The Great Unequalizer
The Pandemic Is Compounding Disparities in Income, Wealth, and Opportunity
For years now, China has faced the daunting challenge of managing its roughly 260 million “domestic immigrants,” or migrant workers. They flow itinerantly from countryside to cities, where they dwell as second-class citizens and temporary guests with no formal urban status because of a system, known as hukou, that prevents them from settling and easily accessing basic services such as health care, social security, primary education for their children, and decent housing.
At nearly 20 percent of the population, China's migrants, if they were to form their own country, would constitute the world’s fourth most populous nation. It is a demographic that has grown 30 times over the past 30 years, according to figures from an official Chinese Communist Party (CCP) journal, Seeking Truth, even as total population growth has increased by less than one percent over the same period. Relative to the overall population, the migrant demographic is younger, more mobile, and not particularly smitten with the status quo.
What’s more, a rising generation of “millennial migrants” aspires to the same lifestyle and opportunities afforded their urban contemporaries. As a result, their expectations are shifting rapidly, increasing the possibility that their accumulated discontents will turn into a volatile force that catalyzes social instability.
MAO’S URBAN BIAS
The irony of the migrant predicament is that it is the direct result of the CCP’s attempt to ensure stability back in the 1950s, when Chairman Mao Zedong implemented the hukou, or household registration system, to control the ballooning population. It broadly categorized the Chinese population into rural and urban and was strictly enforced to prevent rural farmers from flooding the cities. Under Mao’s statist economy, the rigid form of control was designed in part to keep abundant labor on the farms in order to produce enough food for one billion–plus mouths.
Still, the politics at the time—and which remain today—favored the cities, with the government allocating significantly more resources and benefits to urban China, usually at the expense of rural farmers. It’s what political scientists call “urban bias,” a well-worn strategy that authoritarian governments tend to apply to maintain a tacit alliance with their urban constituencies out of concern that they would be the most likely troublemakers.
Mao, who grew up in rural China, understood that the CCP’s power base resided in urban China. And in fact, the party began organizing vigorously in major Chinese cities early in its existence. Ensuring that the urbanites were happy and satisfied was key to the political system’s staying power and ability to maintain order. As for the rural folks, they tend to be easier to control and have a harder time engaging in collective action that can threaten the regime.
According to Jeremy Wallace, a professor at Cornell University, that’s because unlike rural populations, “urban areas have high population densities, reducing the costs of large-scale collective action. Proximity to the locus of economic development and industry renders urban protest more politically relevant.” Mao, like authoritarian leaders elsewhere, seemed to intuitively grasp that fact.
The inflexible hukou system may have worked relatively well when China was largely an agrarian economy, at least in terms of imposing control and stability. But it began to creak under the weight of economic reforms in the 1980s, which demanded a more flexible labor market as China focused on industrializing and building a massive manufacturing sector—a growth model that banked on its comparative advantage: abundant labor.
As a result, Beijing had little choice but to relax its restrictions on population movements in tandem with economic reforms, because it needed to tap the rural labor pool to serve the gargantuan infrastructure and manufacturing expansion along the coast. As parallel reforms on Chinese farms freed up labor, workers left rural China in droves and started filling up the factories that dotted the Pearl River and Yangtze River Delta regions. They were the first wave of migrants that came to be known as the “floating population,” which also included the migrant laborers that built Shanghai’s gleaming skyline.
The irony of the migrant predicament is that it is the direct result of the CCP’s attempt to ensure stability back in the 1950s, when Chairman Mao Zedong implemented the hukou, or household registration system, to control the ballooning population.
THE MILLENIAL MIGRANT
Dealing with migrants is all the more challenging because they tend to be younger, especially the new generation. For instance, the average millennial migrant (about 50 percent of the whole migrant cohort) is under 35 and holds a college degree, according to a Nankai University survey of migrants in seven cities. Those in the top 20 percent income bracket made about $1,000 per month; those in the bottom 20 percent took in just $270. As a point of comparison, an undergraduate from a top-tier school such as Tsinghua University can expect to earn a monthly salary of $2,000 five years after graduation, according to another survey.
The Nankai University survey also revealed that many migrants view the cities as their home, not the rural towns from whence they came. In fact, 44 percent of the migrants surveyed planned to permanently settle in the cities where they work, while only 29 percent considered returning to their hometowns. A quarter of them have already lived in cities for over a decade, and many were likely even born there, yet they still are not officially counted as full-fledged urban residents.
Indeed, with better education and youthful exuberance come expectations and ambitions that make these millennial migrants not so different from their urban counterparts—except that the CCP has sought to appease one group at the expense of another, in part because the urban elites with hukou would not gain much from the enfranchisement of migrants. Rather, these elites tend to fear the potential fiscal costs of granting the floating populations equal access to already scarce social services.
What began as a mechanism for population control has, in today’s China, become a tool that sharpens social cleavages and entrenches inequality. And in many ways, that inequality virtually begins at birth. It is a sentiment captured with brutal honesty in the 2011 essay “I Fought for 18 Years to Have a Cup of Coffee with You,” which made rounds on the Internet after it was penned. It was written by a young migrant who, compared with his migrant peers, has “made it” in the big city:
From the moment I was born, our life’s path swerved away from each other. I was given a rural resident card while you got a city one. . . . We were better off compared to some inner provinces, but still, after a year of hard labor, we were hard pressed to save much. A family of four who consume only the very basics can save 3,000 RMB each year. That means to send one child to a four-year college at 66,000 RMB a family needs to save for 22 years. . . . Finally, I graduated. Finding a job in Shanghai was hard, but going back to the village was not an option. The average salary for our class was 2,000 RMB per month. Perhaps you think that 2,000 RMB is an adequate salary, but I still needed to pay for rent, to pay for utilities, to pay back my student loans, and to send money home to put my brother and sister through school. What was left, I used for food. After all of this, I still couldn’t join you for a coffee at Starbucks! . . . I didn’t write this to complain. The terrifying thing isn’t that justice is relative. The terrifying thing is to witness injustice and to act as if one sees nothing.
What may be terrifying for the Chinese government is that it seems caught in a serious conundrum. Comprehensively enfranchising migrants as urban citizens could lead to severe backlash from the urban elites—the constituency with which the CCP most closely aligns. Yet inaction on addressing the migrant issue would also threaten stability, since such a large concentration of rural migrants in major cities could turn them into a powerful force, especially if their interests coalesce around specific grievances such as inequality.
What began as a mechanism for population control has, in today’s China, become a tool that sharpens social cleavages and entrenches inequality.
Further, by marginalizing migrants, Beijing is also underutilizing a source of economic growth. Urbanization typically unleashes a flurry of consumption, but China has not been able to fully tap that potential because migrants continue to face a host of discriminatory policies that depress their income and limit their opportunities.
Although Beijing has recognized that the hukou system is untenable, it has not moved quickly enough to abolish it. Last year, it announced its intention to roll out hukou reform but applied it only to smaller cities, while doubling down on restrictions on the larger ones. This modest liberalization will probably have a negligible impact or even worsen this urban-to-urban inequality. The bulk of migrants are concentrated in the major, first-tier cities, and they simply don’t want to leave. Yet it is precisely in these major cities where political resistance to a dramatic overhaul of the existing system is most intense.
The hukou may have served the political system well in the twentieth century, when China faced a very different set of socioeconomic conditions. But in the twenty-first century, what was once viewed as a social stabilizer has become not only a symbol of inequality but also an instrument that could foment serious social discontent.
It has become increasingly clear that the success of China’s much touted urbanization process hinges not on merely connecting cities with bullet trains and other impressive infrastructure but also on enfranchising the swelling migrant population so that they become more productive contributors to, and new consumers of, the urban economy and society.