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Jobless rate should be kept below 5% for stability

By Tan Yingzi (China Daily)
Updated: 2008-12-10 08:01

Social stability could be threatened if the registered urban unemployment rate rises above 5 percent next year, a senior lawmaker warned on Tuesday.

A security guard positions himself for a better view of job hunters at a career fair on Dec 4 in Zhengzhou, capital of Henan province, as he tries to maintain order with a loudspeaker.  Social stability could be threatened if the registered urban unemployment rate rises above 5 percent next year, a senior lawmaker warned on Tuesday. [Xinhua]

Zheng Gongcheng, a member of the National People's Congress Standing Committee, told China Daily the jobless rate could rise next year from the current 4 percent because of massive job cuts.

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His remarks come as policymakers are holding a three-day Central Economic Work Conference to discuss measures to create new jobs and keep the present unemployment level in the face of the global financial crisis.

"If the government can keep the registered urban jobless rate around 4.5 percent, everything would be okay," said Zheng, also a leading scholar in social security at Renmin University of China.

But if the rate - which excludes migrant workers - rises above 5 percent, "it will lead to a series of negative consequences". The number of poor urban residents will increase and living conditions in cities will be compromised, he said.

In such a situation, local governments would be prompted to hire more urban residents instead of migrant workers to keep the jobless rate low. It would leave millions of migrant workers without jobs and force them to return to the countryside.

That is the "last thing we want to see", he said, because a drastic increase in the number of jobless migrant workers could pose a threat to social stability.

The job market in the labor-intensive exports sector shrank in the third quarter of this year because falling overseas demand has forced the closure of many factories.

The job market will reach a two-year low in the first quarter of next year as the global financial crisis takes its toll, according to a survey released on Tuesday.

Conducted by Manpower Inc, a leading global employment services provider, the survey shows the intention of employers in Beijing, Shanghai and Guangzhou for new recruits is the weakest.

"The global economic downturn and decline in exports have made employers more cautious about hiring new staff," said Lucille Wu, managing director of Manpower Greater China.

Late last month, Zhang Xiaojian, vice-minister of human resources and social security said the government would be able to keep the urban registered unemployment rate below 4.5 percent this year, but the figure could rise in 2009.

The ministry, which said 24 million people would be competing for 12 million jobs next year, has submitted a job stimulus package to the State Council, or the country's Cabinet, for approval.

The highlight of the package is the introduction of a special nationwide vocational training program, especially for laid-off and migrant workers, to help ease the pressure on the job market.

Local governments will provide most of the finance for the package by making full use of special employment and unemployment insurance funds, sources said.

"The unemployment insurance fund has topped 100 billion yuan ($14.5 billion), and it's high time it is used," Zheng said.

The country has more than 230 million migrant workers, with about half of them working away from their provinces. About 60 to 70 percent of them are below 28 and lack basic agricultural skills, Zheng said.

"The social trend shows more and more surplus laborers will migrate from rural areas to cities and become industrial workers. We should not drive them back to the countryside," he said.