Business & Economy

Unemployment, the new outbreak in a post COVID-19 China

By Javier Triana

Beijing, May 20 (efe-epa).- Having largely stamped out the coronavirus epidemic within its borders – according to official figures – China is now facing another outbreak in the form of unemployment stemming from the economic shutdown that the virus caused in the Asian country.

While the official urban unemployment rate in 2019 never exceeded the 5.3 percent recorded in January, the indicator jumped to an all-time high of 6.2 percent in February when the authorities extended the Chinese New Year holiday as a means of preventing the spread of the virus and when the impact on shops and businesses began to become apparent.

It was at that time that 36-year-old Mr. Li, who is married with a young daughter and owner of new home, was informed that his salary at a daycare management company would remain at 70 percent of the minimum wage stipulated for Beijing, which in its entirety amounts to 2,200 yuan ($309).

Urban unemployment data improved slightly the following month to stand at 5.9 percent in March although it climbed again in April, this time to 6 percent. And Mr Li – in line with the economic circumstances prevailing at the time – was laid off without compensation.

“They didn’t even give me a pink slip,” Li told EFE outside a labor arbitration office in Beijing. Once he started going over the numbers, the news only got worse.

“The company has been paying less into my social benefits fund than it was legally entitled to. They have also paid less than was due into my housing fund,” he added, referring to the mechanism created by the Chinese authorities to promote individual home ownership.

Mr Li believes that the worst blow was that his salary was cut shortly before he was fired so that it would be cheaper for the company to lay him off.

“I want to resolve the problem and receive compensation,” he says, although he has yet to secure an appointment in the arbitration court, where several dozen people facing a similar situation line up first thing in the morning.

Outside the building, there are several labor lawyers offering their services while man has set up a multi-function printer on his bike’s seat to earn some money by making photocopies of documents for those who, like Huang, have come looking for a resolution of their cases.

“46 yuan!” says an indignant Huang. “Last month I was paid 46 yuan!” (equivalent to just over $6). “It’s an insult. I would have understood had I been paid even less than the interprofessional minimum wage… But not that.”

Huang had the bad luck of starting work for a music teachers training company on Dec. 26, when the symptoms of coronavirus were spreading among the population of Wuhan, the Chinese city where the first cases were detected.

Of the four months he worked with them, only for two did they pay him the amount agreed upon. And there has been no trace of the company’s contributions to social security and other benefits.

Most of the cases, which have increased in the last few months, a Beijing-based law firm explains, are like Huang: young workers to whom their companies owe wages.

On the streets of Beijing, where life has almost reached pre-COVID-19 levels, it is not uncommon to stumble upon empty, closed shops. The result is situations similar to that of Huang.

In Guangzhou, in the southeast of the country, the scene is different. One of the quintessential industrial provinces is witnessing an outflux of migrant workers, who are failing to get employment in the area’s once unstoppable textile industry as foreign orders have plummeted.

Buses depart every day for the Hubei province taking back hundreds of migrant workers who cannot find work, cannot afford rents and have nothing to sew with their machines.

Some workshops that earlier produced mobile phone accessories have begun manufacturing masks and sanitary materials. Others, daily-wage laborers, offer their services on posters outlining their skills – demolitions, tiling, electrical installation, plumbing – such as Mr. Wei, who arrived in Guangzhou three decades ago.

“Because of the epidemic, there is less work now. It is not a normal year,” says Wei, a native of central Henan province, who is not particularly optimistic about the future.

It is not surprising that in a press release published last week on the website of the Ministry of Finance, the promotion of hiring was considered “the highest priority.”

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