It’s a shame that cities are forcing the poor to leave
When we talk about the health of an economy, we focus on macroeconomics, which deals with the performance, structure, behavior and decision-making process that deal with the growth, inflation and employment (or unemployment). We also take into consideration microeconomics that studies the behaviors of individuals and enterprises in deciding the allocation of resources, as well as the effects of a country’s economic policies. Amid all this economics jargon (for lay individuals), the role of the informal economy gets lost.
Unwittingly, the latest population data of Beijing, Shanghai and Guangzhou, China’s three majormetropolises, shed some light on the informal economy (or sector) and people engaged in it. The population data of the three cities for the first half of the year show the number of residents in central Beijing declined and the growth rate in Guangzhou slowed. Then comes the disturbing part of the data: those moving out of themetropolises are mainly poorer residents, or those working in the informal sector.
The moving out of poorer residents, or “low-end population” as some media outlets have humiliatingly described them, is no big news, right? Wrong.
The popular perception is that people living at the lower levels of society contribute little to nothing to a country’s economic development. Nothing could be farther from the truth, for without the valuable contribution of these people, a society (especially modern society) simply cannot function. Imagine a city without construction workers; vegetable, fruit, fish and meat vendors; barbers; garbage collectors; street cleaners, small stall and kiosk owners; and housemaids?
It points to the inadequacy, if not failure, of the social welfare and security systems ... the problems of finding a house to live in and get their children admitted to schools are forcing poorer people to move out of big cities.