubtedly contributed to the efficiency with which district governments were able to enroll large numbers of people into the scheme. But because the scheme was set up with a distinct focus on compensating land-deprived peasants in the process of rapid urbanization underway in Shanghai’s outer suburbs, it was also vulnerable to policy changes on land development and use. Shanghai’s town insurance continued to enjoy overwhelmingly favorable media coverage until February 2007 when the widely-read Economic Observer (Jingji guancha bao) published a report outlining the enormous fi nancial difficulties that district governments faced in their efforts to deliver town insurance to land-deprived peasants. That this bad news fi rst appeared in Economic Observer is not surprising since it is one among a growing number of state-controlled newspapers that have earned a reputation for editorial independence (Zhang, 2007). The report noted that because Shanghai’s district governments fi nanced the town insurance scheme through revenues derived from land transfers, the introduction of stringent regulations and controls on the use 10 All quotations relating to this report have been taken from The Bund (2004).

Correct Ideas and Social Security Reform in China

75

and development of land in 2006 produced a sharp drop in the revenues of district governments, making it extremely difficult for them to continue fi nancing the town insurance scheme as compensation for land-deprived peasants. The central government-mandated constraints on land use and development in 2006 are intended to facilitate effective development and to improve administrative transparency. They also had the effect of drastically reducing the revenue that Shanghai’s district governments had become accustomed to receiving through land transfers. Under these circumstances, the capacity of district governments to continue fi nancing town insurance for land-deprived peasants has become highly uncertain. Further complicating this growing concern over the fi nancial capacity of Shanghai’s district governments to fund town insurance is the pension scandal that unfolded in Shanghai in the later half of 2006. Leading Party and state officials in Shanghai, including the Party Secretary Chen Liangyu and the Director of the BOLSS Zhu Junyi, were sacked for allowing the misappropriation of some 10 billion RMB in total from Shanghai’s municipal pension and social security funds as capital investment in speculative real estate deals.11 For these reasons, the extension of social security coverage that remains a key objective of Shanghai’s town insurance is not only dependent on the fi nancial and administrative capacities of the municipal and district governments but at clear risk of being derailed by widespread corruption in the management of social security funds. Thus, while Shanghai’s town insurance clearly accords with the characteristics of “social justice” that the Party is keen to promote, it is much less clear whether there are sufficient funds for its continued viability as compensation for land-deprived peasants. 4. Citizens’ Concerns over Social Security Surveys of the public’s major concerns have repeatedly found that social security is the public’s top concern. In one recent survey by the Beijing-based Horizon Research Consulting Group of 3,780 residents in five cities including Beijing, Guangzhou and Shanghai and five small cities and towns in Liaoning, Sichuan and Zhejiang provinces found that 11 For an insightful article on the political ramifications of Shanghai’s pension fund scandal, see Lam (2006).

76

G. Davies, I. Nielsen and R. Smyth

social security was the number one concern of urban residents followed by employment and education.12 These fi ndings explain why the central government has been so keen to promote itself as delivering social justice through social security reform. In this section of the chapter we utilize data from two surveys administered in September 2002 and 2003 by the China Mainland Marketing Research Company (CMMRC) of 10,000 urban residents across China’s 32 major cities.13 The CMMRC surveys ask a range of questions relating to urbanites’ perceptions of changes in living standards, economic circumstances, household expenditure, and demographic characteristics. CMMRC employs multi-stage stratified random sampling to ensure a representative sample in terms of age, gender and income. The respondents are interviewed either in person or via telephone by a trained interviewer and all responses are checked for accuracy by a supervisor on location and subsequently at the CMMRC offices in Beijing before being entered into the database. In what follows we compare the attitudes of residents in Shanghai with residents in Beijing, Guangzhou and Chengdu. We focus on Shanghai in order to get an insight into how the populace viewed social insurance and social protection and the extent to which people accepted that government practice is improving their social insurance position just prior to the introduction of the town insurance scheme. We use Beijing and Guangzhou as comparators for Shanghai given their importance as major cities in China’s booming coastal region. We selected Chengdu as a comparator, given its importance as a major city in the less-developed western region of China. GDP per capita in Guangzhou is similar to Shanghai. GDP per capita in Beijing is lower than Guangzhou and Shanghai, but still one of the highest among the major cities of China, while GDP per capita in Chengdu is just over a third of that in Guangzhou and Shanghai.14 12 “Social Security Top Public Concern: Survey”, Xinhua News Agency, 10 January 2007. 13 The cities sampled were Beijing, Tianjin, Shijiazhuang, Taiyuan, Huhehaote, Shenyang, Changchun, Harbin, Shanghai, Nanjing, Hangzhou, Hefei, Fuzhou, Nanchang, Jinan, Zhenzhou, Wuhan, Changsha, Guangzhou, Nanning, Haikou, Chongqing, Chengdu, Guizhou, Kunming, Lasa, Xi’an, Lanzhou, Xining, Yinchuan, Wulumuqi, and Xiamen. 14 In 2004 GDP per capita in Beijing was 37058 RMB, GDP per capita in Chengdu was 20777 RMB, GDP per capita in Guangzhou was 56271 RMB and GDP per capita in Shanghai

Correct Ideas and Social Security Reform in China

77

Table 1. Cumulative Percentages Across Levels of Perceived Seriousness of Social Insurance as a Social Problem in 2002. Shanghai

Beijing

Guangzhou

Chengdu

1.6

5.4

3.1

5.9

Quite serious

26.3

30.8

25.4

37.5

Serious

51.9

56.5

59.7

63.3

Extremely serious

In the two surveys, respondents were asked to nominate the three domestic social issues about which they had been most concerned throughout the year. Across the total sample for the 32 cities, social insurance was nominated by the largest percentage of respondents as a “top three” problem of concern in both 2002 (45.5%) and 2003 (50.1%). In 2002, respondents were asked to rate how serious they considered social insurance and the bad management of social welfare to be. Cumulative percentages across categories “extremely serious”, “quite serious”, “serious” and “not too serious” showed 62.1% of respondents considered this social problem to be at least ‘serious’. Nearly 35% (34.3%) considered it at least ‘quite serious’, while 7.7% considered it ‘extremely serious’. Table 1 gives a breakdown of the data across cities. Looking at these perceptions by location, fewer respondents in Shanghai considered social insurance to be a serious social problem than those in Beijing, Guangzhou or Chengdu. Of the four cities, the greatest concern was expressed amongst residents in Chengdu, reflecting that city’s less sophisticated social security regime relative to the three major more economically developed coastal cities. An ordered probit model was employed to ascertain effects of gender, age, income and location on perceived seriousness of social insurance as a social problem in 2002.15 The dependent variable was coded on a five point scale from 1 (extremely serious) to 5 (not too serious). The results are reported in Table 2. Household income and residing in Shanghai were significant predictors at the 5% level. Respondents with a higher was 55307 RMB—(National Bureau of Statistics of China [NBS], 2005). 15 For each of the regression analyses the location reference category was a composite of the remaining 28 surveyed cities.

78

G. Davies, I. Nielsen and R. Smyth

Table 2. The Effects of Gender, Age, Income and Location on Perceived Seriousness of Social Insurance as a Social Problem in 2002. Predictor

Wald χ2

Estimate

p

Shanghai residence

.243

19.307

.000

Household income

.009

4.457

.035

Guangzhou residence

.142

3.118

.077

Beijing residence

.064

1.495

.222

Chengdu residence

–.043

.661

.416

Personal income

–.001

.053

.817

Age

–.001

.030

.863

Gender

–.001

.001

.981

Table 3. Percentages of Respondents Who Endorsed a Strengthening of Each Type of Social Insurance. Total

Shanghai

Beijing

Guangzhou

Chengdu

Aged pension

49.4

39.9

54.1

44.1

53.8

Medical

57.2

53.5

68.0

48.5

59.7

Unemployment

41.7

52.3

39.0

44.7

35.6

Industrial injury

4.7

6.2

2.6

6.4

5.3

Maternity

2.3

4.9

1.2

2.4

2.8

21.7

29.8

20.5

24.1

28.1

Poverty relief

household income and those residing in Shanghai were more likely to perceive social insurance as ‘not too serious’ a problem. The results for household income are consistent with the notion that the market reforms in China have created winners and losers (Nielsen, et al. 2005). Those with low household income, including the retired and the unemployed, have been made more vulnerable by the reforms and are, thus, more likely to be concerned about social insurance coverage. The results for Shanghai suggest that the government has had more success in convincing residents in Shanghai that the social insurance situation is not as serious as in other parts of China. This result also reflects the fact that Shanghai is more affluent and has a more developed administrative structure than other cities in China.

Correct Ideas and Social Security Reform in China

79

The results in Tables 1 and 2 potentially mask considerable differences in perception across types of social insurance. The 2002 CMMRC questionnaire also asked respondents to nominate which form of social insurance they thought needed to be strengthened. Table 3 shows the percentage of respondents who endorsed a strengthening of each type of insurance by location. Shanghai had the lowest percentage of respondents across the four cities who thought pension insurance should be strengthened, but the highest percentage who thought that unemployment insurance, maternity insurance and poverty relief should be strengthened. While actual reports of migrants taking the jobs of urban residents are scant, the results for unemployment insurance could reflect a widespread perception amongst Shanghaiese that, at a time of substantial lay-offs from the state-owned sector, migrant workers are taking the jobs of urban residents. This fear has had an important influence on government policies with local officials viewing migrants as a burden on their cities. This has manifested itself in subtle forms of discrimination. For example, prior to 2004 Shanghai employers using migrant labor were required to contribute 50 RMB to an unemployment fund for each migrant laborer they employed. The proceeds from this fund were used exclusively to assist unemployed permanent urban workers (Feng et al, 2002). With respect to aged pension, medical and unemployment insurance, we employed a binary logit model to determine the effects of gender, age, income and location on perceptions that each of these insurances should be made a priority to strengthen. In each case the dependent variable was coded one if the respondent considered that pension, medical or unemployment insurance should be strengthened and was coded zero otherwise. Tables 4 through 6 show the logit coefficients, Wald tests, and odds ratio for each of the predictors. Females were 1.15 times more likely to endorse the strengthening of pension insurance than were males. Older residents were 1.13 times more likely to endorse strengthening pension insurance than were younger residents, but Shanghai residents were less likely (.62) to endorse strengthening pension insurance than non-Shanghainese. Females were 1.20 times more likely to endorse the strengthening of medical insurance than were males. Older residents were 1.10 times more likely to endorse strengthening medical insurance

80

G. Davies, I. Nielsen and R. Smyth

Table 4. The Effects of Gender, Age, Income and Location on Perceptions that Aged Pension Insurance Should be Strengthened. Estimate

Wald χ2

p

Odds Ratio

–.471

18.646

.000

.625

.126

213.631

.000

1.134

Gender

.144

10.304

.001

1.155

Chengdu residence

.189

3.303

.069

1.208

Beijing residence

.182

3.120

.077

1.199

Predictor

Shanghai residence Age

Personal income

–.012

1.165

.280

.988

Household income

–.005

.326

.568

.995

Guangzhou residence

–.051

.109

.741

.950

Constant

–.773

55.295

.000

Table 5. The Effects of Gender, Age, Income and Location on Perceptions that Medical Insurance Should be Strengthened. Estimate

Wald χ2

p

Odds Ratio

Beijing residence

.494

20.129

.000

1.639

Gender

.178

15.466

.000

1.195

Age

.089

104.376

.000

1.093

Shanghai residence

–.249

5.459

.019

.779

Guangzhou residence

Predictor

–.229

2.200

.138

.795

Chengdu residence

.142

1.814

.178

1.153

Household income

.004

.250

.617

1.004 .997

Personal income

–.003

.051

.822

Constant

–.450

18.539

.000

than were younger residents. Residents of Beijing were 1.64 times more likely to endorse strengthening medical insurance than were nonBeijing residents, but Shanghai residents were less likely (.78) to endorse strengthening medical insurance than non-Shanghainese. Females were less likely (.89) to endorse the strengthening of unemployment insurance than were males. Older residents were less likely (.89) to endorse it than were younger residents. Those with a higher household income were less likely to (.96) to endorse strengthening unemployment insurance

Correct Ideas and Social Security Reform in China

81

Table 6. The Effects of Gender, Age, Income and Location on Perceptions that Unemployment Insurance Should be Strengthened. Estimate

Wald χ2

p

Odds Ratio

Shanghai residence

.666

38.492

.000

1.946

Household income

–.037

20.719

.000

.963

Age

–.116

173.263

.000

.890

Gender

–.115

6.350

.012

.891

Chengdu residence

–.228

4.408

.036

.796

Predictor

Guangzhou residence

.204

1.686

.194

1.227

–.010

.773

.379

.990

Beijing residence

.086

.683

.409

1.090

Constant

.764

51.917

.000

Household income

than were those with a lower income. While residents of Shanghai were 1.95 times more likely to endorse the strengthening of unemployment insurance than were non-Shanghainese, residents of Chengdu were less likely (.80) to endorse it. In 2003, respondents were asked about their perception of the change in social insurance relative to the preceding year. In 2003 the central government spent some 70 billion RMB on social insurance expenditure for laid-off workers, retirees, pensioners, the unemployed, those who had suffered work-related injuries and those on maternity benefits, representing a 19.9% increase on the previous year’s allocation. However, in the CMMRC survey, 25% of respondents indicated there had been “no change” in the level of social insurance. Half (52.2%) of the sample indicated that there had been at least “some improvement”, while 12.8% indicated that there had been some degree of fall. We examined the effects of gender, age, income and location on these perceptions using an ordered probit model. The dependent variable was coded on a five-point scale from one (there had been considerable improvement) to five (there had been a considerable fall). The results are reported in Table 7. Household income and residing in Shanghai, Beijing, Guangzhou or Chengdu were significant predictors. Respondents with a higher household income as well as those residing in any of these four cities were more likely to perceive that social insurance had improved in the preceding year.

82

G. Davies, I. Nielsen and R. Smyth

Table 7. The Effects on Perceptions of Change in Social Insurance as a Function of Gender, Age, Income and Location. Estimate

Wald χ2

Shanghai residence

–.431

59.012

.000

Guangzhou residence

–.367

40.765

.000

Chengdu residence

–.267

23.536

.000

Beijing residence

–.151

7.286

.007

Household income

–.009

4.048

.044

Age

–.001

.936

.333

Gender

–.022

.834

.361

Personal income

–.004

.646

.422

Predictor

p

Overall, interpreting the findings in terms of the success of the present-day Chinese government’s portrayal of itself as actively engaged in improving the welfare of its citizens we can conclude issues of social security were most important to residents across both 2002 and 2003. Almost without exception, social insurance dominated as the most important issue across each location in both years. In terms of degrees of seriousness, in 2002 more than half of the residents in each location thought social insurance to be at least “serious”. Shanghai residency and household income were important predictors of these perceptions, such that the Shanghainese and those from higher income households were less likely to think social insurance a serious problem. When asked in 2003 whether social insurance had changed in the preceding year, 52.2% indicated that it had improved to some degree. Those who were more likely to report a positive change in social insurance were those with higher household incomes. As about half (47.8%) the respondents indicated social insurance had either not changed or had become worse, this explains why the Chinese government has been keen to portray itself from 2004 onwards as focused on improving the social welfare of its citizens, especially the poorest urbanites. Next, we consider Shanghai’s township insurance—a scheme introduced with the specific purpose of extending social security coverage to the rural poor and low income earners—and whether it has lived up to the rhetoric of social justice.

Correct Ideas and Social Security Reform in China

83

5. Has Shanghai’s Township Insurance Been Successful in Extending Coverage? In this section we draw on a unique dataset supplied by the BOLSS on 103,095 individuals, which is the entire population of people who had joined the town insurance scheme in one district of Shanghai as at the end of 2004. For each individual the data contains information on their insurance status prior to joining the new scheme, whether the person was a displaced farmer and whether the person was receiving the X1 component or commercial pension insurance over the 25% basic contribution and some basic demographic information. The district is 40 kilometers from downtown Shanghai. At the end of June 2005, the area had a population close to one million; of which 36% had an urban hukou, 16.5% had a rural hukou and the remaining 47.5% were migrants. By the end of 2004 the “local workforce” (excluding migrants) was about 350,000 with 73% working in the manufacturing sector, 19% in the service sector and 8% in agriculture. In 2000 there were 267,000 employees with a local hukou; of which 51% had urban insurance and 49% had rural insurance or nothing. By the end of 2004, just over one year after the introduction of town insurance, of the 90% of the then approximately 350,000 employees with a local hukou, 35% had urban insurance, 30% had rural insurance or nothing and 30% had joined the town insurance scheme. The remaining 5% were in a transition phase between the rural insurance and town insurance schemes. Prior to being transferred into town insurance, individuals were either a) under the urban social insurance scheme, b) under the rural insurance scheme or c) had no insurance coverage. In our data, the latter two categories were grouped together into a single “rural insurance or no insurance” category. Within the group originally under the urban social insurance scheme there were two sub-groups: one group who traded their land use rights and one group who had never had land use rights. All members of the group that previously had either rural insurance or no insurance traded their land use rights. Figure 1 depicts each group in terms of their land use rights status and social insurance position prior to joining the town insurance scheme. Amongst the 103,095 individuals, 42,840 (41.6%) had previously been insured under the urban insurance model and 60,255 (58.4%) had either

84

G. Davies, I. Nielsen and R. Smyth

District population transferred to 25+X scheme (103,095)

Previously under rural social insurance scheme or no insurance

Previously under 48% urban social insurance scheme

(60,255)

(42,840)

60.255 possessed land rights

37,848 possessed land rights

4,992 did not have land rights

(100% within rural scheme)

(88% within urban scheme)

(12% within urban scheme)

98,103 possessed land rights

98,103 had no land rights

(95% of District 25+X population)

(5% of District 25+X population)

Figure 1. Previous Land Rights and Social Insurance Positions of the Current Town Insurance Population.

been insured under the rural social insurance scheme or had no insurance. Of the total number of people covered under the town insurance scheme in the district, 98,103 (95.16%) had enjoyed land rights that had been reacquired. Of these 98,103 individuals, 60,255 had previously had land use rights with either rural insurance or no insurance at all. While some of this group of 98,103 had possibly derived income both from their land and an enterprise, among them are certainly a subset whose entire income would have been derived from their land. This latter sub-group are thus truly “displaced farmers” and it is possible they constitute the majority of those with no insurance at all. The remaining 37,848 of these 98,103 people dispossessed of their land use rights had been insured under the urban scheme. This group of 37,848

Correct Ideas and Social Security Reform in China

85

Table 8. Land Rights, Social Insurance and Other ‘Benefits’ Positions of All Individuals Both Prior to and After Their Inclusion in the Town Insurance Scheme.

N (% of total)

Prior to joining town insurance

4,992 (4.84)

48% urban insurance

Town insurance with no longevity guarantee

No land

No land

48% urban insurance

Town insurance with 15yr guarantee RMB299/month x 24 months Non-agricultural hukou

Land rights

No land

rural insurance or none

Town insurance with 15yr guarantee RMB299/month x 24 months Non-agricultural hukou

Land rights

No land

37,848 (37.71)

60,255 (58.45)

After joining town insurance

people, while having rights to use land, did not derive all (or perhaps in some cases any) of their incomes from their land. Rather, it is likely that they had rights to use the land, which may either have lain fallow or been farmed as a relatively minor sideline, but derived a substantial part (or all) of their income working for an organization that paid their insurance under the urban scheme. The other 4,992 individuals were people who did not have any land and were previously insured under the urban scheme. Unlike their counterparts who previously had land use rights, these people did not have land to trade for insurance, so they joined town insurance with no compensatory guarantee of insurance longevity and no “job search” allowance. Table 8 summarizes the land rights, social insurance and other “benefits” positions of each group prior to and after joining township insurance. On the face of it, it would seem that the 60,255 people previously insured under the rural scheme—many of whom were likely to be displaced farmers with no insurance—have been rendered (at least for the next 15 years) more secure insofar as their social insurance entitlements are concerned. These individuals with land use rights joined the township insurance scheme from either a position of no insurance, or a position of

86

G. Davies, I. Nielsen and R. Smyth

inferior rural insurance. Also on the face of it, it is possible that the small group of 4,992 individuals without land rights previously insured under the urban model is rendered less secure by their transition to township insurance. At least in the worst case scenario, where they receive no X1 component, their basic insurance entitlement has been diminished and added to this, they have no insurance longevity guarantee. Purely in terms of social insurance entitlements, to break even people in this group would have to receive an X1 component that is almost as large as their new “guaranteed” entitlement. Similarly, those who previously had land use rights who moved from the urban model into township insurance may also have been rendered less secure. Like their counterparts without land use rights, in the event they receive no X1 component, their insurance has been considerably diminished. This group is thus required to accept the benefit of a 15-year insurance guarantee and “job search” allowance as adequate compensation for the loss of their land rights, at least in the immediate future. So at fi rst blush, while some of these individuals—namely the 60,255 dispossessed of land use rights previously either uninsured or insured under the rural scheme—have clearly moved to a better position in terms of immediate social insurance, the position under town insurance of those people previously insured under the urban model is less clear. Their position will differ according to the receipt of X1. Thus, who gets X1 becomes fundamental. While we did not have data on how much X1 any individual received, we could isolate the actual numbers of people who received some X1 component and determine some of their basic human capital and demographic characteristics. In terms of the 60,255 dispossessed land owners previously under the rural insurance scheme, our analysis suggests that despite their transfer into town insurance, any social security enjoyed by this group over and above the base amount is extremely rare. Of these 60,255 people, only 490—a mere 0.81%—receive an X1 component. In reality though, it is not really surprising to see such a tiny proportion receiving X1 in this group given that many of these people will be displaced farmers—people who may have few of the skills sought by enterprises and thus less likely to be valued enough by employers to warrant X1.

Correct Ideas and Social Security Reform in China

87

However, we would have expected those who moved from the urban scheme to be more likely to receive an X1 component than those who moved from the rural scheme. This is because the enterprise had previously been voluntarily contributing to the urban scheme for these people, presumably because the employer valued their skills. This line of reasoning was borne out by the data with respect to displaced farmers previously insured under the urban model, but not with respect to those non-land owners previously insured under the urban model. Amongst the displaced farmers, 3,256 of the 37,848 (8.6%) previously insured under the urban model received an X1 component with their 15-year insurance guarantee. But amongst the group of 4,992 people who had not previously owned land—and hence received no insurance guarantee with their transition to town insurance—only 23 people (0.46%) received an X1 component. The tiny proportions of X1 recipients must raise the issue of whether it is really legitimate to argue that these people have been moved en-masse into a “25+X scheme”, as opposed to a mere “25 scheme with some anomalies”. More worryingly though is the possibility that the scheme is in fact a more systematic “if……then 25+X” scheme, with structural barriers that disadvantage particular segments of the labor force against the receipt of X1. What seems most inherently worrying about such a scenario is not that it might exist, per se, but that it might exist within the context of the X1 component being heralded as a real incentive, when in any practical sense, X1 may be entirely out of the reach of most employees. In order to discern whether indeed we were looking at a “25 scheme with anomalies” or an “if……then 25+X” scheme, we further analyzed the small proportion of X recipients to create profiles of their basic human capital and demographic characteristics. While we need to bear in mind the small numbers involved in these X1 component analyses, it should also be remembered that these data are for a whole population (or in this case, a sub-population), not a sample, so our results will not be biased in terms of over- or underrepresentativeness. Furthermore, while the results are limited by the small array of human capital and demographic variables available to us, they nonetheless go some way towards painting an interesting picture of X1 in practice. The results are summarized in Table 9. At first blush, analysis of these data did not appear to reveal any particularly stable profile that defined an X1 component recipient.

88

G. Davies, I. Nielsen and R. Smyth

Table 9. Human Capital and Demographic Characteristics of X1 Component Recipients. Agricultural/none → town insurance (guaranteed) (N=490)

48% urban model → town insurance (guaranteed) (N=3,256)

48% urban model → town insurance (not guaranteed) (N=23)

67% male

47% male

70% male

Average 39 years

Average 37 years

Average 33 years

68% junior middle

66% junior middle

64% polytechnic/tertiary

Gender Age Education

However, when we went a step further and compared the X1 component recipients within each group to the global group profiles, an interesting difference emerged. Across each of the three groups, the proportion of X1 component recipients who were male were several percentage points higher (indeed up to 16 percentage points higher) than the proportion of males in each of the global groups. This difference suggests a systematic gender bias, in favor of males, in the receipt of an X1 component. A simple chi-square analysis revealed that indeed employers do pay an X1 component to a statistically significantly greater proportion of males than females (χ2=16.70, p<.001).There were no practical differences though between the age and education profiles of X1 and non-X1 recipients within any of the groups. These observations are quite startling, given that if X1 is designed as a human resource tool to attract and retain good staff it should favor the more experienced or the more skilled. Certainly to the extent that age and education can be seen as proxies for these favorable characteristics, X1 has not been targeted to those human capital strengths. Rather, it is simply being male that most strikingly sets apart those few per-cent getting X1. In the end though, even being male does not make the chances of getting X1 much more than a dream, for in the broader context, this only amounted in real numbers to around 2,200 of more than 103,000 people. 6. Conclusion This chapter has used the introduction of Shanghai’s township insurance scheme as a case study to examine the use of social justice as a correct

Correct Ideas and Social Security Reform in China

89

idea in promoting market-oriented social security to the populace. We use data on the perceptions of Shanghaiese and other urbanites in China’s major cities collected in 2002 and 2003 to explain the government’s interest in linking social security with social justice. We also use data on the actual implementation of township insurance in one district of Shanghai, representing the position as at the end of 2004, to examine the extent to which the reality of the township insurance reforms conforms to the government’s propaganda. We focused on three questions from the 2002 and 2003 CMMRC surveys: (1) what were the major social problems perceived by residents?; (2) how serious was social insurance perceived to be as a problem in 2002 and who considered it to be serious?; And (3) how has social insurance as a problem perceived to have changed from 2002 to 2003? While there is considerable diversity across cities and the demographic profiles of respondents, taken together, it is striking that almost a half of those sampled thought their social insurance position had either not changed or deteriorated between 2002 and 2003. This fi nding is even the more remarkable given that in 2003 the government spent 20% more on social insurance expenditure for laid-off workers, retirees, pensioners, the unemployed, those who had suffered work-related injuries and those on maternity benefits than in 2002. The results from the attitude surveys also suggest that the disadvantaged segments of society, such as low income earners, are most concerned about social insurance. Thus, it is not surprising that Shanghai’s town insurance was promoted primarily as a scheme for these segments. The 2004 findings from the actual implementation of the town insurance scheme in one district suggests, consistent with Gloria Davies and Scott Grant’s argument in Chapter 3 of this volume, that the reality trails significantly behind the rhetoric. While town insurance has had a positive effect on the coverage afforded some, there has been a concomitant dilution in the social insurance coverage of others. In the district considered, it is true that the 60,255 dispossessed of their land use rights constituting 58.45% of those enrolled in town insurance in the district, who previously had either rural insurance or no insurance have improved coverage that is guaranteed for 15 years in the fi rst instance. This then entitles them to receive the basic old-age pension in the future.

90

G. Davies, I. Nielsen and R. Smyth

This group is ostensibly better-off with town insurance, although the trade-off of course is that they have lost forever the security provided by their land. This leaves 42,840 people who have had their social insurance coverage reduced (i.e., 41.55% of those newly enrolled in town insurance who previously received 48% under the urban model). For the 37,848 individuals dispossessed of their land use rights (37.71% of the total) at least their baseline 25% insurance is paid in lump-sum for 15 years, although, again at the cost of losing the security of land use rights. For the other 4992 people there is no guarantee of 15 years coverage, which means that if they lose their jobs they will no longer be covered by town insurance. This is the group that loses the most from the introduction of the scheme. While one of the most lauded features of the town insurance model is the flexibility afforded to top up the baseline contribution with commercial superannuation under the X1 component, our data from the one district suggests the reality does not conform with these objectives as a very small proportion of those participating in town insurance receive any X1 component. In conclusion, when we consider the status quo of social security policy in China, it becomes evident that the Chinese government is faced with the following difficulties. On the one hand, authoritarian rule allows the government to implement such schemes as Shanghai’s town insurance quickly without any public consultation. On the other hand, this same authoritarianism, coupled with high-level official corruption as was evident in Shanghai’s pension scandal, is a hindrance to public debate about policy reform. This exacerbates rather than diminishes the concerns of citizens over their social security. Although Shanghai’s town insurance scheme has many positive features in relation to the long-term goal of achieving comprehensive coverage, it is also likely that a majority of urban workers will not welcome it. Those who previously received the far more generous benefits under the urban scheme will clearly not welcome it. If the government were prepared to allow greater scope for public debate on the pros and cons of the scheme, it might fi nd itself in the position of facing an unprecedented level of public criticism. For the time being, it is clear that the government faces huge challenges in its capacity to achieve the social justice it claims to be delivering through social security reform.

Correct Ideas and Social Security Reform in China

91

Acknowledgements The research in this paper was supported by an Australian Research Council Linkage Grant (LP0561084). We thank Chris Nyland for discussions in the course of writing this chapter and Xiaolei Qian for research assistance. David Kelly offered some useful pointers in locating material. References The Bund (2004). 300 Haoyouduo yuangong juanru zhenbao ‘xuanwo [300 Haoyouduo employees caught up in the Town Insurance “whirlpool”]. http://www.bundpic.com/ pap/20040331/a8.htm [March 31 2007]. Feng, W., Zuo, X. & Ruan, D (2002). Rural Migrants in Shanghai: Living Under the Shadow of Socialism. International Migration Review, 36(2), 520–545. Forney, M (2003). Worker’s Wasteland. Time Magazine Asia, 13 December (online at http://www.chinalaborwatch.org/news/031213.htm). Frazier, MW (2004). China’s Pension Reform and Its Discontents. The China Journal, 51(January), 97–114. Gao, S (2007). Tixian shehui gongzheng de wu ju hua [Five sentences that embody social justice]. http://pinglun.eastday.com/p/20071017/u1a3168252.html [17 October 2007]. International Labor Organization (ILO) (2000). World Labor Report 2000: Income Security and Social Protection in a Changing World. Geneva: ILO. Lam, W (2006). The Wall Street Journal Asia. Shanghai Shakedown. http://awsj.com. hk/factiva-ns [29 September 2007]. Mooney, P (2005). Asia Times online. Hu Jintao, bad for intellectuals, good for peasants. http://atimes.com/atimes/China/GC10Ad05.html [10 March 2007]. National Bureau of Statistics (2005). China City Statistical Yearbook 2007. Beijing: China Statistics Press. Nielsen, I., Nyland, C., Smyth, R. & Zhu, C (2005). Marketization and Perceptions of Social Protection in China’s Cities. World Development, 33(11), 1759–1781. Whiteford, P (2003). From Enterprise Protection to Social Protection: Pension Reform in China. Global Social Policy, 3(1), 45–71. Wu, Z (2006). Ruhe lijie shehui gongzheng [How to understand social justice]. http:// theory.people.com.cn/GB/40764/68330/68333/68334/4638343.html . Yusuf, S & Wu, W (2001). Shanghai Rising in a Globalizing World. http://econ.worldbank. org/files/2209_wps2617.pdf. Zhang, X (2007). Shanghai zhebao kunju: fasheng zai tudi huan shebao zijin lian duankai hou [The Predicament of Town Insurance: The Financial Turnover of Land for Social Security has Ended]. http://fi nance.sina.com.cn/g20070220/11263350620.shtml .

CHAPTER 6 WHY DO MIGRANT WORKERS NOT PARTICIPATE IN URBAN SOCIAL SECURITY SCHEMES? THE CASE OF THE CONSTRUCTION AND SERVICE SECTORS IN TIANJIN

Bingqin Li London School of Economics

1. Introduction Policies concerning rural-urban migrant workers in China have changed dramatically since the late 1990s. While migrant workers still do not hold an urban hukou (household registration), they can now live in cities without fear that they will be checked, arrested and evicted by the urban police. They now can be quite sure that if their salaries are not paid, they will be able to seek free legal and administrative help to get their money back. They have much improved access to various social services, such as children’s education. All these changes have greatly improved the position of migrant workers in urban China. Improving the social rights of migrant workers is now largely focusing on extending urban social security schemes to migrant workers. Unlike changes in other aspects of social provision, which are actively embraced by migrant workers– such as free education for their children– social insurance schemes have not been favorably received by migrant workers and this is particularly true for the unemployment, health and pensions schemes. According to the “Survey on the Participation of Pension Schemes by Rural-urban Migrant Workers” (Guanyu nongminggong yanglao baoxin wenti de diaocha) in 2005, in seven provinces and one large city, 80% of enterprises did not wish to contribute to pension

92

Why Do Migrant Workers Not Participate in Urban Social Security Schemes?

93

insurance; 83.2% of the migrant workers were not willing to contribute and more than 90% did not contribute at all (Xiao and Liu, 2005). A recent survey by Guan (2007) in five big cities found that the participation rate in pension insurance was less than 10%. As more rural-urban migrants join the urban workforce from rural areas and remain in the cities for longer periods (Li, 2005), the economic and social costs of having large numbers of people in the workforce not covered by the urban social security schemes escalates and can be potentially damaging to society in the long run. The state of non-participation among migrant workers raises two questions: why are rural-urban migrants not willing to contribute to pension schemes and why have rural-urban migrants who are willing to contribute not participated? Previous research on social welfare participation has uncovered a number of reasons for unwillingness to participate. However, these studies have not examined whether prospective participants are really aware of, or understand, the schemes. The assumption behind existing research, therefore, is that individuals have made informed decisions on whether to participate. This chapter argues that in the context of rural to urban migrants in China information is not always available for informed decision making. I use in-depth interviews with 70 rural to urban migrants in the construction and service sectors in Tianjin to demonstrate that migrant workers are not always aware of the existence of social insurance schemes and even if they are aware of their existence, they may not necessarily understand the schemes. The chapter considers the implication of such research fi ndings for future policy analyses. 2. Literature on Social Welfare/Insurance Participation Around the World A lot of research has been done for countries other than China to under stand why some people are more willing to participate in social insurance than others and why some schemes are more attractive than others. Bassett and Michael (1998) examined how workers use 401(k) plans in the United States. They concluded that employee participation rises with income, age, job tenure, and education. Participation also

94

B. Li

rises if the employer matches contributions. They also considered that many workers, particularly those with low incomes, did not use 401(k) plans to save for retirement. Chen (2001) studied voluntary salary sacrificing plans in the United States in 1993. It was found that such plans had not, as people suspected, contributed to the growing pension coverage gap between whites and minorities. Shuey (2004) studied the decisions made when workers faced a choice of defi ned contribution plans and supplemental pension plans. The findings suggested that gender differences and marital status influenced decision-making. Rege et al. (2007) estimated the magnitude of social interaction effects in disability pension participation among older workers in Norway. They found that people were more likely to draw on disability pensions when neighboring plants were downsized. Li and Olivera (2005) examined the determinants of enrolment in the pension system in Peru and found that a selected group of people, i.e. married males with at least secondary education, high income individuals and individuals with other family members already participating in the pension system, were more likely to participate than other social groups. There are a fairly large number of studies on social welfare and social insurance participation of migrants which can offer insights into their decision-making. Previous research has compared the take-up rate of migrant groups and natives (Borjas, 2002; Castronova, et al., 2001; Currie, 2000; Hansen and Lofstrom, 2003; Hao and Kawano, 2001; Hu, 1998) and among different migrant groups (Borjas and Hilton, 1996; Davies and Greenwood, 1997; Davies, 1997; De Silva, 1997). Currie (2004) concludes that while migrants are more likely to be eligible for welfare, they are less likely to take it up, other things being equal. However, migrants become more likely to take up benefits with assimilation. The length of migrant stay in the destination is related to their participation in state welfare programs. The longer the duration of their stay, the more likely it is that migrants will participate in social welfare schemes (Borjas and Trejo, 1991; Davies, 1997). Migrants participation in welfare programs is also likely to be influenced by ethnic networks. The types of benefits received by earlier immigrants influence the types of benefits received by newly arrived immigrants (Borjas and Hilton, 1996; Hao, 2001). Hu (1998) established a connection between the economic cycle, migrants’ age and

Why Do Migrant Workers Not Participate in Urban Social Security Schemes?

95

their welfare participation. He concluded that in the 1980s, migrants who arrived after age 55 were more likely to use welfare than typical migrants who arrived during their prime working years. Hansen and Lofstrom (2003) analyzed a panel dataset from 1990 to 1996. They found that migrants used welfare more than natives. Borjas (2002) examined the role of federal policies in the US in changing the behavior of migrant welfare participation. Borjas (2004) also examined how policies in relation to state funded aid impacted on migrants’ food insecurity. Kaushal and Kaestner (2005) found that the Personal Responsibility and Work Opportunity Reconciliation Act generated fear among migrant families and caused a lower participation rate in health insurance enrolment. Castronova et al. (2001) found that migrants were more likely than native Germans to receive welfare, not only because migrants were more likely to be eligible, but also because they were more likely to claim benefits when they were eligible. However, they also found that this greater propensity to take up benefits was not really related to migrant status. When other socio-demographic factors were controlled for, migrant households headed by low educated women were not more likely to take up benefits than native households. These studies do not explicitly discuss the role of information. However, they implicitly suggest that sources of information can be relevant. For example, social networks, in particular ethnic groups, or family members have played important roles in influencing decision making with respect to take-up rates. 3. Studies of Social Insurance Participation in China Nielsen et al. (2005) examines participation in social insurance schemes by rural-urban migrants in Jiangsu Province in China in December 2003. They used survey data from Jiangsu province to examine which rural-urban migrants received social insurance in Chinese cities, the factors that determined the willingness of migrants to participate in social insurance and the reasons that migrants were not willing to participate. They discovered that migrants from Jiangsu province were more likely to participate in social insurance relative to migrants from outside the province. People working in the state sector were more

96

B. Li

likely to participate in industrial injury and maternity insurance. Male migrants were more likely to participate in social insurance than females. The length of time spent in a city and past personal income were also predictors of whether a migrant participated in social insurance. The authors identified three factors that affected the willingness of rural-urban migrants to participate in urban social insurance. The fi rst factor was the location of residential registration, i.e., whether the person was registered inside or outside Jiangsu province. They found that migrants from Jiangsu province were more willing to participate than migrants from outside Jiangsu province. The second factor was the length of time a respondent had lived in the city. The research suggested that the longer a person lived in the city, the greater their willingness to participate. The third factor was the respondent’s age. The survey results showed that younger respondents were more willing to participate. The authors also highlighted that the effect size of younger respondents’ participation was small. Nielsen et al. (2005) also discussed why rural-urban migrants were not willing to participate in urban employee social insurance schemes. They found the major reasons were concerns about getting contributions back if they returned to their hometown or went elsewhere to work, and concern they would not be able to collect insurance after paying. According to that study, these two reasons explained about 50% of nonparticipation. The authors concluded that legal restrictions on relocation were still the key factor preventing migrants from joining the urban social insurance scheme. Yang and Guo (2006) discussed the shortcomings of the design of pension schemes in China. They focused on five problems. First, pension schemes work best with long term stable contributions. But rural to urban migrants are highly mobile. Second, neither migrant workers nor their employers are willing to contribute. Third, there are big gaps between regional contribution rates and entitlements; therefore it is difficult for migrant workers to transfer their entitlement from one location to another. Fourth, the pooling schemes are highly localized, making it difficult to transfer contributions from one place to another. Finally, information sharing among local authorities is poorly coordinated, which makes it difficult for local authorities to keep good

Why Do Migrant Workers Not Participate in Urban Social Security Schemes?

97

records of the contribution history of migrant workers when they move between places. Guan (2007) administered a survey in five cities in 2006 and found that less than 10% of rural to urban migrants had participated in the urban social insurance system. He confirmed the finding of Nielsen et al. (2005) that a major barrier to migrant participation lay in the localized social insurance governance. He further pointed out the practice whereby city authorities were reluctant to allow easy funding transfer between cities led to fi nancial losses for migrant workers when they moved. This was not a cost to employers, but a direct cost to migrant workers. A clear distinction between the literature on China and the literature for western countries is the lack of discussion of the influence of social networks in China. Does this mean that the decision of Chinese rural to urban migrants on whether to participate in social insurance is less likely to be influenced by those around them? This certainly does not coincide with the findings in other aspects of migrants’ life, where migrant networks and family connections have important roles in their urban life. This is particularly the case for new migrants. A further question is, given that migrant workers are new comers to cities, to what extent are they aware of social insurance schemes? It may be that they do not know or do not understand what is on offer. What is more, policy changes are based on the assumption that existing schemes do not fit the needs of migrants. However, if policy makers do not have data on whether migrants know or understand the schemes, it is difficult to justify policy changes on perceived needs. 4. The Analytical Framework My main argument is that information has so far prevented rural to urban migrants from making informed decisions on whether to participate in urban social insurance schemes. There are two aspects to the role of information. The first is improving awareness of the existence of urban social insurance schemes. The second is enhancing understanding of each scheme. Unlike urban residents who live and work in cities all their life, rural to urban migrants have greater difficulties in receiving and digesting information regarding urban social insurance schemes.

98

B. Li

First, rural-urban migrants did not have access to social welfare in the past (Li, 2006; Li, 2005; Tang and Ngan, 2001; Wu, et al., 2004; Xu, 2003). The collectively organized rural healthcare system collapsed with economic reforms (Bogg, et al., 1996; Liu, 2004). The state funded welfare centers for elderly people who did not have close relatives to take care of them were also closed (Davis, 1989; Hussain, 1994; Smart and Smart, 2001). Some later attempts to re-establish social welfare in these areas were not very successful, particularly in poor rural areas. Second, even where there have been efforts to revive rural social security schemes in recent years, farmers are still covered by a segregated social insurance system which is very different from the urban system. Over time, farmers have relied on informal protection through family and kinship networks, rather than the state, to protect themselves against various social risks. Therefore, when rural-to-urban migrants fi rst come into cities, they are not only unfamiliar with the kinds of risks that they have to face in an urban environment (Zhang, 1999), but also are not aware of the social protection options that are available to them. It will take time for them to collect the necessary information. Intuitively, if they are not properly guided and they are busy with work, it is very likely that they do not even know of the existence of urban social insurance schemes. Furthermore, even if rural-to-urban migrants are aware of the social insurance schemes and realize the necessity to protect themselves against the social risks, it is not clear they really understand how the system works. The on-going and quite frequent policy changes make it difficult for both rural to urban migrants and their employers to follow the policies. It generates high administrative costs for employers (Nielsen et al. 2005). To follow the changes closely, employers have to hire professionals to handle social security registration and accounting. It is not unexpected that employers would have little incentive to voluntarily offer detailed information to migrant employees. The availability of alternative social support mechanisms may be a reason for why migrant workers may not be keen to find out how the social insurance schemes work even if they are aware of the social risks. Even after migrant workers settle down in the cities, they continue to rely on informal social support (Zhao, 2003). For example, they can rely on their

Why Do Migrant Workers Not Participate in Urban Social Security Schemes?

99

children in old age, return to village when they become unemployed and return home for medical care when they are seriously ill. Poor understanding can also be a result of lack of incentives to acquire better knowledge. For the migrants, contribution based social insurance means a percentage of income will be taken out of their pocket before they even earn money in cities. Therefore, migrants need to be able to trust the urban authorities’ ability to provide benefits to them in the future. There is still a lack of trust in urban authorities, public service providers and the urban society at large. The lack of trust stems from a long history of exclusion and harsh treatment of rural to urban migrants in cities authorized by the state (Banister and Taylor, 1989; Zhang, 1999; Zhao, 2003). If the migrants are not interested in what the urban authorities offer them in terms of social insurance, they may have little incentive to fi nd out more about it. In this sense, the impact of distrust and poor understanding may be mutually reinforcing. The purpose of this research is to ascertain the level of awareness and understanding of social insurance schemes among rural-to-urban migrants. We examine how much people know about the social insurance system, what are the sources of information, and whether they really understand the schemes. This chapter will focus on three types of social insurances; namely, unemployment, health and pension insurance. 5. Research Methods The dataset was obtained through in-depth interviews with 70 rural-tourban migrants in the construction and service sectors in Tianjin, China, in December 2006. Tianjin is one of the four metropolitan cities directly controlled by the Central Government. It has become an important destination for rural-to-urban migrant workers in North China. It is estimated that about 1.5–2 million migrant workers are working and living in Tianjin. The research is largely exploratory and can be read as a backdrop to the more systematic approaches adopted in the next two chapters by Fei Guo and Wenshu Gao and Lina Song and Simon Appleton respectively. In Tianjin, migrants work in all sectors of the economy. There are multiple reasons why I only selected construction and service sector

100

B. Li

migrant workers. First, providing social protection for migrant workers in the construction industry is one of the main policy concerns. Because it is easy to fi nd jobs in the construction industry, it has been an attractive option for newly arrived male migrants. Usually, they would work in construction for a while and then move on to better paid and less tiring jobs. Migrants in the construction sector are highly mobile and readily move between projects and locations. Administratively, a construction worker does not “belong to” one employer and does not stay in one place for a long time. Therefore, construction workers have always been considered particularly vulnerable. Second, the service sector is the least organized sector. It has lots of small businesses and self-employed people. It is difficult to reach small businesses and the self-employed through the conventional enterprise administration system. Therefore, it is likely that workers from the service sector will be the least likely to be informed of policy changes. The interviews included questions regarding basic social demographic information, status of participation in social insurance schemes and, for those who did not participate, how they coped without social insurance. In order to gage awareness of social insurance, I asked the migrants questions regarding whether they were aware of the existence of each individual social insurance, whether they knew the details of each social insurance and the sources of information. There were some issues related to data collection. First, unlike urban residents, there was no official residential registration list that I could select from. Second, the interviews required continuous conversation with the interviewer for about 20 to 30 minutes. Migrant workers were more ready to answer close-ended questionnaires with straightforward questions than open-ended questions which would require them to talk relatively longer. Third, several pilot interviews suggested that rural to urban migrants had become the targets of many interviewers coming from either the media or universities. Migrant workers and their employers were very weary of the interviewers. In-depth interviews were somewhat detested by migrant workers. To overcome these problems, the interviewees were sampled through a snowballing process. I employed six interviewers from Nankai University, Tianjin. The interviewers were masters students. They all came from

Why Do Migrant Workers Not Participate in Urban Social Security Schemes?

101

different provinces and could speak with the interviewees in local dialects when necessary. Each interviewer fi rst selected one interviewee coming from their home county. At the end of the interview, the interviewees were asked to recommend more interviewees. The recommended interviewees could not work for the same employer nor come from the same county, but could be from the same province. In this way, it was easier to gain access to new interviewees. With the reference from friends, the interviews were easier to schedule and the number of interrupted interviews were minimized. Before each interview, the interviewer promised anonymity to the interviewee. During the interviews, the interviewers asked further questions for clarification. Before the fieldwork, all interviewers received training on how to do in-depth interviews. Some interviews were recorded with the interviewees’ permission. When recording was not permitted, the interviewer took notes. There are clearly some limitations on the data collected. The interviewees were more likely to introduce other interviewees from the same province. This problem was partially avoided as we started with at least people from six provinces and ended up with people from several more provinces. Not all recommended interviewees were willing to be interviewed. There were five refusals. Three interviews were interrupted because the interviewees were not willing to complete the conversation. Therefore, there could be some degree of selection bias. The fi nal problem was that the interviews were carried out in Tianjin only. I cannot generalize the results to the whole of China, although the fi ndings are generally consistent with the results reported in the next chapter by Fei Guo and Wenshu Gao which is based on research in the five major cities other than Tianjin. 6. A Brief Policy Review of Recent Social Insurance Changes in Tianjin In 2006, the Tianjin authorities started to publish new policies designed to improve access to various social insurance schemes for rural-tourban migrants. The new schemes do not treat migrants exactly the same as urban residents. At the time of the interviews, access to social

102

B. Li

insurance schemes was not the same for pension, healthcare and unemployment. Access to urban health insurance was open to rural-to-urban migrants from September, 2006. Tianjin local authorities published “Measures of Providing Social Health Insurance to Rural-to-Urban Migrants” (“Tianjinshi Nongmingong Yiliao Baoxian Banfa”). The content of the new policy was officially publicized in mid July and the policy took effect on 1st of September. Although there is no specific local regulations, unemployment insurance was listed as a right of rural-to-urban migrant workers by the Ministry of Labor and Social Security in 2005. Employers are required to contribute on behalf of migrant workers. The pension scheme is more complicated. At the time of the interviews, Tianjin had not yet started offering pension coverage to rural to urban migrants. However, for migrant workers who came to Tianjin from cities that do offer pension insurance, they can either choose to continue or cease contributing to pension insurance. Given the accessibility of the three schemes, we anticipate migrant workers would at least know of the existence of all three schemes. 7. Research Findings and Discussions of the Results There were 63 (90%) male and seven (10%) female respondents. The average age of the interviewees was 35 years. They had on average stayed in Tianjin for four years. Three interviewees came in the 1980s. Sixteen came in the 1990s. Fifty came after 2000. They came from 11 different provinces, including 10 from the rural suburbs of Tianjin. Twenty-three (33%) of the interviewees were single and 47 (67%) married. Forty-five have children. The families of 23 respondents were in Tianjin (see Table 1). The average income of the interviewees was 1024 RMB per month. Sixty percent of them came from the service industry and 40% came from the construction industry. The view that the construction industry attracts more newly arrived migrants was confi rmed by our data (as shown in Table 2). However, the income level was not much different between the construction and service industries.

Why Do Migrant Workers Not Participate in Urban Social Security Schemes? Table 1. Characteristics of the Interviewees. Freq.

%

Cum.

Gender Female

7

10.00

10.00

63

90.00

100.00

No

23

32.86

32.86

Yes

47

67.14

100.00

No

25

35.71

35.71

Yes

45

64.29

100.00

Male Marital status

Children

Years in Tianjin ≤1

31

44.29

44.29

1–5

20

28.57

72.86

5–10

13

18.57

91.43

> 10

6

8.57

100.00

Family in Tianjin No

47

67.14

67.14

Yes

23

32.86

100.00

Service

42

60.00

60.00

Construction

28

40.00

100.00

No

55

78.57

78.57

Yes

15

21.43

100.00

No

34

48.57

48.57

Yes

36

51.43

100.00

No

57

81.43

81.43

Yes

13

18.57

100.00

Sector

Unemployed in Tianjin

Became ill in Tianjin

Usage of hospital services

103

104

B. Li

Table 2. How Long Have You Been in Tianjin? — By Sector unit: year(s). Years in Tianjin

Service Construction Total

1

2

3

4

Total

10 23.8

17 40.5

9 21.4

6 14.3

42 100

21 75

3 10.7

4 14.3

0 0

28 100

31 44.3

20 28.6

13 18.6

6 8.6

70 100

Pearson chi2(3) = 19.6107. Pr = 0.000.

8. Urban Risks and Reliance on Informal Protection Among all interviewees, two people participated in unemployment social insurance. Both of them worked in the service sector. Four people participated in health insurance. They all worked in the service sector. Three people had pension coverage. All of them worked in the service sector as well. There was only one person who had joined all three types of social insurances and one person who had joined two types. The average income level of people who had one of the three types of social insurance was 1,158 RMB/per-month, higher than the average income of all interviewees. 8.1. Unemployment Among all the interviewees, 15 people (21%) had experienced unemployment in the past. The period of unemployment varied. The shortest period of unemployment was less than two weeks. In one case, the interviewee was out of a job for more than six months. One might suspect that people who could not fi nd jobs in the city would go back to their home village. However, the interviews suggested that among the 15 respondents who had lost their jobs in the past, only two had gone back to their home village. All the others decided to stay in the city. They relied on their own savings until they found new jobs. In contrast, among the 55 people who had not experienced unemployment, 30 did not know what they would

Why Do Migrant Workers Not Participate in Urban Social Security Schemes?

105

Table 3. How Do You Survive When You Lose Your Job? No

Yes

Total

1 (7.1)

13 (92.9)

14 100

Borrow money

1 (100.0)

0 (0.0)

1 (100.0)

Go back home

18 (90.0)

2 (10.0)

20 (100.0)

Get money from family

1 (100.0)

0 0

1 100

Don’t know what to do

30 (100.0)

0 0

30 (100.0)

Never lost my job

4 (100.0)

0 (0.0)

4 (100.0)

Total

55 (78.6)

15 (21.4)

70 (100.0)

Savings

Pearson chi2(5) = 53.7939. Pr = 0.000.

do if they became unemployed. 18 reported they would go back home. One said he would borrow money from others. Only one would rely on his savings (see Table 3). The possible explanation for the differences is that migrant workers who actually lost their jobs would not return home straightaway. They would try to fi nd another job by themselves. During job hunting, they would rely on their own resources or borrow from other people to survive for a while. They could end up staying in the city for quite a long time before they gave up and returned to their home village. In most cases, they would be able to fi nd a job after a short while. How did the migrants get by when they stayed in the city without a job? WMZ: I saved very hard when I had a job. I did not want to spend money on useless things. When I did not have a job, I spend even less. I ate less and slept in the street. If it was too cold, I tried to fi nd some folks to stay with for a short time. It was not nice to stay with them for long. They had their own problems.

106

B. Li

I did not want to trouble my family back at home if I could not earn money. Not sending money back was already very problematic. If there was no hope to fi nd a job, I went back to my village. This is the second time I am here. I fi rst came here more than 10 years ago. I left for quite a long time. When opportunity appeared, I still wanted to come.

LLG: I have relatives here. When I lost my job, I went to them to ask for help. They had been here for more than 10 years. They are more reliable. We can’t count on the city people or the government to do anything for us. If I cannot fi nd a job for a very long time, I will consider going back to my home village.

MLS: I was only 19 the fi rst time I lost my job. I did not save very much when I was working. I felt I was young and wanted to have a good time. I only had a small amount of money with me at the time my employer just disappeared. The money was stolen. I did not have any money to buy food. I had to beg for food. It was a very dark time in my life. But I tried very hard and found a job again very soon.

When migrant workers became jobless, their own savings were the fi rst source of income and they could also to some extent rely on social networks to survive. 8.2. Health problems At the time of the interviews, employers were supposed to pay for migrant workers’ healthcare costs if they were injured at work. Therefore, migrant workers were in general not worried about getting injured at work. Among the interviewees, 36 (51%) had been ill in the city. Thirty-five had taken medicine on their own and one person did not take any medicine. Thirteen (19%) had used hospital services, among whom 13 paid for the healthcare out of their own pocket, while only one person’s healthcare costs were covered by the employer.

Why Do Migrant Workers Not Participate in Urban Social Security Schemes?

107

It is important to note that migrant workers have their own defi nition of illness, which can be quite different from the usual defi nition urban people use. Migrant workers defi ne illnesses in relation to their work. Several migrants emphasized this in interviews. As the interviewee MWG said: MWG (construction worker): If I am injured at work, our employer will pay for our healthcare. If I am seriously ill, I will not stay here. I will have to go back home. I cannot afford to stay in hospital here. If it is not serious, then there is no need to go to the hospital. Headaches and fevers are nothing. We only take medicine when it is necessary…. such as when I cannot get up to go to work. That is an illness for us.

The only problem that bothered him when he was in the city was the temporary loss of earning ability caused by lying in bed in Tianjin. People have different coping strategies. LSH (self-employed small business owner): I paid for minor problems on my own. When the illness is not serious, I just buy medicine, antibiotics and pills for fever reduction. Or I just rest a bit and I will get over it automatically. In the worst case, I went to the hospital to receive a droplet injection. Then I was fi ne again.

WKY (street vendor): “We are extremely busy. I do not have time to go to hospital at all. If I am very ill, I just rest a bit. I rarely take medicines.” 8.3. Old age As shown in Table 4, the answers to the question regarding old age are significantly related to the interviewees’ age group. Younger interviewees (under 30) tend to laugh at the idea of worrying about old age. They felt retirement had nothing to do with them. Obviously, this is not a unique phenomenon among rural to urban migrants. However, they indeed saved and sent money back home. In contrast, people from the older age group were increasingly ready to rely on their children or on going back home to ensure security in old age in the near future.

108

B. Li

Table 4. How Will You Survive After You Retire? — By Age group ≤ 20

20–30

30–40

40–50

> 50

Total

Will depend on children

0 (0.0)

5 (17.2)

6 (20.7)

15 (51.7)

3 (10.3)

29 100

Will go back home

1 (8.3)

3 (25.0)

1 (8.3)

6 (50.0)

1 (8.3)

12 100

Haven’t thought about it

5 (18.5)

16 (59.3)

5 (18.5)

1 (3.7)

0 (0.0)

27 100

Have pension already

0 (0.0)

1 (50.0)

0 (0.0)

1 (50.0)

0 (0.0)

2 100

Total

6 (8.6)

25 (35.7)

12 (17.1)

23 (32.9)

4 (5.7)

70 100

Pearson chi2(12) = 28.6328. Pr = 0.004.

ZS: I have been working to support my children to go to school. One of them is going to university next year. By the time I retire, they will become prosperous. They will defi nitely support me and take care of me.

In general, the existence of informal networks offered migrant workers some sort of protection. In the case of emergency, they were ready to rely on their own kinship and friendship networks. As one interviewee said explicitly: WSH: This scheme or that scheme is for what? They want to take money out of our pocket. Who can we count on? The government? The urban people? They do not even trust themselves. We can only rely on ourselves. I do not trust any people in the city. There are nice people here in Tianjin. But they are not reliable.

9. Awareness and Understanding of the Urban Social Insurance System Not all rural to urban migrants have heard of the three social insurances. As shown in Table 5, 50 people (71%) had heard of pension insurance

Why Do Migrant Workers Not Participate in Urban Social Security Schemes?

109

Table 5. Have You Heard of the Following Social Insurance Schemes? No

Yes

Freq.

%

Freq.

%

Unemployment

47

67.1

23

32.9

Health

66

94.3

4

5.7

Pension

20

28.6

50

71.4

Type of Social Insurance

Table 6. Where Did You Hear About the Following Social Insurance Schemes? Unemployment

Freq.

Government Friends & Relatives

%

1

1.4

Health

Freq.

Pension

%

1

1.4

Freq.

%

5

7.1 12.9

13

18.6

8

11.4

9

Employer

5

7.1

4

5.7

1

1.4

Media

8

11.4

28

40.0

26

37.1

Colleagues

3

4.3

5

7.1

8

11.4

Subtotal

30

42.9

46

65.7

49

70.0

Never heard of

40

57.1

24

34.3

21

30.0

Total

70

100.0

70

100.0

70

100.0

and about one-third of the interviewees had heard of the unemployment scheme, but only four people (6%) had heard of health insurance. The reason health insurance was much less known to many people is related to the fact migrant workers were also entitled to social insurance against industrial accidents. This is an insurance to which all employers have to contribute. Some interviewees could not distinguish between health insurance and industrial injury insurance. When the confusion was corrected, the number of people who had actually heard of health insurance was very small. The media including television, newspapers and internet, as well as by word-of-mouth through friends and relatives; were the most important sources of information. Employers played a relatively smaller role, especially with regard to pension insurance (see Table 6).

110

B. Li

Table 7. Source of Information and Understanding of Social Insurance Schemes. No

Freq.

Government Friends & relatives

Yes

%

6

86

27

90

8

80

Employer

Freq.

1

Total

%

Freq.

%

14

7

5.6

3

10

30

24.0

2

20

10

8.0

Media

61

98

1

2

62

49.6

Colleagues

15

94

1

6

16

12.8

117

94

8

6

125

100

Total

To see how well they understood the system, I asked the interviewees who reported they heard about each social insurance scheme whether they knew the terms of contribution and the benefits to which they were entitled. The responses from the interviewees were quite consistent for all three types of social insurances. Only people who had participated were confident that they knew how these schemes worked (Table 7). If we add the responses for all three types of insurance together to generate a larger set of responses and group them by the source of information, we can see that the media, friends and relatives, and colleagues, are the three most important sources of information. However, the government and the migrant worker’s employer are clearly better at helping people to understand the schemes (Table 7). Given that all the people who claimed they understood the schemes were actually those who participated in the system, it is not difficult to see that migrant workers indeed tried to understand the system before they joined. Conversations with the interviewees confi rmed this was the case. MXG: Of course I know how it (unemployment insurance) works. The boss could not force me to contribute to it. No one could. My fellow villagers talked about it. I asked about the details. I thought maybe it is useful in the future, so I joined. We do not have much money. I wouldn’t contribute if I was not reassured by my friends.

Why Do Migrant Workers Not Participate in Urban Social Security Schemes?

111

HYQ: “Our village established a pension scheme. The village cadres explained to all villagers about everything. So we all have pensions already.” The research suggests that although the media has played an important role in spreading the news about social insurance, it does not provide sufficient information for migrant workers to make decisions. More personalized ways of spreading information– such as through friends and relatives, colleagues and employers– have a direct influence on the willingness of migrant workers to participate. The results indicate local authorities could be more effective in increasing awareness if the schemes were organized back in the migrants’ home villages. WKY: I spent all the time working. No holiday and no weekends. I only watch a bit of TV at night. They talked about these social insurances in the news. But it is often very short. I know these names, but not the details……But even if they (TV programs) talk more about these things, I get bored and switch to a different channel. We are too tired to watch such heavy programs.

WF: I have seen all these names. I read them in the newspapers. I can’t really understand these. How can they expect us to pay money on things we do not even know? I even do not want to spend money on newspapers. I only read the front page by standing in front of the newsstand. These insurances were written with big headlines sometimes.

What is more, even if migrants invest in learning about these social insurance schemes, the information may have a limited lifespan. Migrant workers tend to move between different cities. If the localized design of such schemes means that they have to study the policies in each city each time they travel, their understanding of the system will be hindered. What makes things worse is the policies have been changing overtime and some migrants have lost track of what is happening. FS: I am not interested in these social insurances anymore. Our boss deducted some money from our salaries for some sort of social insurance schemes and told us we could get our money back if we wanted to withdraw. This was when

112

B. Li

I worked in the south. I later withdrew as I heard that Tianjin had opportunities. When I fi rst came here, I heard we were not allowed to contribute because we did not work for more than one year. Now I am no longer interested in this. Who knows where I will be in eight or 10 years time.

10. Direct Answers to the Question: “Why do you not want to Participate in the Social Insurance Scheme?” I also asked the migrants a direct question about why they did not want to participate in a certain social insurance scheme. The answers can be broadly categorized into six categories of response. These were: (1) affordability (including ‘I cannot afford it’, ‘too expensive’ and ‘I do not have any extra money’); (2) policy design (including ‘it is useless’, ‘it is not worthwhile’ and ‘it is not for me’); (3) understanding: [a. awareness (‘I have never heard of it’); b. do not understand the details (‘I don’t understand what it is about’, general confusion between different social insurance schemes); c. lack of understanding of recent changes (‘migrants cannot participate’, ‘I do not have an urban hukou’)]; (4) influence of other people—(‘I have not seen other people who have participated’); (5) concern about wage arrears (‘we could not even get our salaries on time’); and (6) lack of organization (‘no one tried to organize us to participate’). The results are presented in Tables 8, 9 and 10.

Table 8. Why Do You Not Want to participate in Unemployment Social Insurance?

Salary not yet guaranteed

Freq.

%

2

3

Participate already

2

3

Don’t understand

4

6

No one organized

4

6

Can’t afford too

6

9

Did not know I could join

6

9

Useless

8

11

Haven’t heard of it

38

54

Total

70

100

Why Do Migrant Workers Not Participate in Urban Social Security Schemes?

113

Table 9. Why Do You Not Want to Participate in Health Social Insurance?

No one organized

Freq.

%

2

3

Participate already

3

4

Never thought of so doing

4

6

Useless

5

7

Did not know I could join

5

7

Do not understand

9

13

Have not heard of it

21

30

Can’t afford too

21

30

Total

70

100

Table 10. Why Do You Not Want to Participate in Pension Insurance? Freq.

%

Other people did not join

1

1

Salary not yet guaranteed

1

1

No one organized

2

3

Do not understand

3

4

Useless

4

5

I already participate

4

5

Have not thought of so doing

6

8

Did not know I could join

7

9

Have not heard of

18

24

Can’t afford too

28

38

Total

70

100

As expected, frequently answers to these questions centered on affordability. This was particularly the case with pension and healthcare insurance. People were most reluctant to spend extra money on pension and healthcare insurance. This could reflect the existence of alternative methods of social protection. For example, relying on children in the future is a good substitute for pension insurance. Regarding healthcare, compulsory protection against industrial accidents was considered (to a large extent misunderstood) to be a substitute for health insurance.

114

B. Li

Three categories of answers were directly related to migrant workers’ awareness and understanding of the social insurance schemes. They are: “haven’t heard of”, “don’t understand” and “did not know that I could join”—as shown in the highlighted cells of the tables. If answers to these questions are added together, information shortage can be seen to be as important as affordability in deterring people from joining social insurance schemes. 11. Conclusion This chapter has examined the role of insufficient information in explaining migrant workers’ participation in social insurance schemes. I used in-depth interview data collected from Tianjin at the end of 2006 to examine migrant participation in social insurance. The workers were from the construction and service sectors. The research findings suggest that poor awareness and understanding of social insurance schemes has been a major barrier to migrants being able to properly decide whether to participate. Clearly, we cannot tell whether, when people have a better understanding of the system in the future, the participation rate will be improved. It is very likely the case they may still find the social insurance schemes not sufficiently worthwhile to participate, but at least policy makers and researchers may know the problems lie in the design of the policies and not users’ ignorance. This research shows that in the existing system, lack of awareness and understanding has been particularly problematic in enabling informed decisions. As shown in the research findings, the media has played the most important role in spreading basic concepts regarding social insurance. However, its ability to pass more detailed information on to migrant workers was very limited. Social networks, including friends, relatives and colleagues, have also been important in informing migrants. However, they may not necessarily spread positive information, especially when non-participation is the norm. What is more, fellow villagers and colleagues are not professionals. They can spread misleading information, largely based on their earlier experiences, but neglecting the on-going changes. So far, the most effective influence comes from employers and the local authorities. Of course, this is only the case when employers

Why Do Migrant Workers Not Participate in Urban Social Security Schemes?

115

and the local authorities are willing to make an effort and adopt a more personalized approach. The research also suggests migrant workers actually welcome people taking a guiding role in providing them with the necessary information so that they can decide whether to participate. The study of information in promoting awareness and understanding can be useful for shaping future research and promoting policy changes. First, the impact of other factors on non-participation can be more accurately examined. Earlier studies examined migrant workers’ participation and willingness to participate in social insurance in relation to various social demographic, life cycle, employment and institutional factors, but did not control for information variables, including sources of information, awareness and understanding of social insurance schemes. These earlier research designs are not able to reveal important elements in the picture. For example, the researchers could not distinguish resistance to social insurance schemes from migrants themselves and resistance from employers. Second, for policy makers, instead of changing the policy design based on low participation rates, some extra effort can be made to better communicate the policies to migrant workers. Although awareness and understanding may not increase participation, at least enhanced awareness and understanding can reveal the true problems in policy design and institutional arrangements. Claiming that policies do not suit migrant workers’ needs without the majority of workers understanding what is available to them cannot really justify policy changes. Frequent policy changes may not increase awareness and understanding, but result in high administrative costs and disincentives for employer involvement. Acknowledgements The author would like to thank the generous support of the Small Research Grant of the British Academy and the useful comments made by Mark Duda and Russell Smyth. References Banister, J & Taylor, JR (1989). China: Surplus Labour and Migration. Asia-Pacifi c Population Journal, 4(4), 3–20.

116

B. Li

Bassett, WF Michael, J (1998). How Workers Use 401 (K) Plans: The Participation, Contribution, and Withdrawal. National Tax Journal, 51(June), 263–289. Bogg, L., Dong, H., Wang, K., Cai, W & Diwan, V (1996). The Cost of Coverage: Rural Health Insurance in China. Health Policy and Planning, 11(3), 238–252. Borjas, GJ (2002). Welfare Reform and Immigrant Participation in Welfare Programs. International Migration Review, 36(4), 1093–1123. Borjas, GJ (2004). Food Insecurity and Public Assistance. Journal of Public Economics, 88(7–8), 1421–1443. Borjas, GJ & Hilton, L (1996). Immigration and the Welfare State: Immigrant Participation in Means-Tested Entitlement Programs. The Quarterly Journal of Economics, 111(2), 575–604. Borjas, GJ & Trejo, SJ (1991). Immigrant Participation in the Welfare System. Industrial and Labor Relations Review, 44(2), 195–211. Castronova, EJ., Kayser, H., Frick, H & Wagner, G (2001). Immigrants, Natives and Social Assistance: Comparable Take-up under Comparable Circumstances. International Migration Review, 35(3), 726–748. Currie, J (2000). Do Children of Immigrants Make Differential Use of Public Health Insurance?. NBER Working Papers National Bureau of Economic Research, Inc. Currie, J (2004). The Take-up of Social Benefits. Working Paper Cambridge, Mass.: National Bureau of Economic Research. Davies, PS (1997). Welfare and Social Insurance Participation by Korean Immigrants to the United States. Journal of Economic Development, 22(2), 69–80. Davies, PS & Greenwood, MJ (1997). The Participation of Mexican-Born Households in Means-Tested Us Welfare Programs. Unpublished manuscript prepared for the Binational Study on US–Mexico Migration Boulder, Colorado. Davis, D (1989). Chinese Social Welfare: Policies and Outcomes. The China Quarterly, 577–97. De Silva, A (1997). Immigrant Participation in the Unemployment Insurance System. Canadian Public Policy/Analyse de Politiques, 23(4), 375–397. Guan, X (2007). Social Policy for Rural Labour Urbanisation (Nongcun Laodongli Zhuanyi De Shehui Zhengce Yanjiu). 21 Century Economic Report, 13 February. Hansen, J & Lofstrom, M (2003). Immigrant Assimilation and Welfare Participation: Do Immigrants Assimilate into or out-of Welfare? Journal of Human Resources, 38(1), 74–98. Hao, L & Kawano, Y (2001). Immigrants’ Welfare Use and Opportunity for Contact with Co-Ethnics, Demography, 38(3), 375–389. Hu, WY (1998). Elderly Immigrants on Welfare. The Journal of Human Resources, 33(3), 711–41. Hussain, A (1994). Social Security in Present-Day China and Its Reform. The American Economic Review, 84(2), 276–280. Kaushal, N & Kaestner, R (2005). Welfare Reform and Health Insurance of Immigrants. Health Services Research, 40(3), 697–721.

Why Do Migrant Workers Not Participate in Urban Social Security Schemes?

117

Li, B (2005). Urban Social Change in Transitional China: A Perspective of Social Exclusion and Vulnerability. Journal of Contingencies and Crisis Management, 13(2), 54–65. Li, B (2006). Floating Population or Urban Citizens? Status, Social Provision and Circumstances of Rural-urban Migrants in China. Social Policy and Administration, 40(2), 174–195. Li, C & Olivera, J (2005). Participation in the Peruvian Reformed Pension System. Economics Discussion Paper. University of Essex, No 592. Liu, Y (2004). Development of the Rural Health Insurance System in China. Health Policy and Planning, 19(3), 159–165. Nielsen, I., Nyland, C., Smyth, R., Zhang, M & Zhu, C (2005). Which Rural Migrants Receive Social Insurance in Chinese Cities?: Evidence from Jiangsu Survey Data. Global Social Policy, 5(2), 353–381. Rege, M et al. (2007). Social Interaction Effects in Disability Pension Participation. Evidence from Plant Downsizing. Discussion Paper No.496. Shuey, KM (2004). Worker Preferences, Spousal Coordination, and Participation in an Employer-Sponsored Pension Plan. Research on Aging, 26(3), 287. Smart, A & Smart, J (2001). Local Citizenship: Welfare Reform Urban/Rural Status, and Exclusion in China. Environment and Planning A, 33(10), 1853–1869. Tang, K.l & Ngan, R (2001). China: Developmentalism and Social Security. International Journal of Social Welfare, 10(4), 253–259. Wu, L., Yu, X., Yan, X & Zheng, D (2004). The Vulnerability of Young Rural Workers in Cities and Its Consequences—a Literature Review of 43 Studies between 1997–2002 [Chengshi Qingnian Nongmingong Ruoshi Tezheng Jiqi Houguo—Dui 1997–2003 Nian 43 Xueshu Lunwen De Wenxian Zongshu]. China Youth Studies [zhongguo qingnian yanjiu], 9(7), 24–32. Xiao, S & Liu, J (2005). Labour Subcontractors, It Is Not Easy to Keep You. Workers Daily. http://www.lf bz.heagri.gov.cn/default3.aspx?id=17199 [27 April 2007]. Xu, J (2003). On “Rural Workers” In the Transitional Economy of China [Lun Zhongguo Jingji Shehui Zhuanxing Shiqi De “Nongmingong”]. Economics and Management Studies [jingji yu guanli luncong], 5(1), 81–83. Yang, C & Guo, J (2006). The Social Endowment Insurance System for Peasant— Workers：Dilemma and Theoretical Analysis. Zhengjiang University Journal: Social Science edition, 36(3), 108–116. Zhang, HX (1999), Female Migration and Urban Labour Markets in Tianjin. Development and Change, 30(1), 21–41. Zhao, Y (2003). The Role of Migrant Networks in Labor Migration: The Case of China. Contemporary Economic Policy, 21(4), 500–511.

CHAPTER 7 WHAT DETERMINES THE WELFARE AND SOCIAL SECURITY ENTITLEMENTS OF RURAL MIGRANTS IN CHINESE CITIES?

Fei Guo Macquarie University Wenshu Gao Institute of Population and Labor Economics, CASS

1. Introduction It has been well documented that the social structure of contemporary Chinese society has been strongly influenced by its decade-long socialist dualistic system, namely the household registration system, or hukou, that divides the entire country into rural and urban areas and classifies its people into “agricultural” and “non-agricultural” residents (Chan, 1994; Solinger, 1999; Wang et al., 2005; Yang and Guo, 1996). In the pre-reform era, non-agricultural residents enjoyed much more provisions and assistance from the state or local governments than their agricultural counterparts. In recent decades, one of the core functions of this dualistic system, restricting people’s mobility, has been greatly weakened. An increasing number of people with agricultural backgrounds have moved to cities, partially due to lack of employment opportunities in the countryside. It was estimated that in 2000 more than 76 million rural migrants moved to cities, which accounted for almost one-third of the entire employed labor force in China’s cities and towns (Cai, 2003). According to a recent survey conducted by the National Bureau of Statistics of China (NBS) and

118

The Social Security Entitlements of China’s Migrants

119

the Ministry of Labor and Social Security, the number of rural migrant labor has reached 120 million, of which about 100 million were working in cities (Liu and Chen, 2005). Rural migrants’ contribution to China’s rapid economic development in recent decades has been recognized. In the period 1978–1997, China experienced a staggering average 9.4% per annum increase in GDP, among which close to 2% (accounting for more than 20% of GDP growth) was contributed by the transfer of labor from the agricultural sector to the non-agricultural sector (Cai and Wang, 1999). The traditional social and economic divisions between the “agricultural” and “non-agricultural” sector has been further blurred by the rapid expansion of many Chinese cities, which resulted in the conversion of agricultural lands to urban usage and the transition of original farming communities to non-farming communities (Guo and Zhang, 2007). While a number of aspects in China’s dualistic social system have been greatly weakened and challenged, there are a few remaining legacies that still have considerable impact on Chinese society and its people. The rapid social change that China experienced in recent decades has created new social divisions that bear a fundamental resemblance to the divisions in the traditional dualistic social system. One such legacy is the dualistic approach in welfare and social security provision, such as medical services, employment related entitlements, and old age pension support. For many decades after the founding of the People’s Republic, welfare and social security in rural areas were primarily the responsibility of rural families with minimum support from local administrative units at township or village level. Consequently, there has been considerable regional variations in welfare and social security provision in China’s vast rural areas. Although in recent years some rural residents in wealthier regions have been able to get some welfare and social security provision from their local governments, for the majority of rural residents, basic welfare and social security provision are still beyond their reach. The dualistic approach is also applied to another social division in Chinese urban society, “locals” vs. “non-locals”. “Locals” (or ben di ren) are those who are locally registered urban citizens in the household registration system, or hukou, while “non-locals” (outsiders or wan di ren) are those who migrated from other areas and do not have a local hukou registration status. The welfare and social security of local urban citizens are the

120

F. Guo and W. Gao

responsibility of either their employers or local urban governments. Laidoff workers, for example, are in many cities, entitled to minimum living allowance, basic medical provision, and in many cases, old age pension payments. Migrants, especially those who are from a rural background, could be in “double jeopardy”1 as far as welfare and social security provision are concerned. It is argued that rural migrants in Chinese cities are neither “locals” nor “non-agricultural residents”. They are less likely to be covered by any of the existing welfare and social security programs, at their native or current place of residence. Based on the results from a recently conducted five-city study, this chapter updates our understanding of the changes in welfare and social security provisions in China through examining the determinants of social security and employment-related entitlements of rural migrants, in comparison with their urban local counterparts. It aims at understanding the legacy of China’s long-lasting dualistic social system and its impact on, and interaction with, the market-oriented social and economic system in contemporary China. 2. Data and Research Settings This chapter draws on the data collected in five Chinese cities: Beijing, Shijiazhuang (Hebei province), Shenyang (Liaoning province), Wuxi (Jiangsu province), and Dongguan (Guangdong province).2 Five migrantconcentrated communities were sampled from each of these five cities. From April to October 2003, fieldwork was carried out to administer individual questionnaires (to both migrants and local residents), compile community profile forms, and conduct intensive case studies. The five cities selected in this study have various levels of social and economic development and various types of public policy on migration. The total number of individual respondents in the five cities was 2,531, including 1,972 migrants and 559 local residents (see Table 1). As the capital city, Beijing is the economic and cultural center of the country, and one of the major migrant destinations. The 2000 census 1 This term first appeared in Wang and Shen (2003), referring to the disadvantageous social status of female migrants in Shanghai. 2 For a detailed profile of each of the selected communities, see Guo and Zhang (2004).

The Social Security Entitlements of China’s Migrants

121

Table 1. Percentage Distribution of the Respondents in the Five Cities. Beijing

Shijiazhuang

Shenyang

Wuxi

Dongguan

Total

Non-migrants

19.6

29.9

19.9

40.9

0.0

22.1

Migrants

80.4

70.1

80.1

59.1

100.0

77.9

Males

62.3

67.1

53.2

57.2

40.4

56

Females

37.7

32.9

46.8

42.8

59.6

44

Migration status

Gender

Age groups <15

0.2

0.0

0.0

0.0

0.2

0.1

15–24

29.3

24.6

29.1

10.1

53.5

29.3

25–44

60.8

60.3

53.3

63.4

44.9

56.5

45–59

7.9

15

17.4

26.1

1.4

13.6

60+

1.8

0.2

0.2

0.4

0.0

0.5

Agriculture

63.7

67.1

79.8

60.9

89.0

72.2

Non-agriculture

35.5

32.7

20.2

38.9

9.4

27.3

0.8

0.2

0.0

0.2

1.6

0.5

Single

34.7

24.6

27.2

8.1

51.5

29.2

Currently married

62.7

73.9

69.0

89.5

46.5

68.3

Divorced

1.6

0.8

1.9

1.4

0.8

1.3

Hokou status

Undecided Marital status

Widowed

1.0

0.8

1.1

0.4

0.0

0.7

De facto

0.0

0.0

0.8

0.6

1.2

0.5

499

501

523

506

502

2,531

Sample Size

showed that Beijing had a population of 13.82 million, of which 77.5% are urban residents (National Bureau of Statistics of China, 2001). The 2005 1% Sampling Survey indicated that the proportion of migrants in Beijing had reached more than 30% of the population, half of whom were migrants with agricultural hukou background (NBS, 2006). Beijing is chosen here as representative of the economically advanced cities with strict migration policies. Migrants in Beijing, especially those with rural backgrounds, tend

122

F. Guo and W. Gao

to be concentrated in a number of “migrant villages” such as Zhejiang Village, Henan Village, Anhui Village, and Xinjiang Village—referring to their place of origin (Jeong, 2000; Solinger, 1999; Xiang, 2000). The capital city of Hebei province, Shijiazhuang, had a population 9.2 million (35% are urban population) in 2000 (NBS, 2001). The 1% Sampling Survey in 2005 shows the proportion of migrant population was only 5.3% (NBS, 2006), which was much lower than other cities included in this study. Shijiazhuang is the first major city in China that has since 1995 adopted a radical hukou reform policy that allows any migrants who have been employed in the city for more than two years to apply for urban hukou status in Shijiazhuang. Their family members could also be granted urban hukou. The low proportion of migrant population might partially reflect this policy that allows eligible migrants to apply for urban hukou status. Shenyang, the capital of Liaoning province, with a population of 7.2 million in 2000 (NBS, 2001), was an important industrial city with many state-run steel-making and coal-refining enterprises. The proportion of migrants in Shenyang’s total population in 2005 was about 11%, of which more than a half were from agricultural hukou background (NBS, 2006). As one of the most important cities in the region, Shenyang has attracted a significant number of migrants from surrounding regions. With strengthening economic reforms, especially state enterprise reforms, the city has also seen an increasing number of laid-off workers from stateowned enterprises. Some of these laid-off workers have taken up the jobs that were previously regarded as “migrant’s jobs”. Wuxi, a medium size city in Jiangsu province, had a population of 4.3 million in 2000 (National Bureau of Statistics of China, 2001). The migrant population in Wuxi accounted for more than 23% of its total population in 2005 (NBS, 2006). Like other medium-sized cities in southern Jiangsu province, Wuxi is highly developed with a significant share of collective economy. Since the pre-reform era, the Chinese government has actively promoted a “small town” urbanization strategy that aims to avoid the problem of over-urbanization. Unlike large cities, the control over migration to Wuxi is not as strict. Housing is much more affordable to both local residents and migrants alike. As one of the most dynamic newly developed medium size cities in China’s Guangdong province, Dongguan had a population of 6.5 million;

The Social Security Entitlements of China’s Migrants

123

of which about five million were migrants (NBS, 2001). Migrants have largely outnumbered local residents. The 1% Sampling Survey revealed that the local Dongguan residents only accounted for about 16% in the total population in 2005 (NBS, 2006). Dongguan is another type of city that has developed rapidly in the past two decades. It is geographically close to the Shenzhen Special Economic Zone and a number of highly developed cities such as Guangzhou and Hong Kong. Like other cities nearby, Dongguan is known by its export-oriented manufacturing industry, which produces small electronic appliances, toys, clothing, and shoes. In the past two decades, Dongguan has attracted a large number of migrant workers from all over the country, especially young rural girls from nearby or interior provinces. Many migrant workers live in employer provided dormitories. Migrant-concentrated communities in many Chinese cities are perceived as “low class” or “under class” communities where the rental prices were generally low and living conditions are generally poor. Our study of migrant-concentrated communities indicates that the selected communities in Beijing, Shiijiazhuang and Shenyang share some similarities in terms of community attributes and locations. Most of the communities in these three cities were informally regarded as “migrant communities” or “outsiders’ communities” by local residents regardless of the proportion of migrants within them. Most of the communities have suffered worsening living conditions and deteriorating environments. The migrant communities in Wuxi and Dongguan differ considerably from those in the other three cities. Both cities have experienced rapid economic development in the past two decades. While Wuxi’s development was largely based on the legacy of collective economy, Dongguan’s development was mostly based on new industries in which industrialists from Hong Kong and Taiwan have invested in recent years. Migrants in Wuxi and Dongguan have become a vital and permanent part of the local labor force. 3. Characteristics of Respondents in the Sample A number of studies in recent years suggest women constitute an increasingly larger proportion of migrant population and play an

124

F. Guo and W. Gao

increasingly important role in migration decision-making (Roberts, 2007; Wang, 2000). Although family migration has increased in recent years, due to institutional barriers, especially lack of opportunities for migrant children to attend school in cities, many married people migrated by themselves and left their school age children behind (Liang, 2007). A large majority of migrants, especially those from rural areas, are in their working prime. Their primary reason of moving to cities is seeking job opportunities and pursuing a better living standard, for themselves and for their family at home. The selected communities are mainly migrant-concentrated communities, so consequently the majority of respondents in this survey are migrants. The proportion of female respondents varies from one city to another, ranging from 32.9% in Shijiazhuang to close to 60% in Dongguan. The age profile of the sample is similar to that of the overall migrant population. The majority of the respondents are concentrated in the labor force participation age range, especially between 25 and 44 years. The majority of respondents (72.2%) are registered as “agricultural” residents in the hukou system. The proportion of single migrants also varies substantially from one city to another. While in Wuxi only 8% of the respondents are single, more than 51% in Dongguan are in this category. This may imply that family migration in Wuxi is more prevalent than in other cities. 4. Determinants of Welfare and Social Security Entitlements The importance of migrants, especially those from rural areas, in China’s urban labor market has been well recognized (Cai and Wang, 2003; Guang, 2005; Liang and Ma, 2004; Yang, 2003). In many cities, including all cities considered in this study, migrants have become an integral part of the urban labor force. In the case of Dongguan, migrants have outnumbered local residents. Although there is a clear pattern of occupational concentration, many migrants are able to find a job in cities, mostly in informal sectors such as retail services or formal sectors such as manufacturing and construction (Guo and Iredale, 2004). The unemployment rate among the migrant population in large Chinese cities, such as Beijing, was generally low. However, the low unemployment rate

The Social Security Entitlements of China’s Migrants

125

among migrants does not necessarily imply that migrant workers were at an advantageous position in the competitive job market in Chinese cities. Migrant workers were less able to afford to be out of work for long periods, because they were not entitled to the unemployment benefits to which most local urban residents were entitled. The economics of migration to the city cannot be understood merely in terms of migrants’ direct contribution to the economic activities of the city, but must also take into account the lack of any attendant costs, as migrants are unable to claim any support and the costs of unemployment are transferred to families in rural areas (Guo, 2007). A multivariate analysis on migrants’ wage and employment status using the same dataset as in this chapter that we report elsewhere indicated the traditional dualistic approach in Chinese social and economic system is still in place in many respects, especially in the labor market in urban areas (Guo and Gao, 2007). However, the massive scale of labor migration, especially from rural to urban areas, has challenged the dualistic system and has blurred the boundary and dimension of “local” and “non-local”. It has also, to a certain extent, weakened the social division of “agricultural” and “non-agricultural” residents. In the multivariate analysis, the variable hukou was not statistically significant in explaining the hourly wage variance. When taking all other variables into consideration, the variable “resident status”—being a local or a migrant—was no longer significant in explaining the hourly wage differences (Guo and Gao, 2007). Wang et al., (2005) found that migrant women in the largest metropolis, Shanghai, had much less access to health care services, especially reproductive related services. They traced the root causes to a number of institutional barriers including a two-tiered payment system which requires migrants to “pay everything” while local residents are covered by insurance. As Bingqin Li’s chapter shows, migrants often lack trust in urban institutions. Migrants’ lack of incentive and trust of the urban health care program also contributed to their inadequate access to the urban health care insurance program. Liang’s (2007) recent study also points out that health care services provision to China’s massive number of migrants should be a priority for policy makers. He also argues that in some rural areas, while many young people left the countryside to seek better job opportunities in cities, many elderly were left behind, often

126

F. Guo and W. Gao

taking the major responsibility of cultivating family farm land, and in many cases, looking after their grandchildren. Their old age support would be largely dependent on support from their migrant children. The question remains, however, who will be responsible for the old age support for young migrants when they grow old? Analysis in this chapter provides further evidence on welfare and social security entitlements of migrant workers in five Chinese cities. Three main welfare and social security related insurance programs are examined—old age pension insurance, health care insurance, and workrelated injury insurance. As discussed at the beginning of this chapter, for many decades, people in China’s urban areas and rural areas, and the “formal” and “informal” sectors, were provided with very different types of welfare and social security benefits. Before the establishment of commercially operated insurance programs, employers in urban China were the primary welfare and social security providers to their employees and their families. Old age pension and free medical care services and work related injuries were almost universally available to all employees in state-run enterprises and many in collective run enterprises. For those urban residents who were unemployed, disabled or in absolute poverty, urban local governments were responsible for providing them with basic welfare and social security services. The majority of rural people, however, were either not covered by any welfare and social security programs or only covered by the sub-standard minimum welfare programs. Nowadays, commercially operated insurance programs, some with government subsidiaries, are available to everyone. However, most of these insurance programs are still employment-based, as employers are normally the co-contributors to the insurance programs. The presence of a large scale of migrant workers in China’s urban labor market has further complicated the welfare and social security provision system. The descriptive analysis presented in Table 2 shows that the overwhelming majority (76%, 76% and 86% respectively) of respondents sampled in this survey did not participate in any of these three insurance programs. A noticeably smaller proportion of female respondents have participated in any of these programs than male respondents. It is not surprising that a larger proportion of older respondents have been covered by old age pension and health care insurance programs, and less so for

The Social Security Entitlements of China’s Migrants

127

work-related injury insurance programs. More than one half (53%) of those who are aged 45 and above have been covered by some form of pension insurance program and close to one half have also participated in health care insurance programs. A very small proportion of younger respondents have participated in any of these three programs. The proportions of participation also vary by the level of education, type of employment and type of occupation. Those who have at least high school education have a much greater proportion of participation in all three programs. In terms of the type of employment, a much higher proportion of those who work in state- and collective-owned enterprises, shareholding and joint-ventures have participated in all three programs. Similarly, a considerable proportion of people in “white-collar” jobs have access to these three insurance programs, especially old age pension and health care programs. The most striking difference from the descriptive analysis is between migrants and local residents. The majority of local residents sampled have been covered by old age pensions (74%) and health care programs (67%), and to a lesser degree, work-related injury insurance (25%), while a very small proportion of migrants (only 5% to 7%) sampled in this study have participated in the three programs. This preliminary observation, which is consistent with Wang Dewen’s descriptive fi ndings in Chapter 4, indicates that the social division between “locals” and “migrants” in Chinese cities is still clearly evident. It could perhaps also serve as an overarching divide that defi nes and determines the differences in other social aspects. A more detailed multivariate analysis would provide some clearer explanations. Table 3 presents the odd ratios of participating in the three insurance programs—old age pension, health care, and work-related injury insurance. In all three logit regression models, the dependent variable is “participating = 1 and not participating = 0” and independent variables include basic demographic variables—gender and age; human capital related variables—resident status (being local = 1 and being a migrant = 0), year of schooling, and hukou status (having an agricultural hukou = 1 and a non-agricultural hukou = 0); employment related variables—types of industry, types of employment, and types of occupation; and city experience related variables—length of city residence (and square of the length of city residence) and locality of urban residence (city).

128

F. Guo and W. Gao

Table 2. Percentage Distribution of Those Participating in the Three Main Insurance Programs. Old age pension

Health care

Work-related injury

No

Not sure

Yes

No

Not sure

23.21 76.1

0.69

23.16

76.21

0.69

10.88 86.57

2.55

Male

25.33 73.97

0.71

26.27 73.03

0.71

14.05 83.66

2.3

Female

19.57 79.71

0.57

17.74

81.69

0.43

91.53

0.47

Yes

Average

Yes

No

Not sure

Gender 5.94

91.01

6.6

3.04

Age groups < 25

92.69

0.71

25–34

16.74 82.16

5.4

94.13

0.47 1.1

18.34 80.56

8

1.1

10.55 86.61

2.36

35–44

28.85 70.3

0.85

26.65 72.71

0.63

12.34 85.28

2.42

45+

53.76 46.24

0.0

49.81 50.19

0.0

15.38 78.85

6.21

Education Primary school or less

11.8

87.64

0.56

12.08 87.36

0.56

5.68 93.47

0.85

Secondary school

18.09 81.25

0.66

18.26 80.98

0.75

8.58 89.13

2.29

High school/ Vocational

42.99 56.4

0.61

41.16

0.3

19.81

75.54

4.64

College and above

50.98

1.96

52.48 46.53

0.99

26.26 68.69

5.05

47.06

58.54

Type of employment State/collective own

56.95 42.25

0.8

55.08 44.65

0.27

24.38 68.22

7.39

Share-holding/ public

40.0

1.48

45.19

53.33

1.48

33.33 60.0

6.67

Foreign/Taiwan/ HK JV

77.78 22.22

0.0

91.11

8.89

0.0

57.78 40.0

2.22

Private enterprise

11.48 88.22

0.3

11.52 87.88

58.52

0.61

7.01 92.07

0.91

Small business

7.34 91.53

1.03

5.08 93.79

1.03

2.55 96.32

1.03

Self-employed

5.67 93.79

0.54

5.13 94.34

0.54

0.89 98.57

0.54

0.0

45.76 54.24

0.0

5.08 94.92

0.0

Other

33.9

66.1

The Social Security Entitlements of China’s Migrants

129

Table 2. Continued. Old age pension

Health care

Work-related injury

Yes

No

Not sure

Professional/ technician

50.77

47.69

1.54

52.67 46.56

0.76

20.93 70.54

8.53

Clerical/office worker

53.33 45.83

0.83

55

0

20.51 76.92

2.56

9.85 89.41

Yes

No

Not sure

Yes

No

Not sure

Occupation

Retail business worker

45

0.75

7.84 91.42

0.75

Industrial workers

31.34 68.2

0.46

35.25 64.06

0.69

Other

21.5

0.47

22.07 77.46

0.47

78.04

3.53 95.5 22.12

0.97

73.73

4.15

8.45 90.14

1.41

Resident status Migrants

5.07 94.2

0.72

74.58 24.58

0.85

Beijing

15.27 82.69

2.04

16.94

Shijiazhuang

25.15

0.2

20.36 79.44

0.2

Local resident

7.33

91.86

67.44 32.14

0.8

6.23 92.72

1.05

0.42

25.49

67.97

6.54

1.63

10.93 84.95

4.13

City 74.65

81.43

3.2

95.4

1.4

Shenyang

13.54 86.23

0.23

12.39 87.39

0.23

7.52 92.26

0.23

Wuxi

38.59

0.21

42.86 56.72

0.42

22.39 73.26

4.35

61.19

Previous studies of Chinese migration indicated that people’s hukou status, and being an agricultural resident or non-agricultural resident, was the most important factor in determining people’s employment and occupational patterns (Guo and Iredale, 2004; Yang and Guo 1999), which then affect people’s welfare entitlements and access to government services. It is therefore hypothesized here that hukou status would also have strong effects on people’s access or participation in the three insurance programs. If all other variables are equal, age only has an effect on the odds of participating in the old age pension insurance program. Age does not explain any variance in the odds of participating in the other two insurance programs. Not surprisingly, being an older person could increase one’s odds of participating in the old age pension program. Gender, on the other hand, only explains the difference in the odds of participating in

130

F. Guo and W. Gao

Table 3. Odd Ratios of Participating in Old Age Pension, Health Care and Work-related Injury Insurance Programs (Participating = 1).

Old Age Pension

Work-related Injury

Health Care

Odd Ratio

s.e.

Odd Ratio

s.e.

Gender (male = 1)

1.1126

0.4326

1.6194

0.5925

5.7276 ** 2.5819

Age

1.0696 **

0.0218

1.0228

0.0206

0.9494

-

-

-

Independent Variables

Resident status (local = 1)

33.5615 *

56.5075

Odd Ratio

s.e.

0.0264 -

Years of schooling

1.2477 **

0.0984

1.1848 *

0.0864

1.2158 *

0.108

Hukou status (agricultural = 1)

0.7414

0.3952

0.9639

0.4593

2.1097

1.4962

Manufacturing

0.4693

0.3095

0.7187

0.3945

1.8726

1.1846

Construction

1.9395

1.193

0.7496

0.4669

0.3066

0.2874

Transportation etc.

2.9209

2.3302

0.8218

0.6458

0.2565

0.3358

Social services

3.3496 **

1.618

2.0132

0.9385

3.6681 *

2.0656

1.7801

1.1456

0.9586

0.4497

1.6391

0.8596

Industry (Retail service = 1)

Types of employment (state/collective own = 1) Share-holding/ public Foreign/Taiwan/ HK JV.

202.9403 ** 160.1977 160.4017 ** 135.5348

Private enterprise

2.5928

1.4643

0.9353

Small business

1.1569

0.7367

0.288

Self-employed

0.4421

0.2707

Other

1.9594

8.1899 ** 6.3113

0.3976

0.9006

0.4426

0.1709

0.2261 *

0.1583

0.2514 **

0.1304

0.0425 ** 0.0369

2.3045

0.6556

0.7489

-

7.8248

4.594

5.1295 **

2.9308

1.4969

1.0719

Clerical/office worker

1.1621

0.9268

4.2506 *

2.5099

1.2858

0.973

Industrial worker

1.9761

1.0864

3.9596 **

2.1136

2.1417

1.3504

Other

0.227

0.2454

0.2272

0.2423

0.806

0.7144

*

-

Occupation (service worker = 1) Professional/ technician

The Social Security Entitlements of China’s Migrants

131

Table 3. Continued.

Old Age Pension

Health Care

Work-related Injury

Odd Ratio

s.e.

Odd Ratio

s.e.

Odd Ratio

s.e.

Length of city residence (year)

1.4259

0.1635

1.2891 *

0.1342

1.2835 *

0.1469

Sq. of length of city residence

0.9829

0.0058

0.9877

0.9909

0.0063

Beijing

1.0738

0.8227

0.8269

0.5147

2.0584

1.7248

Shenyang

2.4865

1.7791

1.3939

0.8645

4.8333

3.9675

Wuxi

7.9357 **

5.3009

6.7222 **

3.3118

Independent Variables

City (Shijiazhuang = 1)

22.0209 ** 15.6652

n

1341

1816

1341

LR Chi-sq

228.8

1155.62

228.8

Pseudo R-square

0.4119

0.5841

0.4119

Notes: ** significant at p < 0.01, * significant at p < 0.05.

the work-related injury insurance program. A male worker has odds of participating in work-related injury insurance 5.73 times as high as the odds of participating in the same insurance program for a female worker. Gender does not explain any difference in the odds of participating in old age pension and health care insurance programs. People with higher levels of education tend to have higher odds of participating in all three insurance programs, especially the old age pension programs. One remarkable fi nding is that resident status (being a local or a migrant) is a very powerful factor in explaining the difference in odds of participating in old age pension insurance programs.3 Local residents have odds of participating in old age pension insurance programs, commercially operated or employer sponsored, 33 times as high as the odds of participating in old age pension insurance programs for migrant workers in the same neighborhood. Migrants could be those with a non-agricultural hukou status or an agricultural hukou status at 3 The variable “resident status” was dropped from the “health care” and “work-related injury” models.

132

F. Guo and W. Gao

their places of registration. In other words, compared with their local neighbors in the same community, migrants have much smaller odds of participating in an old age pension insurance program. More strikingly, in all three models, hukou status (being an agricultural resident or nonagricultural resident) is not significant in explaining the difference in the odds of participating in any of these insurance programs. This fi nding is fundamentally different from the results from previous studies and our conventional knowledge about China’s hukou system. As mentioned at the beginning of this chapter, for a number of decades in the history of the People’s Republic, social welfare provision and social security entitlements, including old age pension and health care services, were always associated with those with non-agricultural hukou status. Those with agricultural hukou status could only receive minimum social security entitlements and welfare provision. The fi nding in this chapter imply that the commercialization of these insurance schemes may have weakened the role of the state and local government as welfare and social security providers whose policies previously would favor nonagricultural residents in cities. The employment related variables, especially types of employment (or the ownership status of employers) is also very significant in explaining the difference in the odds of participating in all three insurance programs. Workers in foreign/Taiwan/Hong Kong joint-ventures have odds of participating in old age pension insurance program 26 times as high as the odds of participating in old age pension insurance program for those workers in state- or collective-owned enterprises. Of course, employees in state- or collective-owned enterprises/organizations are by no means the most disadvantaged group. Those who are in small business and selfemployed have much smaller odds of participating in any forms of old age pension programs compared with those in state/collective-owned enterprises. It is rather unexpected that “occupation” does not have a significant effect in explaining the difference in the odd ratios of participation in health care insurance program. It does explain the difference in the odds of participating in the other two insurance programs. Those who are professionals or technicians have odds of participating in old age pension and work-related injury insurance programs more than three times as

The Social Security Entitlements of China’s Migrants

133

high as the odds of participating in the same insurance programs for retail services workers. The most stunning fi nding from the three models, perhaps, is the effects of variable “types of employment” on the odds of participating in the three types of insurance programs. Employees in joint-ventures turn out to have odds of participating in any type of old age pension programs 202 times as high as the odds for those employees in state- and collective-owned enterprises or organizations. Although joint-ventures and state- and collective-own enterprises and organizations are all regarded as being in the “formal” sector, the results here strongly imply that joint-ventures have challenged the superior position of the players in the traditional dual system in terms of providing their employees with one of the most important social security benefits. Similar results are found in the other two models. Employees in joint ventures have odds of participating in health care insurance program 160 times as high as the odds of participating in the health care insurance program and eight times as high as the odds of participating in work-related injury insurance program for employees in state- and collective-owned enterprises. Interestingly, the variable “occupation” could only explain the difference in the odds of participating in health care insurance program, not the odds of participating in the other two types of insurance programs. Professionals/technicians, office workers and even industrial workers all have higher odds of participating in health care related insurance programs than those service workers. This is probably due to the shortterm based casual nature of service jobs. The fi nal observation from Table 3 is that people in Wuxi have much higher odds of participating in all three insurance programs, especially work-related injury insurance programs than people in all other cities in this study. The regional differentials in terms of odds of participating in old age pension insurance and health care insurance programs in Beijing, Shijiazhuang and Shenyang are not significant.4

4 Dongguan was excluded in the analysis in this section, because the Dongguan sample only has migrant workers. Therefore it is impossible to make comparison between migrants and locals in Dongguan. Dongguan is not included in all tables that present such comparison.

134

F. Guo and W. Gao

5. Conclusion and Discussion This chapter has demonstrated that the legacy of China’s socialist dualism still has a strong presence in determining one’s employment outcome and social security benefits. The traditional social divisions between “agricultural” residents and “non-agricultural” residents, between “locals” and “migrants”, and between “formal” and “informal” sectors still exist. But the boundaries and the key elements that define these divisions have been challenged and complicated by the transforming social and economic structure in Chinese cities. Comparing the main results in this chapter with another related study by the authors (Guo and Gao, 2007), it is clear that the major disparities between local workers and migrant workers is not the wage difference. Rather, it is access to welfare and social security benefits and employment related entitlements that contributed to the widening gaps between local workers and migrant workers. As presented in Guo and Gao (2007), if all factors are equal, being a local worker does not necessarily enable one to earn a high hourly wage. It is through having access to professional and other more prestigious jobs that locals could be better off in terms of hourly wages. One’s hukou status, being an “agricultural” or “non-agricultural” resident, which used to be the most important factor in determining all aspects of people’s life, is no longer significant in explaining the wage gaps. Other variables, such as one’s educational level and ability to obtain a job in the formal sector or a professional job, now play a more important role in determining one’s level of income. This important fi nding implies that although the social divisions created under the household registration system, or hukou, are still in place, hukou status per se no longer plays a decisive role in determining people’s economic wellbeing. This chapter provides some further convincing evidence that there are profound gaps in terms of access to various welfare and social security benefits between “locals” and “migrants” and among different types of employment. Although the social division between “locals” and “migrants” does not have a significant effect on one’s hourly wage, it has a profound effect on the gap between local workers and migrant workers in terms of access to old age pension insurance and health care insurance programs, and to a lesser extent, access to work-related injury insurance.

The Social Security Entitlements of China’s Migrants

135

It is also evident that among various types of employment, workers in joint-ventures have far greater odds of access to old age pension, health care insurance and work-related injury insurance programs than workers in any other types of employment, including those in state- and collectiveowned enterprises, a traditional formal sector providing superior benefits and entitlements to its employees. This interesting fi nding suggests that with increasing injection of capital from overseas, Taiwan and Hong Kong, a new form of “formal” sector has established. Joint-ventures normally would comply with the national and international regulations and standards and utilize the commercially operated insurance programs. This finding implies that in terms of welfare and social security provision, state- and collective-owned enterprises and organizations have been “informalized”, and their traditional function as reliable and superior welfare provider has been greatly weakened in the presence of jointventures. Perhaps this could serve as a warning sign for China’s state- and collective-owned enterprises and organizations that some fundamental changes are needed in order to catch up with the policies and practices of joint-ventures in terms of providing welfare and social security benefits to their employees. Workers in private enterprises and small business, as well as the self-employed, have much smaller odds of participating in old age pension and health care insurance programs. Policy guidance and mechanisms that encourage small business owners and private enterprises to provide pension and health care insurance benefits would be much needed. The analysis in this chapter also implies the existence of a massive number of migrants serves as a “reservoir” of cheap labor in China’s labor market. As David Kelly’s chapter suggests, migrants are at the bottom of the labor hierarchy. Being at the bottom of the employment hierarchy, the improvement of migrant workers’ employment conditions and welfare and social security entitlements would lead to the improvement of employment conditions in other segments of China’s labor market. It should be noted that the primary data on which this chapter is based only includes those respondents in 25 sampled migrantconcentrated communities. It is reasonable to presume that the majority of residents, both migrants and local residents, in these communities are relatively disadvantaged, in one way or another, compared with those

136

F. Guo and W. Gao

in communities without migrants. If generalizing the fi ndings in this study to a wider society, one should keep in mind the selectivity of our sample. However, it is perhaps safe to say that any differences between “locals” and “migrants” in these communities in terms of access to welfare and social security programs would be even more stark if the same comparisons were made for a broader cross-section of society. Acknowledgements The authors would like to thank the Ford Foundation for providing a research grant to conduct a five-city study of migration and urban poverty in China from 2003 to 2005, on which this chapter is primarily based. References Cai, F (2003). Zhongguo renkou yu laodong wenti baogao [A Report on Chinese Population and Labour Issues]. Beijing: Shehui kexue wenxian chubanshe [The Social Sciences Publishing House]. Cai, F & Wang, D (2003). Migration as Mercerization: What Can We Learn from China’s 2000 Census Data?. The China Review, 3(2), 73–93. Cai, F & Wang, D (1999). Zhongguo jingji zengzhang kechixuxing yu laodong gongxian [The sustainability of Chinese economic growth and the contribution of labour]. Beijing: Jingji Yanjiu [Economic Studies]. Chan, KW (1994). Urbanisation and rural-urban migration in China since 1982—a new baseline. Modern China, 20(3), 243–281. Guang, L (2005). The State Connection in China’s Rural-urban Migration. International Migration Review, 39(2), 354–380. Guo, F (2007). The Impacts of Temporary Migration on Migrant Communities. In Transition and Challenge: China’s Population at the Beginning of the 21st Century, Zhao Z & Guo F (eds.), pp.216–233. Oxford: Oxford University Press. Guo, F & Gao, W (2007). The Legacy of Socialist Dualism: Rural Migrants’ Employment Status and Social Security Entitlements in Chinese Cities. Proc. of the International Workshop of Migration and Social Protection in China, 25–26 September 2007, Beijing. Guo, F & Zhang, Z (2007). Social Stratification in Migrant-concentrated Communities in China: Findings from a Five-city Study of Migration and Urban Poverty. International Journal of Interdisciplinary Social Sciences, 1(4), 81–92. Guo, F. and Z, Zhang (2004). Rural migrants and shantytown communities in Chinese cities, Proc. of the 16th Annual Conference of the Association for Chinese Economics Studies Australia (ACESA). Brisbane , July 19–20.

The Social Security Entitlements of China’s Migrants

137

Guo, F. & Iredale, R (2004). The impacts of Hukou status on migrants’ employment: fi ndings from the 1997 Beijing Migrant Census. International Migration Review, 38(2), 709–731. Jeong, J. (2000). Renegotiating with the State: The Challenge of Floating Population and the Emergence of New Urban Space in Contemporary China. Doctoral Dissertation, Yale University. Liang, Z (2007). Internal Migration: Policy Changes, Recent Trends and New Challenges. In Transition and Challenge: China’s Population at the Beginning of the 21st Century, Zhao Z & Guo F (eds.), pp.197–216. Oxford: Oxford University Press. Liang, Z & Ma, Z (2004). China’s Floating Population: New evidence from the 2000 Census. Population and Development Review, 30(3), 467–488. Liu, J & Chen, L. Danqian nongmingong liudong jiuye shuliang, jiegou yu tedian [The number of labour force participating rural migrants and structure and characteristics of their employment]. Zhongguo Laodong Baozhang Bao [The China Labour Protection Bulletin], (6 August 2005) p.2. National Bureau of Statistics (2001). Di fang ren kou pu cha gong bao [Preliminary Results of Population Census by Region]. Beijing: China Statistics Press. National Bureau of Statistics (2006), Preliminary results from the 1% Population Sampling Survey. Beijing: China Statistics Press. Roberts, K (2007). The Changing Profile of Labour Migration. In Transition and Challenge: China’s Population at the Beginning of the 21st Century, Zhao Z & Guo F (eds.), pp.233–251. Oxford: Oxford University Press. Solinger, D (1999). Contesting Citizenship in Urban China: Peasant Migrants, the State, and the Logic of the Market. Berkeley: University of California Press. Wang, F (2000). Gendered Migration and the Migration of Genders in Contemporary China. In Re-drawing Boundaries: Work, Households, and Gender in China, Entwisle, B. & Henderson, GE (eds.), pp231–242. Berkeley and Los Angeles: University of California Press. Wang, F & Shen, A (2003). Double Jeopardy? Female Rural Migrant Labourers in urban China: the Case of Shanghai. In Women in the Labour Market in Changing Economies: Demographic Issues, B Garcia, R Anker & A Pinnelli (eds.), Oxford University Press. Wang, F, Ren, P Zhan, S & Shen, A (2005). Reproductive Health Status, knowledge, and access to health care among female migrants in Shanghai, China. Journal of Biosocial Sciences, 37(5), 603–622. Xiang, B (2000). A Community that Crossing Boundaries—The Life History of Zhejiang Village in Beijing [kuayue bianjie de shequ—Beijing Zhejiangcun de sheng hou shi]. Beijing: Life, Reading, and New Knowledge Press. Yang, Y (2003). Urban Labour Market Segmentation: Some Observations based on Wuhan Census Data. The China Review. 3(2), 145–158. Yang, Q & Guo, F (1996). Occupational attainment of rural to urban temporary economic migrants in China, 1985–1990. International Migration Review, 30(3), 771–787.

CHAPTER 8 SOCIAL PROTECTION AND MIGRATION IN CHINA: WHAT CAN PROTECT MIGRANTS FROM ECONOMIC UNCERTAINTY?

Lina Song University of Nottingham Simon Appleton University of Nottingham

1. Introduction: Issues and Context More than 140 million Chinese people (10% of its population) are classified as a “floating” population, the majority of them rural-to-urban migrants. Rural-urban migration in China has been described by the United Nations Country Team (2004) as “perhaps the most powerful force for further reducing poverty in China”. However, it is commonly observed that migrants tend to be exposed to dangerous environments: living in dreadful conditions in order to save money and working in risky occupations or locations in order to obtain higher income. Moreover, few of them are covered against uncertainties by either publicly managed or commercially organized programs. How do they protect themselves from unforeseen risks? What risk-coping mechanisms do they adopt in the unfavorable social environment in which they fi nd themselves? Using a nationally representative household survey from 2002, we explore whether rural-urban migrants are excluded from social protection and how they anticipate coping with unforeseen economic shocks. We employ a comparative approach, assessing the position of rural-urban

138

What Can Protect Migrants from Economic Uncertainty?

139

migrants in relation to that of their urban or rural counterparts. For brevity of exposition, we use the terms “urban residents” and “urban households” to refer to those dwelling in urban areas who are not rural-urban migrants. The registration system in China is very rigid so that these urban residents will have official urban registration (hukou) but rural-urban migrants will still have rural registration. First, we provide some descriptive information—comparing the coverage of social protection and job-related welfare benefits among three groups defined by residential status: rural, urban and migrant. We further look into the details of how they anticipate dealing with unforeseen economic uncertainties by asking to whom they would turn to for borrowing funds in order to pay for any unexpected events. Job-related welfare entitlements are common in China. Migrants who do not hold an urban registration are, in principle, not entitled to job-related welfare even if they are employees in the State sector. The official explanation is that rural-urban migrants are allocated access to farm land in their rural origins, and hence their welfare rights and security are covered by this entitlement to the use of land. However, all individuals are allowed and even encouraged to join commercial welfare programs, in particular, medical insurance and pensions, provided they can afford them. Employers, both State-owned and private, are requested by law or regulation to contribute to all their employees’ welfare schemes in the formal sector. But the threshold to enter the formal employment for ruralurban migrants remains high. In the 1990s, jobs provided to migrants by official employment agents were usually assigned in the formal state sector (Song and Appleton, 2006). We look at whether migrants still benefited from these opportunities in 2002. Second, we investigate whether it is the poor, the unentitled and the vulnerable that are excluded from public protection programs. Chinese official social protection programs are, like in most western countries, officially designated as being for poverty alleviation. However such programs are still targeted in ways that limit their coverage, curtail the range of basic needs provided for and allocate benefits very unequally. For example, the poor and the vulnerable are not all covered by the ‘Low-income Allowance Scheme’ (known as Dibao) in both rural areas and among rural-urban migrant communities. Medical insurance and

140

L. Song and S. Appleton

old-aged care are still linked to employment. Only those who have longterm contracts with their employers are able to enter schemes provided by public agents. Migrants or rural residents who are not entitled to obtain long-term urban jobs do not benefit from such protection. Third, we explore whether households with favorable productive characteristics are more likely to get into social protection programs. Here, the ongoing debate concerning equality of opportunity and equality of outcomes has some relevance (World Bank, 2006). Those in favor of equality of opportunity often advocate building-up a market system in which competition provides equal chances for all. Believers in equality of outcomes argue that programs should protect the vulnerable population. Social protection in China in its current stage is unlikely to satisfy either camp. Far from using the market mechanism, most social protection schemes in China are provided by the government, public sector employers or local communities and are based on employment in the public sector. Advocates of equality of outcomes would be dissatisfied by the fact that social protection in China is far from universal, being instead mainly job-oriented or based on urban residentship (Song, 2006). Finally, we examine the roles social networks or Guanxi may play in dealing with economic shocks. Social networks, when manipulated for economic purposes, could be regarded as economic resources, and hence can be defi ned as social capital (Coleman, 1988, 1990). Under decades of socialist planning, China suffered from an impaired market mechanism. This has started to change with reform, but marketization remains incomplete and economic resources are still mainly controlled by the state. In such a structure, social connections are essential for obtaining resources. Guanxi is used for economic gain and often substitutes for market exchanges; for the poor, it can be used for social support or social protection. This is especially so when household economic resources are not sufficient (Becker, 1981). In this chapter we ask when there is a lack of centrally-funded or publicly-managed welfare programs, are the vulnerable more likely to rely upon their social connections for protection than the well-off? Section 2 provides information about the data we use for the analysis. Section 3 presents some descriptive statistics. Section 4 outlines the methods used for modeling inclusion in social protection. We focus on

What Can Protect Migrants from Economic Uncertainty?

141

a range of determinants of inclusion. One is household income: whether income increases access to social security or is a substitute for it. We also test whether people with more productive characteristics have a greater chance of inclusion. Finally, we look at the relation between people’s anticipated source of support when coping with economic shocks and whether they are included in social protection. Section 5 presents the main results and Section 6 concludes. 2. Data The household surveys used for this chapter were conducted in 2003, obtaining information on 2002, as part of the Chinese Household Income Project 2002 (thereafter CHIP 2002). All three main types of Chinese households were surveyed: urban households (CHIP Urban Survey 2002), rural households (CHIP Rural Survey 2002), and rural-urban migrant households (CHIP Migrant Survey 2002). The sampling and questionnaires were designed by a team of scholars including the authors. The surveys were implemented by the National Bureau of Statistics and the Research Institute of Economics, Chinese Academy of Social Sciences. All three surveys are intended to be nationally representative either using them separately or merging them together (Gustaffson et al., 2007). However, there was no adequate sample frame for rural-urban migrants. Migrants were sampled from those who resided in cities with addresses, so it is likely that the survey over-samples settled migrants relative to the more recent or more transitory ones (Appleton et al, 2002; Li and Sato, 2006). The surveys covered all household members including children and the elderly. The main categories of questions are similar across the three surveys. The information spans personal and household characteristics, employment, household production, assets, debts, income and consumption. Questions related to social protection and social networks were all included in the surveys, although the wording sometimes varied across the three kinds of household because of the very large difference in circumstances. All information was provided by a respondent, typically the household head. The urban survey contains 7,000 households from 11 provinces; the migrant survey covers 2,000 households with over 5,000 migrants from

142

L. Song and S. Appleton

27 cities in six provinces; and the rural survey has more than 9,000 households from 22 provinces. In the analysis, some observations have had to be deleted due to missing values for key variables. The main exercise conducted in the chapter uses a full sample of over 17,000 Chinese households merged from urban, rural and migrant surveys. 3. Descriptive Information Migrants face many disadvantages not encountered by urban residents. They often lack urban welfare entitlements. For example, their children would have to pay higher fees in order to attend urban schools than their urban counterparts; when food subsidies are issued to those who have urban residentship, they are not included; when the programs of “unemployment benefit”, “low-income allowance” and pension schemes are designed, rural-urban migrants are not considered for inclusion. The only exceptions to this exclusion would be if migrants secured some social welfare linked to their jobs. Only 5% of sampled migrant workers, compared with 64% for urban workers, are covered by some sort of social protection programs. Although very small, coverage of migrants is much greater than coverage of their rural counterparts—which stands at even less than 1% (Table 1). Of all those who are covered nationally (24% of workers), 97% of them are urban residents (Table 2). Those advocating extending social protection for migrant workers are sometimes seen as naïve. The official position is that rural-urban migrants have their access to welfare in their rural origins. However, these migrant workers, according to our survey, have been in the city for an average of over seven years. They are fairly settled and a lot of them are now living and working with their spouse and children in the city. This is consistent with Wang Dewen’s argument elsewhere in this volume that the floating population is becoming increasingly permanently settled. In fieldwork conducted in 2007 in Beijing suburbs, a large number of migrant workers said they would go back to rural areas for medical treatment if they fell seriously ill. It is apparent that whether migrants could get settled in urban centers or not will largely depend on how well integrated they are into the urban system economically, socially and culturally. And all this

What Can Protect Migrants from Economic Uncertainty?

143

Table 1. Percentage of Households with Security Coverage by Types of Household’s Residential Status. Household Type

Included in Social Protection Programs (number) % covered in the type of household Number of cases

Rural

Migrant

Urban

National

15

98

4,204

4,317

0.16

4.92

64.27

24.34

9,200

1,992

6,541

17,733

Note: Social protection is defi ned in this chapter as whether households are included in social safety nets provided by both publicly and commercially funded or managed programs. Table 2. Among Those Who are Covered: Percentage by Types of Households. Household Type

Rural

Migrant

Urban

National

% covered in the full sample

0.35

2.27

97.38

100

Number of cases

9,200

1,992

6,541

17,733

Note: Social protection is defi ned in this chapter as whether households are included in social safety nets provided by both publicly and commercially funded or managed programs.

may point to sweeping changes for rural Chinese in terms of their land ownership, citizenship, and entitlement to state assets. Since the central government liberalized restrictions on internal migration, ‘allowing’ the movement between rural and urban sectors in China, there is no regulation to safeguard migrants’ livelihoods. They have to fi nd their own ways of dealing with problems. One can conceptualize three typical kinds of settlement for ruralurban migrants in China. The first type is the “migrant settlement community”. They have emerged in the suburbs of big cities like Beijing and Shanghai. As Fei Guo and Wenshu Gao note in their contribution to this volume examples of such communities include Zhejiang Village, Xinjiang Village, and Henan Village in suburban Beijing. These communities are semi-autonomous and inhabited mostly by rural-urban migrants with the same provincial origins. These communities are clearly structured with services—clinics, transport, shops and restaurants—to

144

L. Song and S. Appleton

cater to their own needs. In this type of community, migrant workers live with their employers in an environment where they do not have many opportunities to contact “outsiders” (Ma and Xiang, 1998). But the employers have networks to transfer information about jobs, business and many other matters (Song, 2006). The second type of settlement is comparative isolation. Migrants live with their fellow-workers and their employers in a corner within a city. These migrants do not have much contact with urban residents and their reference group remains their rural fellow-villagers or fellow-migrants. These migrants tend to work in manufacturing or on construction sites. The third type of ruralurban migrant is more intermingled with urban residents. Their clients are usually urban residents, or they rent accommodations from urban dwellers, or their children, if with them, are mixed with urban children in schools or residential sites. This chapter studies these more settled migrants, as they are likely to stay on in cities. With all three types of rural-urban migrants, social protection coverage against economic uncertainty has been deficient. The living arrangements, in many ways, are not associated with social security coverage. Job-security in China, since the economic reform, has become the most secured protection. And obtaining jobs in the formal or State sector is the most likely route for migrants to obtain social protection. Entitlement to urban jobs implies welfare entitlement in China. In the 1990s, many types of jobs were not available for ruralurban migrants (whose hukou are registered in rural areas), while most welfare provisions were linked to those jobs (Knight and Song, 2005). This has not been reversed even though it has not been openly mentioned since the current government came to power. The root, therefore, of the exclusion of rural-urban migrants from the current social protection system is, by and large, embedded in urban job-entitlements. However, according to our survey (Table 3), job opportunities have not kept pace with the numbers of rural-urban migrants. In 1999, 35% of sampled migrant workers obtained their jobs from market competition; and this has fallen to 30% in 2002. Government job-centers have stopped helping migrant workers since 1999; less than 1% of migrant workers in 2002 got their jobs from such agents. We note that it is jobs introduced by government agents that are more likely to provide migrants with social

What Can Protect Migrants from Economic Uncertainty?

145

Table 3. Anticipated Sources of Economic Resources in Dealing with Uncertainties (%). Household Type

Rural

Migrant

Urban

National

Using private networks

53.6

85.3

69.9

63.2

Relying on institutional assistance

10.6

11.8

4.1

8.4

Self-sufficient

35.8

2.9

26.0

28.5

9,066

1,980

6,384

17,430

Number of cases

Table 4. Comparing Job-search Methods between Migrants in 1999 and 2002 CASS Surveys (%). Current job-seeking method:

Migrant (1999)

Migrant (2002)

35.02

30.01

2.83

0.60

Getting jobs from social networks

25.98

26.41

Self-employed

34.57

42.99

1.6

0.0

1,128

3,359

Getting jobs from market competition Getting jobs from government agent

Other (non-specified) Number of observations

Notes: Job-search method refers to that used to obtain their current jobs.

protection coverage. Thirty-five percent of sampled migrant workers received a pension package; 30% were covered by medical insurance and 30% could claim unemployment benefits (Table 4). The proportion of migrants’ using their guanxi networks to fi nd jobs remained at a similar level between 1999 and 2002. But the proportion of migrants who are in self-employment is eight percentage points higher. More and more migrants come to cities and create their own work. This raises the issue of whether they can protect themselves from risk. 4. Methods and Modeling Specification The main purpose of this chapter is to examine the determinants of inclusion in the social protection programs available to Chinese households. A recent study by World Bank researchers pioneered an investigation into social protection and expanded the conventional concept

146

L. Song and S. Appleton

into “the double role of risk management instruments—protecting basic livelihoods as well as promoting risk taking” (Holzmann and Jørgensen, 2001). Unfortunately, the data used here does not sufficiently capture all dimensions of risk-taking. Nor did it measure household shocks, such as those studied by Dercon et al (2004, 2005). We do not yet have access to nationally representative longitudinal data that would be ideal for such a study. Consequently, we confine ourselves to analyzing the coverage of social protection programs. The dependent variable is a dummy variable for whether the individual is included in any publicly-funded or managed social security program. These programs are defined as medical insurance (for all three surveys) together with pensions and unemployment benefits for the urban and migrant samples only. Unemployment benefits and state pensions are typically not available to rural residents and so were not inquired about in the rural survey. Social protection and social support have a role given uncertainty over health and incomes. We model whether a household i is covered by publicly funded social protection program (SPi = 1) or not (SP i = 0) using a probit: SP*i = α’ Qi + Ui where Ui ~ N (0,1) Pr (SPi = 1) = Pr (SP*i > 0) = Φ (α’ Qi )

(1)

In Equation 1, Qi is a vector of explanatory variables and α a vector of associated coefficients. Among the explanatory variables are: (i) household income per capita (logged); (ii) logged household income per capita (predicted); (iii) dummy variables to defi ne whether observations are urban, rural or migrant households; (vi) household stock of social capital, proxied by dummy variables for self-assessed sources for social support; (v) household stock of human capital, proxied by the respondent’s education in years and their self-assessed health status; (vi) household stock of political capital, proxied by the respondent’s Communist Party membership; (vii) personal characteristics including sex and age; (viii) marital status; and (ix) province dummy variables.

What Can Protect Migrants from Economic Uncertainty?

147

There are several methodological issues that arise from this model. The household income variable may be endogenous, since it includes public transfers from social protection (medical insurance and safety nets). Consequently, we employ a two-stage probit model and use predicted rather than actual log income as an explanatory variable. The dummy for being a migrant may also be endogenous due to the selectivity of migration. 5. Results: Examining the Determinants of Social Protection Exclusion Table 5 presents a binary probit model for whether adults are included in publicly funded social safety programs. The actual proportion of adults who are included is 28%, although due to the non-linearity of the probit model, it predicts a smaller mean proportion (10%) at the mean of the explanatory variables. Two variants of the model are estimated—one with actual household income per capita as an explanatory variable; another with that variable instrumented by household income in the previous year. The models have a high goodness of fit: the pseudo R 2 for the fi rst model is 56%, and for the second model is 53%. In the fi rst variant of the model (1st Column Table 5), using actual income, the marginal effect of logged income on the probability of being included in a social protection scheme is 8%. This implies that doubling household income would raise the predicted probability of being included by eight percentage points. Compared with urban individuals and controlling for other determinants, rural residents are 34 percentage points and rural-urban migrants eight percentage points less likely to be covered by social protection. One extra year of education for household heads would increase the likelihood of being protected by half a percentage point. Political status, proxied by whether household heads are Communist Party members, also has a positive and significant effect on inclusion in social protection. Having a Party member as household head means it is 3.5 percentage points more likely that they will be socially protected, ceteris paribus. Working in the State sector has a very large impact on the probability of social protection—raising it by eight percentage points. Being unemployed, other things equal, reduces the

148

L. Song and S. Appleton

Table 5. Probit model for Inclusion in Social Protection: All Sampled Households (2002 CHIP Surveys). Marginal effects (Robust standard error)

Variant One

Variable

Log (household income per capita) Log (predicted household income per capita)

0.0813

Variant Two

(0.0065)***

0.4233

(0.0795)***

Rural household

– 0.3478

(0.0220)***

– 0.2811

(0.0383)***

Migrant household

– 0.0822

(0.0068)***

– 0.0754

(0.0186)***

Anticipate using institutional resources in event of adverse shock

– 0.0015

(0.0098)

– 0.0029

(0.0127)

Anticipate being self-sufficient in event of adverse shock

0.0054

(0.0053)

0.0042 (0.0072)

Communist Party member

0.0350

(0.0063)***

0.0129 (0.0104)

0.0051

(0.0009)***

Education in year

0.0029 (0.0019)

– 0.0511

(0.0069)***

Working in State Sector

0.0866

(0.0105)***

0.0235 (0.0153) *

Male

0.0174

(0.0043)***

0.0011 (0.0060)

– 0.0301

(0.0135)***

0.0050 (0.0161)

Unemployed

Married Age Age

0.0008 (0.00123) 2

8.48e– 06

Mean proportion protected

0.2786

Predicted proportion (at mean of explanatory variables).

0.0666

2

(0.0000)

– 0.0177

0.0005 (0.0016) 2.87e– 06 (0.0000)

0.1000

0.5565

0.5282

Wald Statistic

2748.56

3575.44

Number of observations

14,897

14,432

Pseudo R

(0.0240)

Dependent variable: 0 = excluded from social protection; 1 = included. Notes: 1. Robust standard errors are in brackets. *** denotes statistics significance at 1% level, and % at less than 5% level. 2. Omitted dummy variables are urban households, social support from closely-knit networks, not Communist Party member and not in marriage. Province dummy variables are included in both models but not presented for brevity. 3. In the second model, predicted household income per capita is instrumented with the previous year’s income as the identifying instrument.

What Can Protect Migrants from Economic Uncertainty?

149

chance of getting protection by five percentage points. This reflects the loss of access to work-unit based entitlements. Men are 2% less protected than women and age has statistically insignificant effects. In the model we also test whether marital status has any impacts on social protection. Married couples may be more security-mined and it would be more likely for this kind of household to seek extra certainty (Knight and Song, 1999). Indeed, in our model, we fi nd that being married raises the probability of being included in social protection by three percentage points. One of the assumptions we wish to test is whether anticipated social support from informal arrangements is a good substitute for publiclyfunded social insurance. The data allows us to include such information in the model. It includes a question asking what source of financial assistance households would turn to if they had economic difficulties. Three responses were coded: (1) social networks—relatives, friends, and the like); (2) institutional support—work units, local communities and banks; and (3) not using any particular social connection, which mostly can be interpreted as being self-sufficient. However, when we entered dummy variables for these responses into the model (category 1 is omitted as the default), they were statistically insignificant, with small marginal effects. The second variant of the model presented in Table 6 allows for the possible endogeneity of income with respect to social protection. This greatly increases the marginal effect of doubling income from 8% to 42%. In general terms, the absolute size and significance of the other explanatory variables are greatly reduced if income is treated as endogenous. Only location and public sector employment remain significant at conventional levels. If we accept the results of the second variant of the model, this implies household income has the utmost impact on inclusion of social protection programs. The higher the household’s income, the more likely to be covered by publicly funded or managed safety nets. The productive characteristics of the labor force may indirectly—via income generation— increase the likelihood of being covered by social protection, but not have a significant direct effect. Given that income can be singled out as the most important factor for determining social protection, migrants’ relentless pursuit of income seems easily understandable. With the same national household survey

150

L. Song and S. Appleton

Table 6. Safety Net Coverage by Job-search Method (%).

Method of job-search:

Pension

Medical insurance

Unemployment benefit

From government agent

35.00

30.00

30.00

Market competition

6.07

4.26

2.38

Social network

4.40

2.71

1.69

Self-employed

3.24

1.81

0.69

% of recipients to the sample as a whole

4.77

2.98

1.55

dataset, researchers reported from an exercise modeling household income (an OLS regression with logged household income per capita as the dependent variable), after controlling for all other explanatory variables, the coefficient on the rural dummy is –1.178 and that on the migrant dummy is –0.694. In other words, household income per capita is estimated to be 69% lower for rural residents than for urban ones, controlling for other observed characteristics. Migrant households are predicted to earn more than their rural counterparts, ceteris paribus, but still earn 50% less than urban households. Urban households therefore receive a significant income advantage not attributable to their observed human capital (education, health or experience) (Song and Appleton, 2007). Rural-urban migrants are less likely to get social protection funded or managed by public agents. If they had remained residing in their rural origins, traditional methods of social support from the extended family or fellow villagers could provide some alternative for protection. When away from home, they would be expected to establish their own protection system for coping with adverse shocks. Having a closely-knit network could provide not only economic benefits but also emotional protection. In Table 6, however, the sources of anticipated methods to cope with economic risks are not associated with the dependent variable—whether they are included in social protection schemes. According to Song and Appleton (2007), who have employed a multinomial logit model on anticipated sources for coping with future risks, both migrants and rural residents are much more likely to rely on self-

What Can Protect Migrants from Economic Uncertainty?

151

sufficiency in the event of an adverse economic shock. They are much less likely to rely on social networks (83–90 percentage points less likely), but are also less inclined to use institutional agents. Urban residents are more likely to practice Guanxi for economic gains. High income per capita tends to increase the likelihood of households relying on their own resources to cope with shocks. Inclusion in social protection schemes is associated with reduced self-sufficiency—increasing the use of both institutional agents and social networks by roughly equal amounts. 6. Conclusion In this chapter, we have used a nationally representative household survey from 2002 to analyze how social protection varies between three different groups: urban residents, rural residents and rural-urban migrants. We began by comparing the level of social protection of these three groups. Urban residents unsurprisingly came out best in terms of safety-net coverage, although only less than a quarter of China’s working population was in fact protected. Job opportunities for rural-urban migrants in 2002 do not seem to have improved, with more choosing self-employment. Ceteris paribus, this trend would worsen access to social protection, which is typically employment-related in urban China. That inclusion in state social protection schemes is very concentrated on urban residents is not surprising. When modeling access to formal social protection schemes, we found differences by residence status persisted after controlling for observable factors such as personal characteristics. Perversely, although social protection was intended to support the poor and vulnerable, household income had a positive effect on access. Even after controlling for residence, more affluent households were more likely to be covered by social protection schemes. Finally, we have to answer what can protect migrants from economic risks. Looking at who households intended to turn to in the event of adverse economic shocks, we realized that they mainly have to rely on themselves. Like rural households, migrants who appear reliant on selfsufficiency, which could mean a simple “not-sufficiency”. They are trying their luck as their ancestors did in traditional China. For this, they would have to build up their savings by relentless money making. Only coverage

152

L. Song and S. Appleton

by social protection would reduce the likelihood of households relying on self-sufficiency, but such protection largely excludes migrant households. Urban residents are more likely to turn to their social networks or to institutional agencies for help. This fi nding, together with the regressive distribution of social protection, provides some support for the case for further welfare reform to assist rural households and migrants in coping with economic uncertainties. References Appleton, S., Knight, J., Song, L & Qingjie, Xia (2002). Labour Retrenchment in China: Determinants and Consequences. China Economic Review, 13(2–3), 252–276. Becker, G (1981). A Treatise of Family. Cambridge, Mass: Harvard University Press. Coleman, JS (1988). Social Capital in the Creation of Human Capital. The American Journal of Sociology, 94 (Supplement) S95–S120. Coleman, JS (1990). The Foundation of Social Theory. Cambridge, Mass: Harvard University Press. Dercon, S., Hoddinott, J & Woldehanna, T (2005). Shocks and consumption in 15 Ethiopian Villages, 1999–2004. Oxford University: Mimeo. Dercon, S & De Weerdt, J (2004). Risk sharing networks and insurance against illness. Oxford University: mimeo. Gustaffson, B., Li, S., Sicular, T (Eds.), (2007) Inequality and Public Policy in China. Cambridge: Cambridge University Press. Holzmann, R & Jørgensen, S (2001). Social Risk Management: A New Conceptual Framework for Social Protection, and Beyond. International Tax and Public Finance, 8(4), 529–556. Knight, J & Song, L (2005). Towards a Labour Market in China. New York and Oxford: Oxford University Press. Knight, J & Song, L (1999). The Rural-urban Divide, Economic Disparities and Interactions in China. New York and Oxford: Oxford University Press. Li, S & Sato, H (Eds.), (2006) Unemployment, Inequality and Poverty in Urban China. London: RoutledgeCurzon. Song, L & Appleton, S (2006). Inequality and Instability: An Empirical Investigation into Social Discontent in China. Leverhulme Centre for Globalisation and Economic Policy, University of Nottingham, No. 2006/45. Song, L & Appleton, S (2007). In pursuit of wealth, health and happiness in China. Nottingham University: Mimeo. Song, L (2006). Government and Family: Change of a Social Support System in China. Nottingham University: Mimeo. United Nations (2004). Millenium Development Goals (Beijing: United Nations China Progress Office).

SECTION 4 THE ROLE OF THE HOUSEHOLD, STATE AND MARKET IN PROVIDING SOCIAL PROTECTION

153

This page intentionally left blank

CHAPTER 9 GETTING BY WITHOUT STATE-SPONSORED SOCIAL INSURANCE

Linda Wong City University of Hong Kong Zheng Gongcheng Renmin University of China

1. Introduction Access to social security is an important social right of citizens in modern societies. In the “one country, two societies” context of China, the 120 million migrant workers who make their living in Chinese cities do not enjoy this right. Until recently, people without an urban hukou fell completely outside the urban welfare net owing to their rural status. They were not eligible for state-sponsored social insurance benefits covering health care, pension, unemployment, work injury, and maternity. Now, the formal barriers are gradually being removed although the numbers gaining entry remains small. Of greater concern is migrants’ ineligibility for social relief. Exclusion from survival guarantees renders their situation particularly helpless. Their unmitigated hardship may escalate into social risks for society as a whole, threatening the pursuit of social stability and harmony, the very goals espoused by the Hu-Wen leadership at the 11th Congress of the Chinese Communist Party. This chapter examines where migrant workers currently stand in relation to social insurance, their needs, coping strategies, and expectations by drawing on the findings of a survey on social protection for migrant workers that we administered in 2005. We

155

156

L. Wong and G. Zeng

begin by reviewing the reform of the urban social insurance system and the recent moves of the State to extend protection from rural to urban migrants. In the core part of the chapter, we examine our respondents’ participation in State-sponsored insurance schemes, the problems that they face while living in the city, their coping methods and expectations of the State. In the conclusion, we comment on the institutional constraints that obstruct their access to social security and the inherent weaknesses of the current system. We argue that it is important to tackle these issues as quickly as possible in light of the seriousness of the problems migrants face and the rising expectations of a new generation of migrants who are more educated, more rights conscious and more determined to put down roots in the city. 2. Urban Social Security: Features, Reforms, and Limited Access for Migrants China’s social security system includes social insurance, welfare, the special care and placement system (for veterans), social relief, and housing services. As the core of the social security system, social insurance includes old-age insurance, unemployment insurance, medical insurance, work-related injury insurance, and maternity insurance (Information Office of the State Council, 2004). In the socialist period, State-owned enterprise (SOE) employees enjoyed the iron rice bowl, social security, and work-based collective amenities. Intense competition from the nonstate sector challenged the viability of this model. To reduce the burden on enterprises, the State tried out successive reforms to de-link social security from enterprises, streamline policy and management, and unify entitlements for employees working in different types of workplaces. 2.1. Old-age pension Urban employees of enterprises and public institutions have enjoyed the right to draw a pension under labor insurance and other regulations since the 1950s. During the Cultural Revolution, the disruptions to the pension administration system turned the pre-existing pooled scheme into a work-based system funded and managed by enterprises. In the mid 1980s, “unified management” (tong chou) was introduced to pool the collection,

Getting By Without State-Sponsored Social Insurance

157

investment, and distribution of pension funds on a municipal or county basis. In June 1991, the State Council issued the Decision on the Reform of the Old Age Insurance System for Enterprise Workers. A three-tier oldage insurance system for enterprise employees based on joint contribution by employers (about 20% of the wage bill) and employees (about 8% of wages) was formally adopted (Chow, 2000). In March 1995, the State Council’s Circular on Deepening the Reform of the Old Age Insurance System for Enterprise Workers introduced a social pool plus personal accounts pension system (Ge, 2004). In July 1997, the State Council issued the Decision on Establishing a Unified Basic Old-Age Insurance System for Enterprise Workers. This decree changed the fragmented pension schemes managed by different ministries into a single basic oldage insurance system under the Ministry of Labor and Social Security (MOLSS) covering all employees in urban enterprises. Employees outside the public sector were gradually brought into its fold. By the end of 2003, 116.46 million workers or employees in governmental or public institutions, or 45.4% of urban employees had joined the basic pension scheme (Wang and Wang, 2004, p.6). 2.2. Medical insurance Reforms to medical insurance went on throughout the 1990s. Building on these pilot experiences, the State announced the Decision on Establishing a Basic Medical Insurance System for Urban Employees in 1998 based on the principle of “low benchmarks, broad coverage,” (di shuiping, guang fugai). Contributions are required from employers (6% of the wage bill) and employees (2% of wages). At the end of 2003, 109.02 million employees were covered, comprising 79.75 million employees and 29.27 million retirees (Information Office of the State Council, 2004). However, workers’ dependents, who were previously covered by their parents’ employers, became disenfranchised. 2.3. Unemployment insurance Unemployment insurance was first introduced in 1976 to cover SOE employees in enterprises who had terminated their positions, gone

158

L. Wong and G. Zeng

bankrupt or were being restructured. From 1990, improvements were made to improve benefit levels and coverage along with extension to non-state firms (Wong and Ngok, 1997). In 1999, the State Council promulgated the Regulations on Unemployment Insurance to streamline and improve the unemployment insurance system. The scheme is mandatory for all enterprises and institutions in urban areas and their employees. Contribution rates are 2% of the wage bill for employers and 1% of wages for employees (Wong and Ngok, 1997). At the end of 2003, membership stood at 103.73 million, with unemployment relief granted to 7.42 million people (Wong and Ngok, 1997). 2.4. Work-related injury insurance The expansion of private and foreign-invested firms as well as joint ventures accentuates the need to compel employers to compensate employees who are injured at work. In January 2004, the Regulations on Insurance for Work-related Injuries came into effect, smoothing the path for enforcement and expansion. The insurance is financed entirely by employers and covers all employees, permanent as well as temporary. Pooled funds are set up by cities at prefecture level or above. In mid-2004, 49.96 million employees were covered (Wong and Ngok, 1997). 2.5. Maternity insurance The need to ensure female workers receive maternity protection became pressing with the proliferation of non-state firms, which had poor compliance records with labor regulations. In 1988, the state introduced reform of the maternity insurance system in some areas. At the end of 2003, 36.55 million employees were enrolled, with 360,000 employees collecting maternity insurance benefits (NBS., 2006, p.125). 2.6. Broadening the scope of social insurance In 2003, the 16th National Congress called for “quickening the pace of establishing a social security system corresponding to the level of

Getting By Without State-Sponsored Social Insurance

159

economic development”,1 which was endorsed in China’s newly revised Constitution in 2004. Subsequent years saw a rise in membership in all types of social insurance schemes. As at the end of 2006, participants in old-age, medical, unemployment, work injury, and maternity insurance programs had increased to 186.49 million, 157.37 million, 111.87 million, 102.35 million and 64.46 million respectively. Total subscriptions amounted to 851.7 billion RMB, which was a 22.2% rise over the previous year (Ministry of Labor and Social Security, 2007). However, it remains that coverage is still a long way from universal, with patchy coverage outside the state and collective sectors. In comparison with the socialist period, a large part of the urban population has reduced social insurance protection, with the erosion of protection in the state and collective sectors. 2.7. Extending social insurance to migrant workers Until the late 1990s, old-age insurance only covered workers in stateowned and large collective enterprises. After 1999, employees in foreigninvested enterprises, private enterprises, and other ownership types were included. In 2002, employees in urban areas who were employed on flexible terms were included. The need to protect workers in the nonpublic and flexible employment sectors in which the majority of migrants are employed, was highlighted in the 2005 State Council Decision on Improving the Basic Pension System. In implementing the 2004 Regulations on Insurance for Work-related Injuries the MOLSS emphasized the need to protect migrant workers, especially employees in high-risk industries like construction and mining (Ministry of Labor and Social Security, 2004). The Ministry’s targets were to raise membership to 60 million by the end of 2004 and ultimately to 160 million, including migrant workers (Xinhuanet, 2004). The Ministry also announced plans to cover most migrants working in construction and mining within three years (Ministry of Labor and Social Security, 2006).

1 See the Third Plenary Meeting of the 16th National Congress of the Communist Party of China, The Decision on Several Issues on Improving the Socialist Market Economy System.

160

L. Wong and G. Zeng

On medical insurance, the Ministry in May 2004 proposed that migrant laborers working in mixed ownership fi rms, the non-public sector and flexible employment sectors should join the medical insurance scheme. The plan was to build up pooled funds to cover the treatment of major illnesses. Migrant workers were to be admitted gradually (General Office of the Ministry of Labor and Social Security, 2004). Suggested targets were for 20 million migrant workers to join local medical insurance schemes by the end of 2006, while by 2008 it was proposed that almost all migrant workers who have signed labor contracts should have coverage (General Office of the Ministry of Labor and Social Security, 2006). As far as unemployment benefits are concerned, the 2004 Regulations on Unemployment Insurance provide some protection for migrant workers. Migrant laborers who have been with an employer for more than one year and whose company has paid the required premiums are entitled to a lump-sum payment as a living allowance if their labor contract expires or is terminated before the due date. The payment method and allowance level are left to provincial governments. In Beijing, the living allowance is set at 40% of the minimum wage of the municipality. 2.8. General principles in extending social insurance to migrant workers A consolidated view on the issue of social insurance for migrant workers came with the release of Certain Opinions of the State Council on Solving the Problems of Peasant Workers (2006). A number of principles were adopted to guide social security provision for migrant workers. Priority attention will be given to work injury insurance and medical insurance for the treatment of severe illnesses, judged to be the most urgent needs of migrants. Meanwhile, the provision of old-age insurance is to be tackled in a step-by-step approach. In general, the social security system must be compatible with the employment characteristics of migrant workers, notably their high job mobility. Furthermore, insurance benefits should be portable. Contribution must also take account of the low wages of migrant workers and build in incentives to expand membership in a gradual manner (State Council, 2006).

Getting By Without State-Sponsored Social Insurance

161

2.9. Comprehensive social insurance: experiences from Shanghai and Chengdu Shanghai, with over three million migrant workers, has been in the forefront in responding to migrants’ need for social protection, just as it was in piloting the minimum living allowance for needy urban residents (1994) and re-employment service centers for redundant workers (1995) (Wong and Flynn, 2001; Wong and Ngok, 2006). In 2002, the Shanghai government announced Temporary Measures on Comprehensive Insurances for Outsiders Working in Shanghai, which created a comprehensive social insurance scheme to cover workplace injury compensation, hospital treatment, and retirement subsidies. To prevent construction fi rms, (which employed about 600,000 migrant workers), from evading contributing, in 2004 the municipal government required the property owners, rather than the construction companies, to pay comprehensive insurance subscriptions. In its bid for the construction project, the contractor must provide information on insurance premiums and the number of laborers to be employed and incorporate the relevant costs into the total budget. Only after insurance premiums have been paid can the construction company apply for a work commencement license. Following the approach in Shanghai, Chengdu enacted the Provisional Method on Comprehensive Social Insurance for Non-Urban Hukou Laborers in Chengdu in March 2003. While copying the basic features of a bundled scheme and employer only contribution, there are some differences between the two schemes. In terms of coverage, both systems cover all migrants who do not have an urban hukou (except domestic and farm workers). The main difference between the two schemes is that Shanghai uses commercial insurance companies to manage the scheme, whereas in Chengdu this function is performed by the state social insurance bureau. 2.10. Other local experiments: pension schemes for migrant workers While Shanghai and Chengdu have adopted a bundled protection package for migrant workers, other pilot schemes provide separate coverage for each contingency with variations on the contribution rates. In relation

162

L. Wong and G. Zeng

to retirement protection, for example, there are at least four different practices. In Shenzhen and Zhengzhou City, the levies for migrant workers are little different from that for urban employees. Meanwhile Zhejiang Province, Beijing, and Xiamen offer lower contribution levels to match migrants’ ability to pay. In other places, migrant laborers working in township enterprises are encouraged to enroll in social security schemes for farmers (see Hua, 2006; State Council Research Office Project Team, 2006). The key features of various pilot schemes are summarized in Table 1. Further discussion of the alternative schemes is provided in Wang Dewen’s contribution to this volume. 2.11. Medical insurance for migrant workers: the approach of Beijing and Shenzhen Beijing and Shenzhen represent two major approaches to medical insurance for migrants. In Beijing, migrant workers are eligible to join the local medical insurance scheme but the premium is lower than the standard for urban enterprise workers, in order to meet the aim of “low benchmarks, broad coverage” and reduce the burden on employers. In July 2004, the Beijing municipal government released the Provisional Method for Outside Peasant Workers to Join the Basic Medical Insurance in Beijing, which allows migrant workers to join basic medical insurance and large-sum medical cooperative insurance. Only employers are asked to pay the levy at 2% of the contribution base (at 60% of the average salary), of which 1.8% is paid into the basic medical insurance fund and the rest to large-sum medical cooperative insurance. In Shenzhen, medical insurance for migrant laborers went through several rounds of reform. Experiments with medical insurance for migrant workers in Shenzhen, as shown in Table 2, had interesting results. In 1992 after free medical service was terminated, every Shenzhen resident with or without a local hukou could join a new unified medical insurance scheme covering both hospitalization and outpatient treatment. However, since the premium was high (8% of personal salary), few migrants and their employers joined up. In 1994, a pilot hospitalization insurance scheme, with a combination of personal and risk-pooling accounts, was introduced in Nanshan District and this was extended to the whole city

Getting By Without State-Sponsored Social Insurance

163

Table 1. Pension Schemes for Migrants in Various Cities and Provinces.

Ratio of contribution by

Enterprise Individual

Ratio of deposits in

Social pooling account

Personal account

Locality

Basis of Contribution

Beijing

Monthly minimum salary of the city in previous year

19%

8%

16%

11%

Xiamen

Monthly minimum salary of the city in current year

8%

8%

5%

11%

Shenzhen

60% to 300% of average monthly salary of the city in previous year

8%

5%

2%

11%

Zhengzhou

60% to 300% of average monthly salary of the city in previous year

20%

8%

17%

11%

Zhejiang

Total monthly salary

12%

4%

5%

11%

in 1996. With the premium set at 2% of the average local wage, the response was enthusiastic. In June 2003, 1.4 million people had joined up, including 0.7 million non-hukou laborers. In July 2003, the Social Medical Insurance Method for Urban Enterprise Workers in Shenzhen was issued. This allows migrant workers to subscribe to urban hospitalization insurance or local supplementary medical insurance. At the same time, Buji town in Longgang District also launched a low-premium medical insurance plan specifically for migrant workers. A low contribution rate of 8 RMB per month from the employer and 4 RMB from the employee encouraged participation. At the end of 2005, the co-operative scheme had a membership of 1.24 million. 2.12. Low social insurance coverage for migrant workers As the above review makes clear, the central government is now more sympathetic to incorporating migrant workers into social security programs. Extending membership to a young and relatively healthy migrant population not only reduces existing inequality, it also replenishes

164

L. Wong and G. Zeng

Table 2. Experiments with Medical Insurance for Migrant Workers in Shenzhen. Contents of Medical Insurance

Ratio of Contribution

Who pays Number of Contributions Participants

1992.5–1996.6

Comprehensive medical insurance, including hospitalization and clinic consultation

8 % of personal salary

Enterprise

20,000

1996.7–2003.6

Hospitalization insurance

2 % of local average salary

Enterprise

700,000

2003.7–2005.2

Hospitalization insurance

1 % of local average salary

Enterprise

1.42 million

Local supplementary medical insurance

0.2 % of local average salary

Enterprise

Comprehensive medical insurance (very few people covered)

8 % of personal salary

6% by enterprise 2% by individuals

1 % of local average salary

Enterprise

Local supplementary medical insurance

0.2 % of local average salary

Enterprise

Comprehensive medical insurance (very few people covered)

8 % of personal salary

6% by enterprise 2% by individuals

Rural laborers’ cooperative medical insurance

12 RMB

8 RMB by enterprise 4 RMB by individuals

Year/Month

2005.3–2005.12 Hospitalization insurance

1.63 million

1.24 million

Source: Shenzhen Labor and Social Security Department (ed.), A Collection of Regulations on Social Insurance in Shenzhen 2003 and A Collection of Documents on Social Security for Peasant Workers in Shenzhen 2005, quoted in Renmin University Research Team, “ A Survey Report on Medical Insurance for Peasant Workers in Shenzhen”, in Proceedings of the Conference on Chinese Peasant Workers: Problems and Social Protection, organized by City University of Hong Kong and Renmin University of China, 1–2 July 2006, Beijing, p.78.

the local social insurance funds and improves the viability of various schemes (especially pensions). There are several benefits to urban areas. As a result, many cities have experimented with trials. However, all the

Getting By Without State-Sponsored Social Insurance

165

initiatives are fairly recent and actual coverage remains low. For example, at the end of 2006, 25.38 million migrants had enrolled in work injury insurance and 23.67 million migrant workers were covered by basic medical insurance, an increase of 12.86 million and 18.78 million over the previous year (General Office of the Ministry of Labor and Social Security, 2007). Despite such progress, only a small proportion of the migrant population is currently covered. 2.13. Migrant workers’ exclusion from social relief For needy urban residents, social assistance in the form of minimum living allowance (zuidi shenghua baozhang, or dibao) from the government was popularized after 1998 based on the successful experience of Shanghai (Wong and Ngok, 2006). Formerly only those who had no work, no family, and no means of livelihood (“three-no personnel”) were covered by the state’s social relief scheme. The new state-funded dibao scheme is an income supplement for the urban poor who, for all sorts of reasons, lack sufficient means for basic living. In essence, dibao functions as an urban safety net. In the last decade, beneficiaries have risen steadily, reaching 22.3 million in September 2006 (Ru et al., 2007, pp.142–143). Needy migrant workers still do not qualify. The only recourse for State aid is emergency relief for vagrant beggars who fall into destitution. Under the Relief and Management Measures for Destitute Vagrant Beggars in the Cities passed by the State Council in June 2003, such people can seek short-term refuge in aid centers run by the government. Again, the vast majority of rural to urban migrants would not qualify. Exclusion from social relief and poor access to social insurance deprives migrants from institutional resources when they fall on hard times. This has meant migrants have had to adopt survival strategies to address their financial problems without state support. 3. Research Findings: 2005 Survey on Social Protection of Migrant Workers In July to November 2005, we administered a stratified proportional sample survey on various aspects of migrants’ social protection situation

166

L. Wong and G. Zeng

including their survival strategies and expectations for social protection. A total of 2,617 migrant workers living in Shenzhen, Suzhou, Chengdu, and Beijing were interviewed. The four cities were chosen to reflect migrant experiences in the southern, eastern, western, and northern regions. In each city, interviewees came from four types of samples: enterprises (four-six per selected enterprise), industrial zones, residential districts (two administrative streets or jiedao), and random selections (migrants found in construction sites, rail stations, shops, markets, and street corners). This ensured respondents came from all backgrounds and were broadly representative of the target population.2 3.1. Profile of migrant respondents There were more males than females (63.4%, 36.6%) in our sample. The average age was 28.6 years, with 78.4% aged between 18 and 34 and 15.8% aged between 36 and 45. In terms of marital status, married persons slightly outnumbered single persons (52.7%, 46.2%). As far as education level was concerned, 48.6% had junior high schooling, 35.9% had senior high or vocational school education, and 11.6% had primary standard. Gender did not have much impact on education level but the effect of age difference on educational attainment was noticeable. For example, among the young respondents (18–35), only 7.6% had primary school and below standard, but this figure jumped to 42.9% among the 45–65 age group. At the time of the interviews, more respondents worked in private firms (40.4%), individual businesses (22.9%) and san-zi qiqe (foreign–local joint capital, foreign–local cooperation, foreign-owned enterprises) (15.5%). The proportions in state-owned, collective-owned and shareholding fi rms were low (7.9%, 4.1%, and 9.1% respectively). Typically, fi rms in the non-state sector offered fewer labor protection and welfare benefits to employees. Their dominance reduced migrant workers’ access to labor and social protection. In terms of income, most respondents are low-paid workers in the urban economy; 11.6% earned less than 500 RMB per month, 31% made 2 For detailed reports on the research findings, see Zheng and Huang (2007).

Getting By Without State-Sponsored Social Insurance

167

500–800 RMB, 31.9% made 800–1200 RMB, 13.6% earned 1200–1500 RMB, and 11.9% earned 1500 RMB or more. Considering the high living costs in the sample cities, such earnings suggest living standards at or near poverty (below 500 RMB) or lower than average incomes (500–1200 RMB). Higher incomes were more prevalent among male migrants, migrants with better education, and those who found work through institutional channels. Contrary to expectations, there was a negative correlation between hours worked and wages received. Half of the respondents did overtime work on a routine basis; yet 43% did not get extra pay for working overtime. 3.2. State-sponsored insurance coverage Our findings revealed that migrants had very low access to state-sponsored social security. At the time of the interviews, very few had joined local social insurance schemes. The proportion of migrants who had joined was 29.1% for work injury insurance, 23.5% for health insurance, 22.6% for pension insurance and a mere 10.4% for unemployment insurance. 3.3. Medical care Among our respondents, 23.5% have joined the medical insurance scheme in their work unit. The ratio in Shenzhen (35.9%) was much higher than in Beijing (10.7%). In Chengdu, some had joined the cooperative medical insurance for farmers. Becoming ill is a major concern to all Chinese citizens since the marketization of health care provision. Migrants cannot afford to become ill. When they became ill, 42% of migrants in our sample went to a proper hospital/clinic for treatment, 31.7% bought medicine from a pharmacy, and 10.1% went to substandard clinics. Meanwhile 12.9% just did nothing (Table 3). There are three reasons for the high incidence of self-medication, use of substandard services, and non-treatment. First, their incomes were low, as mentioned earlier. Second, most of them had to pay out of their own pocket for health care. Third, medical costs were considered too expensive given their lack of medical insurance. These findings are similar to Bingqin Li’s results for migrants in Tianjin reported elsewhere in this volume.

168

L. Wong and G. Zeng

Table 3. What Do Migrants Do When They Become Ill?

Seek treatment immediately from public hospitals/clinics

Male % Female %

Seek treatment in street clinics, private clinics or from itinerant medics

Buy medicine from pharmacy

615

175

504

39.30%

11.20%

32.20%

425

75

280

46.50%

8.20%

Nothing

212 11.60% 108

30.60%

N

1040

250

784

%

42.00%

10.10%

31.70%

11.80% 320 12.90%

Other

Total

57

1563

3.60% 100.00% 26

914

2.80% 100.00% 83

2477

3.40% 100.00%

Table 4. Migrants’ Rating of Treatment Costs in the City. Too expensive

Relatively expensive

Acceptable

Relatively cheap

Very cheap

Total

N

1553

669

303

7

4

2536

%

61.20%

26.40%

11.90%

0.30%

0.20%

100.00%

Overwhelmingly, migrant workers in our sample had to bear the full cost of medical treatment themselves (77.4%). Only 20.9% of migrants had help from their work unit while a lucky few (1.7%) had the costs paid by their employer. Migrants were asked about their perceptions of the costs of obtaining treatment in the cities (Table 4). Not surprisingly, the majority (61.2%) found the costs to be “too expensive” and a significant segment (26.4%) said it was “relatively expensive”. Only a minority (11.9%) felt the costs were “acceptable”. Nowadays, many urban residents are not covered by medical insurance and co-payment is the norm for people who are insured. For most migrants with their typical low income, the burden is more acute. The coping strategies adopted by our respondents to address the high cost of medical treatment suggest a range of approaches (Table 5). When asked what they had done to forestall their inability to obtain medical care, 23.5% said they had joined a health insurance scheme in their workplace.

Getting By Without State-Sponsored Social Insurance

169

Table 5. Measures Taken to Forestall Inability to Meet Medical Costs.

No action

Join the new rural collective health care scheme in the home village

Join the health insurance scheme in the work unit

Buy commercial insurance

Others

Total

N

1509

241

590

49

124

2513

%

60.00%

9.60%

23.50%

1.90%

4.90%

100%

Table 6. Willingness to Join Various Health Insurance Schemes.

Scheme to cover minor illnesses only

Scheme to cover major illnesses only, excluding minor illnesses

Scheme to cover both major and minor illnesses but at relatively low benefit level

Not willing to join any scheme

Total

N

130

776

1290

308

2504

%

5.20%

31.00%

51.50%

12.30%

100%

A small number (9.6%) were members of a collective health care scheme in their home village while a tiny proportion (1.9%) took out commercial insurance. Of greater concern is the fact that the majority (60%) had taken no action at all to ensure they could pay for health care. Joining a medical insurance scheme is one solution to protect one’s access to health care. When asked whether or not they were willing to take out medical insurance of various kinds, the response was generally positive (Table 6). Only 12.3% did not want to join any scheme. The most preferred plan was one that covered the costs of treating both major and minor illnesses at a basic level (51.5%). This was followed by a scheme that covered major illness only (31.0%) while insurance for minor illness only (5.2%) was not considered attractive. 3.4. Old-age support When our respondents were asked whether they had taken any measures to provide for old age, 57.5% said they had done nothing. Slightly more women than men responded that they had taken no action (61.6% of

170

L. Wong and G. Zeng

women, 55.1% of men) (Table 7). Table 8 shows the strategies of those who have taken action to protect their livelihood in old age. Table 8 suggests that enrolment in organized pension schemes was low. Less than a quarter (22.6%) took part in an urban pension scheme and even fewer people joined a rural scheme (13.0%). The enrolment rate among women was significantly higher than men in both urban and rural plans. Saving for old age (20.2%) was the second most popular option after joining a pension scheme. The cultural custom of raising children to support oneself in old age was the choice of only 10.3% of our respondents. Market solutions in the form of enrolment in commercial insurance were rarely chosen (3.8%). This is an expected result given the paucity of commercial insurance products that are suitable for low-income earners. The respondents were specifically asked whether they were willing to join a pension scheme with individual and pooled accounts. Table 9 shows the responses which were rather startling: 72.9% of migrants were willing, 7.7% were unwilling, and 19.5% have not considered joining. Such enthusiasm for retirement protection contradicts commonly-held beliefs that migrants are myopic about the need for old-age protection. Again, women migrants were more positive about joining than males (63.4%, 53.4%). 3.5. Unemployment Losing one’s job creates hardship and becoming unemployed away from home is doubly stressful. Among our respondents, spells of unemployment were a common phenomenon. In the sample, one in two (52.3%) had experienced bouts of unemployment (56.1% of males, 45.6% of females). Periods without work were rather short: 36.2% for less than one month, 33.6% for between one and three months, 8.5% between four and six months and 21.7% for longer than six months. Table 10 shows the strategies migrants adopted to deal with unemployment. When unemployment occurred, almost all relied on their own social capital to cope: 77.8% subsisted on past savings and 21.4% got assistance from relatives, friends and fellow villagers. The receipt of organized support was rare: assistance from one’s work unit accounted for 0.5%, unemployment insurance for 0.3% and social assistance was not mentioned at

Getting By Without State-Sponsored Social Insurance

171

Table 7. Migrant Responses to ‘Have You Taken Measures to Support Yourself in Old Age?’. No

Yes

Total

886

723

1609

55.10%

44.90%

100.00%

Male N % Female N %

573

357

930

61.60%

38.40%

100.00%

Total N %

1459

1080

2539

57.50%

42.50%

100.00%

Table 8. Measures Taken by Migrants Who Have Taken Action to Protect Livelihood in Old Age. Means

Male

Female

Total

Joined old-age insurance scheme in work unit

293

280

573

18.20%

28.10%

22.60%

Joined old age retirement scheme in home town

Bought commercial insurance

Save money regularly for old age

Raise children to provide for old age

Other measures

196

135

331

12.20%

14.50%

13.00%

63

33

96

3.90%

3.50%

3.80%

338

176

514

21.00%

18.90%

20.20%

188

74

262

11.70%

8.00%

10.30%

57

27

84

3.50%

2.90%

3.30%

N = 2539 (M = 1609, F = 930) Multiple Answers Given

all. Meanwhile, the vast majority of respondents (77.84%) were not covered by unemployment insurance. Only 10.4% had joined unemployment insurance, while a slightly greater number (11.8%) were unsure as to whether

172

L. Wong and G. Zeng

Table 9. Migrant Responses to ‘Are You Willing to Join a Retirement Insurance Scheme with Individual and Pooled Accounts?’. Willing

Not Willing

Haven’t Considered

Total

1841

194

492

2527

72.90%

7.70%

19.50%

100.00%

Table 10. Migrant Responses to ‘How Do You Survive When Unemployed?’.

Male

Female

Total %

Subsist on past savings

Get relief from relatives and friends

Get emergency help from fellow villagers and former workmates

621

137

37

4

2

801

77.50%

17.10%

4.60%

0.50%

0.20%

100.00%

Rely on unemployment compensation from Rely on work unemployment unit benefits

Total

302

70

11

2

1

386

78.20%

18.10%

2.80%

0.50%

0.30%

100.00%

923

207

48

6

3

1187

77.80%

17.40%

4.00%

0.50%

0.30%

100.00%

they were covered. This level of participation and ambivalence merits concern, given that one in two migrants had experienced unemployment. 3.6. Work related injury and illness Many studies have identified migrant workers as the main victims of work related injuries and illnesses (State Council Research Office Project Team, 2006). Our survey confi rmed such fi ndings. To begin with, more than a quarter of our respondents (27.4%) considered their current job dangerous, poisonous or hazardous (Table 11). The perception of vulnerability was much higher among males (35.4%) than females (13.6%). Overall, 22.7% of respondents had actually experienced work-related injury or illness (Table 12). The proportion of males who had experienced work-related injury or illness was double the proportion of females (27.9%, 13.8%).

Getting By Without State-Sponsored Social Insurance

173

Table 11. Migrant Responses to ‘Is Your Current Job Dangerous, Poisonous and Hazardous?’.

Male

Female

Total %

No

Yes

Total

1012

555

1567

64.60%

35.40%

100.00%

788

124

912

86.40%

13.60%

100.00%

1800

679

2479

72.60%

27.40%

100.00%

Table 12. Migrant Responses to ‘Have You Experienced Work Related Injury or Illness?’. No

Male

Female

Total %

Yes

Total

1150

446

1596

72.10%

27.90%

100.00%

794

127

921

86.20%

13.80%

100.00%

1944

573

2517

77.20%

22.80%

100.00%

Table 13. Treatment for Work Injury or Occupational Illness for Migrants. Treatment paid by self

Treatment paid by work unit

Jointly paid by self and work unit

No treatment

Total

N

280

165

87

23

555

%

50.5%

29.7%

15.7%

4.1%

100.0%

In the 555 cases where migrant workers had suffered from work related injury or illness, more than half (50.5%) had to bear the treatment costs themselves (Table 13). In 29.7% of the cases, it was the company which paid for the treatment, while co-payment (by employee and employer) occurred in 15.7% of cases. The proportion of migrants covered by work

174

L. Wong and G. Zeng

injury insurance was low, at only 29.1%, despite the intention of the 2004 State regulations to cover all employees. 3.7. Topmost concern, help seeking, and social security preference Migrants were asked to identify their topmost concern at the time of the survey (Table 14). In descending order, the biggest concerns were: unable to find work after losing job (26.5%), falling sick (18.5%), financial problems (13%), cannot afford schooling expenses (11.3%), being injured at work (8.1%), and old-age support (5.7%). Such responses suggested that migrant anxiety was strongly associated with loss of independence, incapacity, and short-term hardships. These contingencies are precisely those that could be addressed by state social protection schemes. Table 15 shows who migrants approach when having difficulties. When asked who they would approach first when faced with hardship, the top three choices (78.4%) confirmed the salience of immediate family (37.4%), friendship and local ties (28.4%), and other relatives (12.6%). Workmates and employers were chosen by only 7.3% and 6.9% of respondents. Among females, the propensity to turn to family members was higher than males (44.9% and 33.1%) while the reverse was true where friends and fellow villagers were concerned (23.3% and 31.4%). Generally speaking, dependence on private networks was dominant. In comparison, the underuse of organizational resources, and in particular government assistance, is prominent. Such strategic choices not only ref lect the perceived usefulness of various sources of aid, they also highlight the weakness of State-sponsored support in addressing the difficulties migrants face. Even though migrants rarely turned to the State for help with their problems, this does not mean they had no expectation of the government. Table 16 reveals such expectations in an unequivocal manner. Topping the migrant wish list was for the government to set up a social security system that provided protection to migrant workers (30.4%) and emergency relief (20.8%). Next on the list was that the government would police enterprise regulations relating to payment of wages and working hours (16.9%) and the signing and enforcement of labor contracts (12.8%). These concerns are consistent with the widespread view that enhancing government supervision could remove the most flagrant abuses suffered by migrant

Getting By Without State-Sponsored Social Insurance

175

Table 14. Migrant Responses to ‘What is Your Top Concern at the Present Time?’. Cannot find Falling Being re-employment into Have no injured after losing financial income at work one’s job hardship when old Male

Female

Total

Have no money to send child to school

Being sick

157

379

222

91

164

247

10.40%

25.00%

14.70%

6.00%

10.80%

16.30%

38

258

90

45

108

198

4.30%

28.90%

10.10%

5.00%

12.10%

22.20%

195

637

312

136

272

445

8.10%

26.5

13.00%

5.70%

11.30%

18.50%

Other

Total

254

1514

16.80% 100.00% 155

892

17.40% 100.00% 409

2406

17.00% 100.00%

Table 15. Migrant Responses to ‘Who Do You Approach First When Having Dif ficulties?’. Male

%

Female

%

Immediate Family

499

33.1%

393

Other Relatives

198

13.1%

103

11.8%

301

12.6%

Friends and fellow villagers

474

31.4%

204

23.3%

678

28.4%

Work-Mates

101

6.7%

73

8.3%

174

7.3%

Employer or work unit

44.9%

N

%

892

37.4

116

7.7%

49

5.6%

165

6.9%

Landlord or acquaintances

11

0.7%

4

0.5%

15

0.6%

Local government

38

2.5%

8

0.9%

46

1.9%

Home government

3

0.2%

5

0.6%

8

0.3%

69

4.6%

37

4.2%

106

4.4%

Do not seek help Total

1509

100%

876

100%

2385

100%

workers and give them equal labor rights consistent with the Labor Law. A hope that the government would abolish unreasonable charges (15.0%) followed closely behind. This suggested migrant discontent with state discriminatory practices and their desire for equal treatment. All in all, migrant expectations reflected a sophisticated understanding of the role of government in a modern society. When migrants were asked what they regarded as the most urgently needed social security scheme, the responses were health insurance

176

L. Wong and G. Zeng

Table 16. Migrant Responses to ‘What is the Most Important Role of Government/Public Agencies in Solving Migrant Problems?’. Male

%

Female

%

N

%

Family

499

33.1%

393

44.9%

892

37.4

Abolish unreasonable charges

238

15.8%

115

13.4%

353

15.0%

Monitor the signing and enforcement of labor contracts

218

14.5%

85

9.9%

303

12.8%

Establish a social security system to cover migrant workers

419

27.9%

298

34.8%

717

30.4%

Grant emergency relief

297

19.8%

195

22.8%

492

20.8%

Ensure enterprises pay wages in full and on time

271

18.0%

129

15.1%

400

16.9%

60

4.0%

35

4.1%

95

4.0%

Others Total

1503

100%

857

100%

2360

100%

Table 17. Migrant Response to ‘What is the Most Urgently Needed Insurance Scheme?’. Male

%

Female

%

N

%

Work injury insurance

351

23.0%

82

9.4%

433

18.0%

Medical insurance

374

24.5%

268

30.6%

642

26.8%

Unemployment insurance

248

16.3%

155

17.7%

403

16.8%

Retirement insurance

281

18.4%

208

23.8%

489

20.4%

6

.4%

17

1.9%

23

1.0%

Maternity insurance Commercial insurance

25

1.6%

31

3.5%

56

2.3%

None

240

15.7%

114

13.0%

354

14.8%

Total

1525

100%

875

100%

2400

100%

(26.8%), old age insurance (20.4%), work injury insurance (18%), and unemployment insurance (16.8%). These results are displayed in Table 17. Some gender differences were also noticeable. For example, work injury insurance was more important to male migrants (23%) than females (9.4%), which was expected given their higher incidence of occupational injury. In contrast, women valued pensions more than men (23.8%, 18.4%).

Getting By Without State-Sponsored Social Insurance

177

This seems to suggest a stronger proclivity for longer term and familyoriented thinking among women than men. 4. Squaring Policy Intentions and Migrant Expectations with Institutional Constraints As our policy review made clear, the government’s declared intention is to bring the migrant population gradually into the social security system. Over the last few years, the lacuna in social protection has goaded the state into action. Many local areas have experimented with programs aimed at reconciling the needs of migrants, their ability to pay, and practical considerations. Yet, as our research findings indicate, few rural to urban migrants successfully gain entry to the State insurance system. Their participation in the key social insurance schemes is uniformly low. What’s more, there is as yet no attempt to make them eligible for social assistance, a grave deprivation to a group with high exposure to low earnings, vocational exploitation, and social risks. Our survey data offer irrefutable proof that the State has been an absent partner when migrants struggle to cope with living in the cities. This does not mean that migrants have no expectation of the government. Indeed the reverse is true; migrants want to see the State improve its performance in concrete ways. State recognition of its duty is fairly recent. One may argue that in a system as complex as China’s, implementation deficits will also bedevil public policy (Ding, 2002; Lieberthal and Oksenberg, 1988). This is defi nitely true. What cannot be denied is the presence of underlying variables that continue to frustrate the search for good solutions. In our view, these factors are embedded in China’s institutional framework as well as the existing system of social security. Unless these issues are tackled in a resolute manner, drawing up ideal blueprints may not solve the problems. The first hurdle confronting migrant workers in their quest for equality is their ambiguous legal status. Classified as temporary residents, migrant workers are denied the legal, civil and social rights enjoyed by people with an urban hukou. Although the State has introduced many measures to ban abusive treatment, it has not contemplated a repeal of the hukou system that relegates them to an inferior status in the fi rst place (Cao, 2006; Cui,

178

L. Wong and G. Zeng

2007; Jiang and Wong, 2007). In Chinese society, one’s entitlement is still determined by personal status. Unless migrants attain a new status in law, local authorities can still treat them as outsiders who lack a credible claim to public resources, including social insurance and social assistance. Second, the peculiarities of center-local relations in China, works against unity of policy and programs. Students of Chinese politics are all too familiar with the syndrome of “shang you zhengze, xia you duice” (from the top there are policies, from the bottom there are countermeasures). While center-local relations need not always be zero-sum (Jae, 2000; Saich, 2004), the principal–agent relationship is often imbued with difficulties in enforcing the will of the central State. In the case of social protection of migrant workers, the State Council has taken the moral high ground and leadership in advocating migrant claims. However, the relevant regulations are largely promulgated by the MOLSS in the form of official circulars or announcements, which have limited practicability and questionable legal authority (Luo, 2006). If enterprises default on paying insurance premiums, for instance, the state generally lacks teeth in enforcing compliance. In a general sense, decentralized implementation by local authorities gives no guarantee of actual compliance. A current joke about Chinese politics is that central policies wilt as soon as they leave Zhongnanhai, the central government offices in Beijing. This kind of cynicism is rather extreme. However, it does point out a salient issue inherent in the policy process in China: when local agents become uncooperative or are not motivated, the central government is often left in a passive position. The alternative of the central state directly engaging in policy enforcement and providing resources to local governments is often dismissed as unfeasible. The third obstacle confronting migrant workers also derives from the peculiarities of intergovernmental relations in China, namely the divergent interests of the receiving and exporting communities. In host areas, governments are already overloaded by the job of catering to local residents. They are more disposed to pinning the urban malaise on the migrant population than serving these hapless outsiders, people who cannot vote or stand for election and cannot call the local state into account. On the other hand, the exporting areas welcome the exodus of people who would otherwise stir up trouble if they cannot fi nd work in

Getting By Without State-Sponsored Social Insurance

179

the rural areas. The remittances from the sojourners are a boon to the local coffers. They can also improve living standards and alleviate the so-called “sannong wenti or the three-fold problems of agriculture, the village and peasants” (Li, 2003; Lam, 2006, p.78). Absentee voters lack the muscle to force their home governments to take them seriously. Fourth, the failure to find a viable model or models that are compatible with the special needs of migrants is a big hindrance. True, there have been regional experiments to enrol them in pension, health or hospitalization schemes. These are still rather limited. Currently, all social insurance schemes are run locally. In particular, the lack of a unified national insurance system means that transfers in and out of local schemes are exceedingly difficult. Again, the conflicting interests of the importing and exporting areas impede concerted efforts to find common solutions. In the receiving communities, governments dislike imposing additional costs on fi rms, which may result in them investing elsewhere. Even if migrants are allowed to join local schemes, local governments often try to stop funds from being transferred out of the local area. Meanwhile, the exporting areas generally lack the resources and enthusiasm to invest in social insurance schemes for the absent residents. This challenges the central government to design a program that can satisfy the interests of different local areas. One suggestion would be for the central government to introduce a nation-wide social insurance scheme to run in parallel with local schemes, to cover vulnerable groups such as migrant workers, those in the informal sector and the self-employed. Thus far, this idea has been considered too radical and unfeasible.3 Finally, success in extending social protection to migrant workers depends on the support of employers and employees. Among employers, there is general reluctance to take on more labor costs. According to a survey by MOLSS, the contribution SOEs paid towards basic old-age pension, medical, and unemployment premiums amounted to 27.4% of total wages in 1998 (State Council Research Office Project Team, 2006). Granting social security to migrant workers will defi nitely inflate labor costs. Furthermore, many governments adopt a protective stance toward 3 This idea was raised in two conferences on migrant workers and public policy in Beijing and Guangzhou in 2006 as well as with social security researchers working in Renmin University. All the experts consulted thought the idea too impractical.

180

L. Wong and G. Zeng

local enterprises in an attempt to raise the competitiveness of the local economy. A lack of trust in the existing social security system is also evident among some migrant workers. The fact the majority is young, mobile and have low incomes reduces their eagerness for benefits such as pensions that will not come to fruition until well into the future. Our survey shows the majority of migrants were more engrossed with current consumption and dealing with short-term contingencies. The flaws of the existing system compound migrant disincentives to become involved. The fact they cannot transfer contributions when they return to their home town or relocate elsewhere is a leading cause why many migrants withdraw from urban pension schemes. In such a situation, migrants can recover the money in their personal accounts while the premiums they pay into the collective funds remain in the local area. To many poor migrants this practice is gravely unjust. From a regional perspective, the withholding of migrant premiums is even more repugnant as this means that rich (urban) areas are benefiting at the expense of poor (rural) areas (Cao, 2006). In Guangzhou, the sum of money being transferred to the basic old-age pension from migrant workers, because of withdrawal, amounts to 600 million RMB every year. The corresponding sum is 400 million RMB in Dongguan (Liu, 2006). In the Pearl River Delta, a high proportion of migrants withdraw from pension schemes when they leave the area. For example, in Shenzhen during the period 1999 to 2003, the total number to withdraw was 680,700, equivalent to 45.65% of new enrolments. In some years, those withdrawing exceeded those signing up (Hua, 2006). The authorities criticize this behavior as myopic and wasteful of administrative resources. However, this response from migrants is entirely rational. It can be seen as the only reasonable choice of powerless individuals caught in an unfair system. The above obstacles will pose formidable challenges to migrants improving their welfare position. Our view is that for the government to include as many migrants into the social insurance system as possible is the best way to expand the pooling of social insurance, as most migrants are young and will not put much burden on the local government in the near future. Coupled with the resolve to remove the more flagrant abuses

Getting By Without State-Sponsored Social Insurance

181

of a disgruntled group and enhance legitimacy of the state, improving social protection of migrant workers is a strategic investment in social stability. At the same time, sole reliance on migrant personal and social capital is unlikely to meet the rising expectation of young, better educated, and more rights-conscious migrants who make up the new generation of migrants born after the economic reform. Unlike the fi rst cohort of erstwhile farmers who were prepared to tolerate the harsh treatment and low wages in the city, as discussed in Cindy Fan and Winnie Wang’s contribution to this volume, the second generation is more likely to remain in the cities rather than return home after the sojourn of a few years. It is just a matter of time before dormant needs turn into public demands. It is imperative for the state and civil society to tackle the institutional impediments and system drawbacks to granting citizenship rights to a growing social stratum. As the pace of urbanization and industrialization accelerates, procrastination on migrant rights will only serve to increase the social costs and political risks for society. References Cao, X (2006). The Environmental and Policy Framework of Old Age Insurance for Peasant Workers. In Social Security Research Institute of Renmin University of China and Faculty of Humanities and Social Sciences of City University of Hong Kong (eds.), Proceedings of the Conference on Chinese Peasant Workers: Problems and Social Protection, pp.379–387. City University of Hong Kong and Renmin University of China, 1–2 July 2006, Beijing. Cao, Y (2006), Exploration of Certain Questions Concerning Peasant Workers in Our Country. In Social Security Research Institute of Renmin University of China and Faculty of Humanities and Social Sciences of City University of Hong Kong (eds.), Proc .of the Conference on Chinese Peasant Workers: Problems and Social Protection, pp.123–138. City University of Hong Kong and Renmin University of China, 1–2 July 2006, Beijing. Chow, NWS (2000). Socialist Welfare with Chinese Characteristics: the Reform of the Social Security System in China. Working Paper. Centre of Asian Studies: The University of Hong Kong. Chung, JH (2000). Regional Disparities, Policy Choices and State Capacity in China. China Perspectives, 31 (September–October), 36–51. Cui, C (2007). On the Paradigmatic Changes of the Peasant Workers Policy in China. Chinese Public Policy Review, 1, 133–156. Ge, Y (2004). Thoughts and Suggestions on Improving Old-Age Pension System for

182

L. Wong and G. Zeng

Urban Enterprise Workers. In China’s Social Security System Development Report, Jiagui, C & Yanzhong, W (eds.), p.6. Beijing: Social Sciences Academic Press. General Office of the Ministry of Labor and Social Security (2004). Opinions on Promoting the Participation of Employees of the Mixed-Ownership Enterprises and Non-Public Enterprises in Medical Insurance, 28 May. General Office of the Ministry of Labor and Social Security (2006). Circular on Carrying out Special Action to Broaden the Coverage of Medical Insurance for Peasant Workers, 16 May. General Office of the Ministry of Labor and Social Security (18 January 2007). Circular. http://www.molss.gov.cn/gb/news/2007-01/19/content_160175.htm [4 January 2008]. Hua, Y (2006). Peasant Workers’ Social Security System under Rapid Urbanization. In Proceedings of the Conference on Chinese Peasant Workers: Problems and Social Protection, pp.334–360. City University of Hong Kong and Renmin University of China, 1–2 July 2006, Beijing. Huang, D (2002). Policy Implementation Hindrance Mechanism and Measures of Alleviation. Beijing: Renmin Chubanshe. Information Office of the State Council (2007). White Paper on China’s Social Security and Its Policy (Beijing: State Council), (7 September), available at http://english.gov. cn/official/2005-07/28/content_18024.htm. Information Office of the State Council (2004). White Paper on China’s Social Security and Its Policy (Beijing, State Council) 7 September. Jiang, X & Wong, L (2007). The Paradigm Shift of the Peasant Worker Policy and Its Impediments. Chinese Public Policy Review, 1, 170–188. Lam, WW (2006). Chinese Politics in the Hu Jintao Era: New Leaders, New Challenges. Armonk and London: M.E. Sharpe. Li, C (2003). The Crisis in the Countryside. In One China, Many Paths, C Wang (ed.), pp.198–218. London and New York: Verso. Lieberthal, K. & Oksenberg, M (1988). Policy Making in China: Leaders, Structures and Processes. Princeton, New Jersey: Princeton University Press. Liu, W (2006). Comments on Social Security System for Peasant Workers in Some Areas, Project Team on the Issues of Chinese Peasant Workers and State Council Research Office Project Team, Research Report on Chinese Peasant Workers, Beijing: Zhongguo Yanshi Chubanshe. Luo, Z (2006). The Legal Protection of Migrant Workers’ Right to Social Security. In Social Security Research Institute of Renmin University of China and Faculty of Humanities and Social Sciences of City University of Hong Kong (eds.), Proceedings of the Conference on Chinese Peasant Workers: Problems and Social Protection, pp.19–28. City University of Hong Kong and Renmin University of China, 1–2 July 2006, Beijing. Ministry of Labor and Social Security (2004). Circular on Some Issues Concerning the

Getting By Without State-Sponsored Social Insurance

183

Participation of Work Injury Insurance of Peasant Workers (Beijing, , Ministry of Labor and Social Security) 15 June. Ministry of Labor and Social Security (2006). Circular on the Implementation of the “Safety Plan” to Promote the Participation of Peasant Workers in Work Injury Insurance (Beijing, , Ministry of Labor and Social Security) 17 May. National Bureau of Statistics (2006). China Statistical Yearbook 2006, Beijing: China Statistics Press. Ru, X., Lu, X & Li, P (2007). (eds.), Analysis and Forecast on China’s Social Development. Beijing: Social Sciences Academic Press. Saich, T (2004). Governance and Politics of China. Basingstoke: Palgrave Macmillan. State Council (2006). Certain Opinions of the State Council on Solving the Problems of Peasant Workers (Beijing: State Council), 18 January. State Council Research Office Project Team and Project Team on the Issues of Chinese Peasant Workers (2006). Research Report on Chinese Peasant Workers. Beijing: China Rural press. Wang, C. & Wang, Y (2004). Thoughts on Improving Social Security System and Policy Responses. In China’s Social Security System Development Report , C Jiagui & W Yanzhong (eds.), p.6. Beijing: Social Sciences Academic Press. Wong, L & Flynn, N (2001). Welfare Policy Reform. In The Market in Chinese Social Policy, L Wong & N Flynn (eds.), Basingstoke: Palgrave. Wong, L & Ngok, K (2006). Social Policy between Plan and Market: Xiagang [Off-duty Employment] and the Policy of the Re-employment Service Centres in China. Social Policy and Administration, 40(2), 158–173. Wong, L & Ngok, K (1997). Unemployment and Policy Responses in Mainland China. Issues and Studies, 33(1), 43–63. Zheng, G & Huang, LR (2007). (eds.), Rural-urban Migrant Workers in China: Issue and Social Protection, Volume 1 and 2, Beijing: Renmin Chubanshe.

CHAPTER 10 HOUSEHOLD STRATEGIES AND MIGRANT HOUSING QUALITY IN TIANJIN

Mark Duda Harvard University Bingqin Li London School of Economics Huamin Peng Nankai University

1. Introduction The housing sector has been a key contributor to rising urban inequality during the reform period. Whereas under central planning housing options were limited, quality modest, and neither homes nor land had exchange value; great differences now exist owing to intra-urban location, size, quality and the range of other factors that determine housing values in countries with mature housing markets. For rural-to-urban migrants, housing has been a particularly important source of relative social disadvantage because they received no urban housing endowment through privatization and could not access resources that became available during the housing reform process. Due in part to this history, it is often argued that institutional factors are the primary source of housing inequality in today’s Chinese cities. Even with allowances made for the increasing importance of market factors, in the international literature institutional constraints remain the

184

Household Strategies and Migrant Housing Quality in Tianjin

185

focus of investigations into migrants’ generally inferior housing. The point is made in a number of papers, the most recent being that of Huang and Jiang (2007, p. 5), who investigate, and find support for, the hypothesis that “the hukou system has generated significant housing inequality between people with different hukou statuses” and conclude that rural migrants “benefit little from housing reform, and continue to live in crowded and poorly facilitated housing” (Huang and Jiang, 2007, p. 14). Although migrants’ housing is undoubtedly of relatively low quality, two unexamined factors may undermine the claim that the hukou system causes inter-group differentials in urban housing quality. The first of these is the existence of inter-group cohort effects. An apparently apples-toapples comparison of housing conditions among low-income migrants and low-income urbanites, for example, would be contaminated by the fact a substantial subset of urban residents had access to the privatization process, whereas migrants did not. As a result of privatization, lowincome urban residents are not only more likely to own homes but also have lower housing expenses (and thus higher disposable income at the same salary level), a reduced motivation to crowd, and a greater incentive to maintain the quality of the unit they occupy. In order to understand the extent to which institutional factors continue to cause migrants to occupy relatively low quality housing, it would be necessary to determine whether migrant and non-migrant households formed after the “catching the last train” period actually experience different housing outcomes.1 Few published studies even use this more recent data in their aggregate inter-group comparisons, and none control for potentially important cohort effects. The second reason that additional testing is needed before accepting a hukou-based explanation as the source of urban housing inequality is that the proposed mechanisms through which the hukou system may influence housing quality have not been thoroughly investigated. Plausibly, the literature links some share of the difference in migrants and urban natives’ housing quality in the rental market to hukou-based rules 1 Painter et al. (2004) show the importance of controlling for cohort effects among migrants in a housing attainment context. That study’s investigation of tenure choice in the United States showed that migrants’ ownership attainment can exceed that of native-born residents when age and year-of-entry are controlled.

186

M. Duda, B. Li and H. Peng

affording urban natives greater access to public sector rentals (Huang, 2003). This, however, is a somewhat subtle process. Wu (2002) shows that, in Shanghai and Beijing, 11.6% and 18.7% of migrants respectively occupy public sector rentals. In the case of Beijing, this is not much lower than the 24.7% share for local residents. It is likely, however, that the two types of housing are not equivalent. In Wu’s study, when migrants occupy “public housing” they are renting from urban households that purchased the units from housing bureaus or work units and, presumably at something like a market rental rate. Urban natives renting such housing do so directly from the work unit or housing bureau at a highly subsidized rate. At least at the time of her writing, affordability was probably equally important as institutional rules in explaining the different levels of public housing between migrants and natives. The other mechanism by which hukou is thought to inf luence immigrants’ housing quality is by increasing the likelihood that their stays in urban areas are temporary. Because temporary migrants should spend less on housing than permanent migrants, they will experience lower housing quality. Zhu (2007, 2003) argues that there are at least two factors that, independent of the hukou system, increase the tendency for migrant stays in urban areas to be temporary. These are rural households’ income diversification strategies and the nature of labor demand in the Chinese economy.2 Zhu (2007) argues specifically that the notion that all, or even most, migrants would prefer to settle permanently in urban areas but are thwarted by the inaccurate hukou system. Contrary to the evidence reported in Wang Dewen’s chapter in this volume, in survey data from five major migration destinations in Fujian, only 35.1% of respondents report they would stay permanently in urban areas if their hukou could be changed. The point here is not to argue that migrants do not face substantial housing challenges, or that eliminating the hukou system would be a mistake. Rather, it is to point out there are substantial gaps in our understanding about how the hukou system inf luences migrants’ 2 Smith and Pun’s (2006) study of factory workers in Shenzhen supports Zhu’s claims regarding employers demand for flexibility in hiring and firing. They argue that providing housing for manufacturing workers in dormitories helps maximize labor supply during busy periods and, more generally, to respond quickly to changes in the product demand.

Household Strategies and Migrant Housing Quality in Tianjin

187

housing choices. Because of these gaps, the principal policy prescription emerging from the current literature as it pertains to migrant housing conditions—government should eliminate any remaining hukou-linked housing rules—may not yield the anticipated improvements in migrant housing quality. This is the case, at a minimum, because it is unlikely to cause most migrant stays in urban areas that are now temporary to become permanent. In practice, definitively sorting through and apportioning responsibility among the various potential causes of migrants’ relatively low quality housing is a substantial task that is well beyond the scope of this chapter. Here, we take only an initial step in this direction by examining the extent to which migrants with different household level migration strategies make different housing choices, and occupy units with differing levels of housing quality. We argue that in a migrant pool that is heterogeneous with respect to migration intention, housing quality differentials linked to these intentions constitute evidence that factors beyond hukou are responsible for the observed differentials. That is, if migrants with risk-diversifying strategies are shown to occupy lower quality housing than permanent migrants, it is more difficult to argue either that (1) quality differential between migrants and other groups stem principally from hukou-based differential access to urban public rentals or that (2) the hukou system is the source of the temporariness regarding their urban stays that leads migrants to choose lower quality housing. Consequently, although hukou is certainly the source of some housing quality differentials, it is not the only and perhaps not even the primary cause, and researchers should proceed to unravel the various causes and mechanisms involved and policymaking must move beyond hukou-based proposals. Our investigation of these issues relies on data from a survey conducted in Tianjin in early 2007. The sample includes only migrants from rural areas who do not have urban hukou, and excludes homeowners. These restrictions are intended to limit the sample to the most policy relevant subset of migrants, and to restrict the potential sources of variation in housing quality that we uncover for this group to heterogeneity within the low-wage, low-skill migrant pool. In essence, we argue that finding diversity in housing outcomes that is linked to household migration strategies within this subset of the migrant population is evidence that

188

M. Duda, B. Li and H. Peng

migrants’ housing conditions are partially a function of choices made by migrants themselves and not simply the result of institutional barriers. Our results show that housing outcomes indeed differ for those migrants who have settled permanently. The results presented here offer preliminary support for the claim that migrant housing needs are heterogeneous and, therefore, must be matched by a varied set of policies. If supported by further study, these results have important implications for housing policy development and deployment by governments at various levels, which are currently struggling and unsuccessfully addressing migrant housing issues. The chapter is organized as follows. The next section reviews the relevant literature. This is followed by a description of the study site and research design. Then the empirical results are presented. The fi nal section summarizes, concludes, and draws implications for migrant housing policy development. 2. Literature Review Previous studies of migrant housing have considered three issues—tenure choice, rental choice, and quality differences—and done so exclusively in an inter-group context. Many of these studies employ two dimensions of hukou status—urban/rural and permanent/temporary. This makes it somewhat difficult to focus on the situation of rural/temporary migrants, those more commonly referred to as ‘rural-to-urban migrants’ or ‘the floating population,’ who are the group facing the most severe housing problems and, thus, the most relevant to an investigation of social policy/ social protection.3 3 Using two dummy variables to capture hukou status introduces heterogeneity into the “rural” category in particular. “Rural” combines three subgroups with very different housing situations—suburban farmers from the city being studies that (1) still hold farmland and (2) those that have lost their land to urban expansion, and (3) farmers from other rural areas. For the purposes of inter-group comparisons in a single urban area, suburban farmers tend to be owners of units with low quality but fairly large living areas. Suburban “former farmers” tend to own homes via the resettlement process that are of modest size and quality. Rural-tourban migrants tend to be renters occupying housing that is small and of poor quality. Huang and Jiang (2007) effectively solve this problem, by converting hukou from two dummies into a single one that takes account of all four possible statuses but it makes the results of earlier work more difficult to meaningfully interpret.

Household Strategies and Migrant Housing Quality in Tianjin

189

2.1. Tenure choice4 Several studies have looked at the influence of hukou status on tenure choice, finding, unsurprisingly, that being a migrant lowers the likelihood of owning a home in urban areas. Huang and Clark (2002) examined a sample drawn from the 1996 national survey of housing. They found that having temporary hukou reduced the likelihood of owning, with the magnitude of the effect varying across cities. The fixed effect of the urban versus rural variable is not significant but the random effect is, indicating that this distinction is important in some cities but not others. Wu (2004) also includes migrant status in tenure choice models, using survey data collected in Beijing and Shanghai in 1999 and 2000. She finds that having local hukou (i.e., permanent resident status, either urban or rural) significantly increases the probability of owning, as does having rural hukou.5 Huang and Jiang (2007) also consider tenure choice in Beijing using data from 1995 and 2000. They employ a multinomial logit framework that considers four possible outcomes—owning private housing, owning public housing, renting private housing, and “other” (with “renting public housing” as the reference category) and include hukou status as a series of four dummies. The influence of these dummies varies in significance, and in some cases, signs, depending on the type of housing being considered. Relative to permanent urban residents, migrants with temporary, rural hukou status are significantly less likely to own privatized public housing

4 In addition to the studies discussed here, another study, by Li (2000), looks at the influence of a single hukou dimension, local/non-local, on the likelihood of owning four types of housing in Guangzhou market housing, housing acquired from the work-unit, housing acquired from the housing bureau, and resettlement housing. In the case of market and work unit housing, being a migrant significantly raises the likelihood of owning. In the other two models, hukou status is not significant. The market and work unit results are most likely due to the fact that at the time the data were collected, 1992-1994, (1) most households had access to very low cost rentals, (2) market rate housing was too expensive for a large share of the population, and (3) the privatization push had not begun. Therefore, housing rented from the work unit was probably the preferred choice for all but very wealthy local residents. 5 When permanent/temporary resident status is controlled, rural hukou raises the likelihood of owning because of the very high homeownership rates of local suburban farmers, who have permanent but rural residency.

190

M. Duda, B. Li and H. Peng

and significantly more likely to end up in private rentals or the “other” category, but not less likely to own private housing.6 2.2. Rental choice Only two studies have also looked at the determinants of the choice between public and private sector rentals. Wu (2002) shows descriptively that temporary migrants are less likely to occupy public sector rentals than the other groups and, consequently, more likely to occupy private rentals and dormitory/work-site housing. Using the same data, Wu (2004) models the binary choice of renting in the public or private sector. Her results indicate that having local hukou reduces the likelihood of renting in the private market. Huang (2003) uses data from a national survey conducted in 1996 that considers four categories of rental housing: public rentals from work units (69.7%), public rentals from housing bureaus (12.3%), private rentals (11.5%), and other (6.6%). In her multinomial logit models, the last two categories are combined and the two hukou variables are entered as independent variables. Both rural and temporary hukou significantly reduce the likelihood of occupying public rentals through the work unit housing relative to the reference category of private rental/other. Temporary hukou also significantly lowers the chances of occupying public housing via the housing bureau, but the rural/urban distinction is not significant. 2.3. Quality/living space Wu’s (2002) study also looked at the housing outcomes of temporary migrants in comparison with those of permanent migrants and native residents in Beijing and Shanghai. Wu’s descriptive analysis also shows migrants’ housing space per capita and overall housing quality is the lowest of the three groups she studies. In regression models of living

6 The paper does not explicitly define “other”, saying (Huang and Jiang, 2007, p.8) that it includes “presumably temporary shelters such as construction sites and offices.” It seems likely that it also includes additional employer-provided alternatives such as dormitories.

Household Strategies and Migrant Housing Quality in Tianjin

191

space per capita and a quality index, she fi nds that having rural hukou is a significant, negative influence. Wu (2004) uses the same data but runs separate quality and living space models for temporary migrants and local residents. In the migrantonly models, having rural hukou significantly reduces both living space and quality. In contrast, among locals, having rural hukou significantly increases both living space and, perhaps more surprisingly, housing quality (farmers would generally be expected to occupy larger homes with fewer amenities than urban residents). The study by Huang and Jiang (2007) discussed above models floor space and a quality index separately for 1995 and 2000. In all four regression models, having temporary/rural hukou is a significant, negative influence. For living area, the effect decreases substantially between the fi rst and second models, but there is little change in the quality index over time. 2.4. Summary Taken together, results from the modest literature, comparing housing outcomes of migrants and other urban groups, provides only a jumping off point for further research. What we know from these papers is that, in the latter half of the 1990s, there were differences in housing choices and conditions that are linked to two dimensions of hukou status. The literature tells us relatively little, however, about the relative strength of the possible channels through which hukou may affect these outcomes, the extent to which it remains important, or the housing market outcomes that would result from simply abolishing the hukou system. This may simply be a reflection of the transitional environment– it is natural for researchers to investigate the extent to which residual socialist institutions permeate the transitional housing sector. Further, research in this vein plays into important debates about broader transition processes (Bian and Logan 1996; Nee 1989, 1996). Nonetheless, as the housing sector continues to evolve, it is important to continue studying housing market phenomena and to continue trying to understand the determinants of housing outcomes, particularly when the entire research program is relevant to a crucial area of policymaking.

192

M. Duda, B. Li and H. Peng

3. Study Site, Research Design and Data Collection The empirical analysis presented here is based on an 800 respondent survey conducted in Tianjin in January and February of 2007. Tianjin has the third largest built-up area in China behind only Shanghai and Beijing. Because of its size and its status as the home to the ambitious Binhai New Area development project, Tianjin experiences substantial in-migration. At the end of 2006, the estimated “long-term” population (i.e., the number of residents that had been in the city as least six months) was 11 million, up 320,000 from a year earlier. Of these 11 million, 1.4 million were migrants, all but 200,000 of which were “temporary”– that is, without Tianjin hukou. At this level, rural-to-urban migrants make up roughly 10% of the city’s total population. The survey instrument captured housing-relevant characteristics of migrants and of the housing stock they occupy. In order to detect and explore variation in the determinants of housing conditions among the most policy relevant subset of rural-to-urban migrants, we sampled only those: who do not have Tianjin residence permits, who did not come to Tianjin as students, and who do not own homes. Interviewers were graduate students from Nankai University. Each day the interviewers were assigned to specific sub-areas of the six districts in the city proper and to specific types of migrants, whom they identified on, or outside, job sites.7 The interview itself was conducted (anonymously) by the interviewer from a questionnaire prepared by the research team. The research design needed to produce a sufficiently large and varied dataset to support quantitative modeling, which could not be done with existing datasets.8 The primary methodological challenge we faced was devising a method to select a reasonably representative sample of migrant housing units in the absence of sample frames of housing units or the migrant population. This necessitated a methodological work7 Although Tianjin municipality is divided into eighteen county-level divisions, six districts form the city proper (Heping, Hexi, Hedong, Hongqiao, Hebei and Nankai). 8 The most obvious alternative, the 2000 Census has two key problems. First, the information is dated relative to the changes in housing markets and policies that have unfolded in the nearly seven years since it was conducted. Second, using census data it is not possible to single out rural-to-urban migrants from migrants who have always been urban citizens and moved between cities.

Household Strategies and Migrant Housing Quality in Tianjin

193

Table 1. Migrant Employment Distribution by Industry Sector. Category

Share

Manufacturing

27%

Category

Share

Domestic and other services

9%

Construction

26%

Street vending

5%

Wholesale and retail business

12%

Refuse collection

5%

Hotel and restaurant

11%

Other

5%

around in order to generate a reasonably representative sample, which we did as follows. First, we used official data from surveys conducted in 2005 among migrants in nine major cities, including Tianjin, to identify the breakdown of migrants by industry sector (e.g., construction or manufacturing), as shown in Table 1.9 We then stratified based on these industry shares and interviewed the requisite number of migrants from each, yielding a sample with the same employment distribution as the overall migrant population. This method assumes that by ensuring our sample accurately reflects the employment distribution we will likewise capture the range of variation in housing conditions. The resulting dataset consists of 797 viable records. Data on respondent characteristics include: socio-demographic information on the interviewee; individual/household income data; employment information on the interviewee (and spouse if living in Tianjin) and information on the interviewee’s migration characteristics. Housing characteristics include: housing cost (free or rented); housing source (employer, private market, friends/relatives, government); quality; and satisfaction. 4. Variation in Housing Quality among Low-Wage, Low-Skills Migrants As discussed in the introduction, the goal of the empirical section is to determine the extent to which housing conditions differ between households pursuing different migration strategies. We do this primarily by comparing housing quality between those that have moved permanently to urban areas and those that participate in the urban labor market as part 9 The survey was carried out by the Rural Household Survey Team of the National Bureau of Statistics of China (NBS).

194

M. Duda, B. Li and H. Peng

of a household level strategy to diversify the risk that their income stream will be interrupted. The analysis relies on descriptive statistics and a model of the determinants of housing quality to investigate these issues. 4.1. Developing the housing quality indicator The top panel of Table 2 presents information on 10 quality indicators collected in our survey, confi rming that many migrants endure a variety of quality problems. The majority of migrants have no access to showers, kitchen, or toilets in their housing unit. Many (41.2%) also endure damp conditions and about 30% have no interior tap water and occupy units in temporary structures. Slightly less than one-fifth report being cold in winter and about 10% live in units where it is too noisy to sleep, there is no heat, or are in non-residential buildings. The lower panel of Table 2 shows the quality index we produced from the information in the upper panel. In order to be both valid and useful an index must not only measure important elements of housing quality but also offer sufficient variation as to be meaningful. For example, access to an in-home kitchen might be a useful quality indicator but its distribution in the sample limits its usefulness because 535 of the 795 respondents (67.2% of the sample) have no kitchen access. Including it in our index would weight it equally with, for example, not having heat in the winter (11.8%), which could tend to blend out meaningful variation in housing quality. In addition, several of the variables in the table overlap (e.g., not having heat and being cold in winter). Ultimately, we were able to devise a parsimonious index using just six of the 10 variables in the Table’s upper panel. These six are in bold text and starred in the Table. Having each of these characteristics was worth a single point, for a maximum of six and a minimum of zero. The version used in the descriptive statistics and quality model is the inverse of this index (i.e., “6” indicates the highest quality and “0” the lowest) to make the interpretation of the results easier. 4.2. Descriptive statistics The indicators we use to observe household strategies (permanent migration vs. risk diversification) are family structure variables. The

Household Strategies and Migrant Housing Quality in Tianjin

195

Table 2. Housing Quality Indicators and Index Values.

Responses

Share (%)

No shower access

626

No kitchen access

535

Community public toilet only * Damp

Indicator

Very damp and unhealthy *

Valid Responses

Index Points

78.7

795

-

67.2

796

-

419

52.6

796

1

328

41.2

795

-

48

6.0

1

280

35.2

-

No tap water access * Structure is temporary *

244

30.6

797

1

235

29.8

789

1

Unit is very cold in winter

143

18.0

794

-

Somewhat damp but not unbearable

Unit has no heat * Building also used for business purposes *

94

11.8

795

1

83

10.5

789

1

Unit is very noisy, makes sleeping difficult

69

8.7

795

-

Index Values – Index Score

Responses

Share (%)

6

1

0.1

5

10

1.3

4

36

4.6

3

110

14.1

2

176

22.5

1

220

28.1

None

229

29.3

Total

797

100.0

Note: Starred indicators were used to construct the quality index. Others were omitted.

fi rst variable indicator is whether, among respondents with children, their children are in Tianjin or remain at home in the rural area. The second is whether, among married respondents, a spouse remains at home. These two variables allow us to distinguish households that have chosen temporary migration (separated families) to diversify earnings across urban and rural labor markets, and those that have decided to move to the city permanently (children in Tianjin and cohabitating spouses). The

196

M. Duda, B. Li and H. Peng

children-in-Tianjin variable ought to be a better indicator of permanently migrating families because it is common for both parents to seek work in the city leaving children at home with grandparents or other relatives. Nonetheless, for both indicators we expect respondents with separated families will occupy different types of housing, and these will be of lower quality, than that occupied by migrants with intact urban families. Table 3 shows how the family structure variables are related to three housing outcomes. The fi rst is whether the respondent pays rent or not. Among respondents whose children have joined them in Tianjin, nearly all pay rent, whereas only about one-third of others do so. This divide is a result of differential likelihood of getting housing through one’s employer (column 2). Employer-provided housing is typically of low quality, and often in a dormitory setting or temporary structure that is particularly unsuitable for children. The results for separated spouses are similar, though somewhat less distinct. Table 3 also shows that, for households with children in Tianjin, housing quality is higher—4.7 versus 4.0 on our scale from 0 (severe problems) to 6 (no problems).10 Likewise, spouses cohabitating in Tianjin occupy higher quality housing units. Together, the results from Table 3 suggest that not only do households pursuing different migration strategies make different housing choices (columns 1 and 2) but that those who have committed to settling in the city invest in better living conditions (column 3). Our data also allow us to investigate the relationship between housing quality and stated migration intention. We asked respondents what their long-term plans are from a list of choices including: staying in Tianjin permanently, moving among cities including Tianjin, traveling back and forth between their home place and Tianjin, returning permanently to their home place, and “not sure/depends”. Table 4 presents the quality index tabulated by migration intention. The table shows that those who expect to settle permanently occupy homes with the fewest quality problems, and that those who plan to return home have the lowest quality housing. Although the descriptive results in Tables 3 and 4 are supportive of the type of dynamic Zhu (2007) identifies, a number of other factors are 10 Means are significantly different, with t-statistic of 6.35.

Household Strategies and Migrant Housing Quality in Tianjin

197

Table 3. Family Structure and Housing Outcomes. Housing Quality Index

Pay Rent

Employer Provides Housing

Median

Mean

Tianjin

92.3

5.5

5

4.7

Home place

36.6

67.6

4

4.0

Yes

84.1

12.3

5

4.6

No

24.6

81.9

4

3.9

Family Structure Variables

Location of Children (n = 509)

Live with Spouse in Tianjin (n = 496)

Note: Includes only respondents with children (“Location of Children”) and married households (“Live with Spouse”). Housing quality indicator goes from “0” (severe quality problems) to “6” (no quality problems).

Table 4. Housing Conditions by Stated Migration Intention. Count

Housing Quality Index Score

Settle in Tianjin

152

4.9

Move among cities

104

4.7

Circular migration

139

4.5

Return to home place

177

4.3

Not sure/depends

219

4.7

Total

791

4.6

Note: Housing quality indicator goes from 0 (severe problems) to 6 (no problems).

related to housing quality outcomes making it impossible to attach full confidence to such results outside of a multivariate framework. The next section presents a more detailed model that examines the same issues considered here but adding appropriate statistical controls. 4.3. Housing quality model This sub-section presents and discusses results of an OLS regression with the quality index described above as the dependent variable. The

198

M. Duda, B. Li and H. Peng

model includes several groups of controls, which are discussed here and have mean values presented in Table 5. The fi rst group are demographic factors, including gender, age, and educational attainment. A majority of the sample is male. The mean/median age of the sample is 31.5/32.0 years, though the standard deviation is nearly 10 years, indicating that the bulk of respondents fall somewhere between 20 and 40 years old. More than one-quarter have primary schooling or less, and less than one-fifth have no more than a middle school education. The next group of variables captures household characteristics. Twothirds of respondents are married and nearly the same share has children.11 About one-third of all the migrants that we interviewed have children in school in Tianjin. The average number of workers per household is 1.8, though the dominant household size is one, which accounts for 60.9% of all respondents. Monthly household income averages 1,427 RMB (17,133 RMB/year). At 1,000 RMB, the median monthly income is substantially lower. In terms of employment, just over one-quarter work in the state sector. Of these, 12.2% work for COEs and the remainder for SOEs. The largest sector by industry is services, at about one-third of the sample, followed by construction and manufacturing at one-quarter each. The remaining 15.7% are employed in various forms of street businesses. A majority (54.3%) of respondents receive housing from their employer. Of these, 78.8% pay no rent. Respondents’ average time as a migrant is 6.0 years, though the median time is 4.2 years. Their average length of stay in Tianjin is 4.3 years, which is, again, well above the median of 3.0 years. Slightly less than one-fifth claim they plan to settle in Tianjin permanently. Conversely, about four-fifths send monthly remittances. Table 6 presents the results obtained by regressing these variables on our housing quality index. The model’s explanatory power is substantial, as reflected by an adjusted R-squared value of 0.306. Recall that the quality index is simply the inverse of the number of six potential quality problems the respondent could face. Therefore, a score of zero indicates that the respondent endures all six problems, a score of one indicates 11 A larger share has children than is married due to the presence of divorced and widowed respondents in the sample.

Household Strategies and Migrant Housing Quality in Tianjin

199

Table 5. Mean Values for Housing Quality Model Regression Variables. Percentage

Dependent variable: quality indicator

Mean

Standard Dev.

4.6

1.3

31.5

9.7

Number of workers in household

1.8

2.1

Monthly household income (thousands)

1.4

1.2

Demographic Gender (Male = 1)

60.2

Age Education None

5.2

Primary school

21.9

Secondary school

55.6

Vocational school

7.4

High school or more

9.8

Household characteristics Married

66.8

Have children

67.3

Have children in Tianjin in school

32.2

Employment State sector (SOE/COE = 1)

26.9

Industry sector Construction

25.9

Manufacturing

26.2

Services

32.1

Street business

15.7

Get housing through employer

54.3

Migration Years as a migrant

6.0

5.3

Years in Tianjin

4.3

4.4

Plan to stay permanently in Tianjin

19.2

Send monthly remittance

78.3

200

M. Duda, B. Li and H. Peng

the presence of five problems, and so on. The highest quality unit—one with no problems at all—would score a “6.” The index is inverted in this way to make interpretation of the signs on the coefficients intuitive (for instance, income enters the model positively indicating that higher income leads to higher quality). Coefficients are interpreted as increasing or reducing housing quality problems in single unit increments. Therefore, a coefficient of “1” on a dummy variable would indicate that having this characteristic suggests a respondent will have one less problem, and a score of “–1” indicates one additional quality problem. Among the three demographic variables included in the model, only age is not significant. Gender is significant and negative. All else equal, men occupy housing that has one-fifth of one additional housing quality problem relative to women. Education is positively related to housing quality. Relative to the reference category of no formal education, those with a primary school education average about one-half of one problem less, those with secondary or vocation schooling have about one problem less, and those with at least high school education have two-thirds of one problem less. Being married has no impact on housing quality, nor does one of our potential household migration strategy indicators, being married and living together in Tianjin. Having children significantly reduces housing quality but having school-aged children in Tianjin has a positive and highly significant impact on quality. All else equal, this, our primary indictor of permanent migration, reduces housing problems by a little more than one-third of one problem. Having more workers in the household significantly reduces housing quality. Household income is also significant—it takes about an additional 10,000 RMB of monthly income to escape one quality problem. Working in the state sector results in lower quality and, all else equal, the other industry sectors have higher quality housing than construction. This results in part from the fact that much (two-thirds) of construction housing is temporary, whereas the other index elements are less closely linked to specific industry sectors. The manufacturing sector enjoys the highest quality housing—almost one problem less than construction—followed by services and street businesses, which have about half of one problem less than construction.

Household Strategies and Migrant Housing Quality in Tianjin

201

Table 6. OLS Regression of Housing Quality. Coefficient

p-value

Demographic Gender

– 0.176

0.057

Age

– 0.004

0.558

Primary school

0.587

0.007

Secondary school

0.846

0.000

Education (omitted: no schooling)

Vocational school

1.077

0.000

High school or more

0.633

0.007

Household structure Married

0.081

0.700

Married living together in Tianjin

– 0.066

0.661

Have children

– 0.441

0.046

0.380

0.009

– 0.043

0.025

0.108

0.002

– 0.339

0.001

Have children in Tianjin in school Employment Number of workers in household Monthly household income (thousands) State sector (SOE/COE = 1) Industry sector (omitted: construction) Manufacturing

0.881

0.000

Services

0.508

0.000

Street business

0.459

0.009

0.073

0.531

– 0.032

0.007

Years in Tianjin

0.016

0.289

Plan to stay permanently in Tianjin

0.007

0.950

– 0.161

0.100

Employer provides housing Migration Years as a migrant

Send monthly remittance Adjusted R-squared

0.306

Number of observations

711

202

M. Duda, B. Li and H. Peng

Years as a migrant is significant and negative but the effect is quite small. It takes about 30 years for quality to decline by the amount of one additional problem. Years in Tianjin is not significant, nor is the stated migration intention dummy. Finally, sending remittances home significantly reduces a migrant’s housing quality but not by very much. Overall, the results of the model offer what may be thought of as “guarded” support for our hypothesis that households pursuing different migration strategies will occupy different types of housing. As noted above, there are a number of confounding factors in the measurement of family separation using an indicator of whether spouses cohabitate in Tianjin. The failure to fi nd this variable significant is therefore not too surprising. The failure of stated migration intention to be significant is puzzling, however, especially because what we think of here as “unstated migration intention”—having school-aged children in Tianjin is highly significant. Further, Wu (2002) found that planning to stay in the city long term is a significant, positive influence on housing quality, while also fi nding that neither being married with family in the city nor the number of children in the city impact housing quality. It is possible that some families plan to return to their home place after raising and educating their children in the city. A strategy along these lines would be consistent with maximizing housing consumption and minimizing living expenses during retirement. It is also consistent with longer-term income maximizing at the family level, as children raised in the city would be expected to have greater employment prospects and earning potential than those raised in rural areas. Thus, it may be possible to characterize the intention of some migrants as “temporary long-term migration” though our data do not allow us to test this notion. From the perspective of the test undertaken here, the hypotheses that having school-aged children in Tianjin significantly improves housing quality has some support. That is, the idea that migrant housing quality is a function in part of migration intention, with those committed to settling in urban areas permanently (or at least for the long term) occupying higher quality housing, is consistent with the direction and significance effects in the housing quality model presented here. The impact is modest, however, and we take the fi ndings primarily as an indication that very little is known about migrant housing behavior in general.

Household Strategies and Migrant Housing Quality in Tianjin

203

5. Conclusion This paper has developed and tested an argument about the source of migrants’ low quality housing. Whereas existing studies find that a combination of market and institutional characteristics, especially the hukou system, reduce housing quality, we argue that some of the quality differential between migrants and other urban groups is attributable to household level strategies that migrants pursue to maximize and/or diversify their income stream. We looked at the influence of three potential indictors of a permanent migration strategy—having children in Tianjin, spouses cohabitating in Tianjin, and stated intention to settle permanently in the city. Of these, only the fi rst is significant. As we anticipated, committing to the city, as evidenced by bringing school-age children, raises housing quality, holding all other factors constant. The effect is modest, though to some extent this may be expected given the importance of factors such as income and industry sector, which are highly correlated with housing quality in urban China. Ultimately, a study like this one must be followed by additional work before its implications can be fully developed. To this end, there are a number of important and promising areas for additional research. The fi rst and most potentially fertile is to compare housing outcomes among recently formed low-income migrant and urban native households. Findings of differences and the attribution of these to household level migration strategies will go the farthest toward informing migrant housing policy and to clearing up the potentially confounding effects of many uncontrolled variables in the current research literature. Other important next steps include validating these fi ndings in more cities. It is possible that Tianjin may be unique, or at least that results from Northern and Southern cities differ, and/or that results from Coastal and Western cities are not the same. It would also be useful to use indepth interviews to investigate further some of the possible trends and explanations touched on here. Ethnographic detail along the lines of work done by Cindy Fan and Winnie Wang in the next chapter of this volume could be very helpful in explaining the complicated roots of migrant housing choices and quality.

204

M. Duda, B. Li and H. Peng

References Bian, Y & Logan, J (1996). Market Transition and the Persistence of Power: The Changing Stratification System in Urban China. American Sociological Review, 61(5), 739–758. Huang, Y (2003). Renters’ Housing Behavior in Transitional China. Housing Studies, 18(1), 103–126. Huang, Y & Clark WAV (2002). Housing Tenure Choice in Transitional Urban China: A Multilevel Analysis. Urban Studies, 39(1), 7–32. Huang, Y & Jiang, L (2007). Housing Inequality in Transitional Beijing. Proc. Of the International Conference on China’s Urban Transition and City Planning. June 29–30. Cardiff: UK. Li, S (2000). The Housing Market and Tenure Decision in Chinese Cities: a Multivariate Analysis of the Case of Guangzhou. Housing Studies, 15(2), 213–236. Nee, V (1989). A Theory of Market Transition: From Redistribution to Markets in Sate Socialism. American Sociological Review, 54 (5), 663–681. Nee, V (1996). The Emergence of a Market Society: Changing Mechanisms of Stratification in China. American Journal of Sociology, 101(4), 908–949. Painter, G.,Yang, L & Yu, Z (2004). Homeownership Determinants for Chinese Americans: Assimilation, Ethnic Concentration and Nativity. Real Estate Economics, 32(3), 509–39. Smith, C & Pun, N (2006). The Dormitory Labour Regime in China as a Site for Control and Resistance. International Journal of Human Resource Management, 17(8), 1456–1470. Wu, W (2002). Migrant Housing in Urban China—Choices and Constraints. Urban Affairs Review, 38(1), 90–119. Wu, W (2004). Sources of Migrant Housing Disadvantage in Urban China’. Environment and Planning A, 36(7), 1285–304. Zhu, Y (2003). The Floating Population’s Household Strategies and the Role of Migration in China’ Regional Development and Integration. International Journal of Population Geography, 9(6), 485–502. Zhu, Y (2007). China’s Floating Population and their Settlement Intention in the Cities: Beyond the Hukou Reform. Habitat International, 31(1), 65–76.

CHAPTER 11 THE HOUSEHOLD AS SECURITY: STRATEGIES OF RURAL-URBAN MIGRANTS IN CHINA

C. Cindy Fan University of California, Los Angeles Wenfei Winnie Wang University of South Alabama

1. Introduction: The Household Approach The household as a unit of analysis has increasingly gained popularity in social sciences. Clare Wallace (2002) argues that household strategies are likely to become more important when a society is subject to rapid change that leaves households in a situation of risk and uncertainty, when more women enter into the labor force, and when large parts of the economy are informal. All three conditions describe circumstances facing rural Chinese today. First, economic liberalization since the 1980s removed communal protection, leaving those living in the countryside to deal with poverty, large labor surplus and lack of economic opportunities on their own. Agriculture faces an uncertain future, so do peasant households that depend on agriculture. Second, rural women are actively participating in migrant work, while those who stay in the countryside are taking up the bulk of agricultural work. In both cases, they constitute an increasingly important segment of the labor force. Third, as millions of peasant migrants seek work in urban industries and services, the sectors of the Chinese economy characterized by poorly paid, low-skilled and temporary jobs and rampant exploitation are rapidly expanding.

205

206

C. C. Fan and W. W. Wang

In migration studies, the conventional household strategies approach emphasizes the economic or utility gains households can make via migration (Boehm et al., 1991). An influential view is that net family gain rather than net personal gain motivates migration. Thus, labor migration is often interpreted as a strategy to increase income and diversify income sources for the entire household (Adams and Page, 2003; De Jong, 2000; Ortiz, 1996). In some developing countries and poor areas, migration and remittances from migrant work are essential for the subsistence of rural households and households in poverty (Goldscheider, 1987; Itzigsohn, 1995; Radcliffe, 1991). An approach that focuses on economic calculations alone, however, risks downplaying the social relations that underlie household decisionmaking. Increasingly, researchers are highlighting the non-economic factors of migration decisions (Clark and Huang, 2006; Hugo, 2005; Zhao, 1999). Odland and Ellis (1988), for example, fi nd that potential migrants may forgo the economic benefits of migration in order to keep the household intact. Research by feminist scholars, in particular, draws attention to intra-household power relations, gender hierarchy and migrants’ agency (Chant and Radcliffe, 1992; Eder, 2006; Fincher, 2007; Jarvis, 1999; Lawson, 1998; Silvey and Lawson, 1999; Willis and Yeoh, 2000). Marriage and gender roles within marriage are widely considered as the key to explaining differences in the migration process between men and women (Cerrutti and Massey, 2001; Radcliffe, 1991). Inasmuch as migration involves the collaboration of and division of labor among household members, the social and hierarchical power relations within the household are crucial for understanding decision-making and outcomes of migration (Lawson, 1998; Radcliffe, 1991). Among studies on migration in China, those that examine household strategies tend to highlight economic reasoning rather than the social dynamics within households (Hare, 1999b). Yet, migration almost always involves considerations for, and collaboration of, other family/ household members (Rowland, 1994). Split households, where one or more household members engage in migrant work while others stay in the village to farm and care for the young and elderly, are very common in rural China. The most popular arrangements include gender division of labor—the husband does migrant work and the wife stays behind—

The Household as Security: Strategies of Rural-Urban Migrants in China

207

and intergenerational division of labor—the husband and wife both do migrant work and their parents stay behind (Tan, 1996). In both cases, income from migrant work benefits the entire household while household members staying behind maintain the rural bases of livelihood that make possible the migrant’s eventual return. In this chapter we argue that the peasant household and the countryside constitute the bases of migrants’ economic and social security and that migrants’ strategies, in turn, make use of and support such security. In the next section, we examine the concept of security and its relations with migrants’ anticipation of an eventual return. 2. Permanent Settlement Paradigm and the Concept of Security In migration studies, the conventional approach for understanding temporary migrants assumes that they desire to stay. The experience of guest-workers in post-WWII Europe who eventually developed permanent communities, for example, supports the notion that temporary migration is a prelude to permanent settlement, as aptly summarized by the oftrepeated phrase “there is nothing so permanent as a temporary migrant.” This “permanent settlement paradigm,” however, is increasingly being challenged, especially in the context of international migration and transnational communities (Saxenian, 2005). Hugo (2003a, 2006) argues that while non-permanent and circular migration has increased rapidly, migrant workers do not always desire to settle in destination countries. Modern forms of transport and communication have reduced the friction of distance and allowed migrants to maintain closer and more intimate linkages with their home countries and communities than before. In addition, migrants can obtain the best of both worlds by earning in highincome destinations and spending in low-cost origins. By keeping the family at the place of origin, migrants can maintain valued traditions and family ties and make frequent visits. While in the past immigrants were expected to apply for citizenships and commit themselves to the host country, now dual citizenships are common and are recognized by more than half of the world’s nations (Clark, 2007). Concepts of international circulation of labor and international labor markets are, therefore, increasingly relevant.

208

C. C. Fan and W. W. Wang

Within countries, likewise, circular migration is on the rise. Temporary migration has always been common in Africa and Asia (Nelson, 1976). And, rural-urban circular migration is the fastest growing type of temporary migration in countries that are experiencing rapid urbanization and industrialization, such as Vietnam, Cambodia and China (Deshingkar, 2005). In China, however, the prevailing assumption about rural labor migrants is that they desire to stay in the city and bring their families there but are unable to do so because of the hukou system. Peasant migrants’ inferior institutional status is indeed a formidable barrier to their access to urban services and the full range of urban jobs. Yet, some studies have found that migrants’ desire to settle in cities is not as strong as expected and that the majority wish to return (Cai, 2000; Hare, 1999a; Solinger, 1995). Other studies show that many migrants choose not to obtain urban hukou even if given the opportunity to do so. Despite the aggressive hukou reform in Shijiazhuang since 2001, for example, only a small fraction of migrants took advantage of the opportunity to transfer their hukou to the city (Wang, 2003). Yu Zhu’s (2003, 2007) surveys in Fujian conducted between 2000 and 2002 found that only small proportions of the floating population would move the whole family to the city even if they were given city hukou freely. While migrants’ intention to stay or return likely varies depending on the specific city’s labor market, the home village’s resources and locations, and the household’s economic and social situation, we argue that the concept of security provides a useful framework for understanding peasant migrants’ considerations and their mobility behavior. Security is related to protection, safety, continuity and reliability, and a sense of future and permanence. After more than 20 years of massive rural-urban labor migration, the countryside continues to be the basis of economic security for China’s peasant migrants and their families. First, peasants have access to farmland contracted from village authorities. Despite the persistently low economic return from agriculture, it remains a major source of subsistence for rural Chinese. In addition, agriculture serves as an insurance against adversity—for example, when migrant work fails—and a security for migrants’ future return. Access to farmland is, therefore, highly valued (Zhu, 2003, 2007). Protecting and taking care of the farmland during the migrants’ absence continues to

The Household as Security: Strategies of Rural-Urban Migrants in China

209

be a high priority among rural Chinese. Popular arrangements include leaving behind family members to farm, asking relatives to farm the migrants’ land, or leasing the land to other villagers. Such arrangements not only yield output but also guard the farmland’s boundaries (against infringement by others) and prevent it from being fallow. In addition, Chinese peasants are not free to buy or sell farmland, and conversion of farmland into other purposes is strictly controlled by the state (Cai, 2000; Lin and Ho, 2005; Yusuf and Nabeshima, 2006). Roberts (2007) compares this situation to Mexico–US immigrants who have access to farmland in rural Mexico that cannot be sold and has become not only an economic asset but also a base for all household activities. Second, Chinese peasants are allocated non-farming land where they can build houses. Building a new house and renovating or expanding an existing house are priority projects for many rural Chinese. In the countryside, it is commonly expected that in order to get married a man must have a house or a partition of his parents’ house. Only when a new house or an extension to an existing house is complete can a married son and his wife and children have their own space independent from the parents’. Indeed, housing-related expenses are a main reason for migrant work. Third, the cost of living in the countryside is low. Affordability to live in a place permanently is an important dimension of economic security. By contrast, in cities, peasant migrants face high costs of living and do not have a permanent place to stay. For them, the city is merely a place to work. Cities offer income opportunities, but migrant jobs are insecure and most demand youth and manual labor. Once migrant workers become older, most are forced to return to the countryside. The hukou system continues to be a barrier for rural Chinese to live in cities on a permanent basis, as their access to health care, education, housing and other benefits is very limited. Even if a migrant has substantial savings, the city’s high cost of living renders it a less desirable place to live than the countryside. The countryside is also the basis of peasant migrants’ social security, namely, a support system made up of the spouse, children, parents, siblings, relatives, and fellow villagers. In rural China, the age-old concept of jia (family or home)—which refers to not only the nuclear

210

C. C. Fan and W. W. Wang

family but also the extended family and the home village—remains strong. Members of a family are related to each other by blood or marriage and their budgets, properties and interests are interconnected (Woon, 1994). The institution of marriage is fundamental to the social structure and is one that rural Chinese keenly protect. Within marriage, traditional gender norms continue to govern men and women’s opportunities and responsibilities. Children are still the main source of old-age support, and fulfilling obligations to parents is an important way to keep the traditional social support system intact. A parent’s sickness, for example, often compels sons and unmarried daughters to seek migrant work in order to pay for medical expenses. A married daughter, on the other hand, is considered a member of the husband’s family and is thus not expected to be financially responsible for the natal family. Siblings and relatives that live nearby constitute important sources of support when a need arises. Thus, household strategies often include family members not residing under the same roof. Research has found that increased migration does not appear to have undermined the concept of extended families in the countryside (Goldstein et al., 1997). By contrast, as the chapter in this volume by Gloria Davies and Scott Grant highlights, in cities, peasant migrants are seen and treated as outside labor rather than members of urban society (see also Chan, 1996; Fan, 2002; Solinger, 1995; Zhou, 1992). Their social interactions with urban locals are minimal, and they rely mainly on other migrants from the same native place (tongxiang or laoxiang) for support. Although there is some evidence of thriving migrant communities, such as the Zhejiang Village in Beijing (Ma and Xiang, 1998; Xiang, 2005), and of an increase in rural-urban family migration (Zhou, 2004), in general peasant migrants’ social support system in the city is much weaker than that in the countryside. In summary, the very consideration of security explains why peasant migrants are unable or reluctant to stay in the city permanently and their anticipation to eventually return to the countryside. The terms dagong—literally “being employed,” but more specifically peasants seeking work in industrial and service sectors—and chuqu (going out), for example, highlight migrants’ crossing of the rural-urban border but also connote that the countryside is still their home. During their dagong

The Household as Security: Strategies of Rural-Urban Migrants in China

211

tenure—which for some has been over 20 years—migrant workers1 straddle the urban and rural, seek to benefit from both, and “earn in the city and spend in the village” (Hugo, 2003b). The overall objective for most is not permanent settlement in the city but to prepare for a better living in the countryside. This objective has important implications for their migration strategies and behavior, to which we now turn. 3. Household Strategies We argue that division of labor and circularity are two key strategies for peasant migrants to straddle the city and the countryside, to obtain the best of both worlds, and to achieve both economic security and social security. 3.1. Division of labor Division of labor, involving some household members pursuing migrant work and others staying behind to assume village responsibilities, is very popular in rural China. The most common form of split households among the fi rst generation of migrants—those who began migrant work in the 1980s or early 1990s—involves husband–wife division of labor. This is an extension of the age-old inside–outside dichotomy, which defi nes the woman’s place to be inside the family and the man’s sphere to be outside (nan zhu wai nu zhu nei) (Mann, 2000). Although young, single peasant women are highly represented among labor migrants, the pressure to return increases when they reach their mid-20s because of the prevailing tradition of early marriage and because their marriage market is still primarily in the countryside. Once married, and especially after having children, peasant women’s likelihood to pursue migrant work sharply declines, since traditional gender norms defi ne their main responsibility to be looking after the home and the young and elderly. As husbands take up migrant work, the wife’s responsibility multiplies, including not only house chores, care-giving and supervision of children but also farming, animal husbandry and non-farm work (Stockman, 1994). Tamara Jacka 1 In this chapter, “migrant work” refers to dagong but not the more formal, permanent and high-paid jobs that are generally not accessible to peasant migrants.

212

C. C. Fan and W. W. Wang

(1997) argues that the boundary between the feminine inside and the masculine outside has shifted such that the inside now includes all village responsibilities. Since the 1990s, intergenerational division of labor has become an increasingly common household arrangement. When parents are physically well and able to farm, their sons and daughters may be motivated to pursue migrant work in order to improve the family’s economic well-being. To a married son or daughter, the availability of one or more parents to look after young children makes it possible for them and their spouses to pursue migrant work together. Increased popularity of this type of split households reveals in part the differences between earlier, pioneering migrants and younger, most recent migrants. Unlike in the 1980s and perhaps also the 1990s when migrant work was perceived as a temporary economic strategy, labor migration has now firmly established itself as a way of life, even a culture, throughout China’s countryside (Lee, 2007; Zhao, 1998). To many peasant households, migrant work is a necessary, desirable source of income such that married women and women who have children are increasingly participating in it. This trend may signal that the inside–outside dichotomy is being challenged. Another reason is that a husband (urban) – wife (rural) division of labor demands long-time separation between spouses, while the wife joining the husband in migrant work is a strategy that preserves the marriage institution and accordingly the fundamental social structure. The popularity of husband–wife and intergenerational division of labor explains why in many villages only married and older women, grandparents and children remain (Cao, 1995; Cook and Maurer-Fazio, 1999; Croll and Huang, 1997; Davin, 1998). Other, albeit less popular, forms of division of labor are also used. Siblings and relatives may negotiate strategies that allow them to both take advantage of migrant work opportunities and address family needs. For example, siblings can pool their farmland resources together; those who stay behind farm and care for the elderly thus permitting others to do migrant work. Often, this involves siblings who are married and live in the same village but in a different house, which illustrates that household strategies may include family members not residing under the same roof. If no family members and relatives are available, a migrant may ask another villager to take

The Household as Security: Strategies of Rural-Urban Migrants in China

213

care of the farmland, i.e., guard the boundaries, keep the land fertilized, prevent weeds, etc. In exchange, the yield belongs to the stay-behind villager. When the migrant returns, the land returns to him/her. Thus, this type of division of labor is mutually beneficial to both the migrant and the stay-behind villager. The above division-of-labor arrangements are by no means static but may change frequently, as a result of shifts in life-cycle and household needs, changing economic opportunities, and negotiation among migrants and their family members and those who stay behind. While the specific changes vary considerably from household to household, the following are some common examples. Married women who used to stay behind may, after their children grow older, join their husbands in migrant work, especially if grandparents are available to help. At the same time, grandparents who used to take care of young children may be increasingly unable to do so because of age, and thus they may ask the migrant parents to return. A popular view in the countryside is that grandparents can look after pre-school age children but parents’ direct supervision is needed after the children have started school. Finally, veteran migrants may decide to return when their children are old enough to pursue migrant work and assume the responsibility of primary wage earners. While division-of-labor arrangements make it possible for migrants to earn in the city and simultaneously maintain their economic and social bases in the countryside, remittances from migrant work reinforce these bases and support the migrants’ eventual return. Many studies have found that remittances constitute a significant source of household income in China’s countryside (Cai, 2000, 2001; CASS 2003, 2004; Goodkind and West, 2002; Lian, 2002; Wang and Fan, 2006). Surveys conducted in the 1990s have consistently found that remittances were primarily used to fund household “projects” (such as building or renovating a house), maintain regular household activities (such as living expenses and agricultural input), support household members (such as wedding expenses and school fees), and lift the household out of financial difficulties (paying off debts), rather than for savings or investing in new economic activities (Fan, 2004; Murphy, 2002; Wang and Fan, 2006). While these usages continue to be important today, remittances are also being used by peasant households that have improved economically as savings for future use, such as to

214

C. C. Fan and W. W. Wang

fund children’s education beyond the junior and senior secondary levels (see also “Stories and Narratives”). In addition to bringing obvious economic benefits to the household, remittances are also part of a social contract between the migrant and those who stay behind. The New Economics of Migration (NEM) theory, in particular, considers remittances as part of an implicit agreement between the migrant and the household that is grounded on attachment to the community of origin and a plan for eventual return (Lucas and Stark, 1985; Stark and Lucas, 1988). Focusing on late Imperial China, Skinner’s (1976) work shows that it was precisely because sojourners who left to pursue their “occupational calling away from home” were expected to return that they could count on the support from the family and home community.2 3.2. Circularity It is well documented that peasant migrants in China are highly circular in their movements between rural and urban areas (Hare, 1999a; Solinger, 1995). Many studies have described the routine whereby migrants return during the Spring Festival and during planting and harvesting seasons. Such seasonal migration enables migrants to participate in social traditions and to provide needed labor for agriculture, thus contributing to maintaining and reinforcing their social and economic bases in the countryside. Returning for the Spring Festival helps migrants maintain close ties with not only their family members but also the village community. The prevalence of this type of seasonal migration has led to the term “wild geese households” (yan hu), which compares migrants to wild geese that fly to the south in the fall, returning north in springtime. To describe peasant migrants’ mobility as seasonal, however, is to downplay the extent and fluidity of their circularity. In addition to the annual cycle described above, there is a range of circularity practices that are not “seasonal.” For example, migrants may return to stay for an 2 Skinner (1976) draws a distinction between residence in one’s native place and abode in one’s place of work. He argues that residence is permanent and can be interpreted as an ascribed characteristic whereas abode is temporary and can vary.

The Household as Security: Strategies of Rural-Urban Migrants in China

215

extended period of time, up to several years, before pursuing migrant work again. This type of return may aim at enhancing economic security, social security, or both, of the migrant household. First, after accumulating some savings, some migrants may decide to return to full-time farming or to invest in other types of economic activities locally. In addition to finding migrant work too demanding, the opportunity to be with the family is an important motivation for such decision. Yet, existing evidence suggests that many returned migrants eventually seek migrant work again (see “Stories and Narratives” below). Second, migrants may return for months, even years, to build or renovate a house. They may be needed to oversee the construction work or they may be doing the construction on their own. After the house project is fi nished, typically the migrants’ savings are used up or they have accrued a debt, which thus calls for a new round of migrant work. Finally, when a new family need arises, such as the birth of a child, children needing supervision on schoolwork, or a spouse or elderly parent falling sick, migrants may return to meet these needs but they can pursue migrant work again when the needs are resolved. Returning and going out again may occur more than once. Sometimes, a peasant migrant’s return makes it possible for another household member to pursue migrant work. In addition to traveling back and forth between the village and the place of migrant work, peasant migrants also circulate among places of migrant work looking for higher wages and better working conditions. Such circularity is an important explanation for the migrant labor shortage in recent years in some parts of Guangdong, where as discussed in David Kelly’s chapter in this volume, persistently low pay and poor working conditions have driven migrants to other parts of China, such as the Yangtze Delta (Jian and Zhang, 2005; Xinhua News Agency, 2005). Peasant migrants’ straddling the city and countryside makes it possible for a high level of circularity and fluidity, which in turn gives rise to choices as well as opportunities to change plans. We argue that it is precisely migrants’ social and economic bases in the countryside that permit their high degree of circularity and the variety of associated practices: they can always return to the village if migrant work fails. Conversely, their willingness to leave other family members in the village enables them to seek migrant work if village activities are not successful.

216

C. C. Fan and W. W. Wang

Circularity also has implications for household division of labor: new mobility decisions often require new division of labor arrangements. In rural China, circular movement of peasant migrants is no longer a temporary strategy but has become a long-term practice, which challenges conventional approaches in migration studies that assume a high degree of permanency (Fan, 2008). Defi ning migrants as those who lived in different places at two different points in time and defi ning others as non-migrants, for example, would completely overlook the very circularity and fluidity that characterize Chinese peasant migrants’ mobility behavior. In the rest of the chapter, we examine the stories told by migrants and their family members in order to further illustrate the concept of security and the migration strategies peasant households use to achieve economic and social security. 4. Stories and Narratives Qualitative material such as stories and narratives are usually from small samples and therefore not as representative as macro-level quantitative data, but the former is especially useful in revealing complexity and details. Personal stories and narratives are powerful means for identifying migrants’ agency, negotiation and conflicts, and they enable a bottom-up research approach that brings to the foreground the voices and experiences of marginalized individuals in society (Jacka, 2006; Nagar et al., 2002). We draw from two related projects, conducted during the Spring Festival in 1995 and 2005. In 1995, the Research Center for Rural Economy of the Ministry of Agriculture conducted in-depth interviews with 300 households from 12 villages—three villages each from two counties in Sichuan and two counties in Anhui. Sichuan and Anhui are major sources of rural-urban labor migrants in China. The counties and villages for the 1995 project were selected on the following criteria, that: in terms of economic development they were representative of the respective provinces; they had been sending out migrant workers for quite some time; and migrant workers accounted for at least, respectively, 20% of the county’s labor force and 30% of the village’s labor force (Du, 2000; Du and Bai, 1997). In each of the villages, 15 migrant households (where one or more members had had migrant work experience) and 10

The Household as Security: Strategies of Rural-Urban Migrants in China

217

non-migrant households were randomly selected. Interviewees’ responses are in the form of narratives and are transcribed verbatim. The 2005 project, administered by the Renmin University of China, aimed at re-interviewing the same 300 households. The purpose is to document and explain changes that have taken place over the 10-year period, including, for example, whether peasant migrants are more attracted to and more able to settle permanently in cities than before, how household arrangements related to migration have changed, and how new and younger migrants compare to their predecessors. Each of the accounts is again transcribed verbatim. In this chapter, we focus on interviews from one village—which we refer to as Village A—selected randomly from the original 12 villages. For the sake of simplicity, we use the present tense to describe the 2005 material. At the time of the 2005 interviews, Village A has about 310 households and a total population of approximately 1,200. In this chapter, stories and narratives are cited in such a way that ensures respondents’ anonymity—their names are withheld or only pseudonyms are used, and the exact name and location of Village A are not revealed although it has features quite commonly found in many villages across China that have sent out a large number of migrant workers. First, agricultural activities center mainly on farming and animal husbandry, but labor surplus is persistently large because arable land is of short supply. Second, although some nonagricultural economic activities exist in and near the village, the employment and income they generate are limited. A recently built brick factory in Village A, for example, hires villagers mostly on a part-time basis. Third, by the mid-1990s labor out-migration had already become an important source of income for most households in Village A, and this trend has further intensified by 2005. Fourth, over time the number and range of labor migrants have increased. In the 1980s and early 1990s, significantly more men than women were engaged in migrant work, which was largely seen as a new, short-term, economic opportunity. By 2005, migrant work has become an established way of life, and participation in this activity is more extensive, involving more women and almost every household in the village. Finally, despite more than 20 years of migrant work history, very few households have moved out from the village altogether. Officials in Village A estimate that only 15 households, or 5% of the village and involving a

218

C. C. Fan and W. W. Wang

total of approximately 60 people, have done so. Among them, only four households have transferred their hukou elsewhere—thus giving up their contract land in the village. Eleven households—of which eight live in the same county as Village A—continue to keep their hukou in the village. Of the 25 households in Village A originally interviewed in 1995, 16 were successfully interviewed in 2005. In our analysis, we do not distinguish households originally categorized as migrant from those originally categorized as non-migrant, because most of the latter have had some degree of participation in labor migration by 2005. A limitation of our study is that it does not include households where no members stay in the village or return during the 2005 Spring Festival. Since only 5% of the village’s households have moved out, we are confident that our analysis can still reveal the most common household arrangements and strategies in the village. Focusing on the economic and social relations between husbands and wives and between parents and children, we arrived at three models of division of labor (Tables 1 to 3). “Inside–outside” refers to households where at any one time only the husband or wife is engaged in migrant work but they have never done migrant work simultaneously. “Dual migrants” refers to households where in 2005 both the husband and wife are engaged in migrant work. “Second generation” refers to households where one or more children of earlier migrants or household heads are themselves migrants in 2005. The three models are not mutually exclusive, and we classify the households based on their most dominant or unique household arrangements. For the household composition outlined in Tables 1 to 3, we consider the husband and wife as the core of a household, and include also their unmarried children, married children if living together, and parents who live together or spend considerable time in the household. Siblings and married children, who do not live in the house, are not included in the tables. 4.1. The inside–outside model 4.1.1. Type 1: Traditional While in 1995 the most common form of division of labor was one where the husband does migrant work and the wife stays behind to farm and

The Household as Security: Strategies of Rural-Urban Migrants in China

219

Table 1. The Inside–Outside Model. Household Type #1

#2

#3

1995 Migrant Age

Stayer

1. Traditional Husband 28

Age

Husband 38 Wife

37

Son

5

Son

15

Daughter

3

Daughter 13

Father

≈50s

Wife

27

Wife

37

Son

2

Son

12

Father

≈60s

Husband 39

Father

≈50s

Father

≈60s

Mother

≈50s

Mother

≈60s

1. Traditional Husband 30

Husband 40 Wife

28

Wife

38

Son

7

Son

17

4

Daughter 14

Father

≈50s

Father

≈60s

Mother

≈50s

Mother

≈60s

Husband Wife

Stayer

27

1. Traditional Husband 29

2. Reverse

2005 MigrantAge

Wife

Daughter

#4

Age

43

32

Husband 53 Wife

Daughter

11

Daughter

4

42

Daughter 14

raise children (Fan, 2004), in 2005 this traditional inside–outside model is mainly represented by three of the 16 households (Table 1).3 In Household #1, Wang Xinmin is a 38 year-old construction worker and has had more than 20 years of migrant work experience but his wife has never done migrant work. They have a 15 year-old son in junior secondary school and a 13 year-old daughter in elementary school. 3 In several households categorized under the second generation model (#12, #13 and #14) (Table 3), the wife stayed behind when the husband did migrant work, but by 2005 the children in these households are grown and do not need care anymore.

220

C. C. Fan and W. W. Wang

While the husband’s migrant work is the primary source of income for the entire household, farming and raising children remain the primary responsibility of the wife. Wang Xinmin’s mother passed away in the early 1990s, and it appears his father is not an active helper for him and his wife. Wang Xinmin returns home at least once a year during the Spring Festival. His family was the fi rst in Village A, in 1997, to install a telephone set. Wang Xinmin remarks that his calling home at least once a week helps him maintain close contact with his wife and children. A major change during the 10-year period is the way Wang Xinmin thinks about migrant work. When interviewed in 1995, his plan was to return after several years: Going out to dagong is not a long-term solution. After several years, I’ll return to farm. I would like to fi nd non-farm work in the countryside, but I am not sure what exactly I will do. I have no desire to move the whole family out from the village [to the city].

His comment on non-farm work is consistent with the common view in the village that agriculture is an inadequate source of income.4 Despite Wang Xinmin’s initial plan to return, he has, in fact, continued to do migrant work year after year. His plan 10 years later, in 2005, is: “I’ll continue migrant work until 50 years old and then I’ll return. If I can’t fi nd non-farm work here then I’ll just farm. Once the children go out to dagong I won’t have to worry anymore.” If this new plan materializes, by the time he is 50 years old—in the year 2017—he will have done migrant work for 32 years! He anticipates that his children will also rely on migrant work as their main source of income. Despite the family’s heavy reliance on migrant work, it chooses a long-term split-household arrangement rather than moving to the city altogether. Wang Xinmin explains: My wife has to take care of the children at home and cannot join me in migrant work. I cannot take the children with me. School is too expensive in Zhangjiagang (Jiangsu); the fee is twice what we pay at home. Expenses for 4 By 2005, about two-thirds of the households in Village A are engaging in some form of non-farm activities.

The Household as Security: Strategies of Rural-Urban Migrants in China

221

the children at home are about 2,000 RMB a year but would be 5,000 RMB over there. … I live at the construction site. If my wife and children go there, we will have to rent a place … thus, they stay behind mainly because of fi nancial consideration. … Another reason why we don’t settle down in the city is the unpredictability of migrant work. There are too many buildings in Zhangjiagang. Some of them are left vacant. … When there is no more new construction work, everybody will have to return.

Thus, although the city has been a long-term source of household income, it does not offer the security that the countryside does, namely, affordability and a secure, albeit poor, livelihood. In addition, like most other village respondents, Wang Xinmin identifies himself as nongmin (peasant), even though he has not actively engaged in agriculture for more than 20 years: My benfen (role) is nongmin. … Chengliren (city people) are different from us. What they eat and wear are different. You can tell right away. Dagong won’t help you become a city person. City people are those who can buy an apartment, start a business, or open a shop. Dagong won’t help you achieve all that … But they [city people] are they and we [rural people] are we. I don’t compare myself to them.

Among the 16 households, the most common self-description of migrant workers is nongmin or nongcunren (village people), sometimes qualified by dagong, i.e., dagong di nongmin (peasants who do migrant work). These terms are contrasted with chengliren or chengshiren, both referring to city or urban people. Wang Xinmin’s remarks suggest that the peasant identity and the notion of two distinct categories of urban and rural people are related to security. As a migrant worker, he does not live like and cannot afford to live like city people. The countryside is where his membership is, where his economic and social security lies, and also where he defi nes his identity and comparison group. In this light, despite long-term urban work, migrant workers’ temporary, outsider identity with respect to the city remains intact. Likewise, Wei Daming in Household #2 does not plan to move out from the village, despite having engaged in migrant work for more than

222

C. C. Fan and W. W. Wang

20 years. Like Wang Xinmin, Wei Daming plans to eventually return to the countryside: I am still a nongmin. My family and my friends feel the same. City people have houses and jobs there. ... I won’t move to the city. Life is much better in the countryside. Rural people are less complicated. Life is easier here. The city is merely a place to make money. ... I do not want to live there for a long period of time. After I’ve made some more money I want to return.

Wei Daming’s wife has never done migrant work. She is the main person taking care of their 12 year-old son and she is a teacher at a local nursery school. Wei Daming explains why his wife stays in the village: “If my wife did migrant work she could probably earn quite a bit, but I do not want her to go out. Children in the countryside must study hard or else their future [livelihood] is bleak.” His comment shows that he is heavily invested in his son’s education, which is a main reason for the wife to stay behind. This is a rationale consistent with the common view that rural Chinese are inferior to urban people and that education is the only effective means for the former to possibly overcome such inferiority (see also “The Second Generation Model). Household #3, likewise, is governed by a gender division of labor whereby the husband focuses on migrant work and the wife on village and home responsibilities. Wang Gen has had more than 20 years of migrant work experience. His wife stays home to farm and take care of two children, aged 17 and 14 in 2005. Her comment succinctly summarizes the traditional gender norms: “Men should make greater [economic] contribution to the family than women. Just like our family, the husband goes out to make money [and the wife stays home].” 4.1.2. Type 2: Reverse A reverse gender division of labor, whereby the wife is the migrant worker and the husband stays in the countryside, is extremely rare. Household #4 illustrates one such short-lived arrangement. During the early 1990s, the husband Wang Guohui did migrant work for several years but failed. His wife Zhao Xiaolan decided to go out in 1994 and worked in a sewing

The Household as Security: Strategies of Rural-Urban Migrants in China

223

machine factory in Wujiang, Jiangsu while Wang Guohui stayed home to farm and take care of the 11 year-old and four year-old daughters. But this arrangement was problematic for the husband, as described by Zhao Xiaolan in 1995: Migrant work is the only means to pay back our debt [from building a house]. My husband had attempted to work in mining, construction, brick factory, etc. ... He is unskilled and can only do manual work—work that is dirty, tiring and dangerous. … He is impatient and has a bad temper, and he cannot tolerate the tough life of migrant work. ... The past several years, the money he made from dagong wasn’t even enough to pay for his food, cigarettes and drinking. Even he himself admits that he is meiyong (useless). For several years he did not bring back one cent. ... Fellow villagers all tease my husband. He feels embarrassed and doesn’t want to go out anymore. … Now that he has returned, he can work on the farm. I suggested that he take care of the home so that I could try my luck outside. He said ‘Don’t look down upon me. Migrant work is harder than you think. Try it out if you don’t believe me.’ So, I went out and he stayed home to farm and watch the kids. … In one year, I brought home 3,000 RMB. This money helped us to pay back all our debts, buy fertilizer and pesticide, pay the children’s school fees, and buy a TV set for them. ... After the Spring Festival, I still want to go out ... but my husband doesn’t want me to go ... he wants me to help him raise some pigs ... we have been fighting about this matter.

This is a vivid example of how the reverse division of labor is seen as a deviation from the traditional gender division of labor arrangement and is hotly contested. Men who stay in the village while their wives do migrant work risk being perceived as “useless” and tend to put pressure on the wife to return (see also Lou et al., 2004). Even though Zhao Xiaolan was proud of her economic achievements, her comment on the husband’s failure in migrant work shows that she, too, was heavily invested in the traditional gender norms, even as she might simultaneously contest them and feel constrained by them. Not surprisingly, the reverse inside–outside arrangement did not last. Zhao Xiaolan did migrant work for only two years, returned to the village in 1996, and has stayed there since then. The decision to return

224

C. C. Fan and W. W. Wang

appeared to have alleviated the tension between the husband and wife, which suggests that protecting the institution of marriage by assuming the expected gender roles within marriage, is prioritized over the economic benefits from migrant work. Personal considerations like the above, however, are often not directly commented on by respondents. Rather, Zhao Xiaolan describes, in 2005, her return as a result of a combination of reasons: The main reason for my return was I was unable to go out [due to family responsibilities]. Both my daughters were school-age, and my younger daughter in particular needed to be taken care of [because of her young age]. … In addition, a brick factory was built nearby… we began part-time work there. This way, we live at home and there are no additional living expenses [compared to dagong]. Beginning in 2001, we also leased land from relatives to farm.

Thus, the decision for both the husband and wife to stay in the village was made in order to balance economic and social considerations. Economically, the village has low cost-of-living, part-time non-farm work, and farmland including land leased from others. Socially, staying in the village allows them to keep the family intact, take care of the children, and safeguard the husband–wife relations. Like Household #2 described earlier, children’s education is given a high priority, as suggested by Zhao Xiaolan’s remark: “In terms of raising children, migrant households— especially those where both the husband and wife are outside—are usually unable to supervise the children in their education.” 4.2. The dual migrants model The dual migrants model describes households where in 2005 both the husband and wife are engaged in migrant work. While this arrangement was not as common in 1995, ten years later it has become the most popular arrangement, accounting for seven of the 16 households in the sample (Table 2). In most cases, the wife stays behind when the children are young and later joins the husband in migrant work when the children are older. Type 1 refers to households where migrants’ parents replace the wives to take care of the children, thus changing the household arrangement

The Household as Security: Strategies of Rural-Urban Migrants in China

225

from gender division of labor to intergenerational division of labor. Type 2 refers to households where migrants’ parents are not available to help. Household strategies are highly fluid, however, and most migrants in this group display a high degree of circularity and frequent changes in location and economic activity, reflecting a constant need to negotiate and renegotiate among household members and to balance economic and social considerations. 4.2.1. Type 1: Parents available Six households belong to this type. As a whole, the couples in this group are younger than those described under the traditional inside–outside model (Table 1). Below, we select three households (#5, #6 and #7) to illustrate the intergenerational arrangement. At the time of the 1995 interview, Wang Yonghua in Household #5 was 23 years old and had done migrant work for two years, had returned to open a grocery store and decided not to go out anymore. He and his wife had a one year-old son. He explained the decision to stay in the village: The heavy manual work [during dagong] has adversely affected my health. And, migrant work has already given me the exposure needed to start a business in the village. … The income from my current business is a little higher than that from migrant work. Plus, I can help take care of the family. … I won’t go out anymore.

Yet, his plan changed when the grocery business became unprofitable. In 1999, he began migrant work again, this time joined by his wife. They left their then five year-old son with the husband’s parents, both in their 50s. In 2002, Wang Yonghua’s wife returned, gave birth to a daughter and stayed home for more than a year. In 2004, she joined her husband again. Wang Yonghua’s parents, both in their 60s now, are the primary persons farming and taking care of the 11 year-old and two year-old grandchildren. Wang Yonghua and his wife are not returning for the 2005 Spring Festival because of the cost of travel. Wang Cheng in Household #6 was 23 years old and had already had six years of migrant work experience, mostly in construction, when he

226

C. C. Fan and W. W. Wang

Table 2. The Dual Migrants Model. Household Type #5

1995 Migrant Age

1. Parents available

Stayer

Age

2005 Migrant Age

Husband 23

Husband 33

Wife

23

Wife

Son

1

Stayer

Age

33 Son

11

Daughter 2

#6

1. Parents available

Father

52

Father

62

Mother

50

Mother

60

Son

9

Husband 23

Husband 33 Wife

21

Wife

31 Daughter

Father

≈40s

Mother ≈40s #7

1. Parents available

Husband ≈30s

4

Father

≈50s

Mother

≈50s

Husband ≈40s Wife

≈30s

Wife

≈40s

Son

8

Son

18

Daughter 4

Daughter 14

Father

50s

Father

60s

Mother

50s

Mother

60s

Brother ≈30s

Brother ≈40s Brother’s ≈40s wife Brother’s ≈13 child #1 Brother’s ≈12 child #2

#8

1. Parents available

Husband 24

Husband 34 Wife

22

Son

1

Father

≈40s

Mother ≈40s

Wife

32 Son

11

Father

≈50s

Mother

≈50s

The Household as Security: Strategies of Rural-Urban Migrants in China

227

Table 2. Continued. Household Type #9

1. Parents available

1995 Migrant Age

Stayer

Age

Husband 28 Wife

2005 Migrant Age

≈20s

Wife

≈30s

Daughter 4

Daughter 14

Son

Son

2 ≈50s

Mother ≈50s 1. Parents available

Husband 33 Wife

12

Father

≈60s

Mother

≈60s

Husband 43

32

Wife Son

#11

Age

Husband 38

Father

#10

Stayer

42

9

Son

Son

6

Son

16

Father

58

Father

68

Mother

57

Mother

67

2. Parents Husband ≈36 unavailable

19

Husband ≈46 Wife

≈30s

Wife

≈40s

Daughter ≈10

Daughter ≈20 (boarding school)

Daughter ≈9

Daughter ≈19 (boarding school)

was fi rst interviewed in 1995. His wife stayed in the village. In 1996, his wife gave birth to a son, and he returned to stay for a year. Both husband and wife then went to Guangzhou to work and returned the following year. Wang Cheng then tried different non-farm activities near home, including work at the local brick factory and doing transportation work in a nearby town, but none of these attempts were successful. In 2001, after having a baby girl, Wang Chen and his wife went to Guangzhou again to do construction work. In 2005, both Wang Cheng, now 33, and his wife, now 31, continue working in Guangzhou. Their nine year-old son, four year-old daughter

228

C. C. Fan and W. W. Wang

and their contract land are taken care of by Wang Cheng’s parents. Wang Cheng and his wife hope to renovate their house, and in order to maximize the savings from migrant work have not returned home for three years. But Wang Cheng’s parents are increasingly finding this arrangement problematic, because of their deteriorating health and the difficulty in supervising the grandson’s schoolwork. They asked the couple to return. After some negotiation, a compromise was reached: Wang Cheng’s wife will return in the summer of 2005 to take care of the children while he will continue to do migrant work. In other words, intergenerational division of labor will soon be replaced by the traditional inside–outside arrangement. Wang Cheng and his wife’s commitment to renovating the house indicates that they fully intend to return to the countryside. This is also the sentiment expressed by Wang Cheng’s father: He is a nongmin after all. Rural people who live and work in the city can be considered half agricultural and half nonagricultural, but fundamentally they are nongcunren. Eventually they will have to return to the village. Wang Cheng doesn’t have business skills; he can only rely on his physical strength to make a living. When he becomes older and lacks the strength [required for migrant work], he has to return. … There is no question that his future is in the village.

The above two cases show that migrants’ location and activity change frequently. They can return when a new family need arises, such as to care for an infant or to supervise school-age children, and pursue migrant work again later. They can return to do non-farm work or invest in nonfarm activities; if these efforts fail, they can resort to migrant work again. While the city is a place to exchange labor for wage and is not a permanent place to live, migrant work provides a reliable, albeit temporary, source of income that is superior to non-farm activities in the countryside. Yet, it is precisely the countryside’s economic and social security—respectively the house and farmland on one hand and the parents and the spouse on the other—that allows migrants to be flexible and to have choices. At the same time, protection of such security demands that migrants and their household members be prepared to negotiate, compromise, and make changes. A father who helps care for his 11 year-old grandchild,

The Household as Security: Strategies of Rural-Urban Migrants in China

229

for example, comments on how his availability makes it possible not only for dual migrant income from his son and daughter-in-law but also for the two to stay together (Household #8): “It’s better that the husband and wife stay in the same place.” Household #7 differs from #5 and #6 in that two married brothers and their wives and children are living under one roof together with the brothers’ parents. The brothers and their wives are all migrant workers. Of their four children, one is doing migrant work and three are staying in the village with their grandparents. The traditional practice of fenjia, when adult sons establish their independent households—usually occurring after they get married—is postponed in order to facilitate the intergenerational division of labor arrangement. Of the 10 people in the extended family, five are migrant workers and five are staying in the village. The two brothers’ father comments: “We tried fenjia once but changed our minds the next day. The adults are all doing migrant work. My wife and I are taking care of the grandchildren. How can we fenjia?” Because travel is costly, none of the migrant workers in this household return regularly for the Spring Festival. Instead, a telephone set was installed recently and the migrants frequently call home. In the above and a number of other cases in the sample, migrants no longer return yearly for the Spring Festival, suggesting that the economic benefits of migrant work are increasingly being prioritized over social and cultural traditions. Nevertheless, the more widespread use of the telephone in the village and of the mobile phone by migrant workers since the late 1990s may have, to a significant degree, substituted for physical travel as the preferred means of maintaining ties with family members that stay behind. 4.2.2. Type 2: Parents unavailable It is uncommon that the husband and wife simultaneously do migrant work if none of their parents are available to help care for the children. Household #11 illustrates such a case in which the children are older and are in boarding school. Li Wangping, who is in his late 40s in 2005, has done migrant work since the early 1980s. Parents on both sides had passed away years ago.

230

C. C. Fan and W. W. Wang

Until 2004, Li Wangping’s wife was staying home to farm and raise the two daughters and had not had any migrant work experience. Every year, Li Wangping returned home before the Spring Festival and helped with planting before leaving again. In 2004, when their daughters were 20 and 19 years old, Li Wangping stayed home to farm and his wife did migrant work for the fi rst time. She worked in a garment factory in Zhejiang. This experiment turned out to be successful, and thus the couple’s plan for 2005 is that both will continue migrant work but in different places, the husband in Jiangsu and the wife in Zhejiang. Their daughters, in different senior secondary schools, will both be boarding at school. Li Wangping and his wife will lease their land to other villagers and leave the house locked and vacant. The main objective of this new plan is to support the daughters’ future education. The couple estimates that they would need a minimum of 200,000 RMB, which is now their target for migrant work, in order to send both daughters to the university: We are nongmin our whole lives. Our hukou is here, and our land is here. But if our daughters enter good universities and obtain hukou in the city then they may be considered urban people. …Our fi rst priority is our daughters’ education.

Li Wangping’s comment reinforces an observation made earlier that education—more specifically, university education—is widely perceived as an effective, perhaps the only, way for rural people to “become” urban. This point will be further discussed in relation to second generation migrants. 4.3. The second generation model Households with second generation migrants are primarily those where the children are in the late teens or early 20s. The model has three variations: fi rst and second generations simultaneously doing migrant work; fi rst generation migrants have returned and are replaced by second generation migrants; and non-dagong second generation migrants.

The Household as Security: Strategies of Rural-Urban Migrants in China

231

4.3.1. Type 1: Simultaneous Migrant work as a means of livelihood is being passed from one generation to the next. Veteran migrants who are physically capable may still be doing migrant work even after their children are old enough to begin migrant work and contribute fi nancially to the family. Both Household #12 and Household #7, described earlier, belong to this type. Jiang Zhengyi of Household #12, aged 53 in 2005, has done migrant work since 1991, while his wife stayed home to farm and raise their two sons. Every year, Jiang Zhengyi returns home in July for harvest and leaves in March or April after planting. He does migrant work for only four or five months a year so that he can help with farming, including farming the land leased from other villagers. In 2005, Jiang Zhengyi’s oldest son is 24 years old, has graduated from university and is employed as a technician in Chongqing. He is skilled and has a formal job and can therefore be considered a non-dagong migrant. The younger son is 22 years old and has begun migrant work, fi rst in factories and then as a painter, after fi nishing senior secondary school. Jiang Zhengyi’s fi nancial burden was very heavy when the oldest son was in school, because of which he was in debt. Now that both sons are fi nancially independent, he plans to return to the countryside in the near future: I will continue migrant work for two or three more years. When my sons are older I will stop dagong. … As a migrant worker you are, after all, always being controlled. Home [the village] is still a better place to live.

His comment illustrates the effect of the life cycle and the deep-rooted tradition that grown-up children are part of the social support system and are the main source of old-age security, especially in the countryside: I hope that one son [the oldest son] will stay in the city and another son [the younger son] will eventually return home. We are getting old, and it is our hope that one of our sons will stay in the village and take care of us. The main reason for many years of hard work raising children is for old age security.

232

C. C. Fan and W. W. Wang

Table 3. The Second Generation Model. Household Type #12

#13

1. Simultaneous

1995 Migrant Age Stayer

Age

Husband 43

2005 Migrant Age Husband

37

Son

14

Son (nondagong)

24

Son

12

Son

22

2. Replace- Husband 43 ment 37

Daughter 15 Son

≈12

Age

53

Wife

Wife

Stayer

Son (university)

≈22

Son-inlaw

≈20s

Wife

47

Husband

53

Wife

47

Daughter

25

Grandchild 1 #14

2. Replace- Husband 37 ment (injured) Wife

31

Son

11

Son

21

Son

9

Son

19

Husband

47

Wife

41

Daughter- ≈20s in-law Grandchild #15

3. Nondagong

Husband 39

infant

Husband

49

Wife

48

Daughter 9

Daughter

19

Father

Father

73

Wife

38

Daughter 12

63

Daughter (nondagong)

22

The Household as Security: Strategies of Rural-Urban Migrants in China

233

Table 3. Continued. Household Type #16

3. Nondagong

1995 Migrant Age Stayer

Age

2005 Migrant Age

Husband 36 Wife

28

Daughter 12

Stayer Husband

Wife

38

Daughter (nondagong)

22

Age 46

His expectation for the younger son to return is further explained in terms of rural versus urban identity: I am still a nongmin, nongcunren, not chengshiren. Since my oldest son has fi nished university [and has skilled work in the city], it is difficult to say whether he is a rural or urban person. My younger son is, no doubt, a nongcunren. Migrant work is temporary; one year at a time. When migrant work is not available anymore you’ll have to return to the countryside.

Like the comments by other villagers cited earlier, Jiang Zhengyi connects university education and a skilled job to urban identity. In this view, since the younger son is a dagong migrant worker, his identity remains rural and he should be the one who returns to take care of the elderly. Jiang Zhengyi’s younger son, however, has a different perspective: At home [in the village] I am a nongmin. Outside [in the city] I am a gongren.5 Depending on the place and time, my identity is different. Since I am living and working mainly in the city, I am primarily a gongren. Hukou aside, I am an urban person, a gongren. … In the future, I wish to tiaochu nongcun (leave the village), but the possibility of achieving that is slim. Painters may lose their jobs anytime. City people are not afraid of losing their jobs, because they have a permanent place to live. … If my income increased to 3,000 RMB a month, I would consider buying an apartment in the city. If I won the lottery, I would buy an apartment in Chengdu. … But these are all 5 The term gongren is primarily used to refer to urban people—those who have urban hukou —that have working-class type of jobs primarily in industrial or service sectors.

234

C. C. Fan and W. W. Wang

fantasies. At the moment, I can only work as a painter, earn as much as I can and hope to somehow live in the city permanently. People in my generation basically all have this hope.

This narrative reinforces the observation that the security of a reliable and comfortable livelihood and a permanent place to stay is perceived as the key to deciding where one belongs. The younger son’s aspiration and desire to identify himself as an urban person, at the same time, hints at a new generation who may be questioning their rural identity and striving more aggressively than their parents to leave the countryside. 4.3.2. Type 2: Replacement Replacement refers to households where fi rst generation migrant workers have returned and their children are now engaged in migrant work. Three years after Chen Guowei of Household #14 began migrant work, in 1990, he was injured and became paralyzed. His wife’s farming activity then became the only source of livelihood. She, at the same time, had to support the two sons’ education, pay off a debt, and take care of the disabled husband. According to the couple, the family did not have enough to eat, until the two sons were old enough to do migrant work, the oldest son beginning at the age of 14 and the younger son at the age of 17. In 2005, Chen Guowei’s two sons are, respectively, 21 and 19 years old. The second son is married and his wife is also doing migrant work. Chen Guowei’s wife is now taking care of an eight month-old grandchild. The two sons and the daughter-in-law are not planning to return for the Spring Festival. The family does not have a telephone but they can use one that belongs to a relative in the same village. Chen Guowei and his wife’s dream is that both sons will make enough money to build their own houses in the village. Just like Households #5 to #10 in Table 2, in this household intergenerational division of labor is mutually-beneficial: migrants send back remittances that benefit the entire household, and grandparents that stay behind take care of the grandchildren so that the migrant workers can earn as much as possible to build up their economic security.

The Household as Security: Strategies of Rural-Urban Migrants in China

235

4.3.3. Type 3: Non-dagong While in 1995 almost all young people who left Village A to work took up dagong work, by 2005 a minority of second generation migrants have managed to fi nd formal, non-dagong, jobs in urban areas. The oldest son in Household #12, described earlier, is one such example. Like him, both the non-dagong migrants in Households #15 and #16 have received university or post-secondary education, reinforcing once again the notion that higher education is the key for young, rural people to secure skilled, urban jobs, as opposed to the physically demanding and low-paid dagong jobs taken up by migrants with lower educational attainment. Wang Jiankun of Household #15 and his wife have never had any migrant work experience. He has been a village cadre since 1992, and the family’s main source of income is farming and animal husbandry. During the 1995 interview, he explained why he did not do migrant work: Our income is comparable to those who do migrant work. In addition, staying home is less hard work, and I can take care of the family, which is more important than anything else. ... No matter how good it is outside, home is still the best. Nothing is better than the whole family living together peacefully. What’s the use of making so much money? ... Only the children are the most precious.

And his comment during the 2005 interview vividly summarizes migrant work’s negative impacts on the family and the trade-off between economic return and the social support system: The biggest difference between staying home and migrant work is how much one makes. The annual income of two migrant workers can be more than 20,000 RMB; that kind of income is impossible at home. ... But dagong has big impacts on the children. Parents’ not staying home affects children’s education. It also affects the elderly. If sons and daughters-in-law are not around, no one takes care of the elderly; as a result, 70 and 80 year-olds are still carrying 30 jin of chemical fertilizer!

Wang Jiankun has indeed committed fully to his two daughters’ education. In 2005, his oldest daughter has graduated from Chongqing University,

236

C. C. Fan and W. W. Wang

and his younger daughter is in senior secondary school. Because of the school fee, Wang Jiankun has been in debt. The oldest daughter is now a store manager in Chongqing. Ideally, she would like to work for a big enterprise or to fi nd a government job. Her friends are mostly from the university, and her plan is to stay in the city: The key to becoming a chengliren is to own an apartment there. I wish to have an apartment is Qingdao. To own an apartment with an ocean view is a dream that would probably take 10 years to realize.

Her father’s dream is much more modest: a color television, a telephone and a refrigerator. He installed a telephone set five years ago, mainly to contact his oldest daughter, and he has recently bought a color television. He still does not have a refrigerator. 5. Summary and Conclusion Migrant work, or dagong, has become a way of life in the Chinese countryside. Many peasants have been engaged in migrant work for more than two decades, and more and more of their children are following their footsteps. Yet, the city is still seen as a temporary place to stay; migrants’ home village is still considered their permanent base and a place to return to; and migrants’ identity as peasants (nongmin) remains strong. In this chapter, we have used the concept of security to explain peasant migrants’ decisions and strategies. We have argued that the countryside (peasants’ household and home village), rather than the city (migrant work), is the basis of peasants’ economic and social security and that their migration strategies utilize as well as support such security. This argument places the focus on where one feels economically and socially secure rather than where one actually lives. Our analysis has drawn on interviews conducted in 1995 and 2005 in a Sichuan village. Although the sample is from only one village, our observations appear consistent with surveys done in other parts of the country (e.g., Zhu, 2003, 2007) that have found peasant migrants’ desire to live permanently in the city is not as strong as once expected. Villagers’

The Household as Security: Strategies of Rural-Urban Migrants in China

237

stories and narratives show that economically, the countryside provides security because of access to farmland, housing, and low cost of living. Socially, the peasant household and the extended family constitute a reliable and effective support system. To peasant migrants, the city is primarily a place to work but does not offer the type of economic and social security that can give them a sense of permanence, protection and belonging. The concept of security is also useful for understanding peasant migrants’ strategies, in particular, division of labor and circularity. Gender and intergenerational divisions of labor enable migrants to straddle the city and the countryside, obtain the best of both worlds, and preserve the valued economic and social infrastructure in the countryside. Circularity refers not only to seasonal migration but also to the fluidity of migrants’ movements between the home village and various destinations of migrant work. Peasant migrants’ bases in the countryside permit and require them to be highly flexible in their strategies, which are almost always collectively decided, often negotiated, sometimes contested, and constantly changing. The approach we have taken seeks to foreground peasants’ agency, and our analysis supports the notion that peasant migrants are actively strategizing rather than passively succumbing to inferiority. Their persistent reliance on and steadfast protection of a rural livelihood, enables them to have choices (between the city and the countryside) and to be flexible. There is also evidence that the rural youth’s educational attainment has improved, and some members of this generation, as a result, have managed to secure formal, non-dagong, jobs in the city. Our analysis of household strategies and security, however, does not connote a rosy picture for China’s peasant migrants. Far from it, hukou continues to be a formidable gatekeeper, millions of migrants remain in poverty, and they continue to be exploited and marginalized in the city. And, it is questionable if the countryside’s economic security is sustainable: if agriculture and rural non-farm work cannot guarantee a satisfactory livelihood, as the stories we have examined suggest, then will migrants really return for good? In addition, although division of labor facilitates migrant work, splitting a family into two places over an extended period of time is taxing on the family and especially on

238

C. C. Fan and W. W. Wang

those who stay in the village. Left-behind children, for example, are fast becoming a social problem in the countryside (Xiang, 2007). Finally, the new generation of migrants has had little farming experience and may be more determined than their parents to put down roots in the city (Lee, 2007: 206; Qiu et al., 2004; Wang, 2003), thus potentially undermining the rural social support system. At the present, however, it is circularity, not moving for the purpose of staying, that defi nes ruralurban labor migration in China. This challenges conventional approaches in migration studies that assume a high degree of permanency and shifts the focus to frequent movements, flexibility in timing and location, and the collectivity and negotiation that underlie mobility decisions. Acknowledgements This research was supported by a National Science Foundation award (BCS-0455107) and funding from the Academic Senate of the University of California, Los Angeles. The data used in this chapter is drawn from a joint project with Professor Bai Nansheng. We are grateful to him for his central role in the project. We would also like to thank the organizers and participants of the “Migration and Social Protection in China” Conference (September 2007) for their input which helped improve the chapter. References Adams Jr., Richard H & Page J (2003). International migration, remittances and poverty in developing countries. Policy Research Working Paper, World Bank, No. 3179. Boehm, TP, Henry, WH & Schlottmann, AM (1991). Intra-urban mobility, migration, and tenure choice. The Review of Economics and Statistics, 73(1), 59–68. Cai, F (2000). Zhongguo Liudong Renkou Wenti [China’s Floating Population]. Zhengzhou, China: Henan renmin chubanshe [in Chinese]. Cai, F (ed.), (2001) Zhongguo Renkou Liudong Fangshi Yu Tujing (1990–1999 Nian) [The Means and Paths of Population Migration in China (1990–1999)]. Beijing: Shehui kexue wenxian chubanshe [Social Science Documentation Publishing House]. Cao, X (1995). Zhongguo nongcun laodongli liudong yu renkou qianyi yanjiu zongshu [Summary of research on rural labor f lows and population migration in China], Nongcun Jingji Yanjiu Cankao [Rural Agricultural Research], 2(1), 23–33. Cerrutti, M & Massey, DS (2001). On the auspices of female migration from Mexico to the United States. Demography, 38(2), 187–200.

The Household as Security: Strategies of Rural-Urban Migrants in China

239

Chan, KW (1996). Post-Mao China: a two-class urban society in the making. International Journal of Urban and Regional Research, 20(1), 134–150. Chant, S & Radcliffe, S (1992). Migration and development: The importance of gender. In Gender and Migration in Developing Countries. S Chant (ed.), pp. 1–29. New York: Belhaven Press. Chinese Academy of Social Sciences (CASS) & National Bureau of Statistics (2003). 2002–2003 Nian Zhongguo Nongcui Jing ji Xingshi Fenxi Yu Yuce [Analysis and Forecast on China’s Rural Economy 2002–2003]. Beijing: Shehui kexue wenxian chubanshe [Social Sciences Documentation Publishing House]. Chinese Academy of Social Sciences (CASS) & National Bureau of Statistics (2004). 2003–2004 Zhongguo Nongcui Jingji Xingshi Fenxi Yu Yuce [Analysis and Forecast on China’s Rural Economy 2003–2004]. Beijing: Shehui kexue wenxian chubanshe [Social Sciences Documentation Publishing House]. Clark, WAV (2007). Human mobility in a globalizing world: Urban development trends and policy implications. In International Handbook of Urban Policy, Volume I: Contentious Global Issues, HS Geyer (ed.), pp.76–106. Edward Elgar. Clark, WAV & Huang, Y (2006). Balancing move and work: Women’s labour market exits and entries after family migration. Population, Space and Place, 12(1), 31–44. Cook, S & Maurer-Fazio, M (1999). Introduction to the special issue on the Workers’ State Meets the Market: Labour in China’s Transition. Journal of Development Studies, 35(3), 1–15. Croll, EJ & Huang, P (1997). Migration for and against agriculture in eight Chinese villages. The China Quarterly, 149, 128–46. Davin, D (1998). Gender and migration in China. In Village Inc.: Chinese Rural Society in the 1990s. Surrey, F Christiansen & J Zhang (eds.), pp. 230–240. UK: Curzon Press. De Jong, GF (2000). Expectations, gender, and norms in migration decision-making. Population Studies, 54(3), 307–319. Deshingkar, P (2005). The role of circular migration in economic growth. Entwicklung & Landlicher Raum www.rural-development.de/fileadmin/rural-development/ volltexte/2005-05/ELR_dt_10-12.pdf [6 November 2006]. Du, Y (2000). Rural labor migration in contemporary China: an analysis of its features and the macro context. In Rural Labor Flows in China, LA West & Y Zhao (eds.), pp. 67–100. Berkeley, CA: Institute of East Asian Studies. Du, Y & Bai, N (eds.), (1997). Zouchu Xiangcun [Leaving the Village]. Beijing: Jingji kexue chubanshe [Economic Science Press]. Eder, JF (2006). Gender Relations and Household Economic Planning in the Rural Philippines. Journal of Southeast Asian Studies, 37(3), 397–413. Fan, CC (2002). The elite, the natives, and the outsiders: migration and labor market segmentation in urban China. Annals of the Association of American Geographers, 92(1), 103–124. Fan, CC (2004). Out of the city and back to the village: the experiences and contributions

240

C. C. Fan and W. W. Wang

of rural women migrating from Sichuan and Anhui. In On the Move: Women and Rural-to-Urban Migration in Contemporary China, AM Gaetao & T Jacka (eds.), pp. 177–206. New York: Columbia University Press. Fan, CC (2008). China on the Move: Migration, the State, and the Household. London and New York: Routledge. Fincher, R (2007). Space, gender and institutions in processes creating difference. Gender, Place and Culture, 14(1), 5–27. Goldscheider, C (1987), Migration and social structure: analytic issues and comparative perspectives in developing nations. Sociological Forum, 2(4), 674–696. Goldstein, A., Guo, Z & Goldstein, S (1997). The relation of migration to changing household headship patterns in China, 1982–1987. Population Studies, 51(1), 75–84. Goodkind, D & West, LA (2002). China’s floating population: defi nitions, data and recent fi ndings. Urban Studies, 39(12), 2237–2250. Hare, D (1999a). “Push” versus “pull” factors in migration outf lows and returns: determinants of migration status and spell duration among China’s rural population. Journal of Development Studies, 35(3), 45–72. Hare, D (1999b). Women’s economic status in rural China: household contributions to male-female disparities in the wage labor market. World Development, 27(6), 1011–1029. Hugo, G (2003a). Migration Policy Institute. Circular migration: keeping development rolling? Migration Policy Institute. Hugo, G (2003b) Urbanisation in Asia: an overview. Paper prepared for Conference on African Migration in Comparative Perspective. Hugo, G (2005). Migrants in society: diversity and cohesion. Geneva, Global Commission on International Migration. Hugo, G (2006). Temporary migration and the labour market in Australia. Australian Georgrapher, 37(2), 211–231. Itzigsohn, J (1995). Migrant remittances, labor markets, and household strategies: a comparative analysis of low-income household strategies in the Caribbean Basin. Social Forces, 74(2), 633–655. Jacka, T (1997). Women’s Work in Rural China : Change and Continuity in an Era of Reform. Cambridge: Cambridge University Press. Jacka, T (2006). Rural Women in Contemporary China: Gender, Migration, and Social Change. Armonk, NY: M.E. Sharpe. Jarvis, H (1999). The tangled webs we weave: household strategies to co-ordinate home and work. Work, Employment & Sociology, 13(2), 225–247. Jian, X & Zhang, J (2005). Cong “mingong chao” dao “mingong huang”: nongcun shengyu laodongli youxiaozhuanyi de zhidu fenxi [From “the wave of migrants” to “the shortage of migrants”: the institutional analysis of the effective transfer of rural surplus labor”]. Renkou Yanjiu [Population Research], 29(2), 49–55 [in Chinese]. Lawson, VA (1998). Hierarchical households and gendered migration in Latin America:

The Household as Security: Strategies of Rural-Urban Migrants in China

241

feminist extensions to migration research. Progress in Human Geography, 22(1), 39–53. Lee, CK (2007). Against the Law: Labor Protests in China’s Rustbelt and Sunbelt. Berkeley: University of California Press. Lian, X (2002). Tentative analyses on the inf luence of population f loating on the coordinative economic development between regions. Renkou Xuekan [Population Journal] (4:) 41-45 [in Chinese]. Lin, GCS & Ho, SPS (2005). The state, land system, and land development processes in contemporary China . Annals of the Association of American Geographers, 95(2), 411–436 . Lou, B., Zheng, Z., Connelly, R & Roberts, K (2004). The migration experiences of young women from poor counties in Sichuan and Anhui. In On the Move: Women in Rural-urban Migration in Contemporary China, AM Gaetano & T Jacka (eds.), pp. 207–242. Columbia University Press. Lucas, REB & Stark, O (1985). Motivations to remit: evidence from Botswana. The Journal of Political Economy, 93(5), 901–918. Ma, Laurence JC & Xiang, B (1998). Native place, migration and the emergence of peasant enclaves in Beijing. China Quarterly, 155, 546–581. Mann, S (2000). Work and household in Chinese culture: historial perspectives. In Re-Drawing Boundaries: Work, Household, and Gender in China, B Entwisle & G Henderson (eds.), pp. 15–32. Berkeley, CA: University of California Press. Murphy, R (2002). How Migrant Labor Is Changing Rural China. Cambridge: Cambridge University Press. Nagar, R., Lawson, V., McDowell, L & Hanson, S (2002). Locating globalization: feminist (re)readings of the subjects and spaces of globalization. Economic Geography, 78(3), 257–284. Nelson, JM (1976). Sojourners versus urbanites: causes and consequences of temporary versus permanent cityward migration in developing countries. Economic Development and Cultural Change, 24(4), 721–757. Odland, J & Ellis, M (1988). Household organization and the interregional variation of out-migration rates. Demography, 25(4), 567–579. Ortiz, V (1996). Migration and marriage among Puerto Rican women. International Migration Review, 30(2), 460–484. Qiu, Z., Xie, P & Zhou, F (2004). Renkou liudong dui jingji shehui fazhan di yingxiang [Impacts of migration on socioeconomic development]. Renkou Xuekan [Population Journal], 1(1), 47–52 [in Chinese]. Radcliffe, SA (1991). The role of gender in peasant migration: conceptual issues from the Peruvian Andes. Review of Radical Political Economics, 23(3 & 4), 129–147. Roberts, KD (2007). The changing profi le of Chinese labor migration. In Transition and Challenge: China’s Population at the Beginning of the 21st Century, Z Zhao & F Guo (eds.), pp.233–251. Oxford: Oxford University Press. Rowland, DT (1994). Family characteristics of the migrants. In Migration and

242

C. C. Fan and W. W. Wang

Urbanization in China, LH Day & X Ma (eds.), pp. 129–154. Armonk, New York: M.E. Sharpe. Saxenian, A (2005). From brain drain to brain circulation: transnational communities and regional upgrading in India and China. Studies in Comparative International Development, 40(2) 35–61. Silvey, R & Lawson, V (1999). Placing the migrant. Annals of the Association of American Geographers, 89(1), 121–132. Skinner, GW (1976). Mobility strategies in late imperial China: a regional systems analysis. In Regional Analysis, Vol I: Economic Systems, CA Smith (ed.), pp. 327–364. New York: Academic Press. Solinger, DJ (1995). The floating population in the cities: chances for assimilation?. In Urban Spaces in Contemporary China, D Davis., R Kraus., B Naughton & EJ Perry (eds.), pp. 113–139. Cambridge: Cambridge University Press. Stark, O & Lucas, REB (1988). Migration, remittances, and the family. Economic Development and Cultural Change, 36(3), 465–482. Stockman, N (1994). Gender inequality and social structure in urban China. Sociology, 28(3), 759–777. Tan, S (1996). Zhongguo nongcun laodongli liaodong di xingbei cha [Gender differences in the migration of rural labor force]. Paper presented at the International Conference on Rural Labor Migration, Beijing, China [in Chinese]. Wallace, C (2002). Household strategies: their conceptual relevance and analytical scope in social research. Sociology, 36(2), 275–292. Wang, WW & Fan, CC (2006). Success or failure: selectivity and reasons of return migration in Sichuan and Anhui, China. Environment and Planning, 38(5), 939– 958. Wang, W (2003). Renkou chengzhenhua beijingxia di huji zhidu bianqian: Shijiazhuang shi huji zhidu gaige anli fenxi [Changes in household registering system against the urbanization background: Shijiazhuang city as a case]. Renkou Yanjiu [Population Research], 27(6): 8-13 [in Chinese]. Willis, K & Yeoh, B (2000). Gender and transnational household strategies: Singaporean migration to China. Regional Studies, 34(3), 253–264. Woon, Y (1994). Family strategies of prosperous peasants in an emigrant community in South China: a three-year perspective (1988–1991). Canadian Journal of Development Studies, 15(1), 10–33. Xiang, B (2005). Transcending Boundaries: Zhejiangcun, The Story of a Migrant Village in Beijing. Leiden, The Netherlands: Brill (translation by Jim Weldon). Xiang, B (2007). How far are the left-behind left behind? A preliminary study in rural China. Population, Place and Space, 13(3), 179–191. Xinhua News Agency (3 March 2005). South China feels acute labor shortage. http:// www.china.org.cn/english/2005/Mar/121578.htm [7 May 2007]. Yusuf, S & Nabeshima, K (2006). China’s Development Priorities. Washington, DC: World Bank.

The Household as Security: Strategies of Rural-Urban Migrants in China

243

Zhao, S (1998). 1997 nian di nongmin liudong: xin jieduan xin wenti [Peasant mobility in 1997: new stages and new problems]. Manuscript [in Chinese]. Zhao, Y (1999). Labor migration and earnings differences: the case of rural China. Economic Development and Cultural Change, 47(4), 767–782. Zhou, D (1992) Zhujiang sanjiaozhou wailai laodong renkou fenbu tezheng ji yidong quxi fenxi [The nonnative labourers of the Pearl River Delta: an analysis of its distribution characteristics and migration tendencies. In Zhujiang sanjiaozhou jingji fazhan huigu yu qianzhan [Economic Development of the Pearl River Delta: A Retrospect and Prospects], Zhongshan University Research Centre of Pearl River Delta Economic Development and Management (ed.), pp. 271–80. Guangzhou: Zhongshan University [in Chinese]. Zhou, H (2004). Zhongguo renkou qianyi de jia ting hua qushi ji yingxiang yinsu fenxi [The analysis on the trend and factors of family migration]. Renkou Yanjiu [Population Research], 28(6), 60–67 [in Chinese]. Zhu, Y (2003). The floating population’s household strategies and the role of migration in China’s regional development and integration. International Journal of Population Geography, 9(6), 485–502. Zhu, Y (2007). China’s floating population and their settlement intention in the cities: beyond the Hukou reform. Habitat International, 31(1), 65–76.

This page intentionally left blank

SECTION 5 CONCLUSIONS AND FUTURE DIRECTIONS

245

This page intentionally left blank

CHAPTER 12 TOWARDS A HARMONIOUS SOCIETY: CHALLENGES FOR CHINA IN THE PURSUIT OF SOCIAL-PROTECTION-AS-SOCIAL-JUSTICE

Ingrid Nielsen Monash University Russell Smyth Monash University

In the early 1800s, Napoleon predicted that when the sleeping dragon awoke, the world would tremble. No-one would deny that China has now well and truly roused from her slumber and that the world has taken great heed of her rapid rise to economic prominence. Since the stepping up of Deng Xioaping’s reform agenda from the early 1990s, China’s metamorphosis from sleeping dragon to economic superpower has been swift and absolute. The post-Mao neo-Leninist colossus has combined strict state control and marketization with a flair that has seen economic growth steadily trending upwards since the mid 1990s to position China among the fastest growing economies in the world (Yao, 2006). GDP in the year 2006 reached US$2.7 trillion, with an annual percentage growth rate of 10.7% year-on-year (NBS, 2007). In January 2006, GDP exceeded that of both Britain and France, making China the world’s fourth largest economy (Hale, 2006). It has been estimated that China will overtake the United States as the world’s largest economy by 2015 (Allen, Qian & Qian, 2005). In 2003, China overtook the United States for the fi rst time as the number one global destination for inward FDI, with FDI worth US$53.5 billion (Reuters, 2003). In 2004, inward FDI to China hit US$60 billion (NBS, 2005). Most recent figures indicate that inward FDI reached US$63 billion at end 2006 (NBS, 2007).

247

248

I. Nielsen and R. Smyth

One of the key pillars of China’s economic awakening has been her huge manufacturing export growth. Indeed, many observers of China’s economy now refer to China as the ‘World’s Factory’, ref lecting the rapidly expanding export value of manufactured goods from China which increased from US$46 billion in 1990 to US$224 billion in 2000 to an enormous US$713 billion in 2005 (NBS, 2007). Stoking the fi re of the factory has been a seemingly unlimited supply of cheap migrant laborers who have descended on the eastern cities in their tens of millions in response to regional economic disparity (Siebert, 2007). Lured by the opportunities in the cities in the booming eastern coastal provinces, these migrant workers are concentrated chiefly in the manufacturing, mining, construction and services sectors. The work that they perform is typically long and physically demanding. With most migration decisions rooted in economic gain (Zhu, 2002), few migrants integrate into the social fabric of their adopted city (Nielsen, Li, Shen & Smyth, 2007) and life for many is a monotonous and lonely experience (China Daily, 2004). Many migrant workers have left behind husbands, wives and children. In essence, they have traded uncertain futures in their hometowns for lonely, often dangerous, and precarious futures in the cities. The continued flow of migrant labor to the urban centers is vital to the sustainability of China’s rapid economic growth. There is evidence that the presence of such huge numbers of migrant workers in coastal China is, in-part, responsible for attracting the interest of potential foreign investors (Yue, 2006), as their cheap labor costs have, in-part, underpinned the competitive advantage of operating out of China. But as a result of recent changes in China’s labor terrain, some migrant workers are, for the first time, beginning to bargain for better wages and conditions (Shao, Nielsen, Nyland, Smyth & Zhu, 2007) and seek employers who can offer their preferred job incentives (Nielsen & Smyth, in press). Such changes herald a fundamental shift in the employment relationship in urban China, as well as a welcome recognition of migrant’s rights. Indeed, China’s migrants have, until recently, labored largely unnoticed in often third-world conditions. However, from around the mid 1990s reports of China’s widespread labor misconduct began trickling through to the world, increasing rapidly after 1997 when the central government became concerned about levels of corruption within its own

Challenges for China’s Social Protection Policies

249

ranks. Media reports in the early part of the current decade focused on migrants’ occupational health and safety issues. For example, in 2005 a report by Xinhua News Agency claimed that over 90% of recorded deaths caused by occupational accidents and injuries were to migrant workers (XHN, 2005). In 2006, a China Daily report claimed that over 7,800 cases of the respiratory disease pneumoconiosis were reported among migrants working in the Guangxi Zhuang Autonomous Region (China Daily, 2006). As the current decade has worn on, media reports of China’s poor labor conditions have become more frequent and more damning, culminating in reports in May 2007 of the Shanxi brick kiln scandal. At this time, the world’s media screamed headlines of labor tyranny when 31 enslaved workers were rescued from a brick kiln in Linfen, in Shanxi Province, in northern China. These workers, including children as young as eight, and many adults, were forced to work under brutal conditions in the brick kilns. Photographs of the workers were beamed across the globe from the world’s most influential print media outlets (e.g., see New York Times, 2007) showing bewildered and scantily clothed men and boys, bleeding from open and untreated wounds, emerging into the blinding sunlight. Unpaid and often fed little more than water and steamed bread, the plight of these workers once and for all put China’s oft-overlooked labor rights transgressions squarely on the world’s agenda for change. Even stories portraying the migrant-as-villain, began to be seen by the world’s eyes as a blight not on migrants, but on their oppressors. In late 2005, a migrant worker who was executed for the murder of four people over wage arrears was portrayed as the ultimate victim in this tragedy (see China Daily, 2005), and representative of a huge number of migrant workers to whom more than 100 billion RMB (US$13.71 billion) is owed in wage arrears (Asia Times Online, 2005). While it has taken the most extreme forms of human rights abuses and labor law violations to attract the world’s attention, the recent migrant-focused narrative style of media reports has effected a powerful triangulation of research, media and policy (see Biao & Shen, 2005) that has broadened the landscape of debate to a range of labor rights issues. Importantly, issues that might not have seemed as immediately confronting as bonded child labor, such as social protection rights, have now also been legitimized as policy imperatives through the salience they

250

I. Nielsen and R. Smyth

have gained from this triumvirate of commentators. The coalescence of these lenses now presents both an opportunity and a responsibility for these commentators to lend their collective weight to the identification, clarification and publication of China’s labor inequities. It is an ample challenge to meet; and one that we have aimed to contribute to meeting through Migration and Social Protection in China. The substantive papers in this volume began in Section 2 by considering the language of, and symbolism surrounding, social protection policy reform and the position of migrant workers within Hu Jintao’s reform agenda. The analyses in Section 2 by David Kelly and by Gloria Davies and Scott Grant are both troubling, yet set a course for the achievement of social justice. Kelly’s contribution on the etiology of the migrant labor shortage phenomenon and Davies and Grant’s analysis of the efficacy of reform have demonstrated the ways in which the official party organ constructs and imparts to the masses positive illusory meaning from rights deprivation; yet counsel on a future path that would see measured reform and a reformulation of status and the rights of migrants. Kelly has highlighted how a link can be traced between state-imposed sociopolitical structure and oratory, where by virtue of the hukou, migrants’ entitlements are simultaneously subjugated yet ‘addressed’ through the public discourse and semiotics of the party-sponsored notion of an harmonious society. Davies and Grant argue though that this swindle is likely less fi rmly embraced than the government would deem ideal, with notions of the new ‘three mountains’ indicating serious discontent with policy reform and a growing perception of the unauthenticity of the government’s doctrine of social justice. That the people have not fallen for the ruse of a harmonious society is unsurprising. After all, when all is said and done—as Kelly points out—despite migrating to reap the economic benefits of marketization, the migrant share of the pie is pitiful. There are few ‘glorious’ migrants. In Section 3 the party rhetoric—and indeed the labor law—are put to the empirical test with respect to migrants’ participation in social security schemes. The contributions by Dewen Wang and by Gloria Davies, Ingrid Nielsen and Russell Smyth bear out quite starkly the burgeoning media claims about the lack of entitlements accruing to migrant workers. Wang’s analysis showed that in large cities, coverage

Challenges for China’s Social Protection Policies

251

across the main types of social insurances was less than 3% among rural to urban migrants. Davies, Nielsen and Smyth’s data showed that social insurance and the perceived poor management of social welfare is considered very serious among urban residents, reflecting Davies and Grant’s conclusion that official party optimism is not simply devoured en-masse and suggesting a continued role for both the media and social analysts in the public consideration of reform. Consistent with Wang’s fi ndings, Fei Guo and Wenshu Gao found only scant insurance coverage among migrants in their large-scale five-city study and Lina Song and Simon Appleton found a difference of some sixty percentage points in terms of social insurance coverage broken down by household type, in large favor of urban over migrant households . Bingqin Li’s contribution, along with the contribution from Guo and Gao uncovered some of the major factors contributing to social security exclusion and inclusion. Through a series of in-depth interviews with migrants in Tianjin, Li concluded that the major factors underlying non-participation were poor awareness and poor understanding of the various insurances. In terms of participation, Guo and Gao found that higher levels of education predicted a greater likelihood of participation in pension, health and work injury insurances. To the extent that the better educated may be more likely to know about and understand the various insurances, Guo and Gao’s analysis complements Li’s findings and suggests that policy reform should encompass an educative function. Song and Appleton found that income had a positive effect on participation. Given the fundamental pillar of social protection as a social safety net, it seems somewhat antithetical to this aim that relative affluence should better dispose Chinese households to social insurance coverage. This fi nding casts serious doubt on the current success of social protection reform as social justice. Against the backdrop of Section 3, the chapters in Section 4 have considered the options for, and strategies undertaken by migrants who slip through the cracks of China’s social protection safety net. Linda Wong and Zheng Gongcheng considered the coping strategies that migrants adopt when faced with some of the common pitfalls of working in the city, the chief among which is falling ill. Worryingly, when migrants in Wong and Zheng’s study became ill, roughly 60% of them did not receive proper

252

I. Nielsen and R. Smyth

treatment from a hospital or medical clinic. The main strategies to deal with illness included getting by with pharmacy medicines, seeking help at a substandard street clinic or simply doing nothing. Given the frequently reported poor conditions in which migrants work and live—Mark Duda, Bingqin Li and Huamin Peng reported that migrants endure a variety of housing quality problems—illness and occupational injury is common and hence access to state sponsored medical care is critical. According to Wong and Zheng however, over three-quarters of their migrant sample must themselves bear full medical costs. While less than one-quarter of the migrants in this study had medical insurance, even fewer were enrolled in pension insurance. When asked about their plans for support in their old age, about one-third of respondents indicated that they would fall back on traditional forms of support from family and their own savings. When asked how they would protect themselves against unemployment, less than one per-cent said they would rely on unemployment insurance, preferring again to subsist on savings and assistance from family and their fellow villagers. Despite a general lack of engagement with social protection, it is curious that the respondents in Wong and Zheng’s study ranked as fi rst from a range of concerns the need for the government to establish a social security system to cover migrants. Clearly these migrants show a willingness to engage with social protection—and all indications from the data are that they would benefit immensely from such engagement— which begs the obvious question of why they are reluctant to participate. It may be, as Cindy Fan and Wenfei Wang discussed, that the basis of a rural peasant’s economic and social security is his or her hometown and its network of family and fellow villagers. Even in a reformed China, where one can traverse the South end of Wangfujing Dajie sampling on the West side the traditional street-cooked delicacies of ‘Snack Street’ and immediately opposite on the East side the traditional deep-fried wares of KFC, the roaring marketization express has not shaken the foundations of this generations-strong village-based social support structure. Indeed, it may not be until the current village elders whose generation has grown up with these traditional values are replaced by those who have grown up under ‘socialism with Chinese characteristics’ that the norm of statesponsored social protection for all becomes entrenched in the psyche,

Challenges for China’s Social Protection Policies

253

rather than mused at with curious skepticism by many migrant workers. Or, perhaps the reluctance is, as Li demonstrated, simply a pervasive lack of understanding of current social protection regulations and schemes. If so, it is incumbent on the government to ensure that mandated rights to social insurance are delivered to China’s most vulnerable residents in a manner in which the rhetoric necessarily becomes the reality; and in a manner in which social justice is delivered to all. As we write at the beginning of 2008, all Chinese workers nationwide have just gained new rights with respect to job security. From 1st January 2008, employees with ten consecutive years at a fi rm will be entitled to a tenured job with no end date; severance payments will be compulsory for any worker whose contract expires, or who has provided 30 days notice of intention to leave, or who is laid off (Los Angeles Times, 2007). While migrant workers are not treated as a special case under these new regulations (nor indeed should they be, as Zhang (2006) points out, the legal concept of the worker in China makes no distinction between urban workers and rural migrant workers, hence all labor law referring to workers by defi nition includes migrant workers), labor activists and NGOs are quickly educating migrants about these new conditions, with the view to promoting a rights consciousness among China’s migrants (and see Tyroler-Cooper, 2006). This volume has demonstrated that the latter is important for at least three reasons. First, as David Kelly argued, migrants lack a sense of entitlement to social protection as a legacy of the institutionalized discrimination inherent in the hukou system. Second, as Bingqin Li discussed, migrants typically have a poor understanding and awareness of their labor rights. Even in mid 2007, a China Daily report of a poll of 5,000 migrant workers in Beijing claimed that over 50% of the workers did not have a labor contract and of those who did have one, less than one-fifth actually understood its content (China Daily, 2007). Third, regardless of whether various labor conditions are mandated for migrants, the reality remains that implementation of mandated conditions for these workers is extremely difficult to enforce (Tyroler-Cooper, 2006). Compounding this obstacle, Linda Wong and Zheng Gongcheng have also pointed out the skepticism with which labor law and the social protection system is regarded by migrants themselves. This skepticism may well in-part underlie Lina Song and Simon Appleton’s observation

254

I. Nielsen and R. Smyth

that in the face of adverse economic shocks, migrants tend primarily to rely on self-sufficiency, rather than turning to others or the government for assistance. We began this volume with the Introduction title ‘The Rhetoric and the Reality of Social Protection’; we conclude it with the counsel that for Hu’s rhetoric surrounding social-protection-as-social-justice to become the reality for migrant workers, both social and economic development must occur hand in hand. Social protection is a fundamental pillar of both economic and of social development and social security is a key factor in achieving both. As the chapters in this volume have demonstrated, social security must be at the core of new strategies to alleviate poverty and to lessen the gap between China’s haves and have-nots. These strategies must fi rst and foremost involve the extension of coverage to those groups of people that do not currently benefit from mandated social protection; and they must be accompanied by a shift in focus from the current ex post safety net to ex ante risk reduction. Beyond this, serious consideration needs to turn to methods to implement effective surveillance and sound enforcement mechanisms for social security payment. Now that the world’s eyes have been focused on China’s disenfranchised workers, the corollary must be actual positive outcomes. To this end, the collected papers in this volume have aimed to demonstrate the diversity of issues that need to be considered in the context of social security reform in China and provide a commentary on current reform efforts and potential strategies. As the contributors to this volume have argued, while progress has been made, social security is still a system in transition in China, moving, as it is, from a system of enterprise protection to social protection. The progression of social security reforms has been slowed by its complexity; that is, social security reform is linked to other reform processes, most notably reform to the hukou system. Embedded in the latter is the crux issue that by migrating, the overwhelming majority of rural peasants are disengaging from mandated forms of social protection. While China’s economy continues to generate swift growth chiefly on the sweat of migrant workers, wage gaps between China’s urban and rural residents have widened (Whiteford, 2003). Back in their rural hometowns, migration is taking both an economic and a social toll that has not been lost on party officials. Historically, social unrest in rural China has been an

Challenges for China’s Social Protection Policies

255

important force towards political change and from this perspective, China’s migrant workers are a potentially powerful threat to stability—being, as they are, a potential David to the Goliath that is the economy of the People’s Republic. References Allen, F., Qian, J & Qian, M (2005). Law, fi nance, and economic growth in China. Journal of Financial Economics, 77 (1), 57–116. Asia Times Online (2005). China’s migrant worker pool dries up. Asia Times Online. http:// www.atimes.com/atimes/China_Business/GK10Cb01.html [10 November 2007]. Biao, X & Shen, T (2005). Does migration research matter in china? A review of its relationship to policy since the 1980s. International Journal on Multicultural Studies, 7 (1), 11–32. China Daily (2004). Migrants face loneliness and depression. China Daily. http://www. chinadaily.com.cn/english/doc/2004-08/16/content_365709.htm [16 August 2007]. China Daily (2005). China’s migrant worker pool dries up. China Daily. http://www. chinadaily.com.cn/english/doc/2005-11/10/content_493467.htm [10 November 2007 China Daily (2006). Migrants need more protection. China Daily. http://www.chinadaily. com.cn/cndy/2006-06/05/content_608119.htm [5 June 2007]. China Daily (2007). Construction workers alienated. China Daily. http://www.chinadaily. com.cn/cndy/2007-07/09/content_5421656.htm [9 July 2007]. Hale, D (2006). China’s economic takeoff: Implications for Africa. Brenthurst Discussion Paper 1/2006. The Brenthurst Foundation. Los Angeles Times (2007). New workers’ rights being undermined in China. Los Angeles Times. http://www.latimes.com/business/la-fi-chinalabor27dec27,0,1171653. story?page=1&coll=la-home-business [27 December 2007]. National Bureau of Statistics (NBS) (various). China Statistical Yearbook. Beijing: China Statistics Press. New York Times (2007). Reports of forced labor unsettle China. New York Times. http:// www.nytimes.com/2007/06/16/world/asia/16china.html?_r=1&scp=234&sq=China+ labor&oref=slogin [16 June 2007]. Nielsen, I., Li, J., Shen, J & Smyth, R (2007). Effects of intergroup contact on Chinese off-farm migrants’ attitudes to urban locals. In George T Solomon (Ed.), Proceedings of the Sixty-Sixth Annual Academy of Management (CD), ISSN 1543-8643. Nielsen, I & Smyth, R (in press). Job satisfaction and response to incentives among China’s urban workforce. Journal of Socio-economics. Reuters (2003). China ousts U.S. as top target for FDI in 2002. Reuters. Shao, S., Nielsen, I., Nyland, C., Smyth, R., Zhang, M & Zhu, C (2007). Migrants as Homo Economicus: Explaining the emerging phenomenon of a shortage of migrant labour in China’s coastal provinces. China Information, 21 (1), 7–41.

256

I. Nielsen and R. Smyth

Siebert, H (2007). China: Coming to grips with the new global player. The World Economy, 30 (6), 893–922. Tyroler-Cooper, S (2006). Promoting rights consciousness among China’s migrant workers. China Rights Forum, http://hrichina.org/public/PDFs/CRF.3.2006/CRF2006-3_Migrant.pdf [10 January 2008]. Whiteford, P (2003). From enterprise protection to social protection: Pension reform in China. Global Social Policy, 3 (1), 45–77. Xinhua News Agency (XHN) (2005). Rural migrant workers exceed 90% of deaths caused by labor injuries. http://news.xinhuanet.com/photo/2005-10/26/content_3687827.htm [10 January 2008]. Yao, S (2006). On economic growth, FDI and exports in China. Applied Economics, 38 (3), 339–351. Yue, CS (2006). ASEAN–China economic competition and free trade area. Asian Economic Papers, 4 (1), 109–147. Zhang, M (2006). Is this legal protection of rural migrant workers’ rights or “legalized discrimination”? China Labor Bulletin, http://www.clb.org.hk/en/node/37315 [10 January 2008]. Zhu, N (2002). The impacts of income gaps on migration decisions in China. China Economic Review, 13 (2–3), 213–230.

INDEX

China Urban Labor Survey (CULS) 51, 52, 63 City-level aggregates 52 2005 CULS 52 China Urban Social Protection Survey (CUSP) 52 China’s modern agricultural development 24 China’s current land system 24, 25 Part-time/subsidiary farming 40, 119 China’s pre-reform command economy 20 Planned economy era 36 China’s SARS crisis 23 Chinese Academy of Social Sciences (CASS) 52, 141 Chinese Household Income Project (2002) 9, 141 Chi-square analysis 88 Chongqing 235, 36 Chongqing University 235 Circular on Deepening the Reform of the Old Age Insurance System for Enterprise Workers 157 Collective economy 123 Collectively owned enterprises (COEs) 198

All-China Federation of Trade Unions (ACFTU) 3, 5, 10 Anhui 216 Attendant costs 125 Beijing 120–1, 123–4, 142–3, 160, 162, 166–7, 178, 186, 189–90, 192, 210, 253 Binhai New Area development project 192 Brigade-level organizations 19 Buji town 163 Bureau of Labor and Social Security (see Ministry of Labor and Social Security). Capitalist class 68 Changsha Labor Bureau 44 Chengdu 161, 166–7 Chengliren (city people) 221 Chengshiren (urban people) 221 China as the World’s Factory 248 China Mainland Marketing Research Company (CMMRC) 66, 76, 79, 81, 89 China’s income inequality 32, 254 China’s trade balance 23, 248 China’s long-term trade surplus 23

257

258

Index

Commercially operated insurance programs 126, 131–132, 135, 139 Communism 32, 47, 68, 147 Party-state 67, 68 Construction 62, 99–100, 102, 107, 124, 144, 159, 161, 200, 215, 225, 248 Corruption 43 Cultural Revolution 156

Farmland 208–9, 212–13, 224 Fenjia 229 Fujian 186, 208

Decision on Establishing a Basic Medical Insurance System for Urban Employees 157 Decision on Establishing a Unified Basic Old-Age insurance System for Enterprise Workers 157 Decision on the Reform of the Old Age Insurance System for Enterprise Workers 157 Descriptive statistics 194 Dibao Scheme 165 Division of labor 11, 206, 211–13, 216, 218, 223, 237 Dongguan (Guangdong province) 120, 122–4

Harmonious society 6, 8, 13, 36, 47, 68, 155, 250 Hierarchical rent sharing model 18, 19, 20, 21, 22, 23 Hong Kong 123, 132, 135 Horizon Research Consulting Group 75 Household production contracting 19, Household Responsibility System (HRS) 19, 26 Household strategies 205–7, 210– 12, 216, 218, 225 Chuqu (going out) 210 Circularity of migrants 214–16, 237–38 Countryside living 207–15, 221, 228, 234, 236–38 Dagong (being employed) 210, 231, 233, 235–37 Dual migrants model 218, 224, 226 Economic calculations 206 Gender division of labor 206, 211–12, 225, 237

Economic liberalization 205, 248 Economic Observer (Jingji guancha bao) 74 Employment related entitlements 119–120 Farm 206, 209, 212, 218, 231 Farmers (see peasants)

Great Famine 19, Great Leap Forward 18, Guangdong 215 Guangxi Zhuang Autonomous Region 249 Guangzhou 123, 180, 227

Index

Household decision-making 206 Inside-outside model 218–19, 223, 225, 228 Intergenerational division of labor 207, 212, 225, 234, 237 Marriage and gender roles 206 Net family gain motivates migration 206 Non-economic factors of migration decisions 206 Permanent settlement paradigm 207 Reverse gender division of labor 222 Second generation model 218, 230, 232–33, 235 Security 208–9, 215–16, 221, 228, 234, 236–37 Stories and narratives 216, 237 Wild geese households (yan hu) 214 Housing sector 184, 191 Employer-provided housing 196–8 Family structure variables 194–6 Housing inequality 184 Housing quality 186–7, 190–1, 193–7, 200, 202–3, 252 Housing quality differentials 187 Housing quality model 197, 202 Housing reform process 184 Inter-group cohort effects 185, 188 Lacking investigations in hukou system’s influence on housing quality 185

259

Migrant housing needs are heterogeneous 188 Migrants: crowded and poorly facilitated housing 185, 203 Migrants: housing conditions partially a function of their choices 188, 203 Nature of labor demand in the Chinese economy 186 Pays rent or not 196–8 Private rentals 190 Public sector rentals 186, 190 Rental choice 190 Rural households’ income diversification strategies 186 Tenure choice 189 The housing quality indicator 194 Hukou (household registration) 5, 6, 17, 20, 26, 28, 33, 34, 35, 37, 38, 44, 54, 56, 57, 58, 60, 61, 63, 70, 71, 73, 83, 92, 112, 121– 2, 127, 129, 131–2, 134, 139, 155, 161, 177–8, 185–91, 203, 208–9, 218, 237, 250, 253–54 Agricultural hukou 121 Dualistic system 118, 119, 125, 133–4 Hukou status 127, 129, 131–2, 134, 177–8, 185, 188–9, 191 Institutionalized discrimination/ segregation 33, 56, 58, 62, 79, 175, 253 Internal passport 56 Regulating migrant movements 34

260

Index

Rural hukou 191 Urban hukou 122, 139, 155, 161, 177, 187, 208 Industrialization 181, 208 Informal social support 98, 252 Institute of Labor Science (ILS) 32, 36, 37, 42, 43, 44, 45, 46 China’s Labor Relations in Transition 32, 36, 37 Labor Law 38, 42, 45, 249–50, 253 Labor reform 46, 248 Nation-wide labor supervision 44, 45 Institute of Labor Studies – Monash project (2005) 7 Institute of Population and Labor Economics (IPLE) 52 International Labor Organization 65 Social assistance 65 Social Protection 65, 249, 254 Social security 65 Universal benefits 65 Jia (family or home) 209 Job mobility 160 Job security 144, 253 Laborers 160, 162–3, 248 Labor Contract and Employment Promotions Law 5, 62, 63, 174–75, 253 Labor contract status 56 Labor market performance 56

Primary labor market 57 Secondary labor market 57 Local Schools 35 Children’s education 92 Schooling 55, 124 Locals vs non-locals (ben di ren) 119, 125, 134 Low-income Allowance Scheme (Dibao) 139, 142 Manufacturing 56, 62, 123–4, 144, 200, 248 Mao Zedong 67 Egalitarianism 69 Where Do Correct Ideas Come From? 67 Market regime 68 Measures of Providing Social Health Insurance to Rural-toUrban Migrants 102 Mexico-US immigrants 209 Migrants Floating population 188 Migrant-as-villain 249 Migrant status 189, 250 Minimum wage for migrants 62 Remittances 213–14, 234 Rural-to-urban migrants 188, 192, 216 Wages for unskilled migrants 23, 24, 43 Mining 159, 248 Ministry of Labor and Social Security (MOLSS) 32, 34, 62, 67, 71, 73, 83 102, 119, 157, 159–60, 165, 178–9

Index

Ministry of Public Security 62 Multinomial logit framework 189 Multivariate analysis 125 Nankai University 192 National Bureau of Statistics of China (NBS) 118, 121–3, 141 New Economics of Migration (NEM) theory 214 Nongcunren (village people) 221 Nongmin (peasant) 221, 236 OLS regression 197 Ordered probit model 77 Pearl River Delta 180 Peasants 17, 18, 26, 27, 28, 162, 181, 191 Exploitation during land transfer 37, 39, 40 Non-economic shortage factors 27 Opportunity cost of migration 27 Residential permits 33 Social security 6, 37, 38, 39, 40, 45, 46, 58, 68, 69, 71, 75, 76, 82, 86, 89, 90, 98 (see also social security for migrants) Sun Zhigang case 28 Urban and local protectionism 37, 76, 98 People’s Bank of China 45 Personal Responsibility and Work Opportunity Reconciliation Act 95

261

Principal-agent relationship 178 Private-owned enterprises (POEs) 159 Privatization 184–5 Provisional Method for Outside Peasant Workers to Join the Basic Medical Insurance in Beijing 162 Provisional Method of Comprehensive Social Insurance for Non-Urban Hukou Laborers in Chengdu 161 Reform of labor relations 31, 41 China’s Trade Union Constitution 41 China’s Trade Union Law 41 Free-contracting labor relations 41 Regression models 190–1 Regulations on Insurance for Work-related Injuries 158–9 Regulations on Unemployment Insurance 158, 160 Relief and Management Measures for Destitute Vagrant Beggars in the Cities 165 Renmin University of China 217 Research Center for Rural Economy of the Ministry of Agriculture 216 Research Institute of Economics 141 Retirement protection 162

262

Index

Rural insurance scheme 83–87 Rural reform 22, 31, 34, 38, 44, 46 Circular No. 1 34, 36 Collective poverty trap 22 Household contracting 22 Local fiscal decentralisation 22 Rural healthcare system collapsed 98 Two-track pricing system 22 Rural socio-economic problems 71, 119 Rural-urban development model 4, Rural-urban apartheid 33 Rural-urban labor market 38, 124–5 Scientific Concept of Development 4 Seventeenth Party Congress (October 2007) 69 Shanghai 125, 143, 161, 165, 186, 190, 192 Shanghai-based Haoyouduo Management Consulting Service Co. Ltd 74 Shanghai minimum living allowance 161, 165 Shanghai municipal government 66 Authoritarian rule 90 Shanghai’s Agricultural Committee 72 Shanghai re-employment service centers 161

Shanghai Temporary Measures on Comprehensive Insurances for Outsiders Working in Shanghai 161 Shanghai’s township insurance (25+X) 8, 9, 70, 71, 72, 74, 82, 83, 85–90 Basic minimal Platform 72, 73 Extensive Overage 72, 73 Flexibility 72, 73 Gender bias 88 Shanxi brick kiln scandal 249 Shanxi province 249 Shenyang (Liaoning province) 120, 122–3, 133 Shenzhen 162–3, 166–7, 180 Shenzhen Institute of Contemporary Observation 43 Illegal workplace practices 43 Shenzhen Special Economic Zone 123 Shijia zhuang 120, 122–4, 133, 208 Sichuan 216, 236 Snowballing process 100 Socialism 29, 68, 118, 134, 140, 156, 159, 252 Social Medical Insurance Method for Urban Enterprise Workers in Shenzhen (2003) 163 Social networks (Guanxi) 140–1, 145, 149, 151, 174 Social insurance schemes 4, 7, 9, 39, 51, 55, 56, 58, 59, 63, 69,

Index

70, 76–86, 89, 90, 95–102, 104, 109–111, 114, 251, 253 Commercial insurance 169–70 Employment Status 56, 125 Health scheme 92, 99, 102, 104, 106, 108, 113, 126–7, 131, 133– 5, 155, 167–8, 175, 179, 251 Health status 55, 59, 146 Hospitalization scheme 179 Maternity insurance 69, 79, 96, 155, 158–9 Medical insurance 53, 55, 56, 58, 59, 62, 63, 69, 79, 80, 119, 139, 145, 157, 159–60, 162, 165, 167–9, 179, 252 Migrant participation in social insurance 93–97, 100, 112, 114, 141–6 Old-age pensions for migrants 38, 39, 79, 89, 107, 119, 120, 126, 132–5, 155–7, 159–60, 169–70, 176 Pension insurance 53, 55, 56, 58, 59, 63, 66, 69, 79, 92, 93, 94, 96, 99, 102, 104, 108–109, 111, 113, 127, 129, 131, 139, 145–6, 164, 167, 179–80, 251–52 State-sponsored insurance coverage 167, 174, 174, 252 Take-up rates 94–95 Town Insurance (zhenbao) 66 Unemployment insurance 53, 55, 56, 58, 59, 63, 69, 79, 80, 92, 99, 102, 104–105, 108, 110, 145–6, 155, 157–9, 167, 170–72, 176, 179, 252

263

Wage status 125 Work injury insurance 53, 55, 56, 58, 62, 63, 69, 96, 107, 109, 126–7, 131–5, 155, 158– 60, 165, 167, 172–4, 176, 251 Social justice 6, 29, 66, 67, 68, 69, 73, 75, 82, 88–90, 250–51, 253–54 Injustices 34, 68 Social entitlements of the peasantry 25 Town Insurance 69 Social security for migrants 24, 31, 53, 54, 56, 59, 60, 62, 63, 92, 93, 126, 132–4, 144–6, 158–60, 163, 251–52, 254 Equal Contribution and Equal Benefits 60, 61 Low Threshold and Low Benefits 60, 61 Separate Social Security Schemes 61 Social services 92 Sociological notion of citizenship 18, 28, 46 Citizen status of urbanites 26 Local identity politics 25 Social division 127 Social exclusion in the urban labor market 58, 99 Village citizenship 25 Spring Festival (2005) 218, 220, 225, 229–30, 234 State Council Decision on Improving the Basic Pension System (2005) 159

264

Index

State Council Decision on Pension System Reform for Workers and Staff of Urban Enterprises (1991) 69 State Council Document No.5 (2006) 4, 5, 7, 12, 62 State Council Document No.2 (2002) 61 State Council Document No.1 (2003) 62 State Council Research Office Project Team (2006) 162, 172, 179 State-owned enterprises (SOEs) 156–7, 166, 179, 198 State-sponsored public housing 11, 33 Survey on migrants in nine major cities to identify the breakdown of migrants by industry sector (2005) 193 Survey on Social Protection of Migrant Workers (2005) 165 Survey on the Participation of Pension Schemes by Ruralurban Migrant Workers (2005) 92 Suzhou 166 Taiwan 132, 135 The Bund (March 2004) 74 The Information Office of the State Council (2004) 156–7 The Information Office of the State Council (2002) 36

The Pitfalls of China’s Modernization 42 Third Plenary Session of the CCPs 16th Central Committee 40 Collective bargaining model 41 Human resources model 41, 42 Primitive capital accumulation 41, 42 Three D jobs 3, Three-fold problems of agriculture (sannong wenti) 179 Three-no personnel 165 Tianjin 70, 93, 99–102, 107, 167, 187, 192–3, 195–6, 198, 200, 202–3, 251 Tianjin town insurance scheme 70 UNESCO-funded study of China’s migrant labor (2005) 35, New Paradigm for Development 35, 36, 40 Unified management (tong chou) 156 United Nations Country Team (2004) 138 Urban households 139 Urban insurance scheme (Chengbao) 70, 83–87, 108, 156 Urban residents 139 Urbanization 51, 63, 71, 74, 122, 181, 208

Index

Voluntary salary sacrificing plans in the US (1993) 94 Waidiren 26 World Bank 52 Wujiang (Jiangsu province) 223 Wuxi (Jiangsu province) 122–4, 133 Xiamen 162 Xinhua News Agency 249 Yangtze Delta 215 Zhenbao (see Shanghai township insurance) Zhejiang Province 162, 210, 230 Zhengzhou City 162 Zhongnanhai 178

265