China ushered in the Year of the Ox yesterday (today in the U.S.) amid deepening economic and social woes.
It’s hard to get the truth out of the People’s Republic, which is anything but a republic, but the year just closed saw some 18,000 businesses close, mostly in the southeast, and at least 2 million (some would say 10 million) workers laid off. Economic growth has slowed to about 7 percent or so (again, the truth is hard to ascertain since the government concocts, er, tabulates the growth rate), and all these woes have put the government on edge.
In the U.S., we have the WARN Act (Worker Adjustment and Retraining Act) that applies to businesses with 50 or more employees, requiring them to give 60 days’ advance notice of undertaking mass layoffs or ceasing operations. In the PRC, there’s the new Labor Contract Law and other initiatives that require businesses to alert the government in advance of any layoffs of 20 employees, or 10 percent of the workforce.
However, the laws are proving hard to enforce as many business owners simply shut down shop and disappear, leaving their workers without jobs or the money owed them. In some cases, local governments have had to move in and pay the workers themselves to quell potential rioting.
Since many of the plant closings involved operations staffed mostly by migrant workers, hundreds of thousands, perhaps millions (again, who knows for sure?), of these roving employees are being forced back to the hinterlands from the industrialized cities, adding to a cadre of malcontented citizens. In addition, there are at least 1.5 million college graduates from summer 2008 who have yet to find jobs, with another few million set to join their ranks this summer. It could portend an explosive mix in a land that touts economic freedom but practices political and civil repression.
We’ll just have to wait and see if the Year of the Ox ends up seeing the unelected lords of China–who last year had to suppress an uprising in Lhasa, Tibet–getting themselves gored by an unhappy, suppressed population.