China's labor crunch: End to one-child policy?

Returning to his village of Tian Ping in a remote corner of south-western Yunnan province, he bought a pick-up truck with 50,000 yuan borrowed from relatives and started a new job at home: Hauling coal and construction materials such as sand.

Today, the 22-year-old is still there, making almost as much as the 1,400 yuan a month he earned at the Shanghai factory.

“I would have to find a higher-paying job and one that is not dirty or noisy to make me leave my family again,” Huang said on his mobile phone from his village.

With many migrant workers like him still staying away from China's coastal and southern manufacturing belt after the massive layoffs there, factories have in recent weeks reported a 'migrant worker famine'.

Local media say the southern economic powerhouse of the Pearl River Delta is lacking as many as two million workers, while the eastern manufacturing hub of Wenzhou is short of up to a million.

This led the authorities in Guangzhou to raise the minimum wage there from 860 yuan to 1,030 yuan, surpassing even Beijing, the Guangzhou Daily reported on Thursday.

This 'migrant worker famine' has been reported every year since 2004 — except during last year's financial crunch — but it appears to be getting worse.

While the fact that younger migrant workers like Huang have higher aspirations and are pickier about their jobs contributes to the problem, scholars say the current shortage is, more fundamentally, a symptom of a deeper ill: China's diminishing surplus labor advantage.

This is lending weight to growing calls for Beijing to relax the controversial one-child policy introduced in the 1980s to rein in the country's surging population.

The policy helped to give China a 'demographic dividend' as the number of children fell faster than the number of elderly grew. That meant the proportion of the population which was of working age rose, creating faster economic growth.

And for the past three decades, China has chalked up double-digit growth largely on the back of its army of cheap labor.

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