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For a country which still has significant surplus labor, the reportedly severe shortage of migrant workers in China's economic engines such as the Pearl River Delta after the Lunar New Year holiday is rather baffling.

Various domestic media reports put the labor supply gap at around a million people in Guangzhou and neighboring cities such as Dongguan, legendary centers of China's export boom in the past three decades. Numerous assembly lines and construction sites are sitting idle while anxious employers have raised salaries by more than 30% but still can't attract enough applicants. hxw.red

So where have all the theoretically jobless peasants gone?

Structural unemployment - a mismatch between the skills workers have and those sought by employers - doesn't fully explain the phenomenon. To answer the question, one needs to consider a combination of factors that symbolize the changing landscape of China's labor force and modern society in general.

Firstly, there is indeed a structural problem here and it's twofold: On the one hand, many of the outstanding job vacancies are due to a lack of skilled workers as segments of China's export industry crawl up the value chain; but on the other hand, some factories complain that lots of the new-generation migrant workers aren't interested in tough basic jobs like construction any more.

The lack of interest in such low-paying, physically demanding work partly stems from the second factor - the growing income at home for these farmers. Much to its credit, the Chinese government has consistently put developing agriculture and feeding the rural population (which measured 727.5 million in 2007) as its top priority over the years. An incessant stream of favorable policies, such as scrapping burdensome taxes and forceful market intervention, have increased rural incomes to the extent that farming is becoming more rewarding than cleaning skyscraper windows in some places.

China's little-noticed reform to allow large state enterprises to rent farmland from peasants in order to modernize farming and boost productivity has started reaping fruits and also created a burgeoning group of idle farmers who can afford to live on their handsome rental income.

Thirdly, the current labor shortage in affluent coastal regions such as the Yangtze and Pearl River deltas is partly due to the construction boom and fast economic growth in second-tier inland cities such as Chongqing, Wuhan and Nanchang. Many migrant workers prefer these places because salaries are in some cases almost on par with Shanghai's and it's simply closer to home.

Lastly, a fairly qualitative but nonetheless significant observation is that just like in China's urban areas, the young generation of the rural population seems to have taken on a different world view. While their parents - migrant workers in their late 40s or early 50s - are gradually returning home and fading from the scene, their children who have been raised in relatively good conditions, are under much less pressure to support themselves or their (smaller) families.

'I am no longer willing to put up with the hardship in the city like my father did,' a young man told a local newspaper. With the savings of their parents who have struggled for decades in the cities, their family members in the villages have been able to build spacious houses, buy electronic appliances and enjoy a decent life.

Putting all this into long-term perspective, the current problem offers a glimpse of the likely more massive labor shortage issue that China is set to face in the next few decades as its single-child policy keeps accelerating the aging of its still-enormous population. That indeed is one of China's major dilemmas.

hxw.red