Three years into the new century, the nations of the world are only beginning to be exposed to the opportunities and challenges that lay ahead.
One of the greatest challenges, and of a substantial dimension, is the provision of employment in most nations, including the United States and here in China.
In the United States, the loss of at least 2.6 million jobs has increased the reported unemployment rate to above 6 percent. The real unemployment figure is, of course, not available and undoubtedly higher. The dire situation is a good indication that unemployment has become an issue that features big in US domestic politics, the 2004 election and prominently in its foreign relations.
If the recession and unstable recovery offers America any excuse, China, with its fastest gross domestic product growth rate in the world, also faces serious challenge in job provision for its growing work force.
Various sources estimate that about 100 million farm workers have been made redundant. About the same number have already moved to the urban areas, particularly the more affluent coastal areas to seek any jobs, often at minimum wages.
The color of the collar in job hunting, moreover, seems to have expanded from blue to white.
For the past two years, college graduates have found themselves facing an "'employers' market." One figure seen in Chinese media is that only 70 percent of college graduates last year managed to find jobs. This is taking place in an economy that some economists are calling "overheated."
Earlier this year, the central government listed employment as one of the top priorities on its agenda and specifically designated a senior vice premier for the position of job creation.
So what's happening here?
In general, there are three factors that lead to difficulties in job provision today, apart from the usual business cycles.
First, economic globalization. Wherever it reaches, it is followed by global competition - competition that pits a business not just against its counterpart across the street, but also against possible rivals in unknown corners of the globe.
This impacts many Chinese businesses operating during a time of economic transition from a government controlled, and thus shielded economic field, to a more open "market ruled" economy where they are now more exposed to an environment of ruthless competition.
The second factor is technology progress, and, to a lesser degree, management reforms that have pushed productivity growth high.
Productivity is measured by output per working hour. In the United States in the third quarter of 2003, the country hit a growth rate of more than 9 percent, almost a historical high. This came in tandem with the loss of jobs.
In China, particularly in the coastal areas, manufacturers are using more sophisticated technology to gain more added value and stay competitive. Caroline Baum wrote in Bloomberg News, October 14, 2003: "It seems that China's advantage as a low-cost producer has not halted the insatiable, worldwide drive to replace even dirt cheap labor with productivity-enhancing equipment."
This was against the background that "some 22 million manufacturing jobs were lost globally between 1995 and 2002 as industrial output soared 30 percent."
The third factor has to do with the failure of countries to catch up with defining changes in global competition and technological progress by making timely readjustments in economic and social structures.
Of structural changes, the responsibility falls mostly on the shoulders of the government of countries where such changes are most needed. If we could forget about the specific cases and interests of individual entities and examine the world as a whole, its capacity of physical production in agriculture and manufacture has reached such a level that should be enough to meet the demands for basic physical needs of all the people on the globe.
However, that does not mean that the corresponding job-creating capacity has also reached the same level. In other words, more jobs will have to be created in the service sector where the demand remains potentially unlimited.
This was proven recently in the steady increase of services as a percentage of the GDP of most countries. In the United States, services are said to have provided 80 percent of all jobs.
Unfortunately, some governments love to point fingers somewhere else, and often the decision makers do not have a significant understanding of the challenge. They tend to believe that one or two or more percentage points of GDP growth alone are a solution for the employment problem.
They do not realize, it seems, that the economic growth is mostly due to the first two factors: economic globalization and technological progress.
It is also these two factors that are creating the employment problems, or at least hampering the solution. The solution is not to stop the economic globalization and technological progress as both seem to be unstoppable in today's world.
A re-examination, nevertheless, of globalization and technology is necessary, at both the national and global levels. This should be undertaken to find out what can be done to reduce, if not eliminate, the job-killing elements.
Globalization is not just a matter of the pursuit of profit, nor technology just for labor savings.
Ideally and urgently, we need job-friendly economic globalization as well as job-friendly technology development.
(Eastday.com January 5, 2004)
