3. Employment and unemployment profile in Shanghai:

3.1. Employment and unemployment during the transition period: a complex situation

Shanghai’s unemployment figures since 1985 show three trends. Firstly, a rising rate of unemployment over the past 15 years. Before 1992, the number of registered unemployed in Shanghai was insignificant: below 100,000, that is to say, less than 2%. From 1993 onwards, this grew rapidly: by the end of 1994, this figure was 148,500; and, by the end of 1999, 187,000((2). Secondly, there have been no dramatic surges in the rate, with the single exception of 1996. Thirdly, according to official figures, the unemployment rate in Shanghai is not high in absolute terms. By 1999 it was only 3.1% (see Figure 1). These three factors are significant when we consider the transition of the Chinese economy. They are largely explained by the reform of the employment system beginning in the 1980s, a period characterized by a particularly low rate of urban unemployment. At that time, almost the only people out of work in the towns were graduates. For all other employees, jobs were guaranteed for life: which meant no fear of losing them. After the reform of the employment system, it became clear that major unemployment did exist and had been hidden within the state industry sector, and unemployment figures rose((3). Thus, transition brought with it unemployment and, curiously, this was unconnected with whatever macro-economic variations were taking effect in the economy.