February 06,2009

20 Million Laid-off Migrant Workers May Send China's Unemployment Rate to 10%

By CSC staff, Shanghai
20 million! The number of jobless migrant workers brought by the economic slowdown is even higher than the most pessimistic estimation.
Chen Xiwen,
deputy director of the Office of Central Financial Work Leading Group and director of the Office of The Central Leading Group on Rural Work, disclosed that, due to the financial crisis, about 20 million out of 130 million migrant workers, had returned home as they became jobless or failed to find jobs thanks to the economic slowdown.
This number is the result of on a sampling survey by the Ministry of Agriculture not long ago. The result shows that 38.5% migrant workers returned home before the Chinese New Year, among whom, 60.4% went back for the holiday, still keeping their jobs in cities which they can return to afterwards; and the rest 39.6% returned home in advance as they had lost their jobs or failed to find jobs in cities. It is thus estimated that about 20 million migrant workers, accounting for 15.3% of the total, returned home jobless.
"This number is far above our expectation," said a source close to the Ministry of Human Resources and Social Security to China Business News, as previously the most pessimistic estimation was 15 million. But labor authorities are also investigating about unemployed migrant workers and the final figure may be lower than 20 million.
According to the estimation of the Ministry of Human Resources and Social Security, the over supply issue of labor will worsen in 2009, and the government will have to offer jobs to 24 million people, including 13 million new workers, 8 million laid-off workers and 3 million who are waiting for jobs.
According to the source mentioned above, this has become normal in recent years. Urban unemployed population has reached about 9 million these years based on registered unemployment rate, and may rise to as high as 16 million if based on the figures from investigation that haven’t been yet released. "Unemployment rate based on survey is usually 1% higher than the one that based on registration. This year’s unemployment rate from the survey will rise to 10%, a surprising high, if we add the 20 million jobless migrant workers."
The 20 million unemployed migrant workers will bring unprecedented pressure to China. Although China maintained a two-digit economic growth in recent years, it can only create 8 million to 9 million new jobs annually in most of years. Therefore it will take two to three years to create enough jobs for these workers.
But this source also said the increasing unemployed population would not last long, as a series of measures adopted by both the central government and local governments would bring effects soon. Chen Xiwen said if the global economy rebounded in the first quarter or first half of this year, measures taken by the central government would bring effects, and migrant workers?employment problem would soon be solved.
On February 1, the Ministry of Human Resources and Social Security, the National Development and Reform Commission, and the Ministry of Finance jointly launched a "Special Job Training Plan" to offer vocational training and business training to migrant workers who have returned home.
Wang Dewen, director of Social Security Department of Institute of Population and Labor Economics, Chinese Academy of Social Sciences, said training migrant workers would be an effective way to help them to solve unemployment problem, and delay their entry into the labor market and therefore relieve employment pressure.
For migrant workers, this training will be longer than previous ones. The central government requires local labor authorities, taking into account of the local situation and the characteristics of unemployed workers, to provide three to six-month training to urban unemployed population (including those who are looking for jobs in cities.
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