The Household Registration System reform and Migrant Labor in China
Abstract
The introduction of Hukou system in China aimed controlling the migration of rural population to urban areas, but it led to unintended inequalities in the society. This paper offers a literature review of this system, its intended purpose, the negative impacts on the society and various reforms that have been undertaken by the local and national governments. The review includes an introduction to Hukou system, literature review, the reforms adopted and criticism of these reforms. Various benefits of the reforms are discusses and a recommendation of more reforms is provided.
Introduction
Hukou, the Chinese system of household registration was established for the purpose of registering population in urban and rural areas separately. The Hukou system has led to segregation of urban and rural populations in geographical, economic, social and political terms. The system has been the basis of a social-economic structure that is dualistic and divisive resulting to two citizenship classes. With initial aim of the system being prevention of labor force in rural areas from leaving the agricultural sector, it has failed to live to the intended positive outcome, by excluding part of the population from the social and economic benefits of a growing economy. The central and local governments have carried various efforts aimed at reforming the Hukou system so that its purpose is not only the elimination of registration of population that has been separated geographically.
Review
The origin of Hukou system in China is traced to the nation’s adoption of Stalinist communism which involved rapid industrialization is the main growth strategy. The strategy was based on increased industry in urban areas using agricultural surplus from the rural peasantry, and for this to succeed, a prevention of rural –urban migration was essential (Kam Wing, 357). The measures taken by the government to prevent rural exodus culminated in development of Hukou as a registration system for controlling the mobility of the population. The regulation required that internal migration be approved by local government and at this point the Chinese population a basic freedom of migrating and residing willingly in their nation (Kam Wing, 357). The end results was the creation of two social-economic classes: the urban class comprising of people working in the industrial sector and accessed at least the full citizenship and social welfare ; the rural peasants tied in rural land so as to ensure production of agricultural products as raw materials for industrialization and had to look after themselves (Kam Wing, 358).
In contrast to common depiction, the system was not aimed at controlling labor mobility and rural-urban population but it was a social control whose purpose was to exclude rural folks from accessing welfare and goods provided by the state. This was also a curtailment to entitlement of people living in rural areas and hence, a form of segregation. By ensuring that the rural population is held at the countryside, the system denied them the economic, political and social opportunities and hence their rights and the end result was an underclass with low market value in the rural areas. It was at the backdrop of the effects of the Hukou systems that the Chinese government, both central and local, saw the need for introducing reforms whose aim was to ensure reverting of the situation (Cai, 34).
The reforms
Reforms of the Hukou system were on the basis of socioeconomic reforms that were started at the rural areas. At the start of the reforms, a system of household responsibility was introduced with an aim of solving the problem of lack of incentives and this resulted to improved agricultural labor productivity. It also led to release of excess labor which had been piling up during the pre-reform period. The major reason for this reform was not to abandon of the system which meant that there was no clear blueprint and this saw labor movement to non-agricultural sectors and from villages to urban centers (Cai, 35). The transfer of labor involved the rural population relocating to TVEs (Township and Village Enterprise) especially before the governments allowed rural-urban migration. The initial intention of the central government before mid-1980s was to allow leaving the land but remaining in the rural areas but the TVE creation occurred only in local villages or smaller towns but remained very uneven among various regions. There was no creation of enough adequate employment in the non-agricultural sector for the migrating laborers. The farmers resulted to migration across regions and breaking down institutional bottlenecks and the local and central governments resulted to relaxing such institutional obstacles for the labor mobility. The TVE development stagnated in mid-1980’s which saw rural laborers migration from rural areas to towns and cities and across various regions and this was enhanced by the removal of institutional obstacles (Cai, 36). The government could not allow the rural peasants into the long-distance transportation and marketing of products in other places away from local markets. This heralded the beginning of farmer’s rights to carry out business outside local towns, and the permission to work in smaller town in nearby areas was granted. By the 1988, the farmers were allowed to run their enterprises in towns or even in cities but under the self-sufficient staples (Cai, 36). The local and central governments relaxed rural migration restrictions which indicated a certain level of reform in the Hukou system in 1990s. By that time, the planned system was still in operation while the Hukou system was not serious observed in an institutional setting so that it restricted any actions taken by laborers or by the government (Cai, 36).
The development of market economy by the Chinese government in 1990s is considered to be milestone that differentiates the first and second phases of reforms on Hukou system. The was a big demand for labor which was generated by increase in export-oriented and labor-intensive sectors especially in coastal regions and the surge of employment opportunities in urban areas private sectors. Various measures were adopted due to expansion and integration of labor markets aimed at eliminating institutional barriers that hindered labor mobility. For instance, the rationing system and urban employment opportunities are part of these reforms. The rationing system that was adopted in mid-1950s restricting the staple food supplies and such necessities needed in urban areas were removed (Cai, 38). The massive unemployment and layoffs in late 1990s due to financial crises in East Asia and macro-economic downturn resulted to adoption of subsidy program for lay-off, unemployment insurance program, pension regime and program for minimum-living standards by the government. The aim was the protection of urban workers, improved development of labor market environment and liberalization of labor market. Through this, labor mobility would be encouraged while establishing different kinds of ownership across businesses, regions and sectors. By allowing the entry of rural folks into urban areas, couples and children who had been separated were able to re-unite, while elderly people could get city Hukou status with their children. Even though resistance to such reforms occurred in parts of major cities, the Hukou system was afforded a legitimate basis at the national level (Cai, 38).
Even though the mobility of labor led to some reforms, the system still served similar traditional roles: urban laborers had the priority in securing employment and migrants were excluded from accessing social welfare in rural areas. A competition for job opportunities existed between the unskilled laborers in urban areas and migrants workers but urban governments protected urban workers while migrants were discriminated against. At the same time the governments established preliminary systems to protect urban workers which included all those laborers with urban Hukou status (Cai, 38).
The reforms also came in form of ad hoc measures in 1970’s where small number of workers from the rural to fill the labor needs in cities. The temporary workers employed on contract lacked an urban Hukou, and therefore, could not access social services. The practice of allowing the laborers from rural areas to fill the unwanted positions in cities was gradually enhanced during early 1980s (Kam Wing, 358). The state made the deployment of rural peasants to meet the labor demand in industries its major strategy and the rural-Hukou became the basis of industrial export. Such laborers also filled the law low-end service positions in the urban areas. The rural migrant laborers earning low wages and hence, minimum living standards are also not entitled to the benefits offered by minimum protection policies. Since they have temporary status and permanent ineligibility for urban Hukou, the migrant workers will always be vulnerable and can be expended easily (Kam Wing, 359). The workforce formed by poor laborers with no urban rights can be attributed to the situation where China has the most efficient production in the world due to the low cost. The rural-urban migration by rural peasants still continues presently and this has delayed the point and time of labor surplus exhaustion which is a turning point highlighted by Lewis development model in a market with labor surplus. The direct relationship between Hukou system, migrant labor and industrial economy can explain why there little increase in wages for such workers even where the economy is growing rapidly and the ability of China to price its exports below major competitors – other developing countries (Kam Wing, 360).
The rapid growth of Chinese economy over the past decade has resulted to increased labor demand and for once, the challenge of more labor demand than supply is being experienced. The problem has been widespread since 2003, while the wages for migrant laborers has been increasing on a yearly basis (Cai, 38). Such an increase has also been seen in agricultural sector wages and this shows the link between surplus labor reduction in agriculture, reduced unskilled workers in cities and resulting increment in wage for all sectors. As per Lewis definition, this may be a sign that Chinese economy has attained the Lewis Turning Point (Cai, 39). The same year indicates an onset of new phase of reforms in Hukou system and the turning point is essentially manifested in market labor alteration so that the labor market no longer has unlimited labor supply but labor shortages becomes frequent. As the economic reforms in China focused on market orientation, the Hukou system tried to unify labor market in urban and rural areas (Cai, 39). In addition, the conflict between local workers and migrant workers has eased, since the economy no longer guarantess unlimited labor supply while the labor market is dominated by structural factors but not workforce magnitude. Provisions of social welfare programs like social security are becoming socially pooled on the basis of individual contributions and public finance which makes compatibility more important than competition between the urbanites and new comers (Cai, 40).
The local governments have also adopted policies that have encouraged development of institutions of labor market that formally recognize migrant workers. The institutions’ evolution has involved regulations aimed at workers’ protection and de-regulations aimed at liberalization of labor mobility. The efforts employed in improving Hukou systems for better working environment include policies such as, “2008 Employment Contract Law and Labor Disputes Mediation and Arbitration Law” (Cai, 41). The governments have also frequently increased the scale of adjusting minimum wages while at the same time attempting to improve the participation of newcomers in coverage of various programs such as social insurance. These provisions apply even if the laborers migrate across different provincial boundaries (Cai, 41).
Criticism on Hukou system reforms
The reforms on Hukou systems have faced a lot of criticism from within and outside the country. The various adjustments adopted by the central and local governments are seen to have not led to enough alteration the essence of Hukou system which is dualistic structure in economy and labor market. There is still discrimination against workers within rural Hukou. The migration workers are still disadvantage a situation that was made worse by the 2008-2009 financial crises experienced globally where most of those who lost their jobs were migrant workers from rural areas (Kam Wing, 361).
Moreover, the difference between the rate of urbanization and the size of population in non-agricultural sectors has resulted to the perception among policy makers and various scholars that the forms have not yielded positive progress and that there has been an overestimation of urbanization level. The migrant workers who are considered urban residents continue to be excluded from equally accessing many services offered by the urban governments. For instance, the workers face challenges during enrollment of children in schools, lower rates of participating in programs for social insurance and have no guarantee for minimum standards of living (Cai, 42).
Despite such criticisms, the benefits arising from such reforms cannot go unrecognized especially in terms of facilitating employment opportunities and improved working environment for the migrant workers. In addition, the social lives of the migrant workers, their parents or children have been improved greatly in comparison to the pre-reform periods when this population was forced to fend for itself in rural areas. The improved access to welfare services provided by urban governments can be seen as positive results of such reforms. In addition, the acceptance of migrant workers in towns has enabled farmers to operate their enterprise where they can access larger market for their products and this improves their living standards. The reform have also allowed enrollment of migrants children to education and this is important in providing necessary technical skills as the economy expands. The measures adopted by the local governments have also led to stabilization of labor market especially after 2008-2009 financial crises when businesses production capacities could not be fully utilized (Cai, 43). This means that the measures for Hukou systems new reforms are feasible and have been adjusted to align to the real needs of a person’s locality (Cai, 45). The few recognized limitations can be addressed through urgent reforms that include workable measures that will ensure that the Hukou system yields maximum benefits to the urban and rural populations.
Works Cited
Chan, Kam Wing. "The household registration system and migrant labor in China: Notes on a debate." Population and development review 36.2 (2010): 357-364.
Cai, Fang. "Hukou system reform and unification of rural–urban social welfare." China & World Economy 19.3 (2011): 33-48.
