Deputy Dean Yu Hong Interviewed on Employment under the Epidemic

Currently,at the joint prevention and control news briefing of the State Council ondealing with the COVID-19, the Employment Promotion Department of the Ministryof Human Resources and Social Security of the People's Republic ofChina Zhang Ying expressed that such measures as thoroughly extractingcurrent employment opportunities, supporting micro, small and mediumenterprises to stabilize employment, etc. shall be adopted to actively help thelabors for employment and entrepreneurship and strive to keep the generalstability of the employment situation.

Relevantexperts believed that though COVID-19 has posed challenges to the “employment stabilization”of 2020, especially the constantly increased post stabilization pressure ofmicro, small and medium enterprises, the general stability of employment willbasically not change with the Central Government’s and local government’s releaseof packaged “burden relief and profit yielding “policies and effective reliefof epidemic as well as the joint shouldering of risks and overcoming ofhardship at the special moment by the government, enterprise and individual.

Whilebeing interviewed by China Financial andEconomic News, deputy dean Yu Hong of School of Public Economics andAdministration of Shanghai University of China Public Finance Institute expressedthat “employment stabilization” has being always been the due obligation ineconomic development, and with the fermentation of the epidemic, it has moreimportant significance and faces bigger challenge to do this job well. She saidif the employment problem of current stage can be solved properly, it willcertainly play an important role of supporting us to resume to normaldevelopment track; from the characteristics of epidemic development and labormarket, currently “employment stabilization” faces three urgent problemspending for solving. Firstly, restriction on labor mobility has had strikinginfluence on employment and production. The mobility of labor market is a basicprecondition of employment, current epidemic’s restriction on labor mobilityconstitutes systematic risk for economic life including labor market. Second, theemployment adding is also impacted to some sense. The first half year isusually a relatively intensive period for new employment adding, the graduatesenter into the labor market intensively; however, affected by the epidemic,many universities and vocational schools delay the new term, various siterecruitment activities also stop or delay, which may cause a part of newemployment labors not to be able to be put into the labor market timely. Third,some conditions of structure non-matching will appear intensively. On one hand,many employees of some industries have no method to return to their worktimely; on the other hand, some industries lack labors urgently, and need themarket entity to readjust and adapt.

On February 5th,the Ministry of Human Resources and Social Security of the People's Republic ofChina, the Ministry of Finance of the People‘s Republic of China, etc., totally 5ministries issued notice on employment work during the epidemic prevention andcontrol, specified the refund strength of unemployment insurance forstabilizing posts, and loose the standard properly; coordinate to use specialfund for industrial enterprise structure adjustment to support the enterprisesaffected by the epidemic and meeting conditions in stabilizing the posts andguarantee basic life, etc.

Recently,this favorable policy keeps on being refined. As per stipulation, more and morewill be benefited from the post stabilization refund policy for micro, smalland medium enterprises; insured enterprises less than 30 employees has thelay-off rate less than 20% of the insured employees can apply for poststabilization refund policy of unemployment insurance.

The enterprisestabilization is the basis for employment stabilization. To further reduce theproduction, operation and financing cost of relevant enterprises, under theleadership of the fiscal, financial sector, etc., packaged finance and taxsupporting measures have been released. For example, the central finance givesdiscount support for enterprises enjoying special refinancing of the People’s Bank of China, entrepreneurshipsecured loan support for micro and small enterprises affected by the epidemicin priority, and prolongs the years of carry-over of losses by 3 years on thebasis of current 5-year carry-over for transportation, catering, accommodation,tourism and other enterprises suffering relatively huge influence from theepidemic.

Yu Hong analyzedthat, from the aspect of employment stabilization, one of the most importantstarting points to launch a series of such policies is to maintain and keep themost fundamental cash flow of enterprises, especially micro and smallenterprises, to make the blood capillary operate, which is critically importantfor the enterprises to resume vitality after the epidemic is stabilized.Affected by the epidemic, the enterprises fail to achieve profits immediately,face large scale cost expenditure, and the responses of various fiscal andfinancial policies from different angles is an important manifestation of thegovernment, enterprise, and individual to shoulder the risks and overcome thehardship together at such a special period.

With the timelyrelease of “burdenrelief and profit yielding” policies of the central government, the localgovernment places employment at a more outstanding position through reducingtaxes and fees, strengthening financial supporting, and many other means as perlocal conditions. Zhejiang Province clearly stated that the insured enterpriseshaving no lay-off can have 50% of the paid unemployment insurance fee of lastyear refunded; Tianjin stipulated to reduce the unemployment insurance premiumrate in the whole city by stages, with the company premium rate and individualpremium rate as 0.5%, which is effective until July 31st, 2021;Beijing implemented the subsidy policy of refunding the social security fee ofmicro, small, and medium enterprises, inputs RMB3 million of social securityinsurance fee, which will benefit 1.2 million people of the whole city.

In Yu Hong’s opinion, comparedwith the central government’s policies, local governments’ policies are morerefined and pertinent. She said that the local governments are clearer of therealistic problems the local enterprises face, the local governments need togive play to their subjective initiative and the capability of accurateimplementation to implement and refine the tax reduction, financial support,and other policies put forward by the central government as well as achievesubstantial results as soon as possible; meanwhile, these measures need alsoadapt to the development and change of the epidemic, coordinate and support withlabor mobility, enterprises work and production resumption, etc.

Yu Hong remindedthat under the angle of view of stabilizing employment at president, except fortraditional employees, the flexible employment group also needs policyattention and guidance. Some flexible employees with Internet as the media,such as owner of Taobao stores, who can carry out normal operation activities,but are also affected by logistics, etc; it is hard for some labors engaging inlabor intensive industries to resume normal employment state while facing therestriction of labor mobility.

Affected by theepidemic, the service industry employment condition is not so optimistic,including accommodation, catering, tourism, consumption, retails, education andtraining, entertainment, etc.; meanwhile, labor shortage is obvious forenterprises of industry relating to the epidemic. Accordingly, recently, the Ministryof Human Resources and Social Security of the People's Republic of China issuednotice to specify to designate special personnel and grant priority for publishinglabor need information for key enterprises, meet staged labor needs ofenterprises by local potential extraction, adjustment of surplus and deficiency,and other means, and assist enterprises to have cross-region or targetedrecruitment in case of difficulty in meeting needs, and formulatetransportation scheme and organize central transportation with conditions forsome scale enterprises.

On 13th,several sectors of Guangdong Province issued notice jointly to specify to takerelevant enterprises necessary for epidemic control and prevention, rural andurban operation, and the mass’ life and other enterprises concerning thenational economy and the people's livelihood, supply for Hong Kong and Macau,and other special conditions, which need work resumption, as key enterprises,require each place to designate special service commissioners to be in charge ofand contact, carry out organized labor docking cooperation as per conditions,give one-off employment subsidy of RMB1000 / person for employment ofenterprises which produce and distribute urgent articles for epidemicprevention and control because of production expansion during the epidemic;give a subsidy of RMB400 / person for employment agency for introducing laborsfor above key enterprises successfully.

Yu Hong believedthat such a measure to adopt structural re-matching for different employmentposts deserves promotion, and there have been many favorable practices in someindustries. She expressed that some fresh food distribution enterprises haveserious labor shortage, but some catering enterprises have a lot of redundantlabors, in such a way, the two industries can have structural re-matching toarrange the employees of catering enterprises to logistic posts, which has hadgood effect. Currently, the enterprises or industries which have employmentcrisis or unemployment crisis can have active docking, and absorb the employeesaffected by the epidemic to current posts having labor shortage, which is ofimportant significance for relieving the structural influence on employment ofthe epidemic.

Yu Hong saidemployment is the most important “pass” in the capillary conduction process ofenterprises, matters a lot of families, carries the foundarion function foreach family; we call for local governments and enterprises with conditions toresume work and production with orders and encourage diversified and flexibleemployment methods.