In today’s NYT, an article described the labor shortage in Shenzhen, China. I think this article gave a false cry. I can’t imagine that China will lack cheap labors. I read Chinese news reports. All I see is there are hundreds of thousands of unemployed fresh high school and college graduates and there are still millions of layoffs in many cities.

Shenzhen is a different city. In early days, due to the special economic policy, it had recruited many young and cheap workers from rural areas to work in factories with very low payment. Overnight, Shenzhen became one of the most prosperous cities in China. One consequence is that the living cost there is skyrocketing. Most migrating workers now just cannot afford living there.

Since the middle of 1990s, economics is also booming everywhere. Opportunities are abundant. A physically capable labor worker can find equally tough and low paid job in any city. Educated young people are also more willing to stay in civilized cities such as Beijing and Shanghai (Including satellite cities) rather than in culture desert such as Shenzhen.

In addition, cities in western China are also moving forward. Therefore, people may choose to work in cities close to their homes instead of traveling thousands of miles to work in strange cities. Being close to home, they not only can attend their families but also enjoy a lower living cost.

But the critical reason for the labor shortage in Shenzhen is that the payment is far too low.

Economically speaking, if there are more people than jobs, people will take any payment to work because having something is better than nothing. However, this point of view is too simple. Individuals also calculate their own balancing sheet. If a job is too harmful or the payment is too low while the cost (health, energy, time, and dignity, “face”) is too much, they would rather not take that job. That’s why so many unemployed people are not willing to take labor intensive or filthy jobs. They had decent jobs before. They can’t disgrace themselves by working like a migrating worker.

The above rationales can also be applied to those fresh college graduates. They are educated people, thus not for low level jobs. And I believe it is a waste of resource for human society too.

Another important issue is minimal wage. I strongly support establishing and increasing the minimal wage.

I understand that creating or increasing the minimal wage may hurt those unemployed, increase cost, and ultimately damage the economy. However, most people fail to think the minimal wage from the workers’ point of view.

For a low paid worker, increasing the minimal wage will increase his/her income. Even in the situation that the overall living cost was driven higher by the wage increase among all people, the worker still benefit from the higher income. After all, the living cost is increasing all the time, while  those low paid workers will remain the bottom of class.  Increasing the minimal wage won’t change that fact. However, without the wage increase, they will become poorer and poorer because they will work with the lowest paid jobs most of their lives.

Another advantage of increasing the minimal wage is to encourage people to work. For example, in China, there are many unemployed people who used to work with decent payment. If the new payment can match their pre-layoff payment, most people will be happy to work again even though they may still be poor.

Take together, if migrating workers are significantly diverted in all over the country while the educated people won’t take the low paid jobs, those not so labor intensive but not so well paid jobs are in labor shortage. In Shenzhen, companies still have the illusion that they can recruit people from other parts of China with low payment. They are still practicing the condemned exploitation migrating workers. They are wrong.

Chinese migrating workers, united!