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Unequal Chances, Unequal Outcomes: Pension Reform and Urban Inequality*

Published online by Cambridge University Press:  17 February 2009

Deborah Davis
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Extract

Since the Third Plenum of the 11th Party Congress in December 1978 China's leaders have moved decisively to restructure the nation's economy. However, it now appears that while the decollectivization of agriculture has dramatically reoriented rural society, entrenched urban bureaucracy prevents a comparable change in the cities. Analysis of personnel policy, and in particular examination of expanded pension programmes, further articulates the nature of these entrenched interests, revealing in detail why post-Mao urban reforms have maintained, even intensified, privileges which rural reforms have transcended or eliminated.

Type
Research Article
Information
The China Quarterly , Volume 114 , June 1988 , pp. 223 - 242
Copyright
Copyright © The China Quarterly 1988

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References

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21. After 1964 urban co-operatives and street-level collectives offered severance pensions whereby the retiring worker received one month's pay for each year worked. It differed from the pension system in that it was a lump sum payment and that it was taken/offered only when the worker was completely redundant.

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30. Plans to expand retirement benefits in rural areas have also stalled, and even in rich suburban areas there is resistance to new efforts. Hebei Province reports that excluding suburban Beijing, only 1% of peasants qualify for pensions. As in most existing rural retirement programmes, such pensions usually give no more than 150 renminbi per year. Zhongguo laonian, No. 4 (1986), pp. 35–36.Google Scholar

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36. Ibid.

37. Ibid. and Renmin ribao, 10 03 1985, p. 4.Google Scholar

38. This was the key date for deciding who received the most generous benefits in the 1978 legislation, and it continues to be used for setting priorities in allocating housing and cars.

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52. During a June 1987 visit to Shanghai, I discovered that many units had developed means to get around the requirement that new workers be contract workers. First, any one who was a graduate of a post-secondary school or secondary technical school was guaranteed a job through school fen pei, and units who received these graduates treated them as permanent staff not contract workers. Moreover, there were two categories of contract workers, those whom the unit directly hired, usually on long-term contracts, and those who came on one to three year contracts between the unit and the labour office of the Street Committee. As of June 1987 in Shanghai only a minority of new job entrants fell into this last category which most closely resembled the conditions outlined in the September 1986 legislation.

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54. For full text of legislation see, “Guoying qiye shixing laodong hetongzhi zhanxing guiding” (“Temporary regulations on the labour contract system in state units of production”), Guowuyuan gongbao (1986), pp. 739–45.Google Scholar

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64. The contribution for health at that time was set at 5% for light industry, and 7% for heavy industry, with a total contribution for all forms of welfare not to exceed 15·7% for light industry and 17·7% for heavy.

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71. Renmin ribao, 5 05 1987, p. 1.Google Scholar

72. Renmin ribao, 4 11 1986, p. 3.Google Scholar

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77. This is the pattern I observed during 11 weeks of interviewing in Shanghai in 1986 and 1987.

78. In Shanghai, at least among the getihu this transformation appears already to have occurred. In this sector, which originally was developed to employ young adults, retirees and rural emigrants now dominate. In a December 1985 survey of 111,937 getihu, only 7% were young people waiting for work (daiye). Zhongrui, Xia et al. , “Jiachang yindao guanli, fazhan geti jingji” (“Strengthen manage, develop the private economy”), Shehui kexue, No. 7 (1986), pp. 38–39.Google Scholar

79. Whyte, and Parish, , Urban Life, p. 32.Google Scholar

80. Among the 100 Shanghai retirees I interviewed in June 1987 average pensions were 61 yuan, or 83·5% of last wage, and average post-retirement income was 79 yuan. In addition all Shanghai pensioners received a monthly subsidy of 35 yuan, which meant that the average monthly cash income among those working after retirement was 175 yuan, a sum far in excess of wages among children between 25 and 35.

81. Comparing the number of new entrants to the ranks of the urban zhi yuan with the number of new retirements since December of the previous year, we can estimate that retirements created 31% of new urban jobs in 1979, 39% in 1980, 13% in 1981, 24% in 1982, 31% in 1983, 14% in 1984, and 28% in 1985. For total of retirements see the Table, for number of new entrants 1979–84, Chinese Statistical Yearbook 1985, p. 235Google Scholar, for entrants in 1985, Guangzhao, Yue, 01 1987.Google Scholar