The journey of female migrant workers in China
Jul 27, 2015

In the past decade, more farmers, known as “migrant workers”, have chosen to seek jobs in urbanized and prosperous cities rather than stay in the rural areas. It is worth noting that with female migrant workers making up 36 per cent of workers moving to the cities, gender difference should be considered when designing social security systems, especially the insurance system for aged female migrant workers. Currently, female migrant workers not only confront challenges arising from the restrictions of urban-rural dual residence administration system, they also face gender inequality and aging issues. Not only are the rights of female migrant workers being neglected, social issues arising from the introduction of female migrant workers into the community, such as social hierarchical system consolidation and intergenerational transmission of poverty etcetera need to be addressed. To enhance social fairness and thereby social stability, provisions should be made for female migrant workers’ welfare and security as well as the sustainability of their livelihood in the city.

If we use gender and “hukou” (residence administration) as the comparative indicators, we will have four different groups of people, namely, male citizens, female citizens, male migrant workers and female migrant workers. Theoretically, when migrant workers work in the urban area, they are eligible to participate in social old-age insurance system for employees just as other urban workers do. Besides, their pension is also transferable between different areas. In fact, compared to the other three groups, female migrant workers are still at a disadvantage when it comes to social old-age insurance system for employees. One reason is migrant worker is treated differently from citizens under the dual residence administration system in urban areas. The second reason is because as a female, she is discriminated in the labor market because of her gender. Since the amount of old-age pension an employee can get from the social old-age insurance system generally corresponds to how long she has been working and the salary she has been drawing, the female migrant worker having typically been employed for a lesser duration than females who are residents of the cities and all males, will thus draw a lower pension.

The patriarchal tradition has a long history in China and still dominates the rural areas today. Prior to entering the labor market, females are already weaker in the accumulation of human capital because of fewer formal education opportunities. While pre-labor market discrimination results in fewer job opportunities for the female, especially for female migrant worker, labor market discrimination exacerbates the vulnerability of the female migrant worker. On the one hand, given the same productivity level, the male migrant worker generally commands a higher pay than the female migrant worker. Thus, the female migrant worker suffers a gender disadvantage. On the other hand, as a female, they also have to take on the responsibilities of reproduction, childcare and family care, thus shortening her overall working period and results in a lower salary accumulation compared to her male counterpart working in the same labor market continuously without any disruptions. Since the woman typically has a longer life expectancy than the man, she will most likely end up drawing a lower monthly pension after retirement compared to her male counterpart. All in all, female migrant workers for these reasons, benefit the least from existing social security policies.

Some lessons can be drawn from the policies in developed countries to improve gender equality in the labor market. In general, there are two policies to take note. The first policy is domestic compensation which means that the pension accumulated by the male family member can be transferred to the female member through a shared pension such as a spouse-joint pension or pension segmentation. The second policy is social compensation, namely government subsidy, to the female who has lost her pension due to reproduction, childcare and family care responsibilities. Facing decreasing fertility and an aging population, the Singapore government has formulated policies to protect its working women against economic lost due to family duties. These policies include baby bonus to subsidize the cost of raising a baby, tax reduction for working mothers and paid maternity and childcare leave for working mothers. Specifically, parents earning less than S$22, 000 dollars a year are eligible for further subsidies in child-bearing.

Although the current social old-age insurance system for employees is relatively flexible to cater to the needs of migrant workers who move frequently as mentioned, female migrant workers however, still face some obstacles when participating in the system compared to the urban female. First, they have shorter employment period (typically 11-13 years) in urban areas compared to their female counterparts who have been living in cities. It is difficult for them to meet the minimum 15 years of urban employment to qualify for the old-age insurance payment that city dwellers can easily meet. Instead, they end up receiving lower pensions from their hometowns. Second, most female migrant workers engage in informal employment, which renders them ineligible to be covered under urban employee old-age insurance since the system is meant for employees who have formal contracts with employers. Third, since female migrant workers draw a lower pay compared to male migrant workers and female workers who are citizens, they will have a smaller pension fund to fall back on. Yet, they still face the dilemma of meeting living expenditures and servicing their insurance payments at the same time. An incomplete urban-rural dual residence administrative system adds on to the gender discrimination that the female migrant worker has to confront.

If the government is unable to eliminate the dual hukou system completely in the near future, the most effective way is to adopt a structural adjustment for the current social old-age insurance policy, making it more responsive to market and pre-market discrimination. A universal New Rural Residents Old-age Insurance has already been established; it is combined with Urban Residents Old-age Insurance. This scheme has played a key role in balancing gender pension gap but it can be fine-tuned further. Firstly, the government should establish a universal old-age insurance system for employees, and the system must cover all urban workers including female migrant workers.

The other way is to expand the coverage of maternity insurance for female migrant workers, so that an effective livelihood protection is in place for female migrant workers who have to discontinue their work when they start a family. For example, maternity insurance can provide financial subsidy or tax reduction to those enterprises that recruit women in their child-bearing age, so that rogue employers will be deterred from firing pregnant workers to avoid the added costs that may be incurred when the worker goes on maternity leave.

Besides policies in eliminating market discrimination, pre-market discrimination should also be taken into consideration. Education is one method to reduce gender inequality in the long run. Professional training can effectively enhance the competitiveness of the existing female migrant workers and narrow the gender pay gap. Professional training programs can be cooperatively conducted by the talent market and enterprises to help female migrant workers improve their competitiveness and to increase their sense of belonging to the city. This will also encourage female migrant workers to contribute to the city for a longer time.

Pay discrimination for female migrant workers affects not only the livelihood of their left-behind children and emptynest elderly in the countryside, but it also increases inter-generational poverty and urban-rural development gap. Female migrant workers, given their unique circumstances can therefore directly influence the stability, equality and sustainability of the whole society.

Photo credit / China Daily