Tuesday, February 3, 2009

Chinese Survey of Laborers Returned to Rural Villages

The Spinning Wheel, by Wang Juzheng, Northern Song Dynasty (960–1127)

The Chinese government has presented some revealing statistics concerning the impact of the global economic slowdown on unemployment among migratory workers. Because the Chinese news source is in Chinese (and my Chinese language studies haven't progressed that far), I'll summarize from Victor Shih's posting on RGE Monitor yesterday. Dr. Shih is an Assistant Professor of Political Science at Northwestern University.

His post, Unemployment in China...Oh Boy, comments on a press conference by Chen Xiwen, the vice head of the office of the important Central Finance and Economic Leading Group. Chen's presentation concerned a Ministry of Agriculture survey which drew samples from 150 villages located in 15 provinces which exported more rural labor. The survey concerned the 38.5% of laborers who returned home before the lunar new year.

Chen's presentation interpreted the survey findings as saying that, of the urban workers who had returned to their villages for the holiday:
  • 60.4% still had jobs in the cities, and they will return to their jobs after the holiday.

  • 39.6% had lost their jobs or not found a job.
Chen applied these findings to the population of 130 million rural laborers working elsewhere. He estimated that 15.3% or 20 million have lost their jobs or have not found a job. According to the survey methodology, these 20 million are only the most recent "pulse" of unemployment occurring just before the lunar new year.

Based purely on official government statistics, Dr. Shih estimates in his RGE Monitor post that total unemployment is around 36.8 million, consisting of 20 million rural migrants, 15 million urban unemployed, and 1.8 million recent college graduates. The numbers were not converted to percentage terms, as is usual for US unemployment statistics.

I do not understand Dr. Shih's mathematics. If 20 million is the number of migrant workers who have recently lost their jobs, what about those who had lost their jobs earlier and were still unemployed? It looks as if his estimate follows the usual Chinese government practice of counting rural individuals living at home as employed, because they can be employed in agriculture, even if their contribution is marginal.

Whatever the unemployment numbers now, we will have to keep watch as they develop over the next few months. As average income declines, much about Chinese domestic stimulus programs, foreign exchange, and other policy matters may depend on those numbers.