China launches project of re-employment

By Miao Hong

The Chinese government has launched a nationwide project to help urban dwellers who have lost their jobs during the economic restructure to get jobs. In the next five years, as the estimate goes, there will be a total of 8 million people who will suffer either unemployment or underemployment in China's state-owned enterprises.

According to the Ministry of Labor's analysis, many workers have found themselves redundant or laid off as the enterprises streamline and update the technology to improve efficiency and adapt to the competition of market economy.

For instance, between 1988 and 1994, 150,000 textile workers were laid off in Shanghai alone, when the industry was restructured to reduce its production capacity by a fourth. Ten textile mills in the city were closed down, and the total employment of the textile industry of Shanghai dropped to 400,000, with 1,9 million spindles.

While some workers become unemployed due to the economic restructure, other workers cannot get full pay because the enterprises are run in the red or because of their failing health and outdated skills. Nominally they are still on the enterprise's payroll, but actually they have little to do. They are known as "redundant" or "surplus" workers. There are an estimated 15 million such surplus workers who constitute hidden unemployment in China's enterprises and need to be realigned.

The Project of Re-employment, initiated by the Ministry of Labor, is designed to rearrange jobs mainly for workers unemployed for six months and more, and for surplus workers who fail to withdraw their basic wages for six months. The project was started nationwide in April this year, with the approval of the State Council.

10 million a year

The statistics show that by the end of 1994, the total employment in China's urban enterprises reached 148.49 million, plus 12.25 million self employed people. Meanwhile, the unemployed, including both laid-off workers and new entrants to the labor market, hit 4.7 million, which brought the country's urban unemployment rate up to 2.8 percent after it fluctuated around 2.0 to 2.6 percent between 1986 and 1993.

China's labor force grows by nearly 10 million people every year, a figure surpassing the total population of Sweden. The job hunters include those who are newly graduated from universities, colleges and vocational schools and those who have reached the employable age of 16 years old in the rural areas. They make up a constant, formidable pressure on China's labor market.

The government's goal is to keep the urban unemployment rate within 3 percent in the next five years, and the Project of Re- employment is to facilitate that goal, says Wang Wenlong, an official of the Employment Department of the Labor Ministry.

According to Wang Wenlong, the four major channels to realign the unemployed have been job agencies, unemployment insurance, re-employment training centers and the service enterprises which help replace the laid-off workers.

Once a worker is out of work, he goes first to a job agency run by the local labor department to get registered and withdraw an unemployment card with which he can receive his unemployment relief, says Bai Li, another official of the Employment Department. Then he'll be asked to take a training course according to his capability and interests. Upon the end of training, he may have some job offers according to his expertise and physical condition. He can also start his own business or look for a job on his own.

Computerized service

By the end of 1994, Bai Li says, there was a total of 25,000 job agencies throughout China, of which 20,000 were founded by the Ministry of Labor and local labor departments. Many job agencies have computerized the registration procedures, and big cities like Beijing and Shanghai have been able to operate their job agencies by city-wide computer networks, which are connected to many enterprises' networks.

"These networks are very helpful to replace the unemployed workers," Bai Li says. "Some provinces are setting up inter-city networks to further improve the communication."

To alleviate the plight of the unemployed, the State Council issued the Regulations on Unemployment Insurance in State-Owned Enterprises in 1994, requiring each state-owned enterprise to hand in 0.6 to 1 percent of its total wage bill to set up an insurance fund for the unemployed. A total of 1.8 billion yuan (US$ 214.3 million) was collected in the year, according to Zhang Xin, another official of the Labor Ministry.

In addition, he says, the central government allocates at least 200 million yuan every year for the relief of the unemployed workers who are badly in need. In 1994, the government labor departments provided relief funds totaling 500 million yuan for 1.8 million registered jobless workers for a duration of three to 24 months.

The unemployment insurance fund, says Zhang, not only provides relief funds for the registered jobless workers to make a living for at least six months, but also enables them to get retrained with new skills. Besides, it is also used to support social services which help the unemployed get re-employed.

Service enterprises

Many service enterprises have been set up by local labor departments or state-owned industrial enterprises to take in the trained jobless and surplus workers. Providing all kinds of services ranging from catering, retail sales, day-care centers, laundry and other household service to processing parts for some big factories, these enterprises assume sole responsibility for their profits and losses. The central government fosters such service enterprises by preferential policies, which allow them to enjoy tax exemptions for up to three years.

China has developed 200,000 such enterprises since the early 1980s, now hiring a total of 9.15 million workers. These enterprises can replace one million workers laid off by state- owned enterprises every year, estimates Wang Wenlong, currently deputy secretary general of China Society of Labor Services Enterprises for Re-employment.

The unemployment is a cost China has to pay for its economic reform, and its huge population size makes the problem an everlasting challenge to the government.

As the re-employment of the jobless workers concerns China's social stability and the prospects of the reform, the government will work with all the social organizations to make the project a success.