Report: China's Employment Hit Hard by SARS

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Last updated at: (Beijing Time) Friday, June 20, 2003

Report: China's Employment Hit Hard by SARS

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The Ministry of Labor and Social Security recently released a report on the post-SARS employment situation. According to the report by a special research team under the ministry, gross employment, employment structure, job seekers and employment services have all been affected by the SARS crisis.

Summing up the general situation, the SARS crisis has had a great impact on employment rather than just the economy by whittling away existing job posts over the short-term and affecting the existence and increase of labor opportunities in the long-term.

The report agrees that SARS exerted more negative influences on employment than just generally affecting the economy. Objectively, economic development from January to April was riding high in a relatively stable macroeconomic environment. The hardest hit sectors account for a relatively small share in the national GDP structure. Fortunately the mass production system and technology structure were not grossly affected by the disease.

Those hardest-hit sectors, though accounting for a small part of GDP, were the labor-intensive mass working population areas. In the short-term, these enterprises laid off employees as a measure to rise to the SARS challenge financially owing to a sharp decline or suspension in business and revenue. In the SARS period that peaked from May to June, part-time workers were the largest victim group. But researchers predict full-time employees may not escape the same fate if SARS were to go any further. In the long-term, even if SARS could be contained, its impact on the labor market will continue for some time. Therefore, research holds that SARS will have a longer impact on existing work posts.

Team researchers think that the service sector has had the biggest cut in working posts but the pain for the manufacturing sector may yet come later.

According to statistics from the National Tourism Administration, over 6 million people directly work for the tourism industry. Among them, part-time workers are the most vulnerable to be laid off. According to the multiplier effect in tourism employment, employment in related industries will definitely be affected.

The epidemic also brings much challenge to employment in urban services, business and trade, catering, passenger and freight transport sectors. In hard hit regions, the social service sectors were on "shutout" or semi-"shutout". Trade employees had vacations or trickled back to their hometowns. The aviation and railway industries cut flights and trains since demand for moving dropped precipitously. In the business and trade sector, some major retailing outlets began to lay off part-time workers while some privately owned family stores sank directly in the SARS storm. A big number of migrant workers in small and medium restaurants and entertainment venues were laid off too while business soured for the catering sector or were ordered to suspend from entertaining, forcing immediate closure and loss of revenue. A big loss of working posts in these industries constitutes a direct negative index to existing employment opportunities.

Experts think though that manufacturing has had no obvious impact so far, the suspension of foreign trade and economic cooperation may slow down the growth of manufacturing that turns out to delay employment growth. Anti-SARS precautionary measures will definitely boost costs of manufacturing enterprises and squeeze their profit margins and investment capabilities. Senior commercial and economic exchanges were delayed or canceled in fear of SARS. Undergoing foreign-funded project progress was delayed. Negotiation and program assessment were suspended for utilizing international finance and foreign government loans. Outsourcing engineering projects and labor cooperation have been straitjacketed. According to the Ministry of Commerce, the contract value of foreign capital and its growth in April declined by 33 percent and 37 percent than in the first quarter respectively. Late April sees 5 percent less new foreign-funded enterprises setup than usual.

The report holds that migrant workers were the hardest hit employment group, followed by the laid-off and unemployed workers through their difficulties in reemployment and having less income and increased urban poverty. College graduates may have notably tough employment prospects also.

According to estimates by the Ministry of Agriculture, 8 million peasant workers of the over 100 million working in urban and prosperous areas have trickled back to rural areas, accounting for 8 percent of the rural migrant working population. Experts predict that more will return or stay unemployed in cities if the disease remains in the cities.

Moreover, there are 15 million laid-off workers reemployed in flexible working methods. The big impact to the service and catering sector may lower their incomes or even jolt them out of employment again.

Colleges are rolling out 2.12 million graduates, a number that has exploded, thanks to the nation's campaign to expand college enrollment four years ago, in 2003. These avid job hunters have the same gloomy prospects in the job market. Since late April, almost all recruitment activities were delayed or cancelled. As a result, consultation, interviews and recruitment for college graduates were suspended. Enterprises have stopped their plan to recruit new blood from campuses. Some college graduates who planned to study abroad may swell the labor market if they do not get a visa. It is estimated that the employment rate among 2003 college graduates will be lower than 65 percent of 2002 at the time they leave campus. Some may need a longer time than last year to find their first full-time job. (china.org.cn)

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