Amidst China’s continuing economic downturn, rising unemployment rates, and the increasing shortfall in social security funds, the scale of “flexible employees” is growing. How these workers, who do not fall under traditional employment relationships, can access job security, retirement benefits, and other protections has become a matter of concern in Chinese society.
Delivery drivers, gig workers, food delivery couriers, online streamers… These so-called “new employment” groups are showing a year-on-year increase. According to data from the CCP National Bureau of Statistics, as of 2024, the number of flexible employees in China has exceeded 240 million, accounting for about half of the urban employment population.
The concerns of flexible workers include unstable income and inadequate coverage of social insurance.
The CCP government work report claims to “support flexible employment and encourage workers in new employment modes to participate in employee insurance.” However, the current reality is that the premium base is too high and the willingness to contribute to the insurance is low. Implementing the stated “support” is a challenging task for the authorities.
At present, flexible workers can enroll in social insurance for pensions and medical coverage. However, due to the high premiums that are difficult to afford, many flexible workers have become outsiders to the social insurance system.
According to a report by the Central News Agency, an economic scholar in Shanghai discussed how social insurance costs have become a burden that flexible workers find hard to bear. Due to the CCP’s restriction on speech, he was interviewed anonymously.
In a typical employment relationship, the employer shares the cost of social insurance contributions for the employed workers. Flexible workers, on the other hand, are required to bear the full cost of social insurance contributions themselves. The scholar pointed out that the social insurance contributions for flexible workers are a significant expense, and retirement seems too distant for them to consider planning for it now.
Shanghai announced last year that the average monthly wage is 12,434 yuan. The scholar interviewed said that this figure represents the average monthly income of employed individuals in Shanghai but doesn’t reflect the actual living conditions of the people. The government doesn’t explain how this figure is calculated; it appears more like a “policy number” that keeps rising without ever decreasing.
The social average wage is the base for calculating social security contributions. For a flexible worker in Shanghai who chooses to pay the lowest tier contribution, the pension insurance fee is 1,492 yuan, the medical insurance fee is 746 yuan, totaling 2,238 yuan.
The scholar mentioned that the social insurance costs are too high, making it difficult for many people to afford. Therefore, they opt not to pay. Along with potential changes in the social insurance system due to an aging population and declining birth rates, situations like delayed or reduced pension benefits could occur, leading flexible workers to prefer keeping the money in their pockets.
“The characteristic of Chinese companies is being caught up in excessive competition and offering low prices,” he said. If the government were to demand that platforms switch the relationship with flexible workers to full-time employment, it would be impossible.
The scholar candidly admitted that the current social insurance standards are exceedingly high, increasing the risk of a shortfall in social security funds. The premium base for social insurance will only climb higher and is unlikely to decrease. Providing retirement security for flexible workers has become a thorny issue.