2016 Four Possible Causes Of Unemployment

The year is over, and the vacation is over.

But many articles say that this year's employment situation is not optimistic. Is that true?

On the eve of the Davos forum, the forum issued a report that the new wave of industrial revolution will create 2 million 100 thousand new jobs, including computer engineering and mathematics.

However, 7 million 100 thousand jobs will disappear, with office white-collar and management posts being the most affected.

This means that 5 million or more people will be unemployed in the future.

What about China?

In 2016, China's economy was faced with the structural reform of "three down, one down and one subsidy", that is, economic leveraging, industrial capacity, property market inventory, financing cost of real economy, supplementary supply side and short human resources.

Previously,

Normal University

Zhong Wei, director of the research center, once wrote: since 2011, China's economy has continued downhill, but the employment situation is unharmed.

But perhaps in 2016, China may gradually face the continuing pressure of hard employment and hard pay.

Qi Junjie, a commentator of Finance and economics, pointed out that unemployment is mainly reflected in the manufacturing industry, which is not as horrible as expected. Other industries are mainly reflected in the decrease of income and the shortening of the life cycle of enterprises.

So this is a year of keeping a low profile.

During the Chinese new year, it was also found that friends and family members were closed or forced to go out of business during the new year. Many factories and businesses were closed, and some manufacturing factories had been on vacation for 3 days in the new year. They began to work overtime in the third year. But this year, they heard that they had to leave early, and put them on duty only on the first fifteen of the month.

It's not because the boss is stupid, but it really doesn't have much work to do, and the bosses obviously can't afford to lose. Most of these manufacturing factories have low base salaries, earn more work hours, and get more overtime.

But this is pretty good. I heard that several factories in southern China have already laid off several rounds of staff.

Some bosses say that this year's business will definitely not be done well, with fewer customers and fewer orders.

Business is not enough to exchange rates, and domestic clothes are hardly needed, while some of them are required by environmental protection.

As for small steel mills, hardware factories could not last year.

It is quite certain that the winter of manufacturing is coming.

There are three main reasons. First, the burden of enterprises is too heavy to survive. All taxes and fees are added together, and enterprises do not create gross margin of 40%.

Second lack of funds, it is very difficult for banks to borrow money. Even if they get the money, the risk compensation of interest rate is too high. If the cost of borrowing money is 10%, it will be better to shut the factory away.

Third, the cost of labor is too high, and the workers are asking too much price. If the enterprise wants to pform this part of the cost, it must be added to the goods, so that the products produced will lose market competitiveness, so we can see that many large factories have moved to Southeast Asia.

Basically, China's manufacturing is being strangled by cost.

The factory has moved away, and the workers are naturally a large proportion of the unemployed.

Some factories, such as Foxconn, have greatly increased the number of robots. The purpose is to increase production efficiency and reduce the proportion of personnel.

The external demand of the manufacturing industry is weakening, the internal costs are rising, the pressure of technology upgrading, and the employment situation in the future will be worse and worse.

It has been said that there is nothing wrong with workers who have more money than they can.

This really can not blame workers, because of rising housing prices, the cost of living of workers increased.

They also need to rent houses, eat, drink and support their families, so if the owners do not get the income, they will have to go back to their hometown. No one is willing to pay for it.

So this is a stalemate. If the workers want to start up, the enterprises will not have profits. The products have no price advantage. If the wages are lowered, the workers would rather not.

If the two sides fail to agree, the business will quit.

The biggest culprit is the cost of living. The biggest part of the cost of living is renting.

The increase of unemployment in the manufacturing industry is inevitable, and it should be irreversible in the short term. So what is new industry? I am afraid this year is not optimistic. Because of the low tide of capital, many start-up companies will get more and more difficult to get money.

The Internet will also enter the ruthless survival of the fittest. Taking PPT to deceive millions of investors will be gone forever.

But fortunately, in the new economy, there is still enough room for employment. A has dropped out, and there is BC, but the life cycle of the start-up companies may also be greatly reduced under the economic trend. So those who are in the Internet industry are afraid to change jobs more frequently, and the premium will be gradually reduced.

Unless you are such a brilliant person.

There are many traditional economic models besides manufacturing and the new economy. These employees may never have thought about changing jobs or too much unemployment, but they had to bear the pain of lower incomes, lower profits and anti-corruption.

This is the employment situation this year. The unemployment tide is mainly reflected in the manufacturing industry. It is not as horrible as it is imagined. Other industries are mainly reflected in the decrease of income and the shortening of the life cycle of enterprises.

So this is a year of keeping a low profile.

The cause and outbreak of unemployment are concentrated in four areas: one is overcapacity, the other two are non skilled, unskilled labor, three are university graduates, four are state-owned enterprises and institutions.

First, directional blasting of serious excess capacity will bring predictable unemployment pressure.

In 2015, the state repeatedly referred to "going to capacity" and eliminating "zombie enterprises". Iron and steel, coal, cement, electrolytic aluminum, flat glass, shipbuilding and other industries were considered to be serious overcapacity industries.

At the special session of the State Council in January 20th,

Talking about "going to capacity" means that we should take the lead in the steel and coal industry.

Only two employees in iron and steel industry have more than ten million employees, which brings pressure to local governments and social security systems.

Moreover, the employment absorbed by the manufacturing industry may continue to weaken. From 2004 to 2011, China's industry has experienced continuous expansion, and its absorbing labor force is also rising. However, since 2014, industrial investment and value-added have continued to slump, indicating that the subsequent industry will release rather than absorb the unemployment pressure.

In the past tens of millions of retirements - new replacement tide will continue to ebb.

After the new year's day in 2016, the rhythm of workers returning home from the Spring Festival was 1~2 weeks earlier than in previous years, revealing the precursor of the release of unemployment pressure in the manufacturing industry.

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Two, the employment of unskilled labor with young migrant workers as the main body is difficult.

In 2016, it would not be a particularly good year for the employment prospects of migrant workers.

Because the two industries that absorb the employment of migrant workers face profound crises at the same time.

The first is manufacturing.

About 50% of young migrant workers are engaged in manufacturing industry in China, but the disappearance of demographic dividend and the upgrading and pformation of manufacturing industry make the competitiveness of labor-intensive manufacturing industry decline rapidly. With the "world factory" of Dongguan as the representative, the southeast coastal area in 2015 witnessed a collapse of manufacturing enterprises, and intensified in 2016.

The decline of the industry makes it imperative to reduce staff.

Zhaopin recruitment survey data show that in the fourth quarter of 2015, China's manufacturing employment demand plunged into zero growth.

In 2016, the reduction of labor-intensive manufacturing industry, the upgrading of manufacturing industry and the pursuit of high-quality technicians will make knowledge level low, and the group of migrant workers with a lack of vocational skills is closer to a job crisis.

Another major crisis industry is the construction industry that employs 22.3% of migrant workers.

Data show that more than 61 million of migrant workers are engaged in the construction industry.

But now the construction industry is in great trouble. In 2015, the investment in real estate was only 1%. In 2016, the rebound in hope was very small, and the demand for employment in the construction industry suddenly lost momentum.

In 2016, a large number of young and middle-aged migrant workers were faced with the dilemma of nothing to do.

In recent years, the service industry (represented by the property market, home economics, logistics, retail and other industries) has created a large number of jobs for migrant workers.

In 2015, a research report of the NDRC's Economic Research Institute rarely mentioned: "although new forms of online retail, express delivery and other new jobs have created some new jobs, we must also note the impact of online shops on physical stores and the significant substitution effect."

Zhong Wei mentioned that along the southeast coast, these industries have begun to show signs of growth fatigue, and the bargaining power of workers' wages has dropped significantly.

Employment starting salaries in home economics, business and other fields have not started to rise and fall, and the service industry as a reservoir for employment has slowed down its savings capacity.

The three is the pressure on job seekers of college graduates.

According to Zhaopin, the number of Chinese university graduates will reach 7 million 650 thousand in 2016, 160 thousand higher than last year.

According to statistics, this year's graduates, together with 300 thousand returnees and former graduates who haven't found jobs before, expect 10 million of them to compete at the same time.

However, this group of "lucky children" is likely to become a disadvantaged group in this year's sluggish job market.

This is a frictional unemployment.

Renowned scholar Yu Jianrong believes that the employment problems faced by college students are attributed to two main reasons: first, the popularization of higher education, and the more and more serious deformations of professional structure in Colleges and universities, resulting in a large number of redundant talents, bringing the pressure of invisible unemployment; the other is that graduates do not approve of work, and the white-collar jobs of favored metropolitan white-collar workers are limited, and there are not many people willing to go to small and medium-sized enterprises to do blue collar jobs.

Overall, in the past five years, people have misunderstood that even if economic growth continues to decline, it will not hinder tens of millions of new jobs every year.

The key to decoupling growth from unemployment is that steady growth conceals structural pformation without major progress.

Starting from 2016, the unemployment pressure brought about by the decline of growth will become apparent. The vulnerable groups in the labor market will come mainly from three aspects: first, the workers who will turn the industry into production, two of them will be migrant workers, and three of them will be college graduates.

China's labor market will experience painful adjustments to job search difficulties and even lower pay. It will also impact China's only reliable growth engine, namely consumption.

Four, state-owned enterprises and institutions are facing structural reform.

Reform has entered the deep water area, and state-owned enterprises and institutions are facing structural reform.

The employees of state-owned enterprises may face unemployment. One is the overcapacity industry. The share of Chinese enterprises is very large. To go to capacity is one of the keys to the reform of state-owned enterprises. According to "digesting one batch, pferring a batch, integrating a batch and eliminating a batch", there should be a considerable number of SOEs in the four batches. Secondly, the reform of state-owned enterprises will lead to the climax of "merger and reorganization" and pay attention to market-oriented operation and management. In this process, the simplification of personnel is unavoidable.

Institutions are also pushing for reform.

In January 15th, in Beijing, "the latest Forum on personnel system reform in institutions and the Summit Forum on hot issues", officials of the relevant ministries and commissions stated that this year's emphasis should be laid on the compilation of innovative reforms, especially the impact of universities and public hospitals on the related reforms.

Some people may ask why we should promote the reform of public institutions.

The answer is simple: limited financial resources can no longer support so many people.

Added: Why did the economic downturn in the first five years not bring unemployment pressure?

In the past five years in 2011~2015, there were about 20 million new job seekers each year.

So why did the economic downturn not bring unemployment pressure in the first five years? Zhong Wei's explanation is that the following channels have absorbed the pressure of employment:

1, the replacement of labor force caused by the tide of retirement.

At present, the number of urban employees is close to 400 million. If there is no obvious merger and reorganization bankruptcy, they can provide jobs of not less than 10 million per Annex.

2, the rate of labor participation continues to decline.

In recent ten years, China's labour force participation rate has dropped by 0.8 percentage points per year, and its causes are complex. However, it is very likely that more than 5 million of the 50~60 year old labor force has withdrawn from the labor market each year.

3, there is a lack of reliable data on the employment situation of graduates from polytechnic schools and colleges.

Some of them are faced with the predicament of unemployment, but the unemployment pressure of this group is not included in the unemployment rate.

4, changes in the employment structure.

The labor force separated from the primary industry has been pferred to the second and third industries, especially the third industry. The development of the service industry has effectively relieved the employment pressure. Five, the deepening reform of the social security system has made the social pressure of unemployment not exposed in groups.