Workers in China under COVID-19

The global Covid-19 pandemic has already disrupted the global economy and production order, while in China, where the pandemic first broke out, is not immune to such disruption. The unemployment rate in large cities announced by the government has risen by more than 15% since November 2019, until dropping to 5.7% in August this year. In April, China recorded a real GDP growth rate of only 3.2%, the slowest growth since 1992. [1] Although the official media proclaims that China's economy is recovering, [2] the flaws in the legitimacy of the regime and intensify social instability will be further exposed, if the following issues in the labour market that persisted in the past few months continue to compile.

Workers losing out in the fight against the pandemic in the intra-industrial or inter-industrial transformation

Under the system of “World Factory”, the decline in raw materials supply and orders due to global lockdowns and supply chain suspension would inevitably result in production cuts and shutdowns. Labour Action China quoted a survey report that interviewed factory workers, front-line workers, drivers, and security guards, only 30% of Guangdong respondents who had their work suspended in February stated that wages remained unaffected during the period; three Hubei respondents who also stopped work were not paid any wages. [3] Even if work is resumed, wages may be cut by half, resulting in slashing expenses on food and clothing. [4] Some clothing factories went from bad to worse, workers were initially forced to take unpaid leave, subsequently being laid off. [5]

China has been advocating the transformation "from export to domestic sales" for more than ten years, originated in the development strategies of various industries. But taking the automobile industry as an example, despite the government introduced measures to stimulate domestic demand,[6] when nearly half of China's population has a monthly income of less than RMB 1,000, coupled with work stoppages and wage reductions, domestic demand is inevitably constrained by low purchasing power. [7] [8] As a result, more and more workers turn to the domestic service industry, which has relatively small profits but quick turnover, such as food delivery riders. The industry emerged prior to the pandemic and continue to prosper when social distancing regulations are implemented. However, the industry ecology is driven by self-employment platforms, whereas delivery punctuality and service rating directly affect workers’ income and orders, occupational safety, labour security and mental stress have become great hidden hazards. [9] In September, food delivery riders launched a protest that forced the service platforms to make minor modifications to the system, such as allowing customers to voluntarily give riders extra time for delivery. But critics pointed out that the platforms still have no intention to relax the time limit for meal deliveries. On the contrary, the platforms’ attempt to push the responsibilities to consumers is no different from "ethical kidnapping" the customers. [10]

Marginal workers sacrificed in intensified competition

Over the years, China has been able to accumulate huge capital value and create economic miracles based on the arbitrary household registration system. The system not only manages the mobility and motivation of migrant workers in cities, but also stabilizes the supply of cheap, flexible, and marginal workforce required by large cities. [11] However, migrant workers now have to bear the brunt of the production suspension brought about by the pandemic, and many of them fell into unemployment after returning to their hometowns during the Chinese New Year or forced to return to their hometowns after re-entering the cities, because urban employers no longer recruit workers.[12] [13]

In responding to the the increase in unemployment in the first half of the year, the government has strengthened unemployment relief. However, workers who have not signed contracts or made social security contributions are not eligible to such assistance; some analysts estimate that such workers account for more than half of the unemployed. [14] Even if workers keep their jobs, they also face corporates’ exemptions in various social security contributions such as pension, unemployment, and work injury. [15] According to a report in July quoting the Ministry of Human Resources and Social Security of China, the exemptions have been in placed since February and is expected to involve a total amount of RMB 1.6 trillion for the whole year. [16]

The pandemic’s effect on the job market is all encompassing. The number of college graduates hit a record high this year, which resulting in a large-scale job hunting. In August, the unemployment rate of 20-24 years old, with a college degree or above, was 5.4% higher than the same period last year. [17] Graduates are expecting the competition for job opportunities will continue to intensify; thus, many simply stay in school for postgraduate entrance examinations or postpone the timetable for entering the workforce. [18]

Covid-19 is the pandora's box for the labour market, revealing all kinds of new tactics that target workers. To expect the control of the global epidemic and the eventual economic recovery will alleviate the above problems is to ignore the core of social conflicts. If there is a just social system in place to defend workers rights, such as trade unions to organize and represent workers and intervene in the labour disputes, workers will be able to improve their rights through collective efforts. [19] However, the current Chinese government's restrictions on domestic civil society have made the space for self-organization very fragmented, making it difficult to repair social conflicts. [20]

Reference

[1] MacroMicro (2020): "China-GDP Comprehensive Index".
[2] Xinhuanet (2020): "Why did China's economy take the lead out of the shadow of the pandemic".
[3] Labour Action China (2020): "Survey Report on Employees' Resumption of Work During the Pandemic Period (1): Less than 30% of employees are paid normally during the suspension of work."
[4] BBC Chinese website (2020): "Chinese migrant workers and college graduates facing difficulties under the influence of the pandemic".
[5] China Labour Bulletin (2020): "Decrease in orders, cancellation of overtime, layoffs-garment factory workers lacking information and organization under the coronavirus pandemic".
[6] Hong Kong 01 (2020): "Auto sales plummeted: China launched 8 measures to stabilize the auto market".
[7] BBC Chinese website (2020): "Covid-19 Pandemic: Can "export to domestic sales" drag Chinese foreign trade companies out of trouble".
[8] CUP (2020): "Export to domestic sales? China is in a vicious circle of economic recession."
[9] People (2020): "Food delivery rider, trapped in the system".
[10] ICEO (2020): "Who traps the food delivery rider in the system?" Meituan and Ele.me respond together."
[11] Pun Ngai, Ren Yan (2008): "The State and Peasant Workers: Unfinished Proletarianization", 21st Century, 107, 26-37.
[12] Voice of America (2020): "The Plight of Chinese Workers and White Collars in the Pandemic".
[13] 21st Century Business Herald (2020): "The second homecoming of a "drifting" Hubei migrant worker: Grassroots cadres call for relief of secondary disasters caused by the pandemic".
[14] Deutsche Welle (2020): "Ten of Thousands of People Fear Unemployment, Chinese Workers Protest".
[15] KPMG (2020): "Supporting the prevention and control of the epidemic, and the introduction of relevant social insurance policies", China Tax Express, 15.
[16] Hong Kong 01 (2020): "Ministry of Human Resources and Social Security: The unprecedented scale of corporate social security exemption policies will reach 1.6 trillion yuan throughout the year."
[17] Red Star News (2020): "National Bureau of Statistics: Affected by the epidemic, the unemployment rate of college graduates increased in August".
[18] BBC Chinese website (2020): "Covid-19 Pandemic: When record high graduates meets a shrinking job market".
[19] China Labor Bulletin (2020): " Decrease in orders, cancellation of overtime, layoffs-garment factory workers lacking information and organization under the coronavirus pandemic".
[20] Workers under the epidemic (2020): "Workers and the Pandemic Report: Mutual Aid Actions among Youth, NGOs and Workers.”