Unemployment estimates vary widely, but the Ministry of Human Resources and Social Security says more than 10 million migrants have lost their jobs. Officials in Guangdong Province – China's manufacturing heartland, with sprawling factory cities like Shenzhen and Dongguan – say 600,000 migrants went home last year.
In Dongguan's "Sweater Town," where blocks upon blocks of knitting factories form a squat skyline, streets are emptier these days, says a factory boss. Many shops have shut for the holiday – or for good.
Even migrants with jobs are hurting, as bosses cut salaries and overtime from a modest average wage of less than 1,000 yuan ($150) a month, says Liu Kaiming, director of the Shenzhen-based Institute of Contemporary Observation (ICO). The losses are rippling down to migrant shopkeepers who cater to them, and to workers' families, who rely on remittances.
There's hope that migrants will return to the cities to look for work after the holiday, says Mr. Lieberthal. That's when the extent of layoffs and wage cuts will become clearer.
Meanwhile, the government is concerned that frustrated migrants will stir social unrest. They are "very pessimistic about the economy," and demonstrations often break out, says Zhang Zhiru, whose fluorescent-lit legal aid center in Shenzhen receives clients late into the evening.