Job-seeking and Retraining needs for Middle-aged Displaced Workers in Shenzhen

Job-seeking and Retraining needs for Middle-aged Displaced Workers in Shenzhen
Executive Summary

Full report in Chinese is available for download here. Acknowledgement to Shenzhen Migrant Workers’ Centre and student interns for their contribution to the investigation.

 

Industrial upgrading in Shenzhen in recent years have resulted in closure and relocation of numerous factories in labour-intensive industries. With little savings and social protection, middle-aged workers laid off face difficulties in looking for a new job and satisfy survival needs of themselves and their families.  In this investigative report, we demonstrate that the situation of a group of former toy factory workers, who were laid off due to factory relocation, exemplifies the need of these workers regarding reemployment constantly ignored by the government and trade union.

Workers affected in this wave of layoffs are usually in their 40s, and have worked in the same industry for years. Their skill development has been highly dependent on production requirement of the factories. The toy factory workers, mostly female, are responsible for supporting the living costs of both their parents and children. Furthermore, due to the substandard practices of their employment in social security, they are not yet eligible for pension entitlements and are not ready to withdraw from the labour market.

These workers have substantial work experience in the toy industry. Many of them wish to fully utilise skills developed from their past work, but they face a variety of obstacles in job searching –

  1. Age limit – most factories only recruit workers below 40 years of age. Older workers find it hard to land a regular and permanent job.
  2. Insufficient unemployment insurance benefits – most workers are entitled to benefits for 1 to 2 months, but it is insufficient when it takes them 4 months to be re-employed on average.
  3. Worse working conditions – workers who manage to find a stable job report lower remunerations, lack of a labour contract and social insurance. Living needs of their own and their families’ cannot be fulfilled albeit living on a shoestring.
  4. Job precariousness – jobs in remaining toy factories in Shenzhen become more flexible. Most factories shrink in size and employ mostly temporary workers organised by foremen on commission. Duration of work in a factory ranges from 2 days to 1 month, making work highly precarious for workers.

Current unemployment-related policies in Shenzhen do not fit the situations of these middle-aged workers. For instance, most workers who quit their job against their will or fail to provide proof of involuntary unemployment are not eligible for unemployment insurance benefits. The rate of benefit is also inadequate to support them over the job-seeking period. Local officials are ill-informed of related regulations to assist workers in going through procedures for job matching and skill retraining services. Policies assisting start-ups are highly inclined towards young and highly educated entrepreneurs in new and hi-tech industries, which are inadequate for the needs of middle-aged former factory workers.

We hereby propose the following suggestions for improving existing policies regarding reemployment –

  1. The Unemployment Insurance Fund should be used to ease the burden of workers rather than enterprises

    In face of the current economic slowdown, the Guangdong provincial government cuts unemployment insurance premium for employers, whilst the Shenzhen municipal government pay enterprises subsidies with the abundant Unemployment Insurance Fund for the sake of stabilising employment. We argue that workers are equally in need as enterprises during this difficult time, and the operation of the Unemployment Insurance Fund should be more transparent to the public. It is suggested that all workers should receive unemployment benefits for a minimum of 3 months. The amount of benefit should also be no less than the local minimum wage and subject to adjustment at least once every 2 years.

  1. Strengthening of Reemployment services for workers with no local household registration accounts

    All services regarding reemployment – including job matching and start-up assistance – should be extended to workers of all ages, regardless of their household registration status. The Bureau of Human Resources and Social Security to take the lead to coordinate resources and experience from social organisations in providing specific reemployment services for workers of different ages, skills and education levels. Subsidies should also be provided to workers during retraining as a motivation.

  1. Forbidding age discrimination of enterprises during recruitment

    Explicit discrimination of age and gender by enterprises result in obstacles for older workers in search of proper regular jobs. The central government should initiate the legislative process of the anti-discrimination law, in order to better promote social equality and progress for all.