Liu Shinan

 

A high-level official of the National Bureau of Statistics (NBS) explained why the robust growth of China's economy has not brought along a corresponding growth in employment during an interview with the Xinhua News Agency on Monday.

 

Although the unidentified official's technical jargon rendered his interpretation difficult to comprehend, the explanation itself indicates that the authorities have begun to realize the seriousness of the problem.

 

Theoretically, economic growth will yield more job opportunities. China has achieved an eye-catching rate of growth, but people do not perceive an improvement in their employment situations: half of new university graduates cannot find a job; rural migrant workers roam city streets looking for whatever can earn them bread; and State-owned enterprises lay off more and more workers.

 

It should be noted that the employment rate has kept rising as the national economy developed over the 28 years since China commenced its economic reform drive. While the gross domestic product (GDP) soared from 364.5 billion yuan (US$45.6 billion) in 1978 to 18.23 trillion yuan (US$2.28 trillion) in 2005, the number of employed rose from 401 million to 758 million.

 

Then why do people still feel that jobs are hard to come by?

 

One simple reason is that China's total population has risen too quickly, and every year a large army of fresh laborers is plunged into the market. This argument is right.

 

Another phenomenon, however, merits our attention: The speed of job increase is obviously incongruous with the growth rate of GDP.

 

In the past few years, China's GDP has been growing at a rate of between 9 percent and 10 percent, but the rate of employment growth has remained around 4 percent. Longer-term statistics also indicate the same trend (although the method of statistics calculation may have been inconsistent). In the 1980s, a 1-percentage-point increase in GDP would generate 0.453 percent more jobs. The jobs figure plunged to 0.11 percent in the 1990s, and further dropped to 0.098 percent in the first four years of the new century.

 

Such a dichotomy in growth rates between GDP and employment is strikingly abnormal. Something must have gone wrong in our economic development.

 

The NBS official proffered various explanations, such as the "dual-element structure of urban and rural economies," the "upgrading of the economic structure," the "declining of the primary industry," the "contradiction between labor quality and market needs," et cetera, et cetera.

 

However, he seems to have neglected a very important reason, which is conspicuous and easy to settle, if the competent authorities are determined enough.

 

The brisk development of China's manufacturing and service industries in the past decade or so was based on "high efficiency" in the use of labor. In these industries, most "low efficiency" State-owned enterprises have been shut down or transformed into private ones, leaving many workers "laid off." Private and foreign-invested enterprises' exertion of the labor force has almost gone to extremes in order to cut the cost to the minimum possible level.

 

"Extra work hours" are common in almost all these enterprises with little or even no pay.

 

In the Pearl River Delta region in South China's Guangdong Province, normal work shifts without "extra hours" have become "abnormal." Employees, mostly migrants from other provinces, in the toy, shoe, garment or electronics plants usually have to work extra hours "voluntarily" because the work quota is too heavy and they don't want to lose their jobs. There have been several reports of employees dying because of overwork.

 

White-collar workers are faced with the same situation. My niece works at a company in the Jianguomen area of Beijing, an area well known for its concentration of foreign companies. She never comes home at the normal hour for supper. I asked her if her boss wanted her to work extra hours. "The boss never requested so. I have to do it, otherwise I will not finish the work. Everybody in the office does the same," she replied. Other friends of mine who work in these companies told the same story.

 

Raising work efficiency is one of the goals of our reform and is absolutely justifiable. But what the bosses in these plants and companies are doing has gone beyond the legal, and ethical, boundary.

 

In a certain sense, the growth of GDP in many localities is achieved at the cost of employment and workers' health and rights.

 

The contradiction between efficiency and employment should be properly handled. Workers themselves cannot help it. It is the State's responsibility to make a law guaranteeing a reasonable relationship between efficiency and employment.

 

Only in this way can the employment rate rise in synchronization with the growth of GDP.

 

(China Daily August 30, 2006)