China’s real jobless rate may be considerably higher than the official 5 percent.
Bai Peiwei, an economics professor at Xiamen University, estimates, in the words of Bloomberg News, that the rate “may be 10 percent in industries with excess capacity, such as unprofitable steel mills and coal mines that have slashed pay, reduced shifts and required unpaid leave.”
Bloomberg adds: “Many state-owned firms battling overcapacity favor putting workers in a holding pattern to avoid mass layoffs that risk fueling social unrest. While that helps airbrush the appearance of duress, it also slows the shift of workers to services jobs, where labor demand remains more solid in China’s shifting economy.”
“Other projections indicate the employment situation is even worse. An indicator of unemployment and underemployment produced by London-based research firm Fathom Consulting has more than tripled since 2012 to 13.2 percent.
“The official jobless rate isn’t much help for economists: it’s been virtually unchanged at about 4.1 percent since 2010 even as the economy slowed. The gauge only counts those who register for unemployment benefits in their home towns, which doesn’t take into account 277 million migrant workers. Total employment is 775 million, National Bureau of Statistics data show.”
To read the Bloomberg article, please hit this link.