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Economy

A Conundrum Years In The Making, China Is Struggling To Find Workers For Factories

LEILA FADEL, HOST:

Employers struggling to hire is well-documented in the U.S., but Chinese factories are also struggling to recruit workers. It's part of a long-simmering changes in the Chinese workforce that could lead to higher prices on all kinds of goods produced in Chinese factories. Here's Darian Woods and Emily Feng from NPR's daily business podcast, The Indicator From Planet Money.

EMILY FENG, BYLINE: I've been talking to a lot of people in China about factory work. These people are factory owners and businesspeople, and they're all talking about how hard it is to find factory workers.

YEN XIYUN: (Through interpreter) Oh, gosh, they really need workers. They're really lacking.

FENG: That's Yen Xiyun (ph). She is a recruiter for electronics factories in southern China. And this trouble that she Yen Xiyun is having finding factory workers right now can be traced to a slow, creeping trend in China that has become painfully evident in the last year.

DARIAN WOODS, BYLINE: So we're going to explain this with a bit of Chinese economic history.

FENG: Right. To backtrack, China was an extremely poor country in the 1970s, with a lot of people living in the countryside, mostly in poverty. But starting around 1980, these poor rural workers could finally leave, travel into the cities. And there they could work in grueling factories for up to 18 hours a day, six or seven days a week.

WOODS: That doesn't sound like a huge opportunity, but...

FENG: It was a mixed bag, right? They could earn more money, but, of course, they had to work really hard.

MICHAEL PETTIS: China - by the late '70s and early '80s, it was facing what you could call a demographic sweet spot.

WOODS: We called up finance professor Michael Pettis.

PETTIS: There had been a baby boom after 1949. And as a result, you had this really wonderful dynamic going in which you had a huge number of kids becoming of working age, but you had very few old people retiring.

WOODS: This demographic sweet spot was a huge engine of China's economic growth over the 1980s and 1990s. And the number of children that the average worker would have to look after was falling drastically.

PETTIS: Because of the one-child policy, which prevented Chinese from having more kids.

WOODS: China's one-child policy was a strict and extreme way the government tried to limit population growth. The government forced hundreds of millions of women into long-term contraception and even sterilization.

FENG: And this policy also radically changed the country's demographics fast.

PETTIS: The working population peaked out probably five or six years ago, and it has been shrinking ever since.

FENG: China is now rapidly aging. That demographic sweet spot that led to all this cheap labor and cheap stuff for us is farther and farther behind us each year.

WOODS: And there's another reason that factories are finding it harder to hire new workers - stigma around blue-collar work, especially among young people.

YEN: (Through interpreter) Young workers don't want to work. The younger people, I feel, don't want to do hard labor.

WOODS: Yen Xiyun, the factory recruiter, she has this whole spiel scripted out that she uses to help convince young people that factory work actually often pays better than office work, and it's worth doing.

FENG: But when I asked Yen Xiyun what she hoped her own 12-year-old son would do when he grows up, she said this to me.

YEN: (Through interpreter) I hope he goes into the government. I hope he becomes a dragon.

FENG: She hopes he'll be successful - a dragon, as she says - but outside of the factory. Emily Feng.

WOODS: Darian Woods, NPR News.

(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.

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