More job losses may surface for urban workers in 2009, economist warns

Source: Xinhua | 01-03-2009 10:43

BEIJING, Jan. 3 (Xinhua) -- Cai Fang, a renowned labor expert in China, warns the country may see more job losses among urban workers in 2009 after millions of migrant workers became unemployed last year.

The majority of job losses in 2008 were mainly reported among migrant workers, Cai, head of the Population and Labor Economy Institute under the Chinese Academy of Social Science (CASS), wrote in an article published in Caijing Magazine in December.

Migrant workers, who often work in factories, are among the first to bear the brunt of the current global financial crisis. Statistics from the Ministry of Human Resources and Social Security showed 10 million of China's total 130 million migrant workers went back to their rural hometowns jobless last year after some exporters were forced to shut down or halt production to avoid losses as a result of decreased overseas demand.

As a result, the income of rural and urban residents could grow at a slower pace, Cai said. The deceleration of income growth would definitely hurt consumption, he added.

Weak domestic consumption would further slow the country's economic growth. In addition, the other two growth engines -- export and investment -- are also not doing well, Cai said.

This could lead to more job losses across the country, he added.

"In the end, there could be a noted increase in the unemployment rate for 2009."

The government has already taken actions to promote exports, investment and consumption in order to boost the economy.

Measures so far include a four-trillion-yuan stimulus package, raising export rebates to benefit exporters and tapping the vast rural market with more government subsidies for farmers to buy home appliances, among others.

Cai also said the unemployment rate compiled by the government would not rise markedly in 2008 because rural laborers are not counted in the figure.

The unemployment rate was 4 percent for the January-October period in 2008. The unemployment rate in 2007 was also 4 percent.

Editor:Liu Fang