“The second wave of laid-offs will be invaded” spread widely recently. A senior researcher on employment at Renmin University of China, Zeng Xiangquan, said at a recent forum that the unemployed rate issued from Statistical Bureau is useless for researchers. Because of the effects of State-owned enterprises merge and restructure, we must get ready to meet the second wave of lad-offs.
What can we inform of “The second wave of laid-offs”?
State-owned enterprises have big troubles
Zeng Xiangquan thought the large number of state-owned enterprises bankrupt and restructure might lay off large numbers of workers. How bad are these state-owned enterprises running? Jun Lin a user in Zhihu analyzed that there are four great unprofitable enterprises. Chinese Aluminum Industry, £¤24.2 billion accumulated loss nearly 5 years since 2011 till the first 3 quarters of the year; China COSCO, £¤19.2 billion accumulated loss in 5 years; and the third one is YGE, £¤10.4 billion in 5 years and £¤ 960 million for the half of the year with 98.79% asset-liability ratio; and Chongqing Iron & Steel ranks forth with £¤7 billion accumulated loss in 5 years.
Chongqing Iron & Steel ranks forth in the four great loss enterprises but the greatest deficit part absolutely belongs to iron and steel part compares to all kinds of industry, which means in the first 3 quarters of the year the 11 leaders iron and steel enterprises including Chongqing Iron & Steel, GSIG, MA STEEL, Shandong Steel, Anshan Iron and Steel Group, Shougang Concord International, Anyang Steel, Hualing Steel, Hongxing JISCO, Pan zhihua Vanadium- Titanium, Xinjiang Bayi Iron & Steel loss totally £¤19 billion and £¤54.7 billion in past 5 years!
Some analysts pointed that it` s the time to solve the problem of redundant personnel and lower efficiency for state-owned enterprises: “today` s economy is different from old days, the social wealth accumulated profoundly, although the unemployment will take pains but not as hard as before. Long time delaying will collapse the concentrated area of state-owned enterprises. The experience of 1990s was really a cherished reform example.”
Comparing with 1990s` unemployment wave
It was really a nightmare for some of old people as State-owned enterprises merge and restructure took "lay off" large numbers of workers as they did in the late 1990s, over 30 million people lost their jobs.
The lay-off triggered initiative by government, but other industry have enough ability to absorb unemployed avoided overwhelm to the whole society. But this time might be different, Neromous in Zhihu thought: despite of a large number of people losing their jobs in 1990s, the reason was state-owned enterprises over occupied labor resources, the unemployed people filled into the industry which lacked of people, such as tour industry, translation industry, education industry, etc.
The current problem is these kinds of industry develops well and can not supply new stations. Meanwhile, private enterprises squeezed all potential to protect its profit and exist.
Unemployment wave won` t come but recessive unemployment exists widely
Zhu Zhenxin researcher of Minsheng Securities analyzed that there are 3 reasons to prove China might not face the unemployment wave:
Firstly, it reported in several employed statistics, China labor market is still in the condition of short supply.
Secondly, China faces aging of population and sharply decrease of surplus in rural area which means the labor supplying pressure will be reduced in future years.
Thirdly, till now Chinese state-owned enterprises are not as bad as that in 1990s.
Some redundancy in state-owned enterprises can be absorbed by the market, and 4 points to prove:
Firstly, from the redundant data, the unemployment rate in Sep. was 5.2% which can be controlled and the total occupation was stable.
Secondly, from the statistics of ratio between labor demand with labor supply, the multiplying power of the ratio keeps 1 in continued 20 quarters which means the demand of labor supply is bigger.
Thirdly, from income increasing statistics, both urban and rural keeps high increasing speed compares with 2014 urban employed income.
Fourthly, from the newly increased employed statistics, 10.66 million employed people increased in urban for the first 3 quarters completing the target to increase 10 million people and it is hopeful that 13.02 million people will be increased into employment in urban.
But Zhu Zhenxin said simultaneously, some traditional industry turned to the recessive unemployment such as salary reducing, salary delaying, retaining the job but suspending the salary, internal vacation, job entry delaying. For example, Shenhua Group reduced 10% of salary, and CNPC might reduce 15%. The recessive unemployment is not distinct than redundancy wave but it invades the workers` benefits and defense line of social stability.
It` s hard to survive in state-owned enterprises
It exaggerated that to infer the state-owned enterprises personnel reduction to the secondary redundancy wave but it cannot be neglected that the work in state-owned enterprise is harder than before.
It treats not as well as before for employees in SOEs because of economic downturn and enforcement of anti-corruption. Accompanying with that is bringing down a fever of civil servant. People who participate the civil service examination was 1.12 million in 2013, 990 thousand in 2014 and 900 thousand in this year.
Under the wave of publicly startup business, the attract of “iron bowl” is lower and human resource is turning into outside system.
From the big trend, the government scale and its right should be smaller, the demand of iron bowl is less and its gold content has reduced when room assignment closed.
In a pan-politicalization society, the state usually concentrates more resource and excellent talents, however, excellent people should be spread in all kinds of fields like commerce, culture, science, private enterprises, etc. in a normal society.
Like an E-pal Anchorite Allen followed the topic of “Will China appear the second wave of unemployment” in Zhihu: the whole economy in global is turning down, no matter export, manufacturing or other traditional business, it is normal that to reduce the operation cost to perform the redundancy. The industry like steel and concrete has long time overproduction, on the other hand, to low the price, merge to reduce production and cut throat to competition will be unavoidable to redundancy.
But not all the industry is as tragic as infrastructure, like internet industry is flourishing to develop and needs huge of talents.
