China’s Covid lockdowns put millions out of work

After more than a month in lockdown, Zeng Jialin was finally able to return to the Shanghai auto parts factory where he had worked. He was about to be released from a quarantine center, having recovered from Covid, and was desperate to make up the many days of wages he had lost.

But on Tuesday, the day he was supposed to be released, someone in the crowded isolation facility tested positive again. Mr. Zeng, 48, was ordered to wait an additional 14 days.

“I have three children, in college, high school and elementary school. The pressure is enormous,” she said in a phone interview from the facility. Much of his $30 a day salary had supported them. “I also owe money to the bank, so I’m very anxious.”

As China grapples with its worst coronavirus outbreaks, its uncompromising determination to stamp out infections has left millions unable to work. The strict closures, which affect city after city, have forced factories and businesses to close, sometimes for weeks, even in some of the most important economic centers of the country.

Two groups have been hit especially hard: migrant workers, the estimated 280 million workers who travel from rural areas to cities to work in sectors like manufacturing and construction, and recent college graduates. Nearly 11 million college students, a record, are expected to graduate this year.

China’s campaign against the virus has reverberated economically around the world, entangling global supply chains and curbing imports. But labor issues may be of particular concern to Chinese leaders, who have long derived much of their political authority from their promise of economic prosperity. As lockdowns have hampered people’s ability to pay rent and buy food, many are growing increasingly frustrated with the authorities’ zero covid policies. At times, the dissatisfaction has erupted into rare public protests.

China’s No. 2 official Li Keqiang recently announced that the government would take the unusual step of distributing living allowances to unemployed migrant workers and subsidizing companies that hired young people.

“The new round of Covid outbreaks has hit employment quite a bit,” Li said on April 27. “We must do everything we can to boost job creation, especially for key groups like college graduates.”

It is difficult to judge the true scale of the problem. Officially, urban unemployment, the government’s main gauge, grew by just 0.3 percent between February and March, even as lockdowns crippled economic engines in Shenzhen and Shanghai.

But the official unemployment figures are widely considered an undercount. They don’t catch many migrant workers, and they also only count people as unemployed if they can start work within two weeks. That would exclude people under prolonged lockdowns or the growing number of young people putting off job searches.

The new government support measures suggest the problem is more serious than officials have let on, said Stephen Roach, a former chairman of Morgan Stanley Asia, now a senior fellow at Yale University’s Jackson Institute for Global Affairs. The government had also increased unemployment payments for migrant workers before the 2008 global financial crisis.

“The announcement itself is an indication that there is potentially something much bigger going on in this contingent part of the job market,” Roach said. “This could very well be China’s biggest challenge since 2008-09.”

China’s migrant workers, though they form the backbone of the country’s economy, have always survived in precarious conditions. livelihoods They earn meager wages and have almost no job protections or benefits, circumstances made worse by the pandemic.

Workers often live in company dormitories or cheap temporary accommodation, but when factories close, many can no longer pay rent or are trapped at their workplaces, according to Chinese news reports and social media posts. Some slept under bridges or in phone booths.

Yang Jiwei, a 21-year-old from Anhui province, was working as a waiter in Shanghai when the lockdown began. His residence, shared with four other people, had no kitchen utensils, so they could not cook the few packets of vegetables and meat that local officials had provided. He had been eating a dwindling supply of instant noodles.

“I get up, eat, and then go back to bed,” Yang said. “Apart from food, I can’t think of anything else.”

The delivery people, some of the only workers allowed to continue working, had to choose between giving up their income or risk being left without access to their homes. Others took high-risk jobs in construction or staffing quarantine facilities, only to become infected themselves.

Shanghai officials have acknowledged that the number of homeless people has increased during the lockdown. Local and central authorities have promised support, but many questions remain.

When Mr. Li, the prime minister, announced the expansion of unemployment benefits, he did not specify how much money would be provided. (Xinhua, the state news agency, said the government has allocated about $9.3 billion in unemployment benefits this year.) It is also unclear how the workers will receive the money. Although China has unemployment insurance, many migrant workers are not eligible or do not know how to claim it.

Mr. Zeng, the auto parts factory worker, said he was not aware of Mr. Li’s comments and had never heard of unemployment insurance. He hoped to have a job after being released from quarantine, but he knew that instead he would have to return to his home in Guizhou province.

“I will have to see if the factory reopens. If so, I will go there,” she said. “If not, there’s nothing I can do.”

Still, any political risk to Beijing is likely to remain small, said Aidan Chau, a researcher at China Labor Bulletin, a Hong Kong-based advocacy group. Migrant workers’ pain, though acute, will likely lessen as individual lockdowns ease. The government has also promised to invest in infrastructure projects to generate more construction jobs. And migrant workers generally have little political power and can be silenced by local officials if they complain.

The most intractable problem may be white collar employment. Shanghai’s resistance to the lockdown has been fueled in part by its large population of well-educated residents, who are more used to speaking up even in the country’s highly controlled environment. In late March, residents of a middle-class community gathered outside and chanted, “We want to eat, we want to work!”

Of particular concern are the country’s growing ranks of college graduates. Policymakers have worried for years about how to ensure that they have an adequate supply of jobs. But the shortage has become especially severe this year.

At the same time that the closures have hit small and medium-sized businesses, the government has also embarked on a wide-ranging regulatory crackdown on sectors including technology, real estate and education, industries once highly desirable to young people. There have been massive layoffs.

There were only 0.71 jobs available for each newly graduated job seeker in the first quarter of this year, the lowest number since data became available in 2019, according to a report by Renmin University in Beijing and Zhaopin, a website. of jobs.

“For a country that is always obsessed with social stability, having its young people scramble for jobs when they come out of college is not exactly what a system like that would like,” said Yale’s Roach.

Mr. Li’s promises to help college graduates last month included plans to help them start their own businesses and subsidize companies that offer internships.

Even internships are hard to come by. To increase his chances of getting one this semester, Xu Yixing, a Shanghai vocational school student, had offered to work without pay, but his best options turned him down. A pharmaceutical company eventually hired him but let him go when Shanghai closed.

Mr. Xu, who is studying computer applications and advertising, said he was not too anxious about the competition. It was the pandemic that worried him.

“With the epidemic, that just depends on fate,” he said. “It doesn’t matter how hard you work.”

Joy Dong contributed report.

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