From Iron Rice Bowl to Informalization: Markets, Workers, and the State in a Changing China

Chapter 4. Social Policy and Public Opinion in an Age of Insecurity

Chapter 4 Social Policy and Public Opinion in an Age of Insecurity Mark W. Frazier Scholars have commonly turned to Karl Polanyi’s double movement paradigm to interpret the development of welfare policy in China (Wang 2008;Lee 2007; Polanyi 1957). In this view, the introduction of market forces into labor relations in the 1990s led to social dislocation and impoverishment for large portions of the labor force, to protests fueled by demands for subsistence wages and job security,and to increased employment insecurity for a growing proportion of the urban population.These problems then led to policy responses on the part of the Chinese government that provided some measure of protection against the operation of the unfettered labor market. In Polanyi’s double movement paradigm, market forces are unleashed on society and, in response to the resulting turmoil,states quickly introduce labor and social legislation to provide buffers against the raw forces of capitalism—or, in the terms used by social scientists , to “embed” the market. The dismantling of the socialist workplace institutions of lifetime employment and employer-provided benefits in the Chinese state sector and the subsequent informalization of large segments of the labor force (Albert Park and Fang Cai, chap. 2 in this volume) makes a compelling analogy with the rise of industrial capitalism and labor markets in early nineteenth-century England (see also Lu Zhang, chap. 6 in this volume).The concept of the double movement helps us understand the timing of social and labor legislation, but it does little to explain the forms and design of market-embedding social legislation. We know that states respond to the commodification of labor, but how they respond and to whom they respond are also of considerable importance. 62 Frazier The Chinese government in the 1990s attempted to transform labor relations with a two-pronged strategy.With the introduction of labor legislation (Mary Gallagher and Baohua Dong, chap. 3 in this volume), Chinese leaders sought to provide a legal foundation for such issues as employment relations and dispute resolution. A second and related strategy was to create a postsocialist welfare policy to provide adequate social protections both to those laid off in the process of state enterprise reform and more generally to workers in the marketized economy who faced increased employment insecurity due to the imposition of the labor contract system in 1995.A number of important studies have examined how workers in China responded to the legalization of labor relations (Gallagher 2005a; Lee 2007; Cai 2006). These studies suggest a growing awareness of provisions contained in the new labor laws,with an ambivalent view of the efficacy of labor dispute mechanisms.The response of workers to the transformed Chinese welfare system is less clear. Do workers view the new welfare regime as a legitimate attempt by the Chinese government to provide adequate protection from risks such as unemployment, workplace injury, and old age? Do they make rights claims to such social protections? Or do workers generally assess the new welfare regime as a weak appendage of the market economy, providing few if any social protections? This chapter uses public opinion data to explore how urban workers understand social policies and how they perceive the Chinese state and its agents in offering protection from various risks in a market economy.The discussion is centered on old-age pensions in particular, which became the primary compensation that state-owned enterprises (SOEs) used after mass layoffs (through early retirements) in the 1990s. As the analysis shows, the attitudes of urban workers are in part a legacy of state socialism, but the demands on the Chinese state to provide pensions and other social welfare measures also stem from workers’ experience in a highly competitive and insecure market environment. Marc Blecher (2002) has shown that urban workers seem to accept the principles of market allocation of labor.Although such market hegemony is met with a degree of resignation or acceptance, workers also demand that the Chinese government provide them with a measure of protection from the risks that they face in the labor market. Contention and Compensation The dramatic reduction of the state enterprise sector in the 1990s created unemployment and informalization on a vast scale.Urban SOE workers lost not only jobs but also benefits that had once been delivered by their SOEs.Widespread but localized protests followed, in which unemployed SOE workers demanded Social Policy and Public Opinion 63...