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Asia Economy Last Updated: May 29, 2013 - 3:31 PM


China abolishes the "iron rice bowl" for most civil servants
By Michael Hennigan, Finfacts founder and editor
May 28, 2013 - 6:51 AM

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Source: ICEO.com.cn 

China abolished its "iron rice bowl," or the system of guaranteed work lifetime employment for most civil servants, in government-sponsored public institutions last year, according to a ministry report published on Monday.

Issued by the Ministry of Human Resources and Social Security, Xinhua, the official news agency of the nominally communist state, said the report says a contract-based employment system has been expanded to cover more than 90% of positions offered in public institutions.

Meanwhile, its adds, a system of recruiting entrants openly and based on competitive selection had been applied to public institutions nationwide by the end of 2012.

Xinhua says the traditional system has been that individuals recruited to such jobs have usually had an "iron rice bowl," meaning they can receive a regular salary and work at the institutions until retirement, regardless of performance.

However, in a major reform move, China has been striving to reshape its public institutions to improve public services.

The reform will affect more than 30m staff members in over 1.2m public institutions across the country, according to official figures released in August 2012.

France's public employment as ratio of workforce is 2.6 times China's level

The continued right to lifetime public service employment in Ireland dates from 1853 when Sir Charles Trevelyan recommended it in a report he co-authored for the British government.

Trevelyan features in the song, 'The Fields of Athenry,' and he had been responsible during the Famine for closing of food depots in Ireland that had been selling Indian corn. His motivation was to prevent the Irish from becoming "habitually dependent" on the British government.

It's ironic that Trevelyan is the patron of insiders today who protect their own interests but are prepared to have a dual labour market for new entrants where the concept of equal pay for equal work is abandoned.

In Sweden in the early 1990s, in response to a financial crisis, state guarantees of employment were ended and all workers were given equal rights and protections.

In the 1850's after administrative incompetence during the Crimean War, which ended in 1856, British civil servants were given guarantees of employment. It was a time when most of the private workforce were serfs.

Two examples of how this British Empire legacy works in Ireland despite pay and pensions premia, were provided last year 1) The Irish Times reported that Eamon Foley left Aer Rianta International (ARI), a unit of the Dublin Airport Authority, in November 2011 after serving 19 years with the company, 12 of them as director general. His generous exit package comprised a lump sum of €437,000 and a payment of €68,000 annually for 6.3 years to bridge the gap to retirement. The DAA confirmed that Foley then began work as a paid external consultant with ARI and served on the boards of certain subsidiaries. 2) When Dún Laoghaire Vocational Education Committee, a State quango/agency is abolished this year, Carol Hanney, the chief executive, who is wife of Eamon Gilmore, tánaiste/ deputy prime minister, will move to a newly created position for her at the Department of Education on her current pay of €117,000 plus pension.

The lot of the typical SME worker who loses his or her job this week will be basic redundancy, no occupational pension to provide some cushion against poverty in old age and if at an age from middle age up, the prospect of never working again.

Why should citizens like Ms Hanney have such special priviliges while new entrants to the public service and workers in the private sector are treated as lesser citizens?

"Qu'ils mangent de la brioche!" (Let hem eat cake)

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