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By Root 1705 0

take a vacation in their home villages, Shenzhen officials were shocked to discover that two million workers had failed to return; 18 percent of the city’s migrant workforce had decided to leave for good, despite large labor shortages: by the end of 2007, Shenzhen had 700,000 unfilled jobs.17 City officials raised the minimum wage from 450 to 750 to 900 yuan ($132) per month, but it did little to attract workers back. In 2010, when hundreds of thousands more failed to return, Shenzhen announced plans to raise it yet again, to 1,100 per month, after facing labor shortages of more than 20 percent. Again, the promise had little noticeable effect. Officials were left bewildered. Some speculated that China’s competitiveness in low-wage manufacturing was doomed, but few had good explanations.

You don’t have to spend long among Shenzhen’s migrant workers to realize the problem. There are millions of workers here who have bought apartments in dense tower blocks, moved their families in and settled down—but almost all of them are skilled tradesmen, technicians, managers, or people with post-secondary education. For ordinary factory workers, this dream is unaffordable. Nor is it possible to open a rudimentary shop or start-up factory, as migrants do in arrival cities elsewhere. In other Chinese cities, including Beijing and Chongqing, former villagers congeal into self-built “villages” of thousands or tens of thousands of people mainly from the same region—like Liu Gong Li. There they can get a crude but livable first home and build a small shop, restaurant, or even a start-up factory in its ground floor, as arrival-city residents do around the world.

But these self-built neighborhoods no longer exist in Shenzhen. In 2008, I tried to visit one of the last of these “villages,” known as Min Le (“Happy People Village”), on the city’s northwest edge, only to find a narrow, bulldozed patch of land with construction crews building more densely packed apartment towers. The spare, small apartments were affordable to workers earning 5,000 yuan ($732) a month or more, far beyond the reach of a factory worker. The workers from this “village” had lost their shops and homes and moved back to their real villages. This pattern adds up to a serious crisis in Shenzhen, which is losing its workers by the millions to the slum-packed inland cities, causing it to raise its minimum wages and, in turn, lose its garment-manufacturing economy to lower-wage cities, like Dhaka.

After the crisis reached a peak with the mass departure of workers in 2008, one of China’s most esteemed historians and urban-affairs experts staged a provocative intervention that startled Shenzhen’s governing authorities. In a speech to an audience of Shenzhen officials, Qin Hui declared that the city could solve its problems only by encouraging the development of shantytown slums. “It is no shame for big cities to have such areas. On the contrary, Shenzhen and other cities should take initiatives to [permit] cheap residential areas for low-income residents including migrant workers who want to stay in the cities where they work,” he told the audience of dignitaries. “To protect the rights of these people, we should respect their freedom to build houses in some designated areas, and improve their living conditions … By building those areas, big cities could show more consideration for low-income residents, and provide them with more welfare.” He spoke of the dangerous “sexual tension” caused by 140 million migrant workers being separated all year from their 180 million family members and claimed that 50 percent of male migrant workers were not the natural fathers of their children. And he chided the officials for their hypocrisy: They “enjoy the services of migrant workers” yet “want all migrants to return to their villages after [the cities have] exploited their precious youth.” China, he said, should end a shameful era in which “rural migrants neither had the liberty to build houses nor could enjoy city welfare.”18

Around the world, scholars and officials are beginning to realize