labour force in china and romania_project

8/3/2019 Labour Force in China and Romania_project

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Academy of Economic Studies

Master: Business Communication in

English

International Statistics

Ma Zhuang

Sara LyyIrina Gurdi

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Labour force in China and Romania

a comparison between the two countries

1. Definition, catagories and basic terms.

According to Wikipedia, in economics, a labor force orlabour force is a region's

combined civilian workforce, including both the employed and unemployed.

Normally, the labor force of a country (or other geographic entity) consists of

everyone of working age (typically above a certain age (around 14 to 16) and below

retirement (around 65) who are participating workers, that is people actively

employed or seeking employment. People not counted include students, retired

people, stay-at-home parents, people in prisons or similar institutions, people

employed in jobs or professions with unreported income, as well as discouraged

workers who cannot find work.

In other words, the labour force (labor force), is also referred to as economically

active population ("usually active" or "currently active" (currently active is also

known as "the labour force")) comprises all persons of either sex above a specified

age who furnish the supply of labour for the production of economic goods.

Besides the primary definition, the following definition/terms are considered

important. These terms are:

Household Labour Force Survey (HLFS) is conceived as an important source of

inter-census information about labour force; the survey provides, in a coherent way,

essential data about main population segments (economically active - employed and

unemployed - non-economically active), with numerous possibilities of correlation

and structuring by demo-socioeconomical features, under international comparability

conditions.

Beginning with 1996, household labour force survey is quarterly carried out, as a

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continuous survey, resulting in short-term data on the labour force size and structure

and pointing out seasonal phenomena taking place on the labour market. Since 2004,

the sample volume is of 28080 households/quarter. The yearly data are calculated as

quartely data arithmetic means. Data series previous to 2002 were recalculated taking

into account the population estimation at the Population and Housing Census of

March 2002. Due to the revision of definitions applied since 2002, data are not

comparable with previous series.

Civil employment includes, according to the methodology used for the labour force

balance, all persons who, during the reference year, carried out a socio-economic

lucrative activity, excepting military staff and similar (Ministry of Defence, Ministry

of Interior and Administrative Reform, Service of Romanian Intelligence staff,

conscripts), political and community organisations employees and the convicts.

Economically active population (active persons) comprises all persons aged 15 years

and over, providing available labour force for the production of goods and services; it

includes employed population and ILO unemployed. Employment includes, according

to the methodology of Household labour force survey all persons aged 15 years and

over, who carried out an economic activity producing goods or services of at least one

hour1) during the reference period (the week previous to the recording) in order to get

income as salaries, payment in kind or other benefits ILO unemployed, according to

International Labour Office (ILO) criteria, are persons aged 15-74 years who, during

the reference period, simultaneously meet the following conditions:

have no job and are not carrying out any activity in order to get income;

are looking for a job, undertaking certain actions during the last four weeks

(registering at employment agencies, or private agencies for placement, attempts for

starting an activity on own account, publishing notices, asking for a job among

friends, relatives, mates, trade unions a.s.o.);

are available to start work within the next two weeks, if they immediately find a job.

Activity rate represents the ratio between active population and total population aged

15-64 years expressed as percentage. Employment rate represents the ratio between

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2. Labour force in China and Romania, 2007 and 2009

We chose to compare labour force in China and Romania before the start of the global

economic crisis and in the middle of it (a term which became reality more in

Romania, and less in China), which means 2007 and 2009.

In the context of economic transition, the Romanian labour market experienced

significant changes in terms of the volume and structure of the main labour force

indicators. This process was characterized by the reduction of the economically active

population and of employment, with a relatively steady level of the unemployment

rate.

During the second half of the 90s, the economically active population stayed at a

high level, i.e. over 11 million persons. At the beginning of the new

millennium, a slight but fluctuating decline is observed.

Fig.1 Romanian Employed Persons

Apart from some considerable seasonal volatility there is not too much in the way of a

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trend to identify here, except, of course, that total employment is not increasing,

which is not perhaps surprising.

EMPLOYMENT STRUCTURE, BY STATUS IN EMPLOYMENT, BY SEX AND

AREA, IN 2007

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As it can be seen in the chart on labour force by main activities, the evolution in

Romania until 2007 was positive: the primary sector is slightly decreasing, the tertiary

sector is increasing, while the industry is maintaining itself at almost the same level

(with differences of not more than 1% from one year to another). By status, in 2007,

the year with the biggest economic growth in Romanias post communist society,

91,9% of the urban people are employees, and only 5% are employers. Of course, in

rural areas, there are almost as many employees, self employed and members of an

agricultural holding of a co-operative, as there are contributing family workers

(35,9%, 37% and 26,3% respectively). An important aspect should be mentioned here:

the contributing workers represent only 1% of the urban labour force. Also, there are

as many women as men who are employees (66,2% and 66%), but significantly more

men as employers than women in the same position (2,1% compared to 0,7%). And

one last aspect, there are a lot more women who are in the position of contributing

family workers than men (19,9%, and 6,5% respectively).

In what Chinas labour force is concerned for the same period, we should discuss at

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first its structure:

Economic activity rate and economically active population, by sex, thirteen age

groups, 1950-2010 (ILO estimates and projections) are data from the International

Labour Union (ILO). Source details: ILO, Economically Active Population, 1950-

2010, fourth edition, diskette database (Geneva, 1997). The latest set of estimates and

projections covering the period 1950-2010 (4th edition) was released by ILO in

December 1996. These data are updated every five-ten years by ILO and a new set of

these data is in preparation.

In China, men account for 65% which ranked 98th., 5 times more than Romania;

Female engaged in economic activities account for 72.7% which ranked 19th., 43%

more than Romania.

Firing cost is the cost of advance notice requirements, severance payments, and

penalties due when terminating a redundant worker, expressed in weekly wages. One

month is recorded as 4 1/3 weeks. Female labor force as a percentage of the total

show the extent to which women are active in the labor force. Labor force comprises

all people who meet the International Labour Organization's definition of the

economically active population. Labor force participation rate was ranked 15th in

2005.

Countr

y

2007 2008 2009 2010

China 800,700,00

0

807,300,00

0

813,500,000 780,000,000

Fig.2 Chinese labour force absolute number

Female economic activity is ranked #19 with 72.7% compared with Romanian ranked

#82, 50.7% while the average global female economic activity is 52.7%

Chinas Labour Force by occupation:

agriculture: 38.1%

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industry: 27.8%

services: 34.1%

Occupation - Industry

The Chinese labour force in industry has a dominating position both in number and a

lead in ratio. This explains why China is one of the biggest export body in the

worldwide trading. With the advance of a low wage and abundant manufacturing

labour force, China can stand the rapid economic growth as well as a leading in

industry ratio of labour force.

Occupation - Agriculture

The percentage of farmers of Chinese population renders the very high rank in this set

of figures above. Regardless of the absolute number of Chinese agricultural labour

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force, the percentage ranked #5 in 2008.

Occupation - Services

The service occupation percentage shows what Chinas future development strategy

should be like. This percentage is much lower than the worlds average, and it means

the so called 3rd industry in China is not developed, 30% lower than the worlds

average.

From these percentages we can see that China, like Romania, had their labour force

divided in the same period almost inversely: 33,2% and 42,5% for services, 27,2%

and 28,2% for industry and 39,2% compared to 28,2% for agriculture, with

differences of almost 10% for the first and tertiary sector.

In 2009, the economically active population amounted to almost 10 million persons,

of which 95.6% belonged to the working age group (15-64 years).

Average number of employees in the overall private sector, by main activity of

national economy:

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Apart from some considerable seasonal volatility there is not too much in the way of a

trend to identify here, except, of course, that total employment is not increasing.

After a continuous rise recorded during the period 2006-2008, in 2009 employment

reached its lowest value in the last 4 years. Of the employed persons, 55.2% are men.

Until 2002, most of the employed population lived in the rural area. Beginning with

2003, the largest share of employment (54.4% in 2009) resides in the urban area.

Within the employed population, employees prevail (67.2% in 2009).

The positive economic trends are represented by the steady increase in the weight of

employment within the private sector, from 76.9% in 2006 to 80.0% in 2008.

In 2009, we see a stagnation of the phenomenon, because the increase is very small as

compared to the previous year, with a value of the indicator of 80.1%.

In 2009, of the total population employed in the private sector, 64.2% worked in

industry, construction and services, as compared to 64.6% in 2008.

In 2008, as compared to 2006, the increase in the average number of employees (an

increase of 379 thousand persons) continued, mainly in trade activities, construction,

activities of administrative services and of support services, while in industrial

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activities the number of employees dropped.

The breakdown of employees by economic sector in 2008 shows that 57.0% worked

in services (tertiary sector), an increase of 1.6 percentage points as compared to 2007

and 3.0 percentage points as compared to 2006. 40.9% of the total employees worked

in the secondary sector (industry + construction), 1.2% less than in 2007 and 2.3%

less than in 2006, respectively. The share of the number of employees involved in

agriculture (primary sector) was only 2.1%, a decrease of 0.4 percentage points as

compared to the previous year and 0.7 percentage points as compared to 2006.

Unemployment details and comparison

According to Wikipedia, Unemployment (orjoblessness), as defined by

the International Labour Organization, occurs when people are without jobs and they

have actively sought work within the past four weeks. The unemployment rate is a

measure of the prevalence of unemployment and it is calculated as a percentage by

dividing the number of unemployed individuals by all individuals currently in

the labour force.

Here are are the numbers of unemployed in Romania, and again apart from the

volatility there is not a lot to note, except that the numbers are slowly declining.

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Fig. Unemployment in Romania

Again, if we look at the annualised data we can see the position a bit more clearly,

since all three - labour force, total employed and numbers of unemployed are all

coming slowly and steadily down. This is very common and not especially surprising

trend in a steadily ageing society. What is not at all clear is how you can expect to get

rates of growth of 5, 6 or 7 per cent annually with such a static labour force.

The number of unemployed, defined according to ILO criteria, reached 681 thousand

persons in 2009, an increase as compared to 2008 (18.4%) and 2007 (6.2%). In 2009,

of the total number of unemployed, 28.9% were young people (15-24 years).

Chinas Unemployment rate:

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Fig. Chinas unemployment rate chart

Country 2004 2005 2006 2007 2008 2009

China 10.1 9.8 9 4.2 4 4.3

Table. Chinas unemployment rate

Compared to Romanias labour force, China has a much better situation from this

perspective. While Romania had a 41,2% unemployment rate in 2007 and 41,4% in

2009, in China the numbers are ten times lower: 4,2% in 2007 and 4,3 in 2009. It can

be seen as another consequence of the political regime in those two countries:

communism in China, and transition to democracy and democracy in the last 20 years

in Romania. It is well known that a compliant work force is one of the biggest

strengths of an authoritarian regime, like in China. In Romania, after the fall of the

communist regime, in 1989, the transition period lead to the situation from the

present.

3. Conclusion

As a consequence of the geopolitical differences between China and Romania, the

statistics of labour force in these two countries show a much better structured working

force in China than in Romania. However, the minimum wage is still lower in China

than in Romania, and that explains the migration of Chinese working force in

Romania, as well as to other european countries. On the other hand, Romanian

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working force is cheaper than that in Western Europe and America and that is why an

important percent of the Romanian working force is migrating West. The numbers are

usually in inverse ratio to the workers level of qualification.

Another important mention would be that while Romania was confronted with severe

economic changes due to the economic crisis, China did not meet the crisis.

Contrariwise, it has become one of the most important economic and political global

powers.

4. References:

www.wikipedia.org

http://www.nationmaster.com/compare/China/Romania/Labor

http://romaniaeconomywatch.blogspot.com/2007/09/romanian-labour-force.html

http://www.insse.ro/cms/files%5Cpublicatii%5CRomania%20in%20figures%202010.pdf

http://www.insse.ro/cms/files/pdf/ro/cap3.pdf

http://wenku.baidu.com/view/bef6e950ad02de80d4d840b9.html

http://wenku.baidu.com/view/60f475ffc8d376eeaeaa31c6.html

http://www.lm.gov.cn/

http://www.china.com.cn/economic/zhuanti/08jjbg/2008-

01/23/content_9575802.htm

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http://www.wikipedia.org/http://www.nationmaster.com/compare/China/Romania/Laborhttp://romaniaeconomywatch.blogspot.com/2007/09/romanian-labour-force.htmlhttp://romaniaeconomywatch.blogspot.com/2007/09/romanian-labour-force.htmlhttp://www.insse.ro/cms/files%5Cpublicatii%5CRomania%20in%20figures%202010.pdfhttp://www.insse.ro/cms/files%5Cpublicatii%5CRomania%20in%20figures%202010.pdfhttp://www.insse.ro/cms/files/pdf/ro/cap3.pdfhttp://wenku.baidu.com/view/bef6e950ad02de80d4d840b9.htmlhttp://wenku.baidu.com/view/60f475ffc8d376eeaeaa31c6.htmlhttp://www.lm.gov.cn/http://www.china.com.cn/economic/zhuanti/08jjbg/2008-01/23/content_9575802.htmhttp://www.china.com.cn/economic/zhuanti/08jjbg/2008-01/23/content_9575802.htmhttp://www.wikipedia.org/http://www.nationmaster.com/compare/China/Romania/Laborhttp://romaniaeconomywatch.blogspot.com/2007/09/romanian-labour-force.htmlhttp://www.insse.ro/cms/files%5Cpublicatii%5CRomania%20in%20figures%202010.pdfhttp://www.insse.ro/cms/files/pdf/ro/cap3.pdfhttp://wenku.baidu.com/view/bef6e950ad02de80d4d840b9.htmlhttp://wenku.baidu.com/view/60f475ffc8d376eeaeaa31c6.htmlhttp://www.lm.gov.cn/http://www.china.com.cn/economic/zhuanti/08jjbg/2008-01/23/content_9575802.htmhttp://www.china.com.cn/economic/zhuanti/08jjbg/2008-01/23/content_9575802.htm

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