Economic Reform and Development the Chinese Way

Why, then, are there vacancies that remain unoccupied? This is because, when the workforce structure does not tally with the prevailing economic growth rate and economic structure, the rising industries in both material and nonmaterial production cannot find what they want badly: skilled workers and competent engineers, technicians, researchers, and managers. The same labor shortage can also occur in established industries in material production that maintain growth by relying heavily on new technology and equipment, so much so that even workers on their payrolls cannot measure up to what such new technology and equipment require of them. Seemingly unwanted jobs may also occur in newly developed places where required workers are in short supply. This is an outstanding problem with developing countries, where, for historical reasons, skilled workers that can keep pace with industrialization are scarce.

Generally speaking, the number of the jobless can never match the number of jobs awaiting them in a national economy. The ratio between the two numbers differs with the changes and readjustments in a nation’s economic growth rate and economic and workforce structure. However, even if the two numbers match each other, they cannot offset each other, because workers of different proficiency levels and fields of work are not interchangeable under modern production and technological conditions. In the long run, the coexistence of unemployment and unfilled job vacancies in a nation’s economic growth is not temporary, but, most probably, perpetual. That is to say, job vacancies may disappear when long-time job-seekers have found their jobs, but will occur again when new layoffs arrive on the scene. Unemployment, concealed unemployment included, is a waste of human resources, while job vacancies left unfilled are a waste of material resources – for them to exist at the same time is not only detrimental to economic growth, but also holds back the adoption and popularization of new technology and economic restructuring. The result is that the economy remains mired in low efficiency. Chronic joblessness can also be a major destabilizing factor for society.

In a nutshell, employment problems in a growing economy are attributable to the failure in reconciling the conflict between unemployment and unfilled job vacancies. Such is the “structural” nature of employment.

The employment problems confronting China are complicated. Some are universal to all economies, some are common to developing nations in economic development, but others are peculiarly China’s own. These three categories of employment problems are intertwined. The universal ones stem from the fact that the increasing use of sophisticated machines and technological equipment has whittled down producers’ need for workers, unskilled workers in particular. Those common to developing nations arise from the new job needs of large numbers of unskilled laborers that have just quit farming at the time of an agrarian society’s transition to industrialization. The employment problems peculiarly of China’s own are partly to be blamed on incompetent labor administration, but most of them are attributed to the lopsided economic development resulting from the ten-year chaos of the Cultural Revolution that considerably narrowed down people’s job options. These problems were aggravated by the excessive population growth in the late 1950s and the early 1960s. Today, those born in those years are coming of age or will soon become eligible for jobs. If the employment problems for these people cannot be properly handled, both society and the economy will be in jeopardy. The situation is also complicated by a dire shortage of skilled workers and the low labor productivity of those in their jobs. The dilemma facing China today is that while many jobseeking youths are having trouble finding jobs, factories, too, find it hard to fill jobs with qualified workers. A nation’s aggregate volume of labor resources are derived by multiplying the total number of workers with their average level of technical competency – the chief indicator of labor quality. In that sense, China’s aggregate volume of labor resources is by no means abundant because its workers’ average skill proficiency is low despite their sheer numbers.