China’s Booming Economy Lagging Behind Persistent Unemployment

China marked Wednesday’s May Day holiday by giving its citizens a week off. But plenty of China’s 1.2 billion people would rather be working.

Despite a booming economy, the jobless rate is surging to record levels, creating a potential time bomb.

The country has already shed tens of millions of jobs in the painful transition to a market-oriented economy. About 20 million more people could lose their jobs in the next four years, according to the Labor Ministry.

Even if the economy continues to grow by 7% a year, it would generate only about 8 million jobs. That’s not good enough for the estimated 12 million to 13 million people pouring into the work force every year, according to state media.

“It’s ironic that as China’s growth rate is reported to be--and has been--the highest in the world, unemployment has been rising,” said Charles Wolf Jr., senior economist at Rand Corp. “Our estimate is 23% to 24% of the labor force. That’s 170 million people.”

The official jobless figure is only about 3.4%. But with waves of labor unrest sweeping the country, it is increasingly difficult to ensure the social stability so prized by leaders of the world’s most populous nation.

Factory and oil field workers in northern China’s rust belt have staged massive protests recently to fight for lost jobs and benefits. Their action has touched off similar movements around the country, and no doubt makes Beijing nervous as it approaches a change in the top leadership this fall.

It is not only the bankruptcy of state-owned enterprises that is hurting workers. Earlier this spring, about 2,000 employees of a private toy factory in southern China protested their layoff. A New York-based labor watchdog group said the company’s Hong Kong owner laid them off after losing big American customers, who pulled out after learning of substandard working conditions.

“China cannot continue to sacrifice workers’ rights for the sake of economic growth,” said Li Qiang, executive director of China Labor Watch. “Otherwise, labor unrest will become an even bigger burden on China’s future development.”

Beijing is not blind to the problem. The Labor Ministry said this week that it would sponsor a national conference on unemployment. Big cities such as Shanghai are already plowing resources into retraining programs for laid-off workers and are paying more attention to labor complaints.

In the first 10 months of last year, Shanghai logged about 10,000 labor disputes, a 30% increase over the previous year, local officials said. Workers frequently complain about being exploited by bosses who ignore their welfare in pursuit of profits.

Local media reports cited the case of one textile plant that falsified the age of its employees to force them to retire. Another reportedly cut salaries so much that angry workers killed their boss.

Observers say people take matters into their own hands because they lack a proper place to address their grievances.

China does not allow independent labor unions.