Member Login   Register   Chinese   English
  Now you are: News&Events News  
New Normal Employment in China: Lower Growth Rate Promotes High Employment
China Business News Guo Jinhui Beijing 2015-03-11
Chen Peng, a migrant worker from Sichuan, came back to Beijing on the fifteenth day of the first lunar month and received a phone call of a job offer on a construction site. He rejected the offer because the pay was only 200 yuan per day and his expectation was 240 yuan with overtime pay. With high overtime pay, every 6 hours is equivalent to a working day. Last year, Chen Peng worked 8+2 hours a day and thus got 320 yuan for the 10 hours.
Chenpeng started to work in Beijing in 2002. It was in 2008 that he began to feel he earned money. Especially in recent 2-3 years, he felt that the salary increased quickly. He bought a house of 300,000 yuan in his hometown with the money he saved in the latest 5-6 years.
Chenping said to China Business News that he earned 70,000 yuan last year. With the addition of 50,000 yuan his wife earned as a housekeeper, the couple paid the house debt off and even saved some money.
“Today is different from the past and there are plenty of jobs. If the salary is not satisfying, I will not take the job. Due to the Two Sessions, a lot of construction sites began their work after the sessions and I am not worried about getting a good job.” Chen Peng said to the journalist.
Just on the day of Chen Peng coming back to Beijing, Premier Li Keqiang spoke highly of the employment situation in 2014 – though the economic growth slowed down, the number of new jobs increased and the disposable income of rural residents increased by 9.2%.
Professor Zeng Xiangquan, Director of CIER of Renmin University of China, expressed when accepting our newspaper reporter to interview recently, though the indexes of the number of new jobs and registered unemployment rate were not comprehensive to describe labor market, the employment situation turned much positive was quite sure, which not only greatly relieved the employment pressure in 2015, but also left big room for maro-economic policies.
Secrets of Positive Employment Indexes
Compared with last year, Government Work Report of this year gave less attention to employment, which showed that employment pressure was relieved, said Zeng Xiangquan.
Data from Minister of Human Resources and Social Security showed that though the overall economic growth slowed down, the employment situation was stable. In 2014, 13,220,000 new jobs was created in urban and rural areas in China, which not only exceeded the goal of 10,000,000 new jobs set in early 2014, but also was higher than the 13,100,000 new jobs in 2013 and became the new maximum value. The registered unemployment rate at the end of the year was 4.09%.
Zeng Xiangquan believed that four factors has led to the stable increase of new jobs: the increase of job demand due to economic growth, larger fraction of service industry due to economic structure reform, reform of Enterprise Registration System, and reinforcement of service industry.
Premier Li Keqiang said that there is direct link between employment and economic growth. When the economy keep growing at the rate of around 7%, the material basis of realizing modernization will be more solid. Keeping stable growth was for ensuring employment. As the fraction of service industry increase, there will be more modernization and larger economy size and the growth rate of 7% can result in better employment.
Although economic growth has slowed down in China, the economy size is much larger and the quality of employment when economy grow by 1% is much better than that in 10 years before.
In the meantime, employment elasticity in China is increasing. The elasticity of service industry was higher than that in secondary industry. According to Government Work Report, the proportion of the added value of service industry raised from 46.9% to 48.2% in 2014.
Zeng Xiangquan believed that attention should be paid to reform of Enterprise Registration System, which has led to the explosive growth of new enterprises and in turn, a lot of new jobs.
Li Keqiang said that newly registered market entities has reached 12,930,000, among which newly registered enterprises has increased by 45.9%. New jobs kept increasing when the economic growth slowed down showed the strength of reform and the potential of market.
Besides, Zeng Xiangquan believed that a process between job vacancy and employment was employment service. In the past few years, government has done a lot to improve employment service and pushed the construction of talent centers and labor markets. With the improvement of mobile internet making in-time sharing of job information possible, frictional unemployment was greatly reduced.
Starting a Business Became Popular
Zeng Xiangquan said that judgement on employment situation can’t be torn apart from labor supply and demand. Because of the dramatic changes in labor market in China, especially the drop of labor supply due to decrease of labor age, the complexity of making judgement on employment situation has kept increased.
CIER released CIER index every quarter, which reflected the extent of employment competitiveness in China. CIRE is the ratio of the number of people applying for jobs and the number of job vacancies. In the recent 1-2 years, the index kept decreasing due to the continued increase of job vacancies and the decrease of labor supply apart from college graduates. This resulted in the prevalent difficulty of recruiting people. Not only migrant workers like Chen Peng but also college graduates find it easy to find a job in this year.
March is the time of year when 2.5-year master students graduate from universities. A teacher from University of Science and Technology said to the reporter of our newspaper that master students in his school generally have found good jobs and a lot of them went to large companies. He also found that students have changed their employment concept from trying hard to stay in Beijing to taking more consideration to jobs in their hometown.
College graduates will reach 7,490,000 in 2015, which is the new maximum value. “Prioritizing employment and encouraging startups to promote employment” is the guideline of employment policy of college graduates. Government should reinforce education on employment and entrepreneurship; encourage finding a job from the base; complement entrepreneurship guide plan of college students; and support starting businesses in new industries.
Li Keqiang has raised the status of entrepreneurship to a unprecedented height. He proposed build “double engine” of encouraging public entrepreneurship and increasing public goods and services to improve economy.
More and more people of the generation after 80s, 90s and even 70s chose to start a business. Wang Jiawei, who provided outsourcing service for an internationally famous internet security supplier, was laid off after the company moved all the outsourcing business to India. Some of his colleagues turned to Jingdong, while he chose to start his own business.
“In IT and internet industry, it is easy for young people with work experience to find a job. My colleagues found new jobs just a few day after they were laid off. I didn’t find jobs because the entrepreneurship environment has improved a lot and I want to try to run a company.” Wang Jiawei said.
The Hidden Concerns behind Official Data
Though government uses the number of new jobs and registered unemployment rate as indexed to measure employment situation, the two indexes received widespread criticism from experts for they lack sensitivity to labor market as indexed to guide government work.
Qiu Licheng, member of the national committee of CPPCC and vice president of Tianjin Commercial University, proposed “Suggestion on Improving Employment and Unemployment Statistics and Establishing Employment Index” this year. He said that employment index was an absolute indicator, while unemployment index is a relative indicator; the scope of the two indexes was different. Thus, the number of new jobs and registered unemployment rate in urban and rural areas can’t comprehensively reflect the employment and unemployment level in labor market in China and were obvious misleading.
Zeng Xiangquan believed that the biggest problem with “the number of new jobs” was that it can’t show the net increase of employment. Taking the popular mobile internet industry as an example, e-commerce such as Taobao has created thousands of new jobs but was not involved in statistic because it caused close of physical stores and loss of jobs.
Zeng Xiangquan suggested that related government department should improve indexes on employment measurement and release employment and unemployment data in urban and rural area, and increase indexes on measuring changes of employment quality.
Qiu Licheng believed that registered unemployment rate only reflected dominant unemployment and ignored disguised unemployment, so it can’t show the real unemployment level and caused lower employment survey result than the reality.
Qiu Liuchen quoted two groups of data in his proposal. One was from the labor department in Shanghai of the estimate number of people who didn’t register unemployment every year. The number is around 20,000 people. The other is from a sampling survey report. The report showed that of 3000 unemployed people, about 25.5% of them didn’t register themselves.
Registered unemployment rate only counts local urban and rural population and can’t be the real reflection of unemployment rate in China. Qiu Liuchen suggested that the scope of statistics should be broaden, migrant workers should be part of the survey, and unified employment   statistics in urban and rural should be gradually realized.
In recent years, National Statistics Bureau has started to cover migrant workers who lived more than half a year in urban areas when making unemployment statistics. According to our reporter, surveyed unemployment rate was higher than registered unemployment rate by 1% in urban areas.
Zeng Xiangquan believed that under the condition of relieved employment pressure in 2015, some hidden concerns should be paid attention to.
First, in industries that suffered from loss such as steal and coal industry, disguised unemployment may be serious. Though no layoff was implemented, employment quality underwent obvious decrease, which was reflected on shorter working hours and lower salaries.
Second, adjustment of economic structure to solve the problem of excess capacity and measures to handle haze may cause negative influence on employment in short term. Government need to consider how to place people that lose their jobs due to the above mentioned actions.
“Employment pressure brought by new round of adjustment to industry structure has begun to appear. In Beijing-Tianjin-Hebei region and Suzhou Industry Park, this problem existed in the process of moving and adjustment of traditional industries.” Zeng Xiangquan said.
According to CIER index, although employment size is no longer the most significant problem of labor market in China, the structural contradiction is hard to solve. The differences among industries and between regions are huge, and employment situation in the northeast industrial district and some provinces in western China is not positive.
 A total of 0 comments
No comments!
 Please comment (Members only)
Set as homepage | Add to favorites | Contact us
China Institute for Employment Research. All rights reserved.