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China’s mandated laborer protection process, launched only a short while ago, is being suspended in the economic slowdown due to the global crisis. In an effort to ease the way for firms trying to weather present hard times, the government is allowing enterprises to cut contribution to social security funds and delay payments for up to six months, and the new labor contract law, which triggered drastic disputes earlier, is no longer being discussed.
The government is most worried about unemployment triggered by the economic slide, especially among new college graduates and migrant workers. In 2009, marking 20 years after Tiananmen Square event, millions of students will be graduating into a thinning jobs market, and tens of millions of migrant workers will also be jobless or at risk.
Zhang Xiaojian, Vice-Minister of Human Resources and Social Security (MHRSS), said that urban employment growth had slowed since October. In the first nine months this year the average monthly growth was 9%, 8% in October. After constant increase in the recent years, this is first time growth has slackened.
One cause is that extant firms�demand for employees is sliding. An MHRSS survey of labor markets in 84 cities revealed that demand from companies for new employees dropped by 5.5% in the third quarter.
The Chinese Academy of Social Sciences said in a report last week that the urban unemployment rate, excluding migrant workers, might have leapt to 9.4%, more than double the official figure of 4% at the end of the third quarter.
China formulated its labor contract law to protect workers�interests before the outbreak of the financial crisis, with factory owners complaining instantly that it increased their labo