After Spring Festival each year, the labor shortage becomes graver throughout China, and almost all labor-intensive manufacturing companies are concerned. The first shortages appeared in the eastern coastal area in 2003, and now it has become a national problem.

The number of annual new labor has decreased. In the 1990s, annual new labor was between 10 and 20 million, and those numbers have decreased significantly in the last two years. The one-child policy is part of the reason, but there are still many other reasons for the accelerating labor shortage.

First of all, those working in labor-intensive manufacturing obtain meager salaries compared to other jobs. And when they do receive raises the increased in income is easily negated by the increase of product prices.

Secondly, their hometowns have changed a lot as massive labor-intensive manufacturing companies moved into the west and middle of China. Local companies pay high monthly salaries, which are almost equal to the east cities, so many workers choose to work at home while taking care of their children.

Finally, many 20-year old laborers take their dreams to cities. Unlike their fathers who work in cities just for money, these young workers have long-term goals in the cities. For them, being a worker is just to learn skills and accumulate business resources. Once they get the proper chance, they will quit their jobs and seek to develop their careers.

As the labor shortage grows and becomes impossible to ignore, upgrading the industrial structure is a must. A shortage in labor must be endured as China changes its economic growth pattern, industrial layout and labor-hiring system. The government needs to change the economic growth pattern, which means leaving behind the inefficient pattern based on labor and high-energy consumption, and instead cultivate greater concepts and talents. Meanwhile, companies need to increase the value of their products, strengthen independent innovation and hire more high-quality labor and talent.

The author is the guest columnist with Beijing Youth Daily.

(This?article was?translated by Lu Na.)