A Rising China’s Underclass Is Suddenly Thrust Into the Light - The Wall Street Journal

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Migrant workers plant flowers in Beijing in April.
Photo: wu hong/Shutterstock

Updated June 10, 2020 7:29 am ET

Jobs, instead of growth, will be the focus of China’s post-Covid-19 economy. The plight of the country’s millions of low-income workers is highlighting the gaps in China’s social safety net—and creating political fissures as well.

A recent speech by Chinese Premier Li Keqiang has brought the stark contrast between the haves and have nots to the fore. Mr. Li said last month that 600 million people, or more than 40% of the country’s population, have an income of just 1,000 yuan ($141) a month. It is unclear how and when that figure was calculated, but that’s less than half of China’s official median disposable income in 2019. An article by two researchers at Beijing Normal University, published last week in local media outlet Caixin, said their research largely confirmed what the premier said.

Whatever the exact figures are, there are no doubts that income inequality has always been an issue in China. But despite that, much of the population managed to increase their real incomes rapidly when the overall economy was growing at a breakneck pace. The coronavirus pandemic, however, has disproportionately hit many of the country’s poorest people. Collapsing exports have made it difficult for many migrant workers to get back to full employment soon.

Instead of providing direct handouts to furloughed workers like many other governments, Mr. Li has turned to a more unexpected way to boost jobs: street vendors. On a recent trip he said that such stalls, which sell everything from meat skewers to fried noodles but were shut out of cities in recent years, will be crucial for creating jobs. But the idea has already received pushback from state media—which is unusual and probably indicates internal disagreements in Beijing.

Mr. Li’s idea might seem unorthodox, but it highlights the inadequate safety net in the country. Migrant workers and employees of smaller businesses may not have access to unemployment benefits, while the basic allowance for low-income individuals is simply too little and doesn’t cover enough people. Mr. Li has also vowed to expand such programs, but results have yet to be seen.