January 5, 2000	atimes.com

China More than a 'band-aid' solution for jobless By Wu Qi BEIJING - When hundreds of thousands of Chinese workers in the early 1990s began getting laid off from state firms, the government scrambled to put together a social security system for the newly unemployed. But Beijing has since learned that social security is little more than a ''band-aid'' solution to a major problem. So while the social security system is still being strengthened, the government has also made it a priority to help laid off workers find new jobs fast. Coming out of an era in which everyone thought they would have lifetime jobs, unemployment has struck China rather suddenly - and hard. After all, most Chinese have never looked for their own jobs. In the past, they were simply ''assigned'' work according to their skills, qualifications and ''political correctness''. But as state-owned enterprises struggle to become competitive in China's emerging market economy, the number of xia gang, laid-off workers, has been growing in the past several years. A report recently released by a research group with the Chinese Academy of Social Sciences lists unemployment and the search for new jobs as the top social problems in China in 1999. It adds that this will remain so in 2000. In the first half of 1999, some 7.42 million state firm workers lost their jobs. Only two million of them have found employment since. Social security from civil affairs departments used to cover only the disabled and single senior citizens without regular income or means of legally recognized support. Employee welfare commitments and the plight of those in financial difficulty were all traditionally the concern of work units. With the deepening of economic restructuring in the early 1990s, many state enterprises were in such bad financial state that they could barely pay wages, let alone their enormous welfare obligations. Consequently, millions have been left to fend for themselves or manage on small amounts from social funds. A total of 8.8 billion yuan ($1.06 billion) was raised in the first half of 1999 to guarantee social security payments to laid-off workers. At the same time, though, officials have also been busy exhorting people to seek help from re-employment service centers (RSCs) which were established nationwide in 1998, as well as other job agencies. The RSCs are job centers that provide professional training for new jobs and also grant laid-off workers financial subsidies above the normal level of unemployment insurance - an average of 170 yuan ($20) per month. Officials reason that those who continue to remain out of work are not only unable to use their skills to contribute to the country's economy, but are also unable to be real consumers in the marketplace because of their ''survival-level'' incomes. Some municipal governments are even setting targets for how many of their out-of-work residents will be employed in the coming months. In Beijing, for instance, the local government is aiming to get 60 percent of the city's laid-off state enterprise workers working in 2000. To date, some 26,000 out of the 86,900 laid-off workers registered in the capital's re-employment services have found new jobs and no longer depend on social security. In one initiative, subdistricts in the capital are obliged to offer work to men over 40 and women over 35 who have lost their jobs and are having a hard time finding new ones. Much of the work offered is menial - jobs as cleaners or public security guardians that used to be avoided by Beijing residents and were filled by migrant workers. But today, many local residents are accepting such work without much complaint. This ''work creation'' scheme hinges on an agreement among local governments, unemployment insurance fund agencies and the subdistricts to each contribute one-third to the annual pay of these workers that comes to about 14,000 yuan ($1,690). Workers used to the ways of the state firms take some time adjusting to their new occupations. But many are ending up surprisingly content, like 37-year-old Dong Qiaoyun who was laid off last year from an electrical appliance plant in Wuhan, capital of the central province of Hubei. Dong admits that at first she could barely accept that she had to take on the job of domestic in the city, the only work she could find after losing her factory job. But today, she says she would not return to the boring work at state firms, and declares that she is happier now doing the shopping, household chores and cooking for three families for 500 yuan a month. Meanwhile, the jobless can still count on unemployment insurance - if they have it. According to the regulations at the re-employment centers, those registered there who fail to secure new jobs within three years will be automatically removed from their list and lose their financial subsidies. Unemployment insurance has been around in China since the mid- 1980s. Since then, some 94.8 million workers have been covered by it, with about 15.8 million so far benefitting from payments. In June last year, the government raised the required contribution to the unemployment fund from one percent of an enterprise's total payroll value to three percent. Firms are also no longer responsible for paying the entire contribution. Rather, workers must now add one percent of their own salaries to the fund. Last January, the State Council issued its Regulations on Unemployment Insurance, initiating several major reforms in the unemployment insurance fund system, including fund collection. Said Liu Yazhi, vice-minister of labor and social security: ''The unemployment insurance system will help ease the burden on enterprises and create a favorable environment for further reform of state enterprises.'' To be sure, the government has tried to leave little to chance. In September 1997, the State Council issued a circular demanding that all cities establish the basic living social security guarantee system before the end of 1999. By the end of September this year, all cities and towns at or above county level had fulfilled the requirement. (Inter Press Service)

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