Household Registry Reform is No Harm to Urban Hukou holders
How come that Household Registry Reform is faced with strong opposition?
Recently a news report about the opposition of mayors against household registry reform was widely spread. It is reported that the research group on the survey of national urbanization organized by National Development and Reform Commission (NDRC) completed their survey of 8 typical provinces, such as, Zhejiang, Guangdong, Jiangxi and Guizhou, etc. The research topics mainly concerns cost of involving migrant workers in urbanization, urban traffic network building, industrialization and urbanization, and household registry reform. The research group particularly found that household registry reform is strongly opposed by almost all mayors in the survey areas”.
Why is it that the mayors are all averse to household registry reform? Here is a major reason: household registry reform can only impose heavier burden on the local governments in that household registry in China is not merely a tool for demographic statistics but also a pivotal foundation on which residents are entitled to basic public service, which is closely related to education, medical treatment and social security, etc. Household registry reform calls for local governments to make household registry publicly available, in fact requiring local governments to ensure that residents within an administrative area enjoy equal access to public services instead of unequal access based on household registration.
There’s no free lunch in this world. The local governments are naturally burdened with heavier expenditure if it covers migrating population with equal education, medical treatment, social security and other public services. Then, we need to know how much such cost will be? According to China Development Report 2010: China New Urbanization Strategies for Promoting Human Development, a research project conducted by China Development Research Foundation in 2010, current cost for a urbanized migrant worker is approximately 0.1 million yuan. But as for local governments, it will maintain current household registry system on which public services are based, prior to cancelation of the unified household registry policy, which is actually a rational choice. Local governments do not need to provide migrant workers working and living within its administrative area with any necessary public service, yet on the contrary, it can earn the taxes from their work. In this consideration, it is a real bargain to just have benefits without paying any cost.
Moreover, not merely mayors but also Hukou holders lodge the same strong opposition to availability of public service to migrating residents. At the beginning of this year, a letter allegedly written by a young mother to Mr. Han Zheng, Mayor of Shanghai Municipality, was widely spread online in which she argued that Shanghai government should self-examine the policy permitting children of migrant workers to have free education in Shanghai. The letter goes on like this, “the children of migrant workers should not have shared limited resources Shanghai government could afford”. True enough, 2011 witnessed the resident population in Shanghai reached 23.4746 million, in which the migrating population contributes up to 9.3536 million, accounting for 40% of the total resident population. If these migrant workers and their children were entitled to equal education, medical care and other public service, it could impose extremely greater pressure on the local finance.
Objections worthy of scrutiny
However, do the reasons that rejecting equal public service to migrating residents favorably protect the interests of local Hukou holders? In my opinion, it is something worthy of scrutiny. Actually, equal public service to migrating residents will not increase the burdens on the Hukou holders but on the contrary, it is Pareto improvement, considerably benefiting both sides.
First of all, equal public service granted to migrating residents conduces to correction of misallocation of public resources, thus effectively protecting benefits of Hukou holders. As stated above, the size of local basic public service depend on the scale of the local household population. In view of medical care, migrating residents are not entitled to the same public service as Hukou holders, yet it does not mean that these people shall be deprived of any opportunity for medical treatment at local medical institutions when they fall ill. On the contrary, in most cases, they have to seek medical treatment at the place where they work and live, which means that they must fervently vie with Hukou holders for the resources for their own benefits.
We’d like to take Shanghai for example: in recent years, migrating residents have had an increasing number of childbirth in Shanghai, which has elicited quite a backlashamong Hukou holders. According to relevant data, 2011 saw the total childbirth number reach approximately 0.203 million in Shanghai, Hukou holders accounting for 47% and migrating residents accounting for 53%. The ward beds are properly deployed on the basis of Hukou holders while patients’ volume is on the basis of all residents. On condition of the unmatched supply and demand, the rights and benefits of local Hukou holders are greatly impaired. However, if the ward beds are thus deployed according to the scale of all resident, do we still have such a problem of crowed patients lining up for a ward bed at hospitals? It is evident that it is true of hospitals but also of other sectors like education, etc.
In the second place, metropolises currently beset with population aging need to find payment for social security by migrant workers. Migrating residents and Hukou holders have different demands for the public service: migrating residents are mainly in need of medical care and children education but have no need for social security coverage while for local Hukou holders, though they may have the interest conflict with migrating residents in terms of demand for equal education and medical treatment, the greatest pressure confronting the local Hukou holders is social security coverage other than education and medical treatment. As it is, the former can be directly observed but the latter just remains hidden.
Household Registry Reform may relieve stress on local population aging
In 2011, Hukou holders in Shanghai aged at 60 or above accounted for 23.4% out of the total; by 2015 the elderly in Shanghai aged at 60 or above will exceed 4.3 million, at the proportion nearly of 30%. Population aging will pose a serious challenge to Shanghai. Under the pay-as-you-go pension system, lack of the sufficient eligible population to burden the costs of social security leaves a great shortfall of pension. In 2010 Shanghai financial authority filled up the gap of pension system up to nearly 10 billion yuan. Remember in 2007 the figure was 4.981 billion yuan. As aging population becomes more and more serious, this pressure will be increased with no mitigation.
How to relieve such a pressure? It appears to me that the most feasible way is to attract more young people to join in the premium-paying system. Obviously, migrating residents working in this city is a great source as they are a large group of young people. According to statistics from Shanghai Population and Family Planning Commission (SPFPC), the average age for nearly 10 million migrating residents reaches approximately 31.6 years old. Actually, the resident permit system launched in Shanghai City in 2009 was kind of based on this actual situation. It is evident, however, that the resident-permit system does leave spaces for improvement as it set a high threshold that the applicants, in general, should obtain a college degree, leaving a large number of working population at non-regular departments or organizations, particularly the majority of migrant workers outside who could have been a source of payment. In meanwhile, it is inconvenient to handle resident-permit in the application process as most applicants are entitled to limited service, so many migrating residents evade the payment of the social security by whatever means conceivable.
Shanghai is the earliest city in China beset with the population aging, to be followed by many other cities. For the cities confronted with population aging, it is of great importance to maintain safety of social security system for sustainable development in all cities. Currently, it seems that migrant workers will become the favorites to win over by all places in the coming years. Therefore, a wise local government should offer something alluring—by providing migrating residents with basic public service to attract more migrant people so as to take a lead in the fight for more pension.
If my argument holds true, local governments and Hukou holders should welcome household registry reform with much applause. It is something mutually beneficial to both sides to provide migrant workers with equal education and medical treatment to mitigate the current social security crisis. However, why are mayors and urban residents strongly opposed to such a reform? To my mind, a very important reason lies in that they didn’t size up the advantages and disadvantages of the reform, particularly without taking into account the great difference between the aged society and the non-aged society. Whoever, no wonder, would take these seriously when they have not much direct effect on the today’s GDP?
Originally published on China Times | 2012-8-30
