Urban Pauperization under China’s Social Exclusion: a Case Study of Nanjing

This article articulates how two new urban poverty groups, namely the new urban poor and poor rural migrants, are pauperized under China’s social exclusion. We argue that the two poverty groups experience different pauperization processes and are subjected to distinctive social exclusions with relevance to their institutional-based status and changes in it. The urban poor experience status change from being beneficiaries of the planned economy to being victims of the market economy, and become a vulnerable group characterized by market exclusion and limited welfare dependency. The status of poor rural migrants changes from being institutionally inferior farmers in the planned economy to being a marginal group of urban society, which is now subjected to institutional exclusion and the resultant social exclusion. This research argues that positive social policies should be considered and a social security system should be established to pay more attention to the development issues of the urban poor. Over the last decades, the proliferating literature on new urban poverty and social exclusion encapsulates a broad debate on the social and spatial transformations taking place in Western cities (Badcock, 1997; Hamnett, 1996; Mingione, 1996). The prevailing interpretation is to treat the new urban poverty as an outcome of global economic restructuring, changes in the welfare state, and social structure (Morris, 1993; Neef, 1992; Sassen, 1991; Wacquant, 1993; Walks, 2001; Wessel, 2000; Wilson, 1987). Against the background of economic globalization, the post-Fordist economy and an employment regime characterized by a precarious labor market and the curtailment of employment for life have caused very large numbers of uneducated or unskilled workers to be excluded in Western cities (Gans, 1993). Since the labor market is regarded as the most important mode of integration in advanced market economies, the new urban poor, because of limited access to the labor market, are more vulnerable and have become socially excluded (Dorling & Woodward, 1996; Mohan, 2000). They therefore have limited welfare security (Silver, 1993; White, 1998) and weakened social support networks (Mingione, 1996; Musterd & Ostendorf, 1998). In general, the new urban Direct Correspondence to: Yuting Liu, State Key Laboratory of Subtropical Building Science, South China University of Technology, Guangzhou, 510641, China. E-mail: [email protected]. JOURNAL OF URBAN AFFAIRS, Volume 30, Number 1, pages 21–36. Copyright C © 2008 Urban Affairs Association All rights of reproduction in any form reserved. ISSN: 0735-2166. 22 II JOURNAL OF URBAN AFFAIRS II Vol. 30/No. 1/2008 poverty is regarded as a complex phenomenon caused by economic disadvantage and social exclusion (Mingione, 1993). Exclusion from the world of regular employment and from mainstream society is the main feature of the new urban poor in post-Fordist western society (van Kempen, 1994). National paradigms and political cultures associate names for the “new urban poverty” with certain ideological terms, such as social exclusion (Silver, 1996). Originally, the notion of “social exclusion” was dominant in poverty discourse in France, which is understandable partly because the term’s connotations derive from the dominant French Republican ideology of solidarism (Silver, 1996). Recently, the idea of social exclusion has been widely used in Europe, and even in Asia. As Sen (2000, p. 32) pointed out, “the investigation of poverty is both internally and externally supplemented in a fruitful way by the use of ideas of social exclusion.” Originally, the exclusion is seen as a rupture of the social bond of “solidarity.” Along with economic recovery in the late 1970s, social exclusion has been identified as the social problem of the new poverty. By the mid 1980s, the term referred both to the rise in long-term and recurrent unemployment and to the growing instability of social relations: family breakup, single-member households, social isolation, and the decline of class solidarity (Silver, 1996). At present, the connotation of social exclusion has been extended to signify a significant redirection of emphasis from the material deprivation of the poor towards their inability to fully exercise their social, economic, and political rights as citizens (Geddes, 2000; Liebfried, 1993; Sen, 2000). In China, massive lay-offs and unemployment have occurred since the 1990s, and numerous poor rural migrants have emerged in cities, and are considered as China’s new urban poor (Liu & Wu, 2006a; Wu, 2004). The new urban poverty has contributed to a trend whereby China has moved away from being one of the most egalitarian to being one of the more unequal societies in the world (World Bank, 1997). The marketization reform of the economic system in China has caused rising inequality and social stratification (Pei, 2006). Social exclusion properly describes the new urban poverty in China. A large number of urban workers, including many rural migrants, are excluded from the labor market, which is quite different from the situation of full employment in the planned system. They are also excluded from the welfare system. Existing studies point out how institutional establishments and their changes as well as the subsequent economic restructuring have given birth to the Chinese new urban poverty (Liu & Wu, 2006a; Wu, 2004). Because exclusion is not only an extreme state, but the effect of a cumulative logic of deprivation, we need to analyze back to the source the processes of regulation/deregulation that are at work in the whole of society at any given moment (Castel, 2000, p. 534). So in this article, through examining the institutional transition and economic restructuring, an initial investigation is conducted to understand the pauperization experiences of China’s new urban poor under China’s social exclusion. This research pays especial attention to the articulation of the pauperization process of the two new urban poverty groups, which are identified as (1) the new urban poor, including laid-off workers, and unemployed persons with urban residence registration, and (2) poor rural migrants with rural residence registration. Due to different institutional-based origins, the two new urban poverty groups have different pauperization experiences and are subjected to discrepant social exclusions. This article uses qualitative data from in-depth interviews with poverty households in Nanjing in 2004. Empirical study of the pauperization experiences and living predicament of China’s new urban poor will undoubtedly contribute to the comparative understanding of social exclusion in different national contexts. In the next section, we will generalize urban pauperization under China’s social exclusion through examining the institutional-based origins of the two new urban poverty groups and their changes of status. Then, we will analyze empirical evidence-based on qualitative materials from II Urban Pauperization Under China’s Social Exclusion II 23 the in-depth interviews of urban poverty households in Nanjing. In this analysis, we articulate the pauperization experiences of two new urban poverty groups and their different living predicaments. URBAN PAUPERIZATION UNDER CHINA’S SOCIAL EXCLUSION The development of a market economy in China since the early 1990s has resulted in noticeable changes in social structure. As the egalitarian ideology has been abandoned, an increasing gap between the rich and the poor has been created (Gu & Kesteloot, 2002; Pei, 2006; Wang, 2004). Along with rapid economic growth, great numbers of new urban poor have emerged. On the one hand, economic restructuring, which involves the reform of state-owned enterprises (SOEs are those enterprises owned by the central government) and collective-owned enterprises (COEs are those enterprises owned by local government at city level and district level, even subdistrict level) under market transition, has led to large-scale lay-offs and unemployment. At the end of 2003, 8.0 million persons were officially registered as unemployed, and the unemployment rate was 4.3% (NBSC, 2004). At the same time, 2.7 million workers had been laid off by SOEs (CSCIO, 2004). There are still a large number of laid-off workers and unemployed persons left to be registered. A majority of these people, who used to be protected by a work-unit-based welfare system and enjoyed benefits such as job security and stable pay in the planned economy, are currently pushed into the labor market, and only receive limited welfare support. They have urban residence registration, and are identified as the new urban poor (Figure 1). On the other hand, along with rapid urbanization, large numbers of rural laborers have been flowing into urban areas. The number of rural migrants in the whole country reached 98.0 million in 2003 (CSCIO, 2004). However, about 20% of them live in poor conditions due to low-paid work or unemployment in urban areas (Zhu, 2002). These poor migrants, who were formerly farmers restricted to farmland and outside the work-unit-based welfare system in the planned economy, are now flowing into the urban labor market. With rural residence registration, they are identified Poor rural migrants Hukou system Social welfare system The new urban poor Workers in SOEs and COEs Farmers Planned economy Centralized allocation of labour force Market economy Work-unit-based welfare system Labour market Market exclusion Limited welfare dependency Institutional exclusion Social exclusion Laid-off workers, the unemployed etc. Rural migrants Hukou system The reform of SOEs and COEs