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More jobs needed

(China Daily)
Updated: 2009-08-05 07:52

Stabilized urban registered unemployment is better than expected as the strong rebound of the national economy. But slack business for small- and medium-sized enterprises, China's major source of job growth, indicates that the unemployment pressure is still quite heavy.

According to the Ministry of Human Resources and Social Security, the country's urban registered unemployment rate remains unchanged at the end of the second quarter after rising to 4.3 percent in the first quarter from 4.2 percent at the end of last year.

A more encouraging message is that as much as 95 percent of the 70 million migrant workers, who returned to their homes in the countryside before the Spring Festival, have headed back to cities for jobs. And, the remaining five percent have either found work in their hometowns or started their own businesses there.

These headline figures altogether depict a much brighter employment outlook than the country saw just a couple of months ago.

When the nation was shocked to find that about 18 million migrant workers returned home jobless before the Spring Festival, Chinese policymakers raised unemployment forecast to reflect the severe effects that the global downturn will exert on the job market.

China's urban unemployment rate rose to 4.2 percent at the end of 2008, up 0.2 percentage point year-on-year. The country aimed to keep its registered jobless rate below 4.6 percent and provide 9 million new urban jobs this year.

However, thanks to a massive stimulus package and unprecedented fiscal and monetary support, the Chinese economy has bounced back more rapidly than most people expected in the first half of the year, giving a much-needed cushion to the battered labor market.

Now, with the country being put back on course to achieve its goal of 8 percent growth this year, it is natural to expect that more jobs will be created as a result of faster economic expansion.

Related readings:  Many degrees of employment  Experts urge occupational training law for job seekers  China's graduates spend more on job hunting but harvest little  Jobs increase in second quarter

But policymakers should not take it for granted that high-speed growth will guarantee adequate job creation.

The fact that electricity consumption by small- and medium-sized enterprises plunged by 48.9 percent year-on-year in the first six months shows that these job creators are yet to recover. Though these labor-intensive enterprises may not have cut jobs during the crisis, less electricity consumption means less production and thus massive underemployment. So, even when these enterprises regain the growth momentum, they are unlikely to create many more jobs.

To absorb about 10 million new migrant workers, who enter the workforce every year, as well as millions of college graduates, policymakers need to tilt the stimulus package further in favor of employment growth.