The effects of this must be seen in the context of the social counter-revolution of the last three decades, and the skyrocketing cost of housing, education and healthcare. Only a small minority of migrant workers – around five percent – are covered by medical insurance at their place of work. The majority, like their families in the village, are uninsured. Amnesty International has reported cases of migrant workers performing operations on themselves because they cannot afford hospital fees. When the central government initiated a pilot project in the city of Wuhan, offering free health check-ups for 14,000 of the city"s migrant workers, the results were shocking. They showed that about 40 percent of migrant workers continue to work despite being ill. One in five of those examined were found to have hepatitis B, while one in ten suffered from cardiovascular diseases. Two-thirds of women workers tested were suffering from one kind of genital infection or another. One of those examined was Liu Guosheng, a 38-year-old, who was diagnosed with tuberculosis. He told the Shanghai Daily the examination was his first in more than 20 years.

　　In several large cities migrant workers now outnumber the indigenous population. In Shenzhen for example there are 10.5 million mingong and only 1.87 million permanent residents. In many of China"s cities the segregation is almost total, resembling the situation in some Gulf States where nearly all manual work is performed by migrants from South Asia or from other parts of the Arab world. The majority of China"s mingong speak a different dialect to city residents; they"re often shorter, thinner, and more poorly dressed – making them easy targets for discrimination. Their status is no better than the "untouchables in the Indian caste system," according to Professor Qiao Jian of the China Institute of Industrial Relations.

　　On average migrant workers are paid around 40 percent of the wages of urban employees – 540 yuan (78 dollars) per month in 2004, according to China Daily. A sizeable part of their very low wage is sent home to the village where it is usually the family"s main income, sometimes used to pay school fees or medical treatment for a family member. According to the Chinese Academy of Social Sciences, the mingong send home nearly $80 billion a year, making this the largest flow of remittances in the world. In some provinces,the sums transferred by migrants exceed the provincial government"s budget.

　　Epidemic of wage arrears
　　Karl Marx explained 150 years ago that the profits of the capitalist class come from the "unpaid labour" of the working class. But capitalism in China has given this economic principle a new twist, expropriating even a share of what was supposed to be "paid labour". According to official figures the total wage arrears bill across China from 2005 to July 2007 was 66 billion yuan ($9.5 billion). Studies show that more than 70 percent of migrant workers have had their wages withheld at one time or another. While this is illegal, the fines upon companies are so low and the regulatory authorities so weak, that the practise is widespread. The construction industry, due to its transitory nature, is the worst offender accounting for more than two-thirds of all wage arrears cases. In some cases workers do not even know whom they should ask for wages, there are so many tiers of subcontractors. This has led to spate of disputes but also the tragic phenomenon of migrant workers throwing themselves from the top of skyscrapers – which they have built – in a desperate last protest over non-payment of wages. This is known as "tiaolou xiu", or "jump protesters". The central government has attempted to crackdown on these abuses, publishing tables for wage arrears province by province as a means of prodding provincial governments into action. They have set up telephone hotlines and a host of other schemes to help migrants chase up arrears. This is a reflection of growing alarm within the upper circles of the Chinese regime in the face of an upsurge of sometimes violent protest by migrants. The one measure the government refuses to countenance of course is allowing workers to organise independent trade unions.

　　Some partial loosening of hukou restrictions has taken place and trial reforms are underway in some areas that may make it easier for people to change their hukou. Some academics have proposed a version of the US "green card" system to give migrants who have lived in their city for a certain period access to local services. But a full repeal of the system looks a long way off. The central government first discussed scrapping the hukou system in 1992. Then in 2005, the Ministry of Public Security announced a review, but eventually decided that any changes must be implemented by local governments. It is precisely among local governments, however, that resistance is strongest: scrapping hukou and according equal rights to migrants would force them to spend additional funds on local services. This is only an option for the wealthiest cities.

　　When the municipal government of Zhengzhou, capital of Henan province, lifted restrictions in the summer of 2003, its population swelled by 150,000 within one year, forcing the government to "shut its gates" once again. Without a major injection of new funds, the city was unable to cope with the extra burden on schools, healthcare and social services.

　　"In some elementary schools of downtown Zhengzhou, the number of pupils in a class can rise to 90, which is almost double that of the normal standard," the China Youth Daily reported. Some schools reportedly installed smaller desks to cope with the overcrowding.
　　"To ask a city government to initiate reform would be somewhat like "asking a tiger to give away its fur", as a Chinese saying puts it. Therefore, it is necessary that the reform be enforced directly by the central government," argued Wu Zhong in Asia Times Online. Once again, the clash of interests between China"s central power and its cities and regions, runs like a fault-line through all political and economic questions.

　　Many migrant families have settled in the cities yet still face an uncertain and difficult existence on the "wrong side" of the hukou divide. Around three million migrant children who live with their parents in the cities are excluded from the public education system. Many attend poor quality private schools that often rely wholly on unqualified teaching staff. Others receive no schooling. In Beijing, with 5.4 million migrants, there are an estimated 70,000 mingong children who do not go to school. New central government policies require public schools in many cities to enrol migrant children, but in many cases local education authorities have responded with new discriminatory rules and higher admission fees aimed at keeping migrants out. An even greater number of rural children, at least 20 million, are left behind with grandparents or other family members while their parents migrate to the cities. These children can normally expect to see their parents once a year – during the Lunar New Year holidays. During the severe winter of 2008, which closed roads and rail links for days, over six million migrants were stranded at rail or long-distance bus stations as they tried to make the annual trek home for the holidays. Many hundreds of thousands were forced to abandon their journeys and return to their factory towns. Aside from the suffering this caused, the extreme weather conditions highlighted the chronic overloading of China"s transport systems, and lack of investments especially in the rail network, which is struggling to keep up with the sheer numbers of migrant travellers at key holiday periods.