What are the main trends and characteristics of the evolution of China's labor structure

After nearly 20 years of development, China's labor market structure is undergoing a profound change. Only by facing up to this change and the problems can we ensure the smooth transformation of China's economic structure and realize the smooth and healthy development of the economy.

With the gradual promotion of China's rural reform, the increase in agricultural labor productivity has led to the emergence of surplus labor in rural areas, and since the early 1990s, China has seen a large number of large-scale transfer of surplus rural labor to the cities of the "wave of migrant workers", a large-scale transfer of labor from the countryside to coastal cities in the industrial and service sectors, cheap labor costs. Cheap labor costs have brought favorable conditions for China's economic development, making China's labor-intensive industries develop rapidly, attracting a large amount of foreign investment for China and promoting China's rapid economic development.

But in recent years, with the emergence of labor shortages and rising wages, a widespread "labor shortage" began to appear in China's southeastern coastal areas in 2004. Since 2008, this "labor shortage" phenomenon has begun to spread to the inland areas, and gradually bring negative impact on China's economic development. This shows that after nearly 20 years of development, the structure of China's labor market is undergoing profound changes, and it is necessary to analyze the development trend and new features of this change, and to face the problems squarely in order to ensure the smooth transformation of China's economic structure and realize the stable and healthy development of the economy.

China's labor market has entered a stage of limited supply

China's rural reforms, which began in the late 1970s, have increased the productivity of China's agricultural labor and led to the emergence of surplus rural labor. After entering the 1990s, with the advancement of China's urban reforms, the rural labor force that concentrates in the cities and towns has gradually become the main stream, and has once resulted in a spectacular "After the 1990s, as China's urban reforms progressed, the concentration of rural laborers in cities and towns gradually became the mainstream, once creating the spectacular phenomenon of the "migrant labor wave. The large number of rural surplus laborers entering urban employment in a short period of time meant that China's labor market was characterized by unlimited supply.

The labor shortage, marked by the phenomenon of migrant labor shortage, first appeared in 2004 and has never ceased since then, and has pushed up the wages of ordinary workers continuously. In terms of the number of people employed in agriculture, the number of people employed in agriculture began to show a rapid downward trend from 2004, with the greatest rate of decline in 2006.

From the model of China's agricultural output to see, in 2006 China's agricultural labor marginal output from negative to positive, that is, the transfer of rural labor force began to have an impact on agricultural output, indicating that the labor force has entered the stage of limited supply from unlimited supply. From the supply of the number of labor force to see, 15-64 years old working age population stops growing, the population dependency ratio accordingly no longer declining turning point, known as the demographic dividend turning point, after the turning point, means the disappearance of the demographic dividend.

According to the latest forecast, the growth rate of China's working-age population aged 15-64 has been declining year by year, and is expected to peak around 2013, when the total number of working-age people will be close to 1 billion. Since then, the absolute number of people in the labor force has not increased. Moreover, the growth rate of the working-age population has been decreasing before reaching the peak. Therefore, China's labor market is bound to enter a stage of limited supply.

Rapid increase in average annual per capita wages in agriculture

In the dual economic structure described in the Lewis model, in the first stage, the labor force is in unlimited supply, the marginal productivity of labor in agriculture is extremely low, the traditional sector is backward, slow development, and the existence of a large amount of surplus labor, the wages of the labor force working outside the home are constrained by the quantity of labor supply and can not be improved for a long time. The income from farming was much lower than the wage level of non-agricultural industries. In the second stage, there is a limited supply of labor, the accelerated development of the agricultural sector, the rapid increase in labor productivity, the demand for labor between the agricultural sector and the modern sector began to appear competitive relationship, the wages of workers began to be determined by the marginal productivity of labor, the market mechanism and the role of the labor market system.

When the transfer of China's surplus rural labor force exploded on a large scale in the 1990s, China's urban development at that time was not sufficient to absorb such a large number of laborers, but because of the low productivity of China's agriculture at that time and the heavy burden of migrant workers' families, migrant workers were particularly motivated to take up employment, and even if the manufacturers paid them a lower wage, as long as the wage was higher than what they had been earning in the countryside, they were still willing to accept a job rather than return to their hometowns or choose unemployment. With the substantial increase in demand for labor in China's labor-intensive enterprises and the reduction of surplus labor in rural areas, there have been changes in the supply and demand for labor, and there has been a jump in China's agricultural wages.

From the data we calculated, from 1991 to 1996, the annual per capita real wages in agriculture grew at a rate of 12%, which was due to the fact that this period was the early stage of migrant workers going to the cities to work in agriculture, and the low base led to the faster growth rate; from 1997 to 2003, the annual per capita real wages in agriculture began to slow down to only 2%, and this period was the first stage of the typical Lewis model, the Labor wages are determined by the buyer's market, the wage growth rate is slower; from 2004, China's agricultural per capita annual real wage growth rate began to enter an accelerated stage, 2004-2010, the average growth rate of 7%.

During this period, China's agricultural productivity gradually increased and agricultural per capita income was in a rapid growth stage, so labor-intensive enterprises were forced to raise workers' wages to attract enough labor. From the calculated labor supply curve, China's labor supply curve has shown an obvious upward-sloping trend since 2004, indicating that the linkage between China's labor supply and wages has increased, and that raising labor supply needs to be supported by an increase in wages.

This change in the structure of the labor market is irreversible, and for China, which is still in a dual economic pattern and has entered a critical period of economic structural transformation, the shortage of labor is bound to bring a lot of challenges to China's economy: the past 10 years of high growth and low inflation is gone, and the trend of labor wages is already in an upward spiral, and the rise in human capital is bound to push up the prices of consumer goods and drive the inflation rate higher. Higher inflation; rising labor costs will increase the cost of production, reduce corporate profits and thus affect the process of enterprise investment and reproduction, pulling down the entire socio-economic growth rate.

While the structural changes in the labor market have brought many risks to China's economy, there are also favorable factors: the increase in labor income will improve China's national income distribution pattern, narrowing the gap between urban and rural residents in the distribution of income, to maintain social harmony; income increase will also lead to the rise of consumption, promoting China's economic power from investment to consumption change.