(CONCLUSION) INEQUALITY AND DISCRIMINATION TOWARDS RURAL MIGRANTS IN CHINA

Chapter Four: Analysis        

Part One: Inequality in Labour Markets

This part discusses the extent of wage discrimination against rural migration in Shanghai labour markets and how it exists. This thesis classifies Shanghai working populations into the following three types on the basis concepts based upon their Hukou status: the first are the local workers who are the Shanghai urban Hukou holders, which ensures them that they get the privileges to access to Shanghai’s state-sponsored benefits (Chen & Hoy, 2008). Second, the semi-displaced rural migrant workers, people who move from the rural areas to Shanghai gain better jobs and better lives without becoming a Shanghai Hukou holder, their Hukou status retains their original village settlement without any privileges whatsoever (Lei Kuang & Li Liu 2012). Third, the urban migrant workers, constituted by individuals from other cities who are now working in Shanghai but their Hukou status remain in their city of origin, such as Guangzhou or other places (Chen & Hoy, 2008). Such distinctions are important because without the Shanghai Hukou status, both rural and urban migrant workers are restrained by the similar institutional situational arrangements in Shanghai, but previous literature reveals that urban migrant workers tend to have higher educational attainments, such as those from Guangzhou and other medium to larger cities, as a result of the long term huge and persistent rural urban divide in China (Knight and Song 1999), as well as their experience and understanding of urban contexts and city life exposure which will provide them with the advantages over the rural migrants in the labour market and other careers such as the IT industry etc., which most rural migrants have little or no access to (Yu, 2009). Through analysis of the different treatment of these three groups of populations in Shanghai, we can gain specific insights into the nature of inequality experiences by rural migrant workers.

The existing texts and literatures on the Shanghai labour market invariably reveals that there is an obvious labour market segregation between the rural migrants and urban native city dwellers workers, while the differences of employment characteristics between the urban migrants and the migrant locals is very small, except that the urban migrants have better schooling which leads to better jobs like computer IT programmers when they do migrate to other urban cities (Xin & Zhang, 2010; Lu & Wang, 2012; Chen & Hoy, 2008; Gagnon et, al, 2014; Roulleau-Berger & Lu, 2005). Undoubtedly, the vast pools of surplus labour associated with mass inter-continental migrations have gained a lot to China’s manufacturing advantage in the global market. Yet in most cases, the most unpopular jobs within Shanghai’s rural Hukou holders are those such as street vendors, building site construction workers and manufacturing for production line work, which are mainly performed by rural migrants (Meng & Zhang, 2001; Roberts, 2001; Chen, 2009). Moreover, rural migrants make significantly less money than local residents, which cannot be fully explained by production efficiency alone, but can be explained by discrimination and inequality suggested by the central government (Fan, 2001; Knight et al., 1999; Wang et al., 2002; Chen & Hoy, 2008; Meng & Zhan, 2001). For example, in the factory-based production line work, Chen’s (2009) fieldwork survey data from Shanghai’s 21 manufacturing companies in 2005, reveals that 79.0% of rural migrants worked in production-line positions, compared to the number 38.2% of local workers and 36.7% of urban migrant workers, which is consistent with the literature that shows that rural migrants occupy the largest numbers of production line workers (Meng & Zhang 2001; Roberts, 2001). Conversely, 54.2% of urban migrants and 47.4% of local workers worked in managerial or professional positions, compared with only 12.5% of rural migrants (Chen, 2009). Such an occupational difference of this phenomenon can be explained by in two aspects. Firstly, urban migrant workers have better educational experiences, as both urban and rural migrant worker faced similar institutional constraints under the Hukou system, and such differences within this sector shows their different social capabilities, such as education experience etc., Chen (2009) indicated that the average level of education among rural migrants workers is 9.5 years, significantly lower than 12.5 years of urban migrant workers. This reflects the great inequality of educational opportunities between rural and urban areas in China (Zhang and Kanbur 2005, Chan 2009). Secondly, the municipal government acted in interests of protecting its disadvantaged local groups who held a Shanghai Hukou, for example, the Shanghai labour market policies implemented in the 1990’s required that certain kinds of vacancies, such as accountants, clerks, security guards and cafeterias staff only provided for Shanghai Hukou holders to solve the locals’ reemployment issues after the huge job cuts in the state sector since 1990 (Li 2004), these rules effectively solved the employment problem of low educational locals groups and continues to this day. Consequently, rural migration workers had been concentrating on unskilled manual jobs which were despised by the local residents, where they frequently suffered under such harsh working conditions such as dirty, noisy places in workshops as well as wage delays etc. (Chen, 2009).

Furthermore, employment discrimination and prejudice against rural migrant workers within the same sectors is also a serious issue and such a phenomenon had been described as “unequal pay within same occupations”, meaning a great inequality existed and still exists today (Meng & Zhan, 2001). For example, with respect to working hours in production line positions, although labour laws stipulate that normal working hours should be no more than eight hours per day and not more than 44 hours each week and overtime hours must be under 36 hours per month. Chen’s (2009) research shows that, in Shanghai, rural migrants worked 55.5 hours per week, while the number in urban migrants and local workers was 49.5 and 44 respectively. Although part of the work overtime can be explained by rural migration’s willingness to work more in improving wage income because they were getting paid less than the locals or urban migrant workers, fieldwork experience shows that there was forced work put upon by employers in these factories to the rural migrant workers if they wanted to keep their jobs, rural migrants had to work on weekend unless it was special approved by their manager. However, all local workers had two days off each week which are regulated by the law. Meanwhile, in terms of wages, rural migrants earn a significantly lower wage (5.5 Yuan per hour) than urban migrants (9.8 Yuan) and local workers (9.9 Yuan). It should be noted that the wage difference between urban migrants and the locals was very small. As can be seen, there are obvious unequal treatments between rural migrants and the other two groups of populations.

According to the analyses above, although it be subject to the similar institutional constraints (Shanghai Hukou status), different from their rural counterparts, urban migrants workers enjoy almost the same level of treatment and achieve great occupational attainments in manufacturing as the Shanghai local residents do. The explanations for this phenomenon is that the occupational attainment of urban migration reflects their human capabilities, especially educational experiences, contributed by their continued higher educational time spent on their vocations, educational attainment of urban residents improved significantly, while the average level of education experience among rural migrants just experienced educational levels below the high school level as high school in the rural areas is not compulsory, but is expected in the urban cities. Lu & Wang (2012) indicated that from 1995 to 2005, the Index of dissimilarity showed an increasing amount of inequality in educational attainment between the urban residents and rural migrants rise from 30% to 40% for the urbanites. In addition, urban migrants also benefitted from be born and raised in urban areas and thus they are more familiar with various job search skills such as newspaper ads, the internet and local employment fairs etc., as well as having good interview and presentation skills which was a contributing  factor of their tertiary education experiences. Therefore, urban migrants are able to take advantage of good employment opportunities like the Shanghai local residents also enjoy (Chen & Hoy, 2008).

The significant segmentation between rural migrant workers and other two classes shows that the most obvious inequality was embodied in discrimination against the rural migrant workers and this is because rural workers have for years received lower pay levels which cannot be fully explained by production efficiency alone, but can be explained by exploitive bosses and the central government who either casts a blind eye to this situation or are themselves being rewarded by bribes from the owners of those businesses (Meng & Zhan, 2001). From the point of view of Harriss-White (2005) they indicated that capitalism will actively determine “what kinds of bodies are eligible to enter the workforce” and it can filter out the most non-productive or productive group, whichever the case may be. In term of production-line work, since the 1990’s, the rapid expansion of manufacturing in Shanghai produced a big demand for unskilled labour and hence the rural migrants were needed to fill this void (Xin & Zhang, 2010). From this point in time the rural migrants were the ideal selection of groups who were younger (averaging about 28.5 years of age compared to local workers’ who were roughly 34.9 years in age in the year 2005), they were hard-working, willing to work overtime but unprotected by any institution compared to their urban counterparts who are protected by the labour policies of the central government (Chen, 2009; Chen & Hoy, 2008). On the other hand, urban private enterprises have the incentive to reduce their labour cost due to intensified market competitiveness, hence, and employers have gradually learned to make use of marginalised rural migrants based on their non-local Hukou status (Lu & Wang, 2012). Meanwhile, narrow channels of obtained employment deterred rural migrants from making more effective occupational decisions, for example, the main strategies of employment for rural migrants were based on the limited personal networks, such as mutual support, and family and community exchanges, rather than government assistances (Roulleau-Berger & Lu, 2005; Feng et,al, 2002). Chen & Hoy (2008) indicated that personal networking of rural migrants does not help individuals obtain better paying jobs in Shanghai, but this is further evidence for the restricted nature of migrant networking abilities. In addition to the high degree of income inequality, rural migrant workers were also more unlikely to be entitled to non-wage welfare such as social insurance or job stability (labour contrast), which should be shouldered by their employers if they had the local urban Hukou. The survey of Lu & Wang (2012) shows that from 1995 to 2005, the percentage of Shanghai Hukou holders in the workforce with social insurance and formal labour contracts continues to increase over time (social insurance increased from 87% in 1995 to 96% in 2005 and labour contracts from 56% to 77% respectively), while the fraction of rural migrant workers remain low for formal contracts and some form of insurance (formal contracts: 47% in 1995 and 39% in 2005; social insurance: 13% in 1995 to 19% in 2005). Work-place discrimination also resulted in the highest degree of perception of social injustices among rural migrant workers, compared to urban migrant workers and local residents groups (Long & Feng, 2013).

The analysis of the results given above is consistent with the research presumption of one that employers have the interest in perpetuating the significantly high unequal treatment of rural migrant workers in Shanghai. However, discriminating against rural migrant workers to some extent is not only determined by the employers themselves, detailed explanations of this dual phenomenon are needed in some detail to understand the rural migrant’s crises. The first one is, how can the social mechanism only create and persist in a boundary that excludes rural migrant workers rather and giving urban migrants special priority, who are confronted with matching institutional challenges in Shanghai. We can explain this more specifically in Part Two of this Chapter; the second one is, discrimination of the rural migrant worker is visible in work place and also non-compliance with  labour regulations and law, however, it was tacitly encouraged by the municipal government, the causes and form of this mechanism will be explained in Part Three of this Chapter.

Part Two: Social Mechanism of Durable Inequality

As argued by Mosse (2007) that the social mechanisms have created and continue to make inequality thrive through boundary marking and exclusionary systems set in place, the inequality-generating social mechanisms are extremely important to affect the rural migrants’ identities and social categorisation in Shanghai. This dissertation will answer how the interaction between institutional and non-institution arrangements constitutes how the social mechanisms treat rural migrant workers and treat them as second class citizens in Shanghai (Zhang, 2002).

In terms of the institutional factors, the Shanghai municipal government has carried out a series of Hukou reform measures to encourage skilled and qualified migrants who have settled in Shanghai since the early 1990’s (Berger & Lu, 2005). In 2004, Shanghai became the first city in China to introduce the points system, which have been interpreted by researchers as a biased policy that aims to attract talented migrants and the affluent while excluding the low-skilled migrants, most, if not all, are the rural migrant workers who cannot participate in the point system (Zhang, 2012). Under the Points system, migrants who have had long-term stable occupations or have an investment(s) in Shanghai can apply for the Shanghai Hukou if their qualifications meet the requirements of the points system. There are two main regular channels, the first one is “individuals who have direct investment and have established an enterprise in Shanghai, have paid taxes of more than one million RMB each year for over three consecutive years, or hires more than 100 local workers each year for at least three consecutive years’. The second one, for the migrant workers, the minimum application conditions are ‘having participated in the Shanghai social insurances scheme and have paid taxes accumulated for over 7 years” and “holding at least an intermediate professional title and technical qualifications certificate” (Shanghai Municipal Government 2009). Zhang (2012) points out that the point system contains two primary functions: attracting the talented and investment migrants who are treated as important resources in improving urban competitiveness in Shanghai; and is the institutional barrier to control and restrict the related beneficiaries who may share the benefits of economic development such as rural migrant labourers.  The policy deficiencies of the points system is tilted toward the migrants who have a high educational degree, high title or affluent positions, while excluding the vast majority of rural migrant workers (Hu & Gao, 2011). For example, under the point systems, the employing companies who have hired these migrants are the one and only one to be responsible for helping individuals obtain a Shanghai Hukou. The municipality would not process the applications from individuals without the guarantee by their employers (Zhang, 2012). In this case, three groups who are mainly employ rural migrants in Shanghai: are the self-employed, or employees without a formal labour contracts with their employers, or rejected by employers for protecting the interests of their companies,  are excluded from official channels to obtain the Shanghai Hukou, (Hu & Gao, 2011). Even if they have long-term stay and worked in Shanghai for many years, they are not regarded as migrants who meet the condition of “having long-term stable occupations” the rules of the Points System. As a result, in practice, the existence of a residence management institution in Shanghai have created two types of inequality: the first is that the Hukou status distinguishes between Shanghai locals from migrants, and the second is the point systems and how it distinguishes the bottom rural migrants who have few cultural and also economic predominance from those migrants with skills or financial resources, thereby ruling out rural migrants (Berger & Lu, 2005).

In terms of the non-institutional factors, in China, generally rural migrant workers are labelled as “inferior, unenlightened, under-bred and with peccary aspects” while the urban residents are regarded as “high quality” (Afridi et,al. 2014). This is closely related with China’s urban-biased development policies in last several decades (Yang, 1999). However, such a prejudice perception have been shaped and allowed by a mind set of “the existence of informal social mechanisms”. As explained by Cornell and Hartmann (1998) that when the discrimination on particular set of social classes (rural migrations in this thesis) has been formed by an external social environment, these classes can generate a response to transform or adapt to the environment. This is reflected, as discussed in the previous section, that the rural migrants reply on personal networks as the main channels to find jobs in Shanghai. In response to be treated unjustly and having been reduced as low transaction costs in cities, the rural migrants have generated solidarity and network resistance to the advantage of urban residents, which may not be neutralized by self-interest, but “mobilised to destroy, undermine, bypass, or create alternatives to create categorical barriers” (Mosse, 2007). For example, as revealed by Zhang (2014) that in order to distinguish themselves from the “low quality” labels which were often associated with “peasant identities”, some of the female rural migrants attempted to deny their inferior “peasant identity” by keeping away from rural migrant workers. However, a series of institutional restrictions, and their inferior status in Shanghai compelled them to compromise and seek help from families and personal networks from their hometown. This in turn reinforces their connection to their “peasant identity” (Zhang, 2014). As illustrated in Akerlof and Kranton’s (2000) identity model of social exclusion is that the adverse impact of social exclusion is impossible to vanish unless the outsiders are fully blended into a community (Afridi et,al. 2014). When asked about their urban life, many female rural migrants shared the feeling of being transient in the city, rootless, isolated and inferior (Zhang, 2014), and the lack of a sense of belonging in cities strengthened rural migration back to their hometown. From these perspectives, over-reliance on rural migration social networks, which have been described as “small, tight and homogeneous” by Chen et,al (2008), in resistance to the discrimination in cities, to same extent, isolated them from local communities which had not helped to change their imposed stereotype of “inferior identities” in cities. This can be supported by Chen & Hoy’s (2008) research that the urban migrant who were raised in cities and were more familiar with urban life, have shown an active willingness towards communication with the locals.

As argued by Bourdieu and Champagne, (1993) that various forms of migrants could give rise to “exclusions from the interior”. Whenever migration entails a phased loss of social capital, both in economic resources and social identification then resulting in substantially reduced and eventually full of negated individuals and their qualifications (Roulleau-Berger & Lu, 2005). This thesis argues that the long term imposed stereotype of “low quality” identities have led to a decrease and denial of rural migrant workers’ qualifications, the lower wages of rural migrants can be explained as not only by their educational under-attainments, but also devalues rural migrants labour by employers due to their “second class citizens” status. Migrant worker's work do not match up with their solid contributions in Shanghai and they are still in a weak position in urban society, in which their legitimate rights and interests are often infringed upon (Long & Feng, 2013). Meanwhile, the “points system” which makes a distinguishing difference between the majority of unqualified migrants who are regarded as ”low quality” and “unwelcome” people in cities and the qualified migrants who are labelled as individuals who can make worthwhile contributions to society and promote Shanghai's economic development (Berger & Lu, 2005), which legitimizes the devaluation of rural migrant labourers (Zhang, 2014).

These results reveal that the nature of discrimination experienced by rural migrant workers persists because of the “the mutual effect of institutional limitations and non-institutional arrangements”. Such mechanisms have excluded rural migrants from getting equal value added by their labour and ensuring that even after decades of work in Shanghai the generations of rural migrants still has little access to skilled and better paying jobs and they concentrate on despised jobs because no one else will do them. This is consistent with Mosse’s viewpoint that social mechanisms can create and stabilize exploitation and accumulation, and identify distinctions that are superior to personal efforts (Mosse, 2007).

Part Three: Power in the Analysis of Inequality

The long-term existence of structural inequality to rural migrants is not only underpinned by the interest of capital gains by their employers but also the organisation of social categories, but more importantly, it reveals the rural migrants themselves as the victims of unaccountable institutions and their powerlessness in China.

Differences from western governments who exist through general elections, in the absence of a democratic mechanism in China, the leaders of the administering authority, both in the central and municipal levels, are directly appointed by their superiors rather than being responsible for their voters as there are no real voters (Spires, 2011). As argued by Mosse (2007) that the premise of tackling inequalities is backed by an accountable government who has a strong demand by their constituents and the incentive to defend the interests and rights of marginalized groups. Although the Chinese government has announced a range of targets to tackle on the inequality issues of rural migrants, these measures have to give ways for the primarily targets of economic development (Xie&Heiden, 2010). The interests of rural migrants are thus excluded from the core political agenda in the municipal government as the performance appraisal system for government officials are mainly based on the local GDP growth rates (John & Zhou, 2010). Since the reform of fiscal and managing decentralization at the provincial level in the mid 1980’s, the municipal governments were also saddled with the responsibility for providing local citizens social welfare which goes along with their financial autonomy (Lee, 2007). City governments thus lack the incentive to provide migrants with the same level of social welfare as to the local Shanghai residents mainly because of the enormous financial pressure as well as reducing the loss of the vested interests (Yu, 2009). Worse yet, the city authorities also acted in the interests of protecting its citizens and provided nothing for migrant labourers, even if they had lived and worked there for many years. For instance, in 2002, the Shanghai government adopted a range of measures of employment protection policies to ensure certain positions were only open to the locals (Fang, 2004), meanwhile, Shanghai also launched the “points system”, which has been regarded as a migrant-selection policy to meet the challenges of an aging population and promote urban competitiveness within China (Zhang, 2012). Although the central government has consistently made new laws and regulations in order to enhance the migrant workers' access to urban services, the effects were very limited (Xin & Zhang, 2010). For example, the premise of enjoying a particular public service are aware of the related policies, in Shanghai, migrants can enjoy a sequence of public services, however, Yang (2015) reveals that only the acquaintance rate of household registration management, children’s education and family planning service among rural migrants were up over 30%, and other public services such as preferential outpatient care, community family physician service and employment counselling etc., are under 10% (Yang, 2015). The low awareness rate of public services among rural migrants reflects that there is inertia in the system and this is because the city government is reluctant to treat migrants as equally as locals, conversely, they see migrants as rivals of the Shanghai local residents in sharing the public products and services (Xin & Zhang, 2010). Interestingly, except an effort by the central government to Increase the treatment of rural migrant workers in the cities, to solve the issue of labour shortages due to the increasingly fierce competition for labour between cities in China in 2002, then the Shanghai municipal government had launched the “comprehensive insurance” scheme, which provides both rural and urban migrants the care of workplace accidents, serious diseases and old age insurance (Yu, 2009), in 2009, the actual joined rates of comprehensive insurance is 54.4% (Li & Guo, 2011). Albeit, the insurance vested to the rural migrant workers is within this number, it suggests that there are political spaces to serve in the interests of marginal groups within the municipal government.

In terms of the labour protection mechanisms, different from the western developed countries where labour unions play an important role in improving working conditions, and safeguards workers’ rights and interests but in China, to ensure social stability workers were not permitted to form trade unions independently (Zhang &Zhu, 2014). Although the establishment of trade unions is encouraged by labour law, it must be approved by the companies, for example, in most cases the union leaders are directly appointed by and are accountable to company managers. This is like having the fox in the henhouse. Collective union activities, such as popular resistance, protests and so on, are rare due to the restricted control of the company managers. These factors have sharply reduced the role of labour unions to protect workers’ rights (Yu, 2009), let alone the rural migrant workers. In China, the local labour bureau is the most important official agency in charge of implementation of labour laws and regulations. However, as illustrated by Mosse (2007), labour inspectors almost simultaneously have an alliance with employers and have an interest in glossing over the truth rather than actively acting looking for evidence of exploitation or abuse in the workplace. Are these inspectors taking bribes, one has to wonder about this scenario as they do practically nothing for the rural migrants or upholding the laws and policies which they are not apparently doing. Especially in China, the cities are full of enthusiasm about attracting investment which can in turn provide a large number of direct tax sources and raise the GDP growth rate for the municipal government. As revealed in Chen’s (2009) fieldwork that even though know clearly that the many employment practices of production-line companies where the rural migrant workers are usually working overtime, are not legal, and that the Shanghai district-level labour bureau officials selective ignorance in violation of the labour laws unless receiving direct complaints from these rural workers. Furthermore, the Shanghai labour bureau has launched a range of regulations to protect urban workers, specific requirements by employers not only reserved for particular vacancies for Shanghai local residents, but also suggests that payments for local workers should not be less than that of migrants and that the offenders would be severely fined (Feng et,al, 2002; Wang et al., 2002;  Lu & Wang, 2012). These results suggest that the city authorities’ tolerance of employer’s illegal acts to migrant workers is tolerable, meanwhile they actively act in the interests of protecting its urban citizens, however all of these actions come at the expense of the interests and rights of migrants. Municipal authorities themselves unconsciously generate unofficial powers to discriminate against rural migrants, as when local formal power-holders such as the labour bureau mentioned, provide space for employers to practice power over the rural migrants, or local residents over migrants, or public servants of municipal agencies unfair treatment of the rural migrant workers when provided public services, the inequality remained intact or was strengthened.

The discussions above show that both formal and informal mechanisms at municipal levels provide rural migrants a tiny way to make positive impacts on “reducing discrimination against rural migrant workers in cities” (Zhang&Zhu, 2014). The durable exploitation to rural migrants reveals they don't have the power to affect the political agenda or let their interests and rights be recognised to defend their interests and rights, to allegedly claim for equal wage payment or social security. Additionally, as argued by Mosse (2007) that although durable inequality has persisted by the dominant powers and extensive political exclusion, the inequality mechanisms are also sturdy by the “adaptations” of those who are themselves exploited. Rural migrants who are the most vulnerable populations to seek matching jobs are most unwilling to go against their employers. They are not actively looking for an alliance with progressive parts of authorities, government assistances or integrate themselves into local communities, but usually only through relationships with limited homeland personal networks. Lu & Wang (2012) discover that, for the self-employed of rural migrants in Shanghai, it is very hard to establish networks and good relationships with urban bureaucrats who are necessary to succeed in one’s business, instead, they become more closely linked with other migrants which tie themselves to a further limited group of people who themselves lack of preponderance to obtain resources from the booming economy (Lu & Wang, 2012). While the monolithic solidarity of rural migrants can be regarded as self-protection, it undermined their long-term economic mobility abilities as well as to maintain their stereotyped negative preconceptions by the urbanites.

Conclusion

Structural discrimination against rural migrants remains a serious problem in China, its production and maintenance is profoundly embedded by the complex interplay of profit-seeking incentives such as the capital made by their employers at their expense of working at extremely low wages, the inequality generated and the persisting social mechanisms and unaccountable institutions are mostly to blame for rural inequalities. We took the Shanghai labour market as the first path to analysing the disparate treatment between rural migrants, urban migrants and local workers and it revealed that even after decades of rapid urbanization and development, rural migrants are still excluded from equal gain to the value added by their labour and that they have little access to skilled and better paying jobs and that they mainly concentrate on the most despised jobs, while facing “unequal pay within the same occupations”. By contrast, although they are subject to similar institutional constraints under the Hukou system, urban migrant workers enjoy almost the same level of treatment and achieve great occupational attainment in manufacturing as that of the Shanghai local residents. This phenomenon cannot be fully explained by production efficiency factors alone. One the one hand, it shows that the most obvious inequality was embodied in discrimination against these rural migrant workers by intensifying profit seeking capital by their companies, which has a strong incentive to belittle and marginalise rural migrants as cheap and exploitable labour through the use their non-local Hukou status as well as the long term huge and persistent rural urban divide in China. On the other hand, discrimination against rural migrant workers is not only determined by the employers themselves, but also stabilized by the inequality generated and persisting through social mechanisms and unaccountable institutions.

In terms of the social mechanism, this thesis concludes that the interaction between institutional and non-institution arrangements constitutes the social mechanisms for treating rural migrant workers as second class citizens in China. In Shanghai, migrant worker's work do not match up with their contributions and they are still in a weak position in urban society, which their legitimate rights and interests are often infringed upon. We argue that the long term imposed stereotype of negative identities have resulted in their substantially reduced rights and denial of rural migrant workers’ qualifications in the workplace. The low wages of rural migration can partly be explained as devaluations of rural migrant’s labour by employers due to their “second class citizens’ status” identities. Meanwhile, the points system, which makes a distinguishing divide between the majority of unqualified migrants who are regarded as “low quality” and “unwelcome” people in cities, while the qualified urban migrants who are labelled as individuals who can make worthwhile contributions to society and promote Shanghai's economic development, legitimizes the devaluation of rural migrant labours. Such prejudice perceptions are also persisting by the rural migrants themselves, in response to be treated unjustly treated with reduced transaction costs in urban life, they have generated solidarity and network resistance to the advantage of their urban counterparts with such a limited social network for themselves, however, having isolated themselves from local communities, strengthens their imposed stereotype of being “inferior identities” and undermined their long-term economic mobility abilities in cities. We conclude that the discriminations against rural migrations are not only based on their documented rural Hukou status, but the monolithic solidarity social networks they have established and unless the rural migrants can be fully blended into the Shanghai local community, the adverse impact of social exclusion is impossible to vanish and go away.

The persistent exploitation and discrimination against rural migrants reflects the misrepresentation of the political system at municipal levels. It is important to note that China’s official institutional is set up different from centralization management in the era of a planned economy and is more decentralized and consists of a multitude of actors. In recent years, although the central government has announced a wide range of measures to tackle the inequality issues of rural migrants, the effects of these policies were very limited in Shanghai and the authorities have long held back from full embracement of migrants and provide them the same level of social welfare as that of local Shanghai residents, this is mainly because of the enormous financial pressure of social welfare as well as reducing the loss of the local residents’ vested interests. Although labour shortages and the increasingly fierce competition among cities have pushed the Shanghai government to take some active approaches to solve inequality issues, within the municipal government, there are only tiny spaces for rural migrants to make positive impacts on protecting their interests and rights. Compared to the increase in the local GDP growth rates associated with attracting investment and preventing the loss of the Shanghai residents’ vested interests while the interests of the rural migrants are still excluded from the core political agendas in the municipal government. These two agendas, however, also come at the expense of the interests and rights of rural migrants. Discrimination of rural migrant worker is visible in the work place and is also not in compliance with labour regulations and laws of the central government, however, it was tacitly encouraged by the municipal government, which suggests that the municipal government and capital markets are complement each other rather than opposite of their antagonistic actions in production and persistence of inequality of rural migrants. We discover that the municipal authorities themselves are unconsciously generating unofficial powers to discriminate against rural migrants, as when state agencies, such as the local labour bureau we mentioned, provide space for employers to practice power over the rural migrants, even local residents over migrants, and even worse, the public servants of municipal agencies unfair treatment of rural migrants when providing public services, discrimination against rural migrants remains intact or has even been strengthened. Rural migration is as much market-based as a state-directed process (Guang, 2005), and China’s Communist party has proven its success for promoting rapid economic progress by maintaining significant control and force within domestic market institutions, though it completely fails to take effective measures to overcome discrimination against rural migrants.

This thesis concludes that the production and maintenance of the structural discrimination against rural migrants is profoundly embedded by the complex interplay of profit-seeking incentives of capital, and this inequality generating machine continues to persist within social mechanisms and unaccountable institutions. The problem of rural migrants’ inequality is fundamentally unsolvable unless two key questions are resolved: the first is a new political mechanism to be established, where the interests and rights of rural migrants can be included into the core political agenda by the municipal governments. The second is that rural migrants can be fully blended into the Shanghai urban life.