The perils of undercounting the jobless

David Gray/Reuters

More than half of all Chinese live in cities. Like their counterparts in other developing parts of the world, citizens from rural areas flocking to China's urban centers are being drawn by the prospect of factory work and higher wages. Official estimates suggest life in the city is pretty good for job seekers: government data puts the unemployment rate among metro areas at 4.1 percent. But a worrisome new report suggests the real figure is actually more than twice that rate.

Researchers from Texas A&M University, working in concert with China's Southwestern University of Finance and Economics, surveyed 8,000 Chinese households to find that China's urban unemployment rate is 8.05 percent. That's up a half-point from last year, according to Gan Li, one of the study's authors.

Some of the most alarming results came from low-skilled workers and migrant laborers. More than a quarter of Chinese aged 51-60 who are registered to live in their cities are out of work. Migrant workers, meanwhile, have seen their unemployment rate surge to 6 percent, up from 3.4 percent just a year ago.

Migrant laborers are key to understanding how Gan and the government came to such radically different conclusions. Overall, the country is host to about 160 million such workers. But official figures from the government's side leave out that population in its estimates, in part because the main way China tracks unemployment is by counting the people who apply for unemployment benefits. But you can't apply if you don't belong, and you can't belong unless you have a residency permit for the city you're in. Migrant workers are at a major disadvantage in this respect.