Millions of China’s most vulnerable lack even the most basic means to save for their children’s education, make purchases on credit, protect their homes through insurance, and send and receive money. Financial exclusion prevents many of them from realizing their potential and improving their livelihoods.
In the run-up to the February 11 launch of our latest publication, Embracing Informality: Designing Financial Services for China’s Marginalized (event details and RSVP here), we’d like to feature some of their stories.
Wang Jun, 27, is a migrant worker. He is among a floating population of 250 million strong with no legal status that has been the engine behind China’s economic boom.
Ten years ago, at the age of 17, Wang Jun packed a small bag, left his village in northeastern Hebei Province, and boarded a 40-hour train to bustling Kunming in China’s southwest. He left behind his parents and grandparents, all of whom worked as subsistence farmers on the family’s meager plot, and traveled to a big city.
Through a friend from his hometown, Wang Jun met a laoban (a labor boss and middleman). The laoban got him a job on the construction site of a five-star hotel. Working six days a week in 12-hour shifts, he earns RMB 1,000 (USD 160) each month.
All of Wang Jun’s possessions fit into a small suitcase he carries home every year for Spring Festival. He lives in a shared dormitory, with 12 bunk beds to a room, no walls, and no secure place to store his belongings. His room is one in a series of low-slung, non-insulated buildings that house hundreds of workers on the site. He owns a simple mobile phone for keeping in touch with his family, but rarely uses it because those calls are always filled with pressure to find a wife.
Wang Jun desperately wants to find a wife. But in order to be considered a viable suitor, he needs to first buy a home. At the rate things are going, Wang Jun worries he will be an old man before he can afford such a purchase. He’s heard of training courses that would qualify him to work in skilled mechanical trades to earn a higher wage, but the cost of such courses would deplete his meager savings, putting him further from what he needs for a house.
He can’t decide which is riskier: staying at his current, low-paying job with the hope of one day becoming a laoban himself, or making a huge investment in training that may—or may not—pay off in a few years.
With no basic financial literacy, Wang Jun doesn’t trust or participate in the modern banking system, but with his communal living situation, he has nowhere to store his earnings. Instead, his laoban holds his wages for safekeeping, an arrangement that reduces the risk of theft but keeps him locked in the working relationship. He gets paid twice a year. If he needs money before his biannual payday, his laoban will give him an advance as long as he has worked the days to cover it.
The arrangement is mutually beneficial but also lopsided. While Wang Jun avoids the temptation to spend his earnings and his laoban maintains control over his workers, Wang Jun remains indebted to his laoban, working without a contract because his boss holds his money.
Editor’s Note: This profile is a composite of real people who shared their stories with us. Though the profile takes pieces from different individuals’ lives, the goal was to develop individual stories that are representative of a broader group.