According to a report by Hong Kong media on October 22, based on an estimated base of around 200 million people, over 60% of flexible workers in mainland China are not participating in employee medical insurance. The report cites heavy premium burdens, unstable income, and skepticism about long-term payment returns as the main reasons why many people are not enrolled in insurance.
The report, as per Hong Kong Economic Daily, states that according to Vice Researcher Zhao Ying of the Insurance Department of the China Institute of Labor and Social Security Science under the Ministry of Human Resources and Social Security of the Communist Party of China, the participation rate of this group in employee medical insurance is approximately 34.9% when calculated based on around 200 million flexible workers. This ratio does not cover the insurance for urban and rural residents.
Flexible workers include delivery drivers, ride-hailing drivers, domestic service workers, and freelancers, among others.
The challenges faced by flexible workers in paying for pension and medical insurance were summarized into three main reasons by Hong Kong Economic Daily.
First is affordability. For employees in enterprises, pension premiums are shared between the individual and the employer, with individuals paying 8% based on the payment base; whereas flexible workers have to bear 20% on their own, in addition to medical insurance. Using Shanghai as an example, the report mentioned that at the minimum standards, the combined monthly cost for these insurances exceeds 2200 yuan (RMB), making it difficult to afford during income fluctuations.
According to a report by Lianhe Zaobao on October 12, a delivery driver named Shu Liman earns around 10,000 yuan per month, and after deducting rent and household expenses, he can save about 5000 yuan. He mentioned that contributing to insurance would require an additional 2000 yuan per month, making it hard to save money.
The second reason is hesitation. The gradual increase in the retirement age and the minimum payment years for receiving basic pension benefits, which will be raised from 15 years to 20 years starting from 2030, have led some young individuals to believe that the time for paying and waiting for returns has been extended, thus preferring to keep cash in hand.
The third reason is the perception of being unprofitable. The analysis by the newspaper indicates that some low-income workers lack expectations for future pension returns and are more concerned about how much income they can save at present to cover rent, meals, and family expenses.
Vice Minister Li Zhong of the Ministry of Human Resources and Social Security of the Communist Party of China stated on October 10 that expanding insurance coverage through methods like “finding individuals through data” is vital. The focus is on promoting the participation of flexible workers, migrant workers, and those in new employment forms in employee pension insurance.
As reported by Reuters on October 20, the Weibo topic “Reasons why young people choose not to pay social security” received at least 48 million views on October 19. However, when searched on October 20, it displayed “According to relevant laws, regulations, and policies, this topic cannot be viewed at the moment”. Some related posts and comments are still visible.
The report quoted online comments where some expressed a desire to enroll in insurance but found their income just enough to sustain life, leaving them unable to afford additional payments. Others requested authorities to first help workers find jobs that provide reasonable wages and social security benefits.
Researcher Nie Riming from the Shanghai Institute of Finance and Law recently wrote that obligating low-income, highly mobile workers to pay into employee social security would initially reduce their available income, with uncertainties surrounding the benefits several decades later.
Zhao Lita, a senior researcher at the East Asia Institute of the National University of Singapore, told Lianhe Zaobao that the current social security system primarily caters to fixed employment forms, which do not align with the instability of income and high immediate expenses faced by flexible workers. He believes that if workers are already aware of social security but are reluctant to participate due to real pressures, using big data to track them might not be effective and could possibly cause resentment.