Three Worlds of Welfare Capitalism

Author: Anderson
Publisher:
Publish Date: 2003-11-01
Features: Starting from the poor relief laws of early industrialized countries, after several hundred years of development, the social security system has now formed a relatively complete framework and become an important component of a country's socio-economic system. As a socialist country, China has always attached great importance to social security work since the early days of the founding. In 1951, the "Labor Insurance Regulations" were promulgated, and in the 1950s, a social security system was established to adapt to the planned economy system, with the characteristics of state funding and unit management. This system played a positive role in ensuring the livelihood of workers and social stability. With China's transition to a socialist market economy, the traditional social security system formed under the planned economy has increasingly exposed its flaws: First, the implementation scope is narrow, mainly limited to state-owned units, and it does not adapt to the needs of the co-development of multiple economic sectors. It is unfavorable to the mobility of laborers between different ownership units and hinders the equal competition of state-owned enterprises with other types of enterprises. Second, the level of security is single, with all costs borne by the state and units, and workers are not insured, lacking a sense of self-security, leading to a serious waste of social security resources. Third, the management and service of security are handled by enterprises, forming a "social enterprise" model, which affects enterprises' ability to focus on production and operation. When enterprises transform from appendages of government institutions to self-reliant, market-oriented entities, if they incur losses, it becomes difficult to guarantee the basic security benefits for workers. Fourth, the security programs are incomplete, such as not recognizing unemployment under the planned economy, lacking unemployment insurance, making it difficult for state-owned enterprise workers to be laid off, resulting in a large number of redundant employees and an inability of the labor structure to adapt to the adjustments of industrial, technological, and ownership structures. In recent years, with the deepening of reforms, the long-accumulated issue of enterprise redundancy has become explicit, leading to a large number of laid-off workers and an increasing unemployment rate. Issues such as old-age insurance, medical insurance, and social relief have also become increasingly prominent. The reform of the social security system, which affects the lives of hundreds of millions of people and involves the adjustment of interests among the state, enterprises, and workers, has now become a focal point of attention across all sectors, with its complexity and importance gaining social consensus. Establishing a social security system compatible with the socialist market economy system has become an extremely important and urgent task related to reform, development, and stability. The Party Central Committee and the State Council have always attached great importance to the reform of the social security system. Since the Third Plenary Session of the 11th Party Congress in 1978, reforms have been explored in some social security programs. After the Third Plenary Session of the 12th Party Congress in 1984, reforms were carried out around the central task of revitalizing state-owned enterprises. The "Decision on Several Issues Concerning the Establishment of a Socialist Market Economy System" adopted at the Third Plenary Session of the 14th Party Congress in 1993 listed the social security system alongside modern enterprise systems, unified market systems, macro-control systems, and income distribution systems as important components in building the framework of China's socialist market economy, marking the transition of China's social security system reform from a supporting measure for state-owned enterprise reforms to a new stage of system construction.