Socialism and Communism arose as responses to exploitation by capitalism (and feudalism). Article 1 in China’s Constitution says that country is “led by the working class and based on the alliance of workers and peasants.” However, modern China is run by elites and capitalists, who have been exploiting those workers and peasants for the last 40 years. Farmers and others from rural provinces were lured — and sometimes forced — into Chinese cities with promise of higher wages but were instead exploited.

The rural people, who were labeled as “migrants,” were abused, discriminated against, and deprived of basic human and labor rights. Worse, this treatment is founded upon institutional and legal discrimination. To put it another way, these Chinese workers in China have fewer rights and opportunities than illegal immigrants in the USA. Mao will be turning in his grave.

In 1980, 80% of Chinese lived in rural areas. Now, that number is 36%. Thus, over the last 40 years, hundreds of millions of rural people migrated to the cities. In 2020, there were over 280 million “migrants” living in China’s cities, accounting for one-third of China’s urban population and HALF of all urban workers. In some cities like Shenzhen — the Silicon Valley of China — 60% of the population are migrants!

Behind the glamorous Chinese cities are the underpaid and exploited migrant workers who face myriad of societal and institutional discrimination.

The migrants were/are the cornerstone of China’s miracle. However, they and their families are treated as second-class citizens in their own country. This blog post will give some details — it will be shocking to most readers.

Before we start, it is true that China has lifted 800 million people out of “extreme poverty” but there is a catch: China has deliberately kept them in “relative poverty.” That is, the once extremely poor now make more than $2 a day but face a bamboo ceiling at about $6 a day. 40% of the population (600 million) in China still live on $5 or less per day.

And the migrants face extreme exploitation even if they make relatively more money in the cities. More on that later.

“Hukou” system – Basis for discrimination

The legal basis of discrimination comes from the Hukou, or the household registration, system. In the 1950s, China introduced Hukou, which classified people as either rural or urban. One of the goals was to prevent rural people from going to the cities. A person with rural Hukou was forced to live, work and die in his/her village.

When China started to embrace capitalism, it needed cheap labor and thus moved hundreds of millions of rural people into the cities. However, the new migrants and their children were still stuck with their rural Hukou, which made them aliens in their country. Hukou is like a caste system with Chinese characteristics.

How migrants get discriminated and humiliated

There are countless ways in which the migrants get discriminated socially and legally. First, they are described using a derogatory term: Nongmin gong (farmers-turned-workers). Urban Chinese don’t want migrants to live in their neighborhoods; and the urbanites even protest when migrant children are allowed to study in public schools in the cities.

Migrants also face a plethora of discrimination at work. They are not even allowed to apply for white-collar jobs. They are relegated to low-wage, dirty, dangerous, menial, and labor-intensive jobs — like in factories, construction, mines, janitorial services, restaurants etc. In such jobs, the migrants get exploited in inhumane ways.

Migrants are also denied access to public services such as education, healthcare, pensions, and housing in the cities regardless of how long they live there. Ironically and cruelly, migrants are prohibited from buying homes which were built by … migrants.

How migrant children suffer

Since the Hukou is “hereditary,” migrant children, even if they are born in the city, face similar institutional discrimination. Public schools may completely reject migrant children or have a small quota and require migrants to pay extra fees (imagine charging the poor extra money to get education). Thus, many migrant couples are forced to leave their children in their home villages, usually with the grandparents. This is why rural Chinese has tens of millions of “left-behind children,” who grow up without their parents, enduring psychological trauma and even physical abuse. Migrant parents typically get to go home only once a year.

The schools in rural areas are awful and underfunded — the teachers are not well trained, the schools are shabby, and there are not enough resources. Only 5% of rural children end up going to college; most drop out of school by 9th grade. In a study of Chinese rural teenagers, half were found to be cognitively delayed — i.e., with IQ below average. In developed countries, these children would be admitted to special education programs.

Below is a rural school entirely made up of one teacher and two students — and this is in 2021!

Migrants are also stigmatized as outsiders (perhaps “illegal” or without documentation of citizenship) who differ physically, culturally and linguistically from the majority.

Human rights activists have tried to create special migrant schools in cities. However, these schools are understandably of poor quality, lack qualified teachers, and also reinforce social stigma. It’s de facto segregation.

In rural and poorer provinces, there is also rampant child labor since migrant children drop out of schools by 9th grade. So, these 14- or 15-year-old children are exploited in factories that boost China’s exports and foreign exchange reserve.

No employer-sponsored or government plans

Migrants don’t typically get to participate in any of the numerous employer plans — vacations, sick days, health insurance, disability insurance, unemployment insurance, retirement plans etc.

Migrants also don’t have access to other public services like public housing, public hospitals etc. So, if a migrant or their spouse get severely sick, they have to either pay for a private hospital or take a train back to their hometown.

Migrants don’t get to participate in the city’s pension plans. For urban residents, the government and the employer set aside a portion of the salary — like social security in the U.S. — towards pension. However, migrants cannot benefit from this program. After working in cities for decades, when migrants go back to rural areas, they get a pension of about $12 a month! Just incredible.

Exploitation at work

In the last couple of years, migrants have been attracted to service jobs and gig jobs like delivering food and parcels or driving ride-hailing cars. This has become a crucial feature of China’s modern economy that’s driven by tech companies like Didi, Meituan, and Alibaba — like Uber, DoorDash and Amazon in the U.S.

While these jobs offer more freedom than dreadful factory jobs, these are still very exploitative and stressful. A courier would have to work for 12 hours a day and 6 days a week to make about $750 a month. Driving in heavy traffic, delivering food to people in high-rise buildings, and meeting stringent timelines and quotas are not easy. Even if they are a few minutes late, their commissions get withheld. And they don’t get any tips either, thanks to the culture.

Worse, since these people don’t have any health or workplace injury insurance, one accident can ruin their lives. This is perhaps more true in construction and mines, where migrant workers are exposed to numerous toxic chemicals and dust, for which there are no protections or compensations.

Without health insurance, these people get sick and just carry on as long as they can. There are now about 6 million migrants with an incurable lung disease – Pneumoconiosis; and worse they live on about $60 a month. And many of these workers — especially those who work in rare earth minerals mines — get cancer as well. The victims are typically workers in coal mines, and China gets 2/3rd of its electricity from coal. Thus, sadly, the most important workers are the least paid and most abused.

Migrants are also victims of large-scale wage theft and are powerless to fight back. In Chinese factories, migrants typically work for 12 hours but get paid for 8. In construction, migrants often don’t get paid for months; and when they get paid in the end, they get shortchanged. How these poor people manage to work for, say 10 months, without getting paid is shocking and sad.

In big factories, migrants are housed in dorms where there might be 10 people crammed in one room. It’s like a prison.

Migrant suicides are also more common than acknowledged by the government. When factory workers jumped out of Foxconn buildings, the media covered it extensively but many more get censored. Also, note how the company reacted — it simply put a suicide net around the building rather than fixing the working conditions. Recently, a delivery worker for Ele.me committed suicide by setting himself on fire.

Note that China technically has wonderful labor laws that demand minimum wage, 8-hour limits per day etc. but just like the free speech clause in China’s Constitution, all the labor laws are a big joke.

Wages have also not kept up with China’s growth. In the 1980s and 90s, China was very poor and low wages were understandable. However, when China surpassed Japan to become world’s 2nd largest economy in 2010, the average manufacturing wage was still $2 an hour. Of course, if the workers have to put in 12 hour days but get paid for only 8, the wage goes down to $1.50 an hour.

Lack of political power

Migrants cannot form grassroots or independent labor unions and thus lack collective bargaining power. Some migrants can join the government-controlled labor union — “All China Trade Federation of Trade Unions,” but it’s a toothless organization that is aligned with the corporate management and doesn’t allow collective bargaining. A strange phenomenon in a “socialist” country.

There was a food-delivery worker — Chen Guojiang — in Beijing who tried to organize other workers like him. He gathered 14,000 workers online. Soon, the CCP shut down his groups and arrested him.

Lawyers, journalists, and activists who attempt to help migrants or publicize their plights are arrested on fake charges like “picking quarrels” or “disturbing social order.” Even Maoist groups that have protested on behalf of the migrants have been shut down.

Farmers and workers once made up 100% of the Communist Party of China. Now, they make up only one-third of the CCP. More importantly, they represent only about 1% of new members. Thus, poor people are quickly losing their voice in China.

Invisible in statistics. Massive inequality

Migrants are invisible and conveniently left out of many urban statistics. Thus, stats related to urban home ownership, wages, inequality, wealth, life expectancy etc. are much rosier by excluding migrants.

In Shenzhen, the GDP-per-capita is $30,000 but the average migrant makes about $10,000 a year. Considering that 6 out of 10 people in Shenzhen are migrants, you can imagine how uneven the distribution of wealth is. In this case, 10 people would create a GDP of $300,000 and the migrant share is $60,000. Thus 4 non-migrants account for $240,000 or $60,000 per person. Thus, a non-migrant makes six times as much as a migrant.

When mainstream media talk about 90% home ownership in China, they don’t include migrants whose home ownership is about 1%. Thus, migrants were excluded from the real estate boom for the last two decades. (The tragedy here is that China has whopping 3 billion square meters of unfinished apartments/homes, which could easily house 60 million migrant families).

Similarly, when China claims to be #1 in the world in education – measured by PISA scores – it once again excludes migrant children.

Another source of inequality is that while urban people can buy and sell their homes (for profit), rural people cannot sell their homes or land, since they are owned by communes. And when the government confiscates land in rural areas (for, say, building roads or railways), the rural people get as little $10 per square meter. Compare that to the cost of $1000 per sq. m. for a house in cities like Beijing.

Living Standards

Not surprisingly, migrants typically live in the outskirts of cities where rent and cost of living will be cheaper. They live in tiny apartments or even in low-cost hostels. However, they are often pushed out in gentrification as the local government sells lands to developers. Sometimes, an entire neighborhood with hundreds of thousands of migrants will be demolished after giving the migrants only a month of notice. For smaller neighborhoods, migrants may get just 2-3 hours to pack everything and leave. Just inhumane.

Conclusion

For an alleged socialist/communist country, China has been abusing its workers for a long time. The migrants face legal and social discrimination — “apartheid with Chinese characteristics.” The greed of corporations and politicians is abominable. Treating rural Chinese people as second-class citizens is not only a violation of human rights, it’s also bad for China in the long run. Xi Jinping now talks about “common prosperity” to placate the urban middle class but China must pursue universal common prosperity that includes migrants, working class, and rural people. If half the country stays poor, China will never escape the middle-income trap.

Also, rural children account for 2/3rd of all children in China. So, how will China’s future look if 2/3rds of people are malnourished, uneducated, and unskilled?

China needs to abolish the Hukou system, pass strict laws to prevent abuse of workers, build low-cost housing for migrants, and provide equal access to healthcare, education, pension, and workplace programs.