Growing Number of Laid-off Workers Turn to Employment Agencies

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Last updated at: (Beijing Time) Friday, September 13, 2002

Growing Number of Laid-off Workers Turn to Employment Agencies

A growing number of Chinese workers laid off by state-owned firms during the past four years turned to job agencies for re-employment, not to local governments or their former employers.

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A growing number of Chinese workers laid off by state-owned firms during the past four years turned to job agencies for re-employment, not to local governments or their former employers.

Maybe the trend does not intrigue Westerners, but it is very important in China since, until recently, there was the common practice for Chinese urban residents to rely on state-owned companies for long-life employment, heavily subsidized housing and payment of medical bills.

That may explain the painful experience of millions of blue-collar workers laid off by state-owned enterprises several years ago, when dismissal meant the total loss of income and jobless workers had to pay their own medical bills, as there was no social security system in China.

Accordingly, private firms were less attractive to job seekers as they provided no medical and housing allowances for their employees.

Zhou Zhongliang, 45, a building materials dealer in Shanghai, said he had formerly relied on the local government and the plant where he was previously employed when he was laid off five years ago.

He now views that mentality as "outdated," however, thanks to the social security system put into place over the past four years.

Zhou has terminated the labor contract with his former work unit and receives unemployment, medical and pension insurance benefits according to the local social security arrangement. "I have no worries about social security now," said the building materials dealer, one of one million laid-off workers in Shanghai.

Statistics released by the Ministry of Labor and Social Security, which was set up in 1998, indicate that Zhou's case is not unique.

A growing number of the 16.8 million workers who have found jobs after being laid off during the past four years by state-owned enterprises are willing to terminate their labor contracts with former employers.

According to the statistics, 3.08 million workers were removed from government-funded re-employment service centers last year after they were re-employed. Among them, 1.42 million, or 46 percent, chose to terminate their labor contracts with the state-owned firms they used to work for.

Li Yuqiong, a self-employed shop owner in Tianhe District in Guangzhou, capital of south China's Guangdong Province, said she felt very distressed and hopeless when she was laid off four yearsago.

After that, she opened her own shop. Now Li describes herself as a self-employed person in very positive terms. She opened her shop after she was given a small loan by a state-owned bank.

The rapid development of the private sector and the influx of overseas investment have created millions of jobs, rendering the labor market more diversified, while housing and medical welfare in the state-owned sector are being replaced by a comprehensive social security system.

All these changes have placed state-owned and private firms on equal footing in terms of welfare, and state-owned firms are no longer as attractive as they used to be to job seekers.

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