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To: CPAMarty who wrote (27952)	1/11/1998 12:36:00 PM
From: John Rieman	Respond to of 50808

China's redundant workers.......................................... scmp.com Thursday January 8 1998 Shadow of iron rice bowl lingers <Picture> FOO CHOY PENG in Shanghai "Never mind if my salary is low, as long as I have an iron rice bowl." That sentence summed up the sentiment of retrenched workers in a recent survey by an employment agency under the Beijing Labour Union to find out why most had difficulty finding new jobs. The survey revealed that workers still identified state-enterprise employment with job security and cradle-to-grave welfare benefits, even as the link is slowly but surely being severed. Most were not keen to work in the private sector. All they wanted was a job with their former employers or state enterprises which provided social security, regardless of profitability. A newspaper report on the survey did not reveal ages, but anecdotal evidence has suggested people laid off by factories tend to be 35 years and older. In other words, most laid-off workers are likely to have been born after 1949 but long before the 1979 launch of Deng Xiaoping's economic reforms, and were thus raised on a socialist doctrine of life-long employment and welfare benefits. As the social contract is being broken out of necessity by the government, the urban proletariat is facing a painful adjustment to the reality of job uncertainty. The potential pain and anger at retrenchments are worrying to central and local governments, which are tackling state-enterprise reform with renewed vigour in a process inevitably involving massive layoffs. If these sentiments are widespread, government fears of a political backlash from rising urban unemployment are justified. "It is a painful experience for many workers, but there is no choice for China but to press ahead with state-enterprise reforms," said Wang Tongsan, an industrial economist with the China Academy of Social Sciences, which predicts 11 million Chinese will lose their jobs this year. Few retrenched workers could adapt quickly to the harsh realities of an economy in transition - as the sentiment expressed by the workers in the survey showed. The likely scale of future layoffs is unprecedented in China. Depending on the method of calculation, the number of workers in the state sector is between 100 million and 140 million. Foreign brokerages tend to quote the first figure, which takes into account only workers in industrial state enterprises. Wang Huijiong, an economist in the Development Research Centre, a think-tank under the State Council, says the figure is closer to 140 million when employees in non-industrial agencies are included. China 2020, a World Bank report projecting the country's growth, quoted government officials as indicating that 15 to 20 per cent of workers in state enterprises could be released without affecting output. In other words, between 21 million and 28 million state-sector workers may be classified as redundant - up to 20 million in state enterprises, and up to eight million in educational agencies. Given the potentially massive scale of layoffs, it is hardly surprising Beijing has declared fighting unemployment its top social priority. "You can observe from speeches made by government leaders in the past few months that potential social problems arising from layoffs are a top concern," Wang Tongsan said. Beijing is counting on its re-employment project - retraining workers to arm them with new skills - to absorb those made redundant by state employers. Those who are unemployable may be given limited unemployment benefits under a revised social security scheme. To ensure livelihoods are not pushed below poverty levels, the central government stipulates that a husband and wife cannot be laid off at the same time. State Statistical Bureau chief economist Qiu Xiaohua recently was quoted as saying unemployment would be manageable if economic growth rates averaged 9 per cent annually in the coming decade. That rate of growth would create between eight million and 10 million jobs each year. Last year, the country recorded 8.8 per cent growth, its lowest in six years. This year, growth is expected to slow further, partly because of the effects of the financial turmoil gripping much of Asia. Finding new jobs for those made redundant threatens to be more difficult than Beijing thinks.