China's labor market is experiencing growing pains

China Daily News: China Daily, November 30 version of the article: The end of China's labor surplus means that higher productivity should bring better institutional services for migrant workers. The contradiction between labor shortages and rising labour costs has become increasingly acute, resulting in growing hostility between employers and employees.　　Through the establishment of collective bargaining mechanism is only to ease the contradictions of the interests of the solution, the fundamental way to solve the problem is to establish a mature labor market system. China's rising labour costs are inevitable because of supply and demand rather than the awakening of workers ' awareness in sweatshops.　　China used to have a lot of cheap labor, but now that China has reached Lewis's inflection point, the labour force has disappeared, along with rising wages, consumption and inflation. China's dual-track employment system, inherited from the planned economy era, is the dual-urban twin, which once made China's urban and rural labor supply excessive. However, the great social and economic changes have led to an unprecedented mass flow of Chinese population.　　Since the 90 's, rural surplus labor began to migrate to cities on a large scale. China's rapid urbanization process has absorbed nearly 145 million migrant workers, and has greatly promoted the development of the urban labor market and the reform of the employment system.　　But as China reaches the Lewis inflection point and the number of people entering the labour market is shrinking, China's human resources are also being readjusted.　　The emergence of the turning point of labor supply is the main cause of labor conflict. Unlike the early migrant workers who migrate to cities, many migrant workers are now able to find a secure fixed job.　　After decades of working and living in cities, migrant workers began to demand the same rights as urban dwellers. That is why we cannot effectively ease labour conflicts by providing more jobs.　　Safeguarding the health, education and pensions of migrant workers is preferable to encouraging a system of collective bargaining, which cannot change the basic facts of the current labour shortage. As long as Mr Lewis's inflection point brings labor shortages, which in turn leads to rising labour costs, the trend will continue and will not weaken China's economic strength.　　This is evidenced by the fact that Japan experienced the Lewis inflection point in about 1960 years.　　The industrial transformation inevitably requires the improvement of labor efficiency, so the rising labor cost will not lose China's relative advantage in the global economy.　　And correspondingly, our employers should also pay attention to high-quality Labor to provide a good remuneration package. 2004 years later, China's wage arrears have fallen sharply.　　After that, migrant workers took a more proactive approach by calling for higher wages through strikes and consultations. Before 2004, China's surplus labor supply, peasant workers in a very low social status, had to endure extremely poor treatment, but also faced the risk of being dismissed at any time.　　After China reached Lewis's inflection point, the supply of labor became more resilient, that is, migrant workers had the right to say no to their employers. Some companies show poor adaptability to the new labor marketMing, these enterprises are unable to deal with labor problems.　　Employers should strengthen their understanding of the labor market and labor force, and work together with the Government to promote the formation of a more mature Chinese labor market system. From 2000 to 2007, China's manufacturing labour costs grew at an average rate of 9.8% a year.　　At the same time, marginal labor productivity and average labour yield increased by 20.4% and 22.8% respectively. The continuous improvement of labor market mechanism indicates that the increase of productivity must be accompanied by the improvement of labor remuneration. This is an unavoidable "growth pains" for employers in all emerging economies.　　Japan and Korea experienced such processes in the 60 and 70 respectively. After reaching Lewis ' inflection point in the 60 's, Japan improved income distribution through collective wage bargaining and gradually increasing consumption levels. South Korea, which reached Lewis's inflection point in the late 70, remains tightly regulated by its unions.　　As a result, South Korea has spent 17 years, consuming a great deal of political and social costs, to gain experience from mistakes and begin to provide workers with the rewards they deserve. Only the relevant stakeholders agree that the wages of the workers should occupy a larger share of the initial distribution of national wealth, so that we can establish a collective bargaining system in order to play the role of trade unions. This is the correct order to eliminate income disparities, improve corporate efficiency and foster a good mentality for workers.　　For everyone, this is a winning situation, not "you win Me" or "You Lose Me Win" "0 and Game". History shows that it is now the Golden age for the Chinese government to lay the groundwork for a reasonable labour market.　　This will not only help China to upgrade the industry, but also effectively release social pressure. Please see the original in English: Http://www.chinadaily.com.cn/cndy/2010-11/30/content_11627208.htm. Special note: Because of Chinese and English writing style is different, the English manuscript and the original text does not correspond completely. (author is Director of Institute of Population and Labor economy of Cass Cai compiles Zhao Xinying edit Pan Zhongming)