2020-03-30_Bloomberg_Businessweek

◼ ECONOMICS Bloomberg Businessweek March 30, 2020

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● Companiesfeelpressurenottoshedworkersevenif theirbusinessis suffering

China’s Job Protections

identifiedbecauseofthesensitivityoftalkingabout

joblosses,saytheycannolongeraffordtopayall

theirworkersyetareloathtodismissthem.

A suddenspikeinunemploymentthatmight

fillthestreetswithdisgruntledworkershasbeena

recurrentfearfortheCommunistPartyofChina,

whichhasoutlasteditsRussiancounterpartby

almost 30 years,inpartbyconsistentlyhittingits

economicgrowthtargets.

Inthelate1990s,whenPremierZhuRongji

carriedouta sweepingreformofstate-owned

enterprises(SOEs)thatresultedinanestimated

2 millionjobcuts,sackedworkersstagedprotests

aroundthecountry.

Nowauthoritiesareconcernedthatlayoffs

trackedbytheBureauofLaborStatistics,with

anaverage wage of $16.83 an hour, compared

with $28.17 in manufacturing and $31.19 in con-

struction. Only about a third have access to health

benefits, the lowest proportion among all sec-

tors. It’s hard not to make a connection between

these depressing statistics and the fact that some

of the sector’s largest employers, notably fast-

food chains, have strenuously resisted workers’

attempts at unionization.

For Sandoval, West, and millions of oth-

ers, how long the hardship lasts will depend on

whether measures like the ones adopted in New

York, Chicago, Philadelphia, and other major cit-

iessucceedin slowingthespreadofthevirus.

Theroughly$2trillion economicrescuepack-

ageCongresswasonthevergeofapprovingas

BloombergBusinessweekwenttopressshouldbring

somerelief,thoughthemedicinemaynotbefast-

acting.Itsprovisionsincludedirectpaymentsfor

lower-andmiddle-incomeAmericanhouseholdsto

helpthemstaycurrentonpayments.Thelegislation

alsobudgets$500billioninbailoutfundsforcom-

paniesthathaveseentheirrevenueevaporateover

thelastcoupleofmonths,aswellas$350billionfor

lendingprogramsavailabletosmallbusinessesthat

pledgenottoshedworkersduringthecrisis.

InChicago,GinaCapitanini,thethird-genearation

ownerofItalianVillageRestaurants,a groupof

THEBOTTOMLINE Theleisureandhospitalitysectoremployed

about16.9millionworkersasofFebruary,butlayoffsareaccelerating

asvirus-inducedclosuresandcancellationsincrease.

“Wewon’tslashjobs,butwecan’tpayyoueither.”

That’s what thefounders ata 200-person

startupthatcreatedoneofChina’smostpopu-

larrunningappstoldsomeoftheiremployeesin

March.Thestatementsumsupthepredicament

nowfacedbybusinessesacrossmuchofChina,

wherethegovernmentis askingcompaniesnotto

fireworkersandofferingincentivestokeepthem

onthebooks.

InFebruaryrevenueattheGuangzhou-based

companydroppedtolessthan10%ofitsusual

monthlylevelasgovernment-mandatedmeasures

tocontainthespreadofthenovelcoronavirus

confined runners to their homes. The founders,

who asked that neither they nor the company be

three eateries that includes the one that employed

Sandoval, says she worries about the people she’s

had to lay off because of the virus and also about

her business, which will suffer, too. That means

Capitanini may not be in a position to rehire every-

one once this is all over. “Probably, financially, we

wouldn’t be able to do it,” she says. “It’s definitely

going to be hunkering down.” �Matthew Boesler

and Shruti Date Singh

● San Francisco