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Labor security in Sichuan province thrived in the past 60 years

  During the past 60 years after the founding of the PRC, the cause of labor security in Sichuan province progressed and thrived despite difficulties, explored and put forth new ideas and made impressive achievements. Especially in the new century, a market-oriented employment mechanism was basically formed, proactive policies for employment were improved and the system of public job-seeking service was bettered. A labor security system coordinating urban and rural interests and serving urban and rural residents was improved, and a labor security service network benefiting urban and rural people came into being. All these helped maintain long-term stability of the employment situation in the province, sustain and promote the reform and opening-up as well as economic and social development of the province, and ensure and improve people’s livelihood.

  I. With increasing employment scale, the employment situation was stable. 

  Rapid economic development of Sichuan province during the past 60 years pushed forward employment growth. Especially after the adoption of reform and opening-up policy, adjustments in economic structure and industrial structure kept enlarging employment scale and optimizing employment structure. The number of employed people in urban and rural areas increased from 20.28 million in 1952 to 47.4 million in 2008, an addition of 27.12 million people and representing a growth rate of 134%. Employment structure was optimized, with the ratio of the three main industries adjusted from 86.5: 4.4: 9.1 in 1952 to 47.9: 22.5: 29.6 in 2008. Recorded unemployment rate in urban areas was effectively controlled and remained at about 4.5 % in most of the years. In the context of the dual impact of the Wenchuan Earthquake and global financial crisis in 2008, the recorded unemployment rate in urban areas in Sichuan province nevertheless rose to merely 4.57%.

  Sichuan province is a province of abundant labor resource. Since the adoption of reform and opening-up policy, labor export turned out to be an important means of absorbing the massive rural labor force in the province. Rural labor transferred and exported in 2008 reached 20 million and labor income exceeded 100 billion yuan.

  As employment scale expanded and market economy prevailed, the labor and employment system in Sichuan province has seen significant changes. Its reform and development experienced five major phases. In the first phase from 1949 to 1978, the labor and employment system, being highly planned and centralized, was consistent with the traditional planned economy, where governments were responsible to “assign” jobs for people. In the second phase from 1979 to 1985, laborers were gradually regarded as the subject of employment and the “job-assigning” employment system came under reform. Either job-seekers were introduced jobs by labor authorities, or they organized themselves to get jobs on a voluntary basis, or they found jobs on their own. In the third phase from 1986 to 1994, labor contract system was effected step by step in line with the reforms launched in state-owned enterprises. Laborers’ and employers’ position as market subject was recognized to a preliminary extent and dual-way choice mechanism was in effect. In the fourth phase from 1995 to 2001, in the context of structural adjustments and economic transition and deepened reforms in state-owned enterprises, reemployment programs were launched, where surplus labor from state-owned enterprises was transferred steadily. Enterprises’ position as employers and laborers’ position as suppliers of labor were recognized in the labor market, and market-based allocation of labor resource was increasingly notable. Since 2002, on the basis of actual conditions, the province has worked out, established and improved various regulations, policies and measures for employment promotion and thoroughly implemented the Employment Promotion Law. Investment in employment promotion by the state and governments at all levels in the province has increased year by year. Such investment added up to 6 billion yuan from 2006 till the present, a forceful guarantee for putting into effect the proactive employment promotion policies. Solutions have been found to issues in relation to laid-offs that remained unsolved in the wake of the reforms in state-owned enterprises, while an employment promotion mechanism covering all laborers in urban and rural areas has been set up.   

  Employment service system with Chinese characteristics has been established, covering urban and rural areas in the province and involving job-seeking services, employment training, employment aid and unemployment insurance, and a vocational training network led by vocational training agencies of labor authorities and backed by enterprises and supported by private training agencies has taken shape. In 2008, the province saw an addition of employed people of 635 thousand. 331 thousand laid-off people and unemployed landless farmers were reemployed, among which 109 thousand people with employment difficulties were reemployed. 49 thousand families with zero employment had at least one member employed. Reemployment training was arranged for 272 thousand laid-off people and unemployed landless farmers and entrepreneurial training was arranged for 54 thousand people. 2.39 million migrant workers were organized for training and 79 thousand people were organized for reserve labor preparatory training. In 1988, the province initiated the assessment of vocational technical grading, where over 3.5 million person-times have participated so far. Over 3 million people succeeded in obtaining the certifications.

  The Wenchuan Earthquake brought tremendous impact on the work related to employment in Sichuan province. An addition of 372 thousand people in quake-affected areas lost their jobs and 1.15 million agricultural workers lost their farmland and forests in the disaster and were unable to return to their original residence. In line with the centralized arrangements for quake relief and post-quake reconstruction by the CPC Central Committee and the State Council, Sichuan province took the solution of employment problems in quake areas as the major task for resettlement. Great efforts were dedicated to employment assistance and special policies for employment and social security, therefore alleviating the massive employment pressure in quake areas. Up till June this year, the reemployment rate of unemployed people as a result of the earthquake reached over 95%.

  Confronted with the financial crisis, the province put forth proactive measures (including postponing payment of five items of social insurance; reducing premium rates and salary base of basic medical insurance, unemployment insurance, work injury insurance and childbearing insurance; subsidizing distressed enterprises’ social insurance payment, training expenses and salary expenses; and facilitating fair negotiation between enterprises and trade unions or employees), and encouraged enterprises not to dismiss any employee or to dismiss as few employees as possible so as to stabilize the employment size and the employment situation. As of the end of August this year, 3.32 billion yuan insurance premium was postponed and 1 billion yuan insurance premium was exempted.

  II. The system framework of social security was formed, with increasing coverage and steadily rising benefits.

  First, the province launched all-round reform of the pension insurance system in 1986. Pension schemes for retired employees of state-owned enterprises were centralized at province level in 1992. A novel system for enterprise employee pension insurance combining social funds and individual accounts was officially established in 1998. Since 2005, the province unified the salary bases for contribution to enterprise basic pension insurance, contribution rates, basic measures for the calculation and dispensation of pensions, programs of centralized planning and pension fund policies. After 2000, pension fund covered more and more people. At present, pension fund involves employees of state-owned enterprises, collective enterprises, foreign-invested enterprises, private enterprises and other enterprises as well as people in flexible employment and part of the rural population. In 2008, 10.179 million people in the province engaged in pension insurance, and 8.839 million people engaged in enterprise basic pension insurance, up from the 210 thousand in 1986. 3.222 million rural population engaged in rural pension insurance, and 313 thousand people collected their pension in the same year. The collected sum of pension insurance fund was only 55 million yuan in 1986 and jumped to 42.47 billion yuan in 2008, an increase of 771.2 times.

  The number of retired employees who engaged in enterprise basic pension insurance in the whole province increased to 3.067 million at the end of 2008, 61.8 times more than that of 1986, which was 48.8 thousand. Dispensed sum of basic pension fund rose to 31.477 billion yuan in 2008, an increase of 202 times compared with the 155 million yuan in 1986. These pension funds were one-hundred percent dispensed timely and sufficiently and provided by social institutions. Pension insurance Benefits were enhanced. The average monthly pension for enterprise retired employees has reached 1,115 yuan in 2009, representing an increase of 973 yuan and 6.9 times more compared with that in 1986, which was 142 yuan.

  Second, in respect of medical insurance, from 1978 to 2000, enterprises and government agencies and institutions in the province followed the public-expense medical welfare system that was set up in the early period after the founding of the PRC. In 2000, the medical insurance system for employees came under all-round reform and in the next year full coverage of the system was realized. And people in flexible employment, migrant workers, employees in distressed enterprises, retired employees and landless farmers were gradually involved in the basic medical insurance system. In 2007, the province launched pilot programs of basic medical insurance for urban residents and so far 13 cities have joined in the pilot programs covering 6.402 million urban residents. By the end of this year, the medical insurance system for urban residents will be in effect in 21 cities and prefectures, involving 80% of the residents.

  As of the end of 2008, three medical systems in the province, namely the basic medical insurance system for urban residents, basic medical insurance system for employees and novel rural cooperative medical system covered 75.585 million people, representing 86.6% of the total population of the province. The collected basic medical insurance fund rose from 1.61 billion yuan in 2001 to 12.93 billion yuan in 2008, an increase of 7 times in 7 years.

  In 2008, reimbursement rate of hospitalized medical expenses out of the basic medical insurance for urban employees approached 80%, and the average reimbursement rate of medical expenses for urban residents reached 59.4%.

  Third, in respect of unemployment insurance, the province started “job-waiting” insurance for employees of state-owned enterprises in 1986. In 1993, unemployment insurance for enterprise employees extended to employees of state-owned enterprises, joint-stock enterprises, associated enterprises, collectively-owned enterprises, private enterprises, foreign-invested enterprises and enterprises funded by Hong Kong, Macau and Taiwan compatriots. The promulgation of the Regulations of Sichuan Province for Unemployment Insurance by the People’s Congress of Sichuan Province in 2001 marked the beginning of its rapid development in the province, which gradually played an important role in sustaining enterprise reform and ensuring the basic living of the unemployed. As of the end of 2008, 4.369 million people engaged in unemployment insurance, and the collected insurance premium rose from 547 million yuan in 2000 to 1.89 billion yuan in 2008.

  In 2008, unemployment insurance benefits of 870 million yuan were dispensed in the province, ensuring the basic living of 223 thousand unemployed people, and the average monthly unemployment insurance benefits reached 385 yuan. In 2004, qualified farmers whose land was expropriated were covered in the scope of unemployment insurance. As of the end of 2007, 173.7 thousand unemployed landless farmers were granted unemployment insurance benefits, which accumulated to 1.661 billion yuan.

  Fourth, in respect of work injury insurance, the province decided in 1991 to start pilot programs for the reform of work injury insurance system in some counties and districts. Subsequently in 1997, the province issued the Opinions for the Implementation of the Interim Measures for Work Injury Insurance for Enterprise Employees, further promoting the reform of work injury insurance system for enterprise employees. In 2004, the State Council put into effect the Regulations of Work Injury Insurance and the provincial government promulgated the implementation measures for the same, pushing the cause of work injury insurance in the province into the phase of rapid development. As of the end of 2008, 4.646 million people engaged in work injury insurance in the province, 18.4 times more than the 240 thousand people in 1990. The number of employees in high-risk industries that engaged in work injury insurance was 1.084 million, and migrant workers that engaged in work injury insurance totaled 1.271 million. In 2008, 790 million yuan work injury insurance premium was collected, 162.6 times more than the 4.83 million yuan in 1990. As of the end of 2008, 46 thousand people were entitled of work injury insurance in the province, and 836 million yuan of work injury insurance benefits was dispensed.

  Fifth, in respect of childbearing insurance, from the early 1950s until 1992, employing units were responsible to pay female employees the medical expenses and related benefits arising from their childbearing in accordance with relevant policies. In 1992, the province started the reform of the childbearing insurance system for enterprise employees. In 1997, the Interim Measures of Sichuan Province for Childbearing Insurance for Enterprise Employees was put into effect, providing that in the administrative region of Sichuan province all state-owned enterprises, collectively-owned enterprises, associated enterprises, private enterprises and foreign-invested enterprises as well as the employees that have labor relationship with them shall engage in childbearing insurance. In 2008, 3.7 million people engaged in childbearing insurance in the whole province, and the collected childbearing insurance fund increased from 248.5 thousand yuan in 1992 to 431 million yuan in 2008. As of the end of 2008, 44.3 thousand people were entitled to childbearing insurance benefits and 248 million yuan was dispensed as childbearing insurance benefits, which meant that childbearing cost little for parents.

  III. Reform of the labor system was intensified, and laborers’ rights were thoroughly protected.

  The labor system reform that was consistent with the socialist market economy saw remarkable achievements. In the middle of the 1980s, as a pilot province for trial implementation of labor contract system in state-owned enterprises, the province started to experiment the labor contract system on newly-recruited workers in state-owned enterprises. After the Labor Contract Law was put into effect in 2008, the contract-making between employers and laborers was further regulated, and as of the end of 2008, the contract-signing rate for enterprise employees within the statistical scope in the whole province was 94%. Employees’ salary rose rapidly. The highly-centralized salary system transferred into a salary and income distribution system consistent with enterprises’ characteristics. The distribution mechanism of enterprise income took shape, featured by market-based adjustment, enterprises’ self-distribution, employees’ democratic participation and governments’ supervision and direction. As of the end of 2008, the average salary of incumbent employees in enterprises was 23,753 yuan, 49.3 times more than the 590 yuan in 1978, with an average annual growth rate of 13.1%. Reform measures in respect of the collective contract system, labor relationship coordination system, working hours system and rest and holiday system are in steady progress.

  There was significant progress in the legislation in relation to labor relationship. In line with the legislative progress for labor security in China and Sichuan’s actual conditions, the People’s Congress of Sichuan Province and the provincial governments formulated such local legislations and government regulations as the Regulations of Sichuan Province on the Administration of the Labor Market, the Regulations of Sichuan Province on Collective Contracts, the Regulations of Sichuan Province on Unemployment Insurance, the Regulations of Sichuan Province on Supervision over Labor and Social Security, the Regulations of Sichuan Province on Enterprises’ Recruitment of Employees, and the Regulations of Sichuan Province on Minimum Salary, specifying the minimum labor standards that employers shall abide by, exercising necessary government control on the market and providing legal guarantee for regulating labor relationship in accordance with law.

  Since 1987, the province established and improved the labor dispute settlement system involving such stages as negotiation, mediation, arbitration and litigation. At present, there are 13 arbitral tribunals for labor disputes in the whole province, 17 thousand enterprise mediation committees for labor disputes and 688 local mediation committees. From 1995 to 2008, arbitral committees for labor disputes at all levels in the whole province dealt with over 94 thousand cases with the case finalization rate of more than 97%. 

  The province made reinforced efforts in supervision over labor security and right-protection. Since the promulgation of the Labor Law, labor supervising bodies at all levels recorded 521 thousand firm-times of self-initiated checks on employers, 3.873 person-copies of labor contracts were re-signed under the urge by these supervising bodies, accumulatively 1.69 billion yuan salaries and other benefits was recovered for laborers, and employers were urged to make up for 2.05 billion yuan social insurance premium. Besides, 128 thousand cases of violations against labor security rules were dealt with and investigated in accordance with law, and in 111 thousand cases employers were ordered to make rectifications within a time limit.

  Public services for labor security experienced robust development. In 2008, there were 7,750 public service institutions for employment and social security, engaging 21 thousand practitioners. Public service system for labor security involving municipal, district and town (sub-district) agencies and municipal, district, sub-district and community networks is taking shape and helps ensure timely and convenient employment and social security services for the public.


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