Migrant workers don't return after Spring Fesitval

Migrant Workers Stay Home, Stinging Employers

A longtime attraction for migrants is a relatively high wage level in eastern regions, which can be about 20 percent above those in central and western provinces. But more recently the wage differential has become less attractive, since eastern living costs have risen and are higher than elsewhere.
In addition, workers have become increasingly unwilling to leave hometowns, children and other relatives for dormitories and assembly lines far away.

Chinese Academy of Social Sciences scholar Cai Fang also notes that the nation's labor force is growing more slowly than the demand for goods in rapidly growing China.

Cai said China's working age population is nearing its peak and predicted that it will stop growing after 2015. That's when the nation's so-called demographic dividend will disappear.

Gong Sen, a researcher at the State Council Development Research Center's Social Development Office, agreed the nation's labor supply has turned a corner. What had been a seemingly unlimited supply is now falling, and employers can expect more worker shortages.

But some experts have challenged the forecasts of permanent shortages for the labor pool. Zhang Libin, labor market office director at the Ministry of Human Resources and Social Security, argues that the overall worker supply is still increasing in China, and that current shortages are merely structural, tied to a changing labor force.

Companies in general are contending with a shortage of younger migrant workers, who are more mobile than ever and more likely to shop around for better offers, which leads to high turnover rates, Zhang said. On the other hand, she said, fewer jobs are available for older migrant workers, and university graduates have trouble finding suitable work.

As I showed in the post Labor costs soar in China, the population of entry-level workers is in decline. The total labor force is still growing, but entry-level factory workers are fewer. Mix in all the other factors and it is a powerful force that will push wages higher in the coming years.