Invisible Poor

There has been a recent article highlighted the demographic split of smartphone users in China. You can read the article here as well as the more balanced report here.

In a nutshell, the article postulated that the primary users of Apple smartphones are users between the ages of 18-34, single and low salaried. I found this information quite close to my understanding of life in modern China.

In the last 4 years, I have traveled to China at least once a year, either on my own capacity or for work. Anyone that has been to China will be awed by the immense number of skyscrapers and high-rise buildings constructed even in tier 3 cities. But few know the harsh economic realities for the “invisible poor” powering this economic giant.

Even in the large tier 1 cities, there are many workers that are paid a monthly wage of below RMB 5k or about SGD 1k. This is way below the average required to maintain a normal standard of living in a tier 1 city where expenses can be very high.

These “invisible poor” work in typical office jobs either customer service or back office ops. Most of them start off as fresh graduates and typically do not have a very strong undergraduate degree (三本). They are seen working in offices located along the CBD fringe. These offices look very much like any other modern skyscraper in the CBD. However, most are cramped open offices where employees are expected to complete repetitive tasks that for the moment can’t seem to be automated.

The competition in China is intense and without financial assistance from their families, these workers would not be able to afford the lodgings that put them within 1 hour from their workplace, much less their source of weekend entertainment. Rental can cost close to 30% – 50% of their monthly salary.

Despite this, I couldn’t help but notice that many of them, at least in the company that I visited, were carrying the latest model of iPhones. For this demographic, it seems like trying to “strike it out” and being seen as successful is the most important indicator to others of their ability.

Understandably, due to the low pay, most just do their job and are gone as soon as they can clock out. Job hopping is also extremely prevalent among this demographic with people switching jobs for a pay rise anywhere between RMB 200-300. This is really workplace suicide, as without a long-term goal to strive for and putting in the extra effort, these people would still be in the same place many years from now.

With the gap between the larger cities and smaller cities growing ever smaller, one will wonder for how long more this source of labor will continue to power the chinese economy. For the foreseeable future at least, there will be more not less “invisible poor” people.

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