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Who are the layoff workers?
Workers in state-owned enterprises who are forced to leave their posts before
retirement age are the layoff workers
For reasons leading to the layoff of serving workers, read the reference material
below.
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The reform of state-owned enterprises has been a top priority for the Chinese
government since the mid-90’s. On 22 September 1999, the Communist Party of
China (CPC) convened the 4th plenary session of the 15th Central Committee of CPC.
It was decided that government would only retain control over certain industries such
as power, telegraph, banking and insurance.
As it was, large and medium state-owned enterprises began to be corporatised.
More and more corporatised state-owned enterprises obtained stock market listing
status. Government gradually reduced its stake in non-strategic industries. Small
scale state-owned enterprises were permitted to engineer ownership changes through
merging, contracting out, leasing, selling etc. As for state-owned enterprises
producing products with no market or suffering from long-term deficits, they were
permitted to wind up.
Government also introduced the shares system in respect of enterprises not
warranting full ownership by the state. Private investors were allowed to become
shareholders or even directors of state-owned enterprises. Government also stepped
up measures to ensure state-owned enterprises would no longer be required to take up
activities not related to production. The pace of reform of the social security system
has quickened. Schools, hospitals and other welfare services presently provide by
state-owned enterprises will eventually be taken over by local governments.
Under the circumstances, state-owned enterprises will no
longer be responsible for the livelihood of their employees.
They have the power to layoff surplus manpower. Under the
umbrella of a social security system, layoff workers are to be
given cash assistance to tide them over until they find new
jobs.
Translated from: Hang Seng Bank Limited. Economic Research
Department. Hang Seng Economic Monthly.
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Wednesday files
You are a TV reporter. You are interviewing a layoff worker for a TV special.
Reporter:
Which factory did you work in before the layoff?
What type of work did you do? What is the current
situation in the factory? How do layoff workers earn
their living?
I used to work in a machine factory in Shenyang. I am
44 years old, with a junior middle school education and I
started working in 1980. There used to be over 6000
workers at the factory. Now, only a very few front line
production workers are left. The rest have been laid off.
A small number of layoff workers were given the one-off
sum of 4,000 yuan as compensation. After being layoff,
some workers work for private enterprises, some sell
vegetables and others take up piece work.
LAM Hung
Reporter: When were you laid off?
What arrangement did
government or the factory make for your livelihood after
the layoff?
I was formally laid off in April 1999. The factory
informed me that there would not be any more work and I
was told to go home. Neither government nor the factory
made any arrangement for me. No layoff paper was
issued and I was not given any minimum amount as living
expenses. Most layoff workers are in the same boat as I
am.
LAM Hung
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Reporter: It is said that many layoff workers have become bosses or
found better jobs. Can you describe how you tried to start
a trade or find a job?
There are very few examples of ex-colleagues
becoming bosses or finding good jobs. There are
too many layoff workers. We are getting nowhere.
It looks as though the sooner you are laid off, the
better! After the layoff last year, I had several
casual jobs and earned 50 yuan per month on
average. Even then, you need connections.
LAM Hung
Reporter:
Nowadays, what do you rely on for your livelihood?
What stresses you the most?
Mine is a family of three. My wife used to earn 300 yuan per
month, but the factory stopped production several months ago and
workers were put on leave with no pay. After the layoff, my
income is unstable, so I have tried to cut down on expenses as far
as possible. When I am ill, I simply buy some medicine at the
medicine shop. I would not go to the hospital. My father was
very ill earlier this year. He had not eaten for a week, but he
held out without going to the hospital. We seldom eat meat unless
we entertain guests at home. In general, it would be considered
good if we have meat for two meals in a month. As for
vegetables, we buy the cheapest kind. The greatest stress I face
now has to do with tuition fees for the child studying in senior
middle one, and living expenses for the family. All in all, the
problem is that I don’t have a job.
LAM Hung
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Reporter: What are your plans for the future?
……
1.
LAM Hung
Based on Source 1, in what way are state-owned enterprises being reformed?
Method of reform
Large
and
medium Corporatisation
state-owned enterprises
Corporatised state-owned Speeding up the listing process
enterprises
Small scale state-owned Ownership changes through merging, contracting out,
enterprises
leasing and selling etc.
Enterprises
producing Winding up
items with no market and
suffering from long-term
deficit
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2.
As described in Source 1, what kind of arrangement has the state made for layoff
workers?
Layoff workers are given cash assistance until they find new jobs.
3.
Is the information supplied by LAM Hung in the interview similar to the
arrangement made for layoff workers described in Source 1?
Answer for reference: The information supplied by LAM Hung in the
interview regarding arrangement for layoff workers does not tally with the
description in Source 1.
The layoff worker interviewed said that neither
government nor the factory had made any arrangement. No layoff papers
had been issued and no minimum amount for living expenses had been
paid.
4.
In the interview, you the reporter asked LAM Hung what plans did he have for
the future. Assuming you are LAM Hung, how would you respond?
Students are free to give their answers.
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5.
What lessons can you learn from workers who have been laid off?
Answer for reference: One needs to keep up with changes in the course of
economic development. One has to learn to adapt or one loses out.
Students are free to give their views supported by reasons.
LAM Hung is one worker in the masses of the layoff. This definitely exerts pressure
on society. The state has now formed a special task force to look into ways of
helping layoff workers.
You are a member of this group. Make reference to the
views in the reference material and propose solutions.
the chairperson will make a report.
After discussions in the group,
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In the former planned economy, state-owned enterprises provide life employment,
social security and welfare etc. to workers. The arrangement is a heavy
economic and social burden on state-owned enterprises. To change all these, the
state has first of all to build a sound social security system for workers who are to
be made redundant.
At present, many retired or layoff workers are not getting any form of
compensation from their companies while others are waiting. In some cases,
enterprise managers misappropriate funds so workers get no compensation. It is
essential for a social security system to be put in place in order to provide
protection to the millions of layoff workers. Such a system would mean
voluntary or mandatory contributions.
Layoff workers should be helpd to undergo retraining at re-employment centres.
They should be allowed to register with labour offices and receive unemployment
assistance.
Multiple policies should be implemented to help layoff workers secure
re-employment:
a. Ensure economic growth. According to the analysis of experts, each
percentage increase in the economy creates over a million jobs.
b. Develop infrastructures and primary industries. There is need to develop
highways, railways, agricultural irrigation facilities and environmental
protection facilities. Such development not only enhances economic
growth, it also expands the employment market.
c. Develop tertiary industries, the service industry in particular. The
employment potential of tertiary industries is very great, especially in
businesses directly related to the daily lives of the people such as commerce,
catering, child care, maintenance and repairs, transportation, domestic
services etc.
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Workers are laid off as a result of long term over-supply of the work force.
China has a large population. Its total work force surpasses the demands of
production. There are many surplus workers. They are layoff.
Traditional state-owned enterprises are too heavily burdened with employment
commitments. They end up having a large number of surplus workers. They are
overstaffed and their efficiency is low. In the face of fierce competition from the
market, enterprises need to reduce surplus workers in order to survive and develop.
Long term poor investments and overlapping production have put many
enterprises into a production coma. They used to rely heavily on loan facilities
because of insufficient capital and were operating at a loss. Eventually, they come to
a dead end and their workers have to be laid off.
There are in-house problems too which lead to laying off workers. Some
state-owned enterprises are badly run. There are also bad managers. In the end, the
enterprises break down, production stops and no alternative to laying off workers is
left.
Translated from: