Yu Yongding: Without economic growth, the unemployment problem cannot be solved at all

YuYongding:Withouteconomicgrowth,theunemploymentproblemcannotbesolvedatall
AccordingtodatareleasedrecentlybytheNationalBureauofStatistics,thenumberofemployedpersonsinMarchfellbymorethan6%comparedwithJanuary,whichmeansthatmostpeoplehavenotresumedwork.Howtoviewthecurrentemploymentprospectsandhowtohelptheunemployed?SaunaNightNetworkinterviewedYuYongding,memberoftheChineseAcademyofSocialSciencesaroundtheseissues.YuYongdingbelievesthattheactualunemploymentsituationinChinamaybemoreseriousthanthestatisticsshow.Aftertheepidemicisbasicallycontrolledandtheworkhasbeenbasicallyresumed,thereisstillalongwaytohelptheexistinglargenumberofunemployedpeopleCrowd).SinceMarch,theUnitedStates,Germany,Japanandmanyothercountrieshavetakentheformofdirectpaymenttosupplementthepublic.Recently,China’seconomicscommunityhassharplysentmoneydirectlytohelppeopleindifficulty.ShouldChinafollowtheexampleofforeignsubsidiesforpayingmoney,includingthehard-to-reachfortheunemployed?”WorkingclassinWesterncountriesarefacedwiththeproblemsoftaxempowerment,lowsavings,andsubstantialexpenditures.Atpresent,theUnitedStates,Germany,Japanandothercountriesareinthestageofanti-epidemic.Stayathome.However,Chinahasbasicallypassedthestageofanti-epidemicreliefthatWesterncountriesarecurrentlyin,andnowitnolongermakessensetosendmoneyagain.”YuYongdingalsosaidthatfromtheperspectiveofselectingsupplementaryobjects,therearecertaindifficultiesindirectlyredeemingsupplementsinChina.”So,howtohelpthedifficultpeopleincludingtheunemployed?YuYongdingsuggestedthatfirstofall,theexistingoverallsocialsecuritysystemshouldbeputintooperationassoonaspossible,tocompletelycovertheunemployedagain,andtorebuildthedifficultiesofurbanunemployedandmigrantworkersforcedtostayathome.”Forthesourceofrelieffunds,thecentralgovernmentcansetupananti-epidemicreliefreliefproject.”YuYongdingsaidincrementallythatshort-termreliefmeasuresarenotsustainable.Tofundamentallyrescuelow-incomepeopleandsolvetheunemploymentproblem,thekeyistohavecertaineconomicgrowth.”Similarly,thereleaseofconsumercouponscanstimulatedemandintheshortterm,butthefundamentalwaytostimulateconsumptionliesineconomicgrowth.”Economicgrowthisthelastword.Witheconomicgrowth,employmentopportunitieswillincrease,residents’incomewillincrease,andconsumptionwillincreaseaccordingly,thusformingavirtuouscircle.Withouteconomicgrowth,itisimpossibletosolvetheunemploymentproblemandrescuethedisadvantagedgroups.”Tomakemoney,wemustfirstunderstandthepurposeofmakingmoney.”Unemployment.Howtoviewthecurrentemploymentprospects?YuYongding:AccordingtothedatareleasedbytheMinistryofHumanResourcesandSocialSecurity,fromJanuarytoMarchthisyear,2.29millionnewjobswerecreatedincitiesandtownsacrossthecountry,areductionofatleast95people,andthethree-monthdeclinehasnarrowed.TheunemploymentrateintheurbansurveyinMarchwas5.9%,aslightdeclinefromthepreviousmonth.Attheendofthefirstquarter,urbanunemploymentregisteredinthecountry3.66%.Thenationalregisteredunemploymentrateandtheurbansurveyunemploymentratearetwodifferentconcepts,atleasttheyshouldbeabletoimproveandreflectthetrueunemploymentsituation.Butatleast,becauseofstatisticalcoverageissues,peoplegenerallyfeelthatChina’sunemploymentsituationmaybemoreseriousthantheunemploymentratefiguresreflect.Accordingto2018figures,thenationalemploymentis7.8billion,towns4.4billion,migrantworkers2.900million(goingouttowork1)700million),2billionfarmers.AlthoughtheMinistryofHumanResourcesandSocialSecurityhasnotreleasedthespecificfiguresoftheunemployed,itisnotdifficulttoimaginethatduetotheimpactoftheepidemic,China’sunemploymentproblemisveryserious.Ofcourse,astheeconomyresumesgrowth,thenumberofunemployedwilldeclinesignificantly,buttheproblemsofunemploymentandinvisibleunemploymentcannotbesolvedimmediately.Infact,aftertheepidemicsituationisbasicallycontrolledandtheresumptionofproductionandproductionisbasicallyachieved,thereisstillaproblemofhowtorescuealargenumberofexistingunemployedpeople(notunemployedpeopleinthepast)foralongtime.SaunaNightNet:IntherecentChineseeconomicscommunity,thereisalotoftalkaboutdirectpaymentofsubsidies,includingthetrappedpeoplewithintheunemployed.ShouldChinafollowtheexampleofsendingmoneyabroadtoitscitizens?YuYongding:Firstofall,weneedtodistinguishclearlythepurposeofmakingmoney-isittofightagainsttheepidemicortostimulateconsumption(ortostimulatetheeconomy)?Duringtheperiodofanti-epidemic,moneywasreleasedtoalleviatethedifficulties.Inordertopreventandcontroltheepidemic,thegovernmentclosedthecityandaskedthepublictoreducetheirtravelandisolatetheirhomes.However,working-classworkersinWesterncountriesarefacedwiththeproblemsoftaxempowerment,lowsavingsandlargerigidexpenditure.Oncethefactoryisclosed,workerslosetheirsourceofincomeandlifemaybeintrouble.Intheeventthattheentireeconomicactivityhasbasicallyceasedtofunction,thestatemustprovideemergencyrelief(money)infunds.Otherwise,evenifthereismoneyinthehandsoftheworkingclass,iftheyarenotconfidentaboutthefuture,theywillinsistonworkingtomakemoney.Notlongago,thesubwayinTokyo,Japanwasstillverycrowded,butwhenthegovernmentannouncedthatitwouldissue100,000yensupplementtoeachresidentfromMay,thepeoplewhocrowdedthesubwaysuddenlydisappeared.Atpresent,theUnitedStates,Germany,Japanandothercountriesareinthestageofanti-epidemic.Thereasonsforthegovernment’smoneytobailoutthebailoutsaretomakeresidentsfeelathomeathome.Evenso,therearestillvoicesofmoralhazardcausedbyexcessivemoneyinsomeofthesecountries.However,Chinahasbasicallypassedthestageofanti-epidemicreliefinWesterncountries.Accordingtothechangesoftheepidemicsituation,theChineseeconomycanbedividedintothreestages:thefirststageistheperiodofanti-epidemic,inordertocontrolthespreadoftheepidemic,thegovernmentmusttakemeasurestosealthecity,sealthearea,andsealthecommunity;Inmanyareas,productionhasresumed;thethirdstageisthattheepidemicisbroughtundercontrolandeconomicactivitythroughoutthecountryreturnstonormal.NowChinaisenteringthethirdstage.Fromanationwideperspective,productionhasgraduallyrecoveredandthefactoryhasbasicallyresumedwork.Thatistosay,wehavepassedtheperiodtofighttheepidemicandrescuethehardshipsbysendingmoney,andnowsendingmoneynolongerhasthemeaningofrelieffromtheepidemic.Ofcourse,wecannotruleoutthepossibilityofrepeatedepidemics.Iftheepidemicsituationrecursinthefuture,wewillreturntotheperiodofproductionandworkstoppageagain.Intermsoftheselectionofsupplementaryobjects,therearealsoconsiderabledisadvantagesingeneratingsupplementsinChina.Whencompensating,thefirstquestionis:towhomdoesthismoneygo-isitlikeamillionaireandapoorperson,dopeoplehaveashareofcompensation,oronlytothepoor?Ifitisonlydistributedtopeopleindifficulty,whoshouldberescuedandwhoshouldnotberescued,howtoidentifytheobjectsthatshouldberescued?Evenwithvariousreasonsformakingmoney,itisstilldifficulttooperate.InJapan,notonlyallJapanesenationalsbutalsoallforeignerslivinginJapanaresupplementedwith100,000yen.ThereasonfortheJapanesegovernment’smoneyissimple:inordertoeffectivelypreventandcontroltheepidemic,leteveryone-whetherJapaneseorforeignerslivinginJapan-stayathome.Notonlythat,butthemethodofgenerationisalsoverysimple:thegovernmentsendsoutan“applicationinvitationletter”toeveryonebasedontheresident’sIDcard.”SeeWujin”)procedure.”Weneedtomaketheexistingoverallsocialsecuritysystemoperationalassoonaspossible”SaunaYewang:Sohowdoyouhelptheunemployedinyouropinion?YuYongding:Fortheunemployed,wecanbedividedintotwotypes:theurbanunemployedpeoplewhoareinsured,theuninsuredpeople,andinaddition,theurbanunemployedpeopleandmigrantworkersundercontract.Beforedecidingwhethertopayornot,weshouldfirstconsiderhowtoplaytheroleoftheexistingsocialsecuritysystem.Thesocialsecuritysystemsrelatedtotheissuesunderdiscussionmainlyincludetheunemploymentinsurancesystem,theminimumlivingsecuritysystemforurbanresidents,andtheruralsocialsecuritysystem.Firstofall,fortheurbanunemployedpeopleparticipatingintheinsurance,unemploymentinsurancefundsshouldpayunemploymentinsuranceforthem.Accordingtostateregulations,migrantworkersinparticipatingenterprisesshouldbepaidafull-timelivingsubsidy,sothattheycanreturntotheirhometownstoworkafterleavingtheiroriginalunits,andhavecertainlivingsecurity.TheoutbreakoccurredduringtheSpringFestivalholiday,anditwasduringthisperiodthatmigrantworkersreturnedhomefortheChineseNewYear.Migrantworkerswhohavenotyetreturnedtothecitycantemporarilystayinthecountryside,whichisconsideredtobeanoriginalformofemploymentinsurance.Aftertheepidemicisover,theycanreturntothecitytowork.Second,subsidiesareprovidedtoemployeeswhohaveparticipatedintheinsuranceandhaveneverbeenunemployed,butwhosewagesandincomeshavebeenseverelyaffectedbytheepidemic.Inordertoreducetheunemploymentrate,theMinistryofPeople’sInsurancehasintroduced”stabilizationofjobsubsidies”inrecentyears.Enterprisesthattakeeffectivemeasurestolayoffs,reducelayoffs,andstabilizejobscanapplyforstablejobsubsidies.Thesubsidystandardis40%oftheunit’sunemploymentinsurancepremiums,andtherequiredfundsareallspentfromtheunemploymentinsurancefund.Althoughitsrationalityisworthyofstudy,thissupplementcanindeedreducethereliefeffectinthecurrentsituation.Infact,incountriessuchasGermany,thegovernmentencouragescompaniesnottolayoffworkersbecauseoftheepidemic,andthegovernmentbearsasignificantpercentageofwages.Third,bailouttheunemployedthroughtheDibaosystem.TheNationalConventiononApril21statedthattheurbanandruralfamilieswhomeettheminimumsecurityrequirementsshouldbeguaranteed,andtheunemployedpeoplewhodidnotparticipateinunemploymentinsuranceandwhoseincomewaslowerthantheminimumsecuritystandardshouldbereducedtoreducetheminimumsecurity.Etc.Itispracticaltousethelocalminimumsecuritysystemtoreleaserelieftolocalunemployed.Theintroductionofthispolicyisverytimely,andthepartiesconcernedshouldrebuilditassoonaspossible.Fourth,wecanusethechannelsoftargetedpovertyalleviationtohelppeopleinruralareaswhoareindifficultyduetolossofwork.Fifth,throughtheunemploymentinsurancesystemtorescueunemployedurbanunemployedpeopleandbusinesses.ThenumberofpeopleparticipatinginChina’sunemploymentinsurancein2018was1.964.3billionpeople,comparedwiththenationalemploymentpopulation7.800millionpeople,theinsurancerateisonly25%.Thelowrateofparticipationissurprising.Inaddition,thegradualsurplusofunemploymentinsurancefundswas581.7billionattheendof2018.Thelowparticipationrateandlargebalanceseemtoindicatethatalargenumberofenterprisesthatreallyneedtoparticipateinunemploymentinsurancedonotparticipateinunemploymentinsurance.Ifyouassumethis1.9.6billionpeopleareurbanresidents,andtheinsurancerateforurbanresidentsisonly44.5%.Infact,therearealargenumberofunemployedurbanemployeesinChina.Whataboutunemployedurbanunemployed?Consideringthattherearealotofsurplusesintheunemploymentinsurancefund,asanextraordinarymeasureduringtheextraordinaryperiod,canthegovernmentconsiderusingsomewaytoborrowthesurplusoftheunemploymentinsurancemoneytobeusedastheunemploymentinsurancemoneyoftheuninsuredunemployedpeople?Canthe”stablejoballowance”beextendedtosmallandmicroenterprisesthatarenotparticipatingbutarestillstruggling.Sixth,thereisanotherethnicgroupthatcannotbeignored.Withtheimprovementoftheepidemic,alargenumberofmigrantworkershavereturnedtothecity,butsomepeoplearelivingonthestreetsbecausetheycannotfindjobs.Localgovernmentsmustmakeuseoftheexistingrescuemechanismorallocatespecialfundstohelpthesepeoplereturntotheirhometownsorperformotherresettlement.Inshort,wemustfirstreusetheexistingsocialsecuritysystemandchannels,andmaketheentiresocialsecuritysystemoperationalassoonaspossible,completelycoveringtheunemployed,andeliminatingthedifficultiesofurbanunemployedandmigrantworkersforcedtostayathome.Inaddition,beforetheeconomicoperationfullyreturnstonormal,asanextraordinarymeasureduringtheextraordinaryperiod,thegovernmentandfinancialinstitutionsshouldalsoconsiderhowtopostponedebtrepaymentandreducevariousrents,interestandpublicservicefeestohelplow-andmiddle-incomeworkingclass,especiallyItistheyoungpeoplewithlowincomeandlowsavings,whousuallyhavelargerigidexpenditures,andsmallandmedium-sizedindustrialandcommercialworkerstoovercomethedifficulties.However,weshouldalsoseethatallreliefmeasuresaretemporarymeasuresandhavenosustainability.Forexample,thenearly600billionUSdollarsinunemploymentinsurancesurpluscannotbemaintainedfortoolong.Tofundamentallyrescuelow-incomepeopleandsolvetheunemploymentproblemfundamentally,thekeyistohavethenecessaryeconomicgrowth.Withouteconomicgrowth,theproblemofunemploymentcannotbesolved.”Financialestablishmentofspecialexpenditureitemstohelppeopleindifficulty”SaunaYewang:Inadditiontothecoverageoftheexistingsocialsecuritysystem,isthereanyotherwaytohelptheunemployedtobailout?YuYongding:Whilemakingfulluseoftheexistingsocialsecuritysystemtohelptheunemployed,itshouldalsoconsiderusingfinancialfundstohelptheunemployedandinvisibleunemployedpeoplewhoarenotcoveredbytheexistingsocialsecuritysystem,especiallythosewhoarenotcoveredbythesocialsecuritysystem.Invisiblejoblesspeople.Wedonotknowhowmuchbailoutfundsthegovernment’sfinancesactuallyspentinthefirstquarter.Fromthenationalfiscalbudgetforthefirstquarterannouncedbythegovernment,itcanbeseenthatsocialsecurityandemploymentexpendituresare983.700millionUSdollars,ayear-on-yeardeclineof0.7%.Thisnumberisstaggering.Itstandstoreasonthatunderthisproject,governmentexpenditureshouldhaveincreasedsignificantlyratherthandecreased.Perhaps,thegovernment’sbailoutfundsarescatteredunderotherexpenditureitems.Thisyear,whetheritisthefinanceofthecentralgovernmentorlocalgovernmentsiscertainlyverydifficult,butalotofmoneymustbespent.Forexample,doctorswhohavemadetremendouscontributionsintheprocessofanti-epidemicdiseasemustbefullyrewarded,andcommunityworkersloyaltotheirdutiesshouldalsobefullycompensated.Allofthismoneyshouldbemainlypaidforbythecentralgovernment.Itisnotdifficultforthecentralgovernmenttosolvethefinancialconstraintsthatlocalgovernmentscannotovercome.AftertheWenchuanearthquakein2008,theMinistryofFinanceestablishedafund(fund)forreconstructionandreconstructionaftertheWenchuanearthquake.Aimingathelpingthehard-hitpeoplesufferingfromsuddendiseaseepidemics,thecentralgovernmentcanalsofollowthepracticeoftheyearandestablishananti-epidemicreliefaidproject.Relevanttemporaryexpendituresarebranchedunderthisprojectaspartofthegeneralpublicbudget.”Thefundamentalwaytostimulateconsumptionliesineconomicgrowth.”SaunaYewang:What’syourcommentonthelocalgovernment’swayofissuingconsumptionvouchers?YuYongding:Themethodofissuingconsumervouchersisdifferentfromthatofissuingmoney.Itsmainpurposeandfunctionistostimulatedemand.Fromtheperspectiveofstimulatingconsumption,itmakessensetoreleaseconsumercouponsratherthantoaccumulatemoney.Localgovernmentscanobtainconsumptionvouchersbasedontheirownfinancialresources.Issuingconsumervoucherscanstimulatedemandintheshorttermandcanbeusedasatemporarymethod,butitsroleislimited.Thefundamentalwaytostimulateconsumptionliesineconomicgrowth.Fromaneconomicperspective,therearetwomainfactorsthataffectconsumption:thecurrentincomesituationandtheexpectationoffutureincome.Fromtheperspectiveofincome,consumptionisafunctionofincome,andtheincreaseinconversionincomewillincreaseconsumption.However,therelationshipbetweenconsumptionandincomeisnotincreasedeveryyear,becauseconsumptionwillbeaffectedbyexpectations-evenifincomeisincreasednow,ifeveryoneisnotoptimisticaboutfutureeconomicexpectations,theymayalsosavemoneyandreduceconsumption.Similarly,ifyouareoptimisticabouteconomicexpectations,evenifyourincomeisnotveryhighnow,youmaybewillingtospendinadvance.Therefore,onlybyimprovingthecurrentincomestatusofresidentsandtheexpectationsofthefutureeconomywilleveryonebewillingtospendmoney,andbothofthesewillultimatelyrequireeconomicgrowthtoachieve.Myviewhasalwaysbeenthateconomicgrowthisthelastword.Witheconomicgrowth,employmentopportunitieswillincrease,incomewillincrease,andconsumptionwillincreaseaccordingly,thusformingavirtuouscircle.Withouteconomicgrowth,itisimpossibletofundamentallysolvetheunemploymentproblem,anditisalsoimpossibletoalleviatethedifficultanddifficultpeople.Ofcourse,thegrowthIamtalkingaboutisnotblindlypursuingthegrowthofpoliticalachievements,notthegrowthof”diggingandburyingpits”,butthegrowththatbenefitspeople’slivelihood,strengthenseconomicsecurity,andpromotesthegrowthofindependentinnovation.Inaword:sustainablegrowth.Sauna,YeWangHouRunfangEditorChenLiproofreadingLiuBaoqing