Increasingly Proactive Employment Policies for the Poor to Find a Job
Liu Danhua,
Department of Employment Promotion, Ministry of Human Resources and Social Security

1. Proactive policies and effects

Employment is a huge challenge facing the government and society of a developing country with a large population as China, prominent in urban-rural dual structure and right through the historic era of institutional reform and structure upgrading. A proactive employment policy came out of this context. While absorbing international experience, the policy was rather an integrated policy system of employment promotion, designed and executed based on China’s reality, aimed at expansion of employment and improvement of people’s livelihood.

The primary goal for the policy when it was formulated in 2002 was to help the reemployment of over 20 million laid-offs displaced with enterprise reform and restructuring. To address the reemployment as an important social issue, Chinese Party Central Committee and the State Council staged a national work meeting of reemployment, handing out papers, rolling out proactive employment policies, shifting the focus of solution to laid-off unemployment from livelihood security to reemployment. As the jobs for laid-offs have gradually been adequately provided, the policy has been expanded, adjusted and complemented on and on since 2005. Polices related to employment but specified to aspects of finance, taxation, commerce and industry, social security, services and training constitute a relatively complete policy system. The Law of Employment Promotion issued in 2008 mainstreamed the policy system, institution and mechanism of employment onto trajectory of legalization. Now the implementation of proactive employment policy has been regarded a pillar policy for the Party and the country, and an important approach for a socialist harmonious society.

The system of proactive employment policy includes seven components: first, impose policy impact for a more pro-employment economic growth; second, provide policy support for workers to increase their dynamics of self-employment; third, guide the employers to absorb more labor; fourth, assist the poor groups with employment aid to bail them out of unemployment; fifth, act on the balance between market demand and supply, and increase public employment services and training; sixth, combine reduction of unemployment and increase of employment, as well as prevention and control; seventh, improve social security system and build an interaction mechanism with employment promotion.

Proactive policy of employment is an embodiment of a core concept: First, employment prevails. “Employment is the foundation for livelihood and the approach for national stability”. Governments at all levels should attach importance to the issue of employment and put it on a more prominent position of agenda. Second, center on human need. The enthusiasm and dynamics of job-losers should be fully tackled to change their mind from reliance on relief to engagement in work; Qualification improvement should be a fundamental approach to employment in ways of occupational training and enhancement of workers’ capability; Self-employment should be supported to increase employment. Third, effective intervention. Economic growth itself can by no means address unemployment. It is critical for the government to, through policy regulation and control, increase jobs, prevent large numbers of unemployment, and realize virtual interaction between economic growth and employment expansion. Fourth, roles of market orientation. Employment should be provided not in traditional ways of government planning and government contracting, but by means of reform, building of a unified, open, competitive and orderly market of human resources, and improvement of employment mechanism led by market.

Over the years, the effects of proactive policy began to show. During the years from 2002 to 2008, an additional number of 62 million urban residents was employed with annual growth of over 10 million. Nearly 30 million laid-offs from state-owned and collective enterprises nationwide were reemployed, while the livelihood security of laid-offs has been integrated to unemployment insurance system. A total of 8.3 million poor population was reemployed to maintain the urban registered unemployment rate at a stable level, and even drop it from 4.3% to 4.0% by year (4.2% in the last quarter of 2008 due to the financial crisis).

2. Increasingly proactive employment policy in response to the financial crisis

Since the second half of last year, the international financial crisis severely hit China’s employment, apart from the impact on economy. As many enterprises were trapped in difficulties, many jobs faded away and some of the enterprises halted or closed. Slow down of economic growth is too weak to be able to drive up employment, leaving a expanding oversupply of labor. The most affected is migrant workers, urban residents in difficulty of employment and college graduates, many of which have been reduced to unemployment in the new situation. First is unemployment of migrant workers. An estimate of 12 million migrant workers returned home ahead of time due to unemployment. Some of them have moved their families to coastal cities for many years, thus employment comes to be a big shock on their living. Second, the poor originally employed in cities fell back to trouble. As the enterprises would cut temporary workers first while consumption decline resulting from economic crisis affects the operation of services, many of the workers with flexible jobs lost their jobs and return to difficulties, and new numbers of labor force with job difficulties were adding. The old and new groups of job-losers faced bigger difficulties with the tougher employment climate. Third, college graduates find it hard to seek a job. In 2009 when the number of college graduates reached a historic height of 6.1 million, expected recruitment of enterprises greatly shrank. The graduates out of rural areas and poor families can not wait to find a job before they are short of family support. They are the groups inquiring urgent support.

In light of the impact of financial crisis, the Central Government of China clearly announced more proactive employment policies to ensure stabile employment. The State Council and related department immediately formulated and implemented a package of policies and measures for the stability and expansion of employment, including six aspects:

First, drive on employment by economic growth. The scaled employment-driving investment package in combination with the 4 trillion RMB investment plan would create 24 million jobs in two years. Second, help enterprises overcome difficulties and stabilize employment. By means of postpone of five fee collections (five social insurance fees), four reduction (reduction of four social insurance rates), three allowances (social insurance allowance, post allowance, occupational training allowance), two consultations (consultations between enterprise and labor union or employee), the pressure on enterprises has been relieved. Jobs are thus protected by protecting enterprises, while employment is thus stabilized by stabilizing labor relationship. Enterprises expected to reduce financial burden by 200 billion RMB while 20 million jobs expected to be secured. Third, gear policies more supportive to encourage self-employment. The plan of driving employment with self-employment was implemented to figure a support of 1.5 million jobs for residents in both urban and rural areas, helping 4.5 million job-seekers. Fourth, design tailored policies and measures for the three most affected groups for them to be employed. Fifth, roll out specialized occupational training to enhance labor’s capability. Sixth, strengthen public services of employment, and improve environment for employment. It was planned in 2009 to provide free employment service for 25 million laborers. To ensure the above policies well put in place, the government finance increased input to employment, with the finance transfer from central government finance for employment alone rose from 26.1 billion RMB last year to 42 billion RMB.

Policies responding to crisis and promoting employment made by China can be found a few obvious features: first, instant reaction and great efforts. From last September to this February, the State Council and related department rapidly staged seven major papers, followed by series of matching papers by related departments, correspondent policy papers and implementation methods by provincial, prefecture and municipal governments in just a few months. Second, strong integration, inclusive but specified with focus on both short term and long term. It is the combination of short-run emergent measure and sustained mechanism, the combination of government guidance and market regulation, and the combination of policy and financial inputs by Central Government and initiatives of local governments. Third, three breakthroughs realized. It was the first time that Chinese government came up with policies to stabilize employment, the first time that unemployment emergent measures were launched at country-level, and the first time to begin the chain of self-employment driving employment and make the former a new supporting point against the crisis.

3. Help the poor with employment during the crisis

In the efforts of acting against the crisis and implementing more proactive employment policies, the employment promotion for three groups, migrant workers, urban residents in difficulty of employment and college graduates, emerged to be the priority.

Regarding the massive unemployment and early return back home of migrant workers, the government on the one hand, put in place the policy of protecting enterprises and stabilizing posts, on the other hand, mobilize public employment service providing institutions into “Spring Wind Action” ahead of schedule (used to be conducted after the Spring Festival), utilize sites of public employment service providers at all levels, carry out mobile services in rural areas, and provide employment services targeting migrant workers. Its targeted groups are: first, those who just lost jobs but remain in cities have immediate access to free public employment services; second, those who return home for loss of job but still ready to come back have access to free and effective employment information and services; third, those who look for training opportunities have access to the occupational training subsidized by policy; fourth, migrant workers who have already returned home can be employed in local enterprises or public programmes of infrastructure construction. A number of activities took places accordingly in many localities. For example, primary labor exporters surveyed village by village the condition of migrant workers returning home, mobilized local enterprises to provide posts for them, and employed them as near as possible. Caravans of employment and on-site recruitment fairs send information right to the home of farmers. Knowledge prevalence activities of working right protection also played a role. At the same time, local governments encouraged migrant workers returning home to engage in self-employment, and include them to the supportive umbrella of self-employment which would provide them support in lending, tax and fee reduction and relief, commercial and industrial registration. They would also be organized for self-employment training and other related services.

With the above measure, in the next month to the Spring Festival, a proportion of over 80% migrant workers went out again. Statistics show that by the end of this April, the number of migrant workers working out of hometown reached 96% of that by the end of August last year, most of which have found a job.

Our working objectives targeting urban residents in difficulties of employment: first, ensure that each and every new laborers with employment difficulties and zero-employment families who are entitled to support should be registered in service institutions at streets or communities and provided with help; second, help them employed through enterprise absorption, welfare posts or flexible employment; third, guarantee that at least one member of the zero-employment families can be employed within a certain period of time; fourth, help those entitled to support actually benefit from the supportive policies of social security allowance and post allowance. In doing so, local governments increased daily support and set in more welfare posts to help those in difficulties. A nationwide aid action was staged before the New Year Day and National Holiday when staff from all the service institutions at street and community were called on to do household surveys, in an aim to better understand their condition, to support them by “one-to-one”, to implement employment policies like social allowance and post allowance. These activities turned out to be fruitful. The number of those in difficulties of employment being employed reached 1.07 million from January to August this year, up by 30 thousand over the same period of last year. The emerging zero-employment families were also bailed out of difficulty one after another.

Targeting the college graduates in difficulty of finding a job, the State Council clearly stated that the employment of college graduates should be put on top of employment agenda for the time being, with specialized policy documents and 15 matching documents by related departments. In order for these policies to be well implemented, we put the “Q&A of National Employment Promotion Policies for College Graduates” on internet for them to know about these policies. Second, four employment channels were opened and expanded through policies and increase of inputs, namely, encouraging them to work at grassroots levels, encouraging the recruitment of college graduates in major scientific and technological programs, encouraging employment of college graduates in SMEs and private enterprises, and encouraging them to be self employed. Third, strengthen employment services in and out of campus. The employment guidance lectures at school were opened for graduates to know about employment policies. They were also provided information of various kinds with employers organized to enter schools. Out of campus, the public service institutions provide not only daily free services but also some specialized services through activities of “Connection between School and Enterprise” and “Recruitment Week of Private Enterprises”. Fourth, carry out the package of organizing the probation for over one million graduates in three years and encourage the employers to give intern posts. Fifth, cover the poor graduates who have long be unemployed due to family economic difficulty and other reasons into the employment aid for college graduates, and provide them specialized aid.

With joint efforts, the employment of college graduates for this year is better than expected. By July 1st, a total of 4.15 million college graduates have secured their jobs, with the initial employment rate as high as 68%, much at the same level of last year.

So far the financial crisis is yet to hit the bottom, but the serious unemployment can not be addressed in a short period of time. Therefore Chinese government still regards as a priority the employment, especially that for those most affected by the crisis and difficult in employment, and further the stability of employment situation. The action of employment for college graduate has been well placed to supervise the policy implementation in all localities, and to mobilize service institutions nationwide to provide various services. It is our goal to provide jobs for the majority of registered graduates, and to ensure those out of difficult families and those in difficulties of employment to be employed in the year. At the same time, we will prepare in advance the employment aid and spring wind action before and after the New Year’s Day and Spring Festival, taking into account the condition of urban residents in difficulties of employment and migrant workers. Tailored measures will be taken to create for them a sound climate.