Cause: https://v2ex.com/t/951385#reply47
Conclusion:
Due to the large number of workers in China and lax enforcement of labor laws, the cost of labor for companies is low, allowing them to carry out large-scale layoffs reasonably, thereby creating a 35-year-old crisis in disguise.
From the perspective of social resources, the workers recruited by companies are nurtured using social resources. The country spends money on schools to educate numerous college students, who then flow into the workforce and create value for companies.
When the company's performance is poor or the cost of labor increases (lower cost-effectiveness), according to labor laws, the company needs to adjust job positions or provide training. The cost of training naturally falls on the company, thereby increasing the cost of labor. However, the cost of hiring new employees is lower than the cost of training existing employees. Therefore, by carrying out layoffs in disguise, companies can shift the cost of job reassignment or training to society, thereby reducing their labor costs.
In times of economic prosperity, laid-off employees can quickly find suitable job positions, and the amount of social resources invested by the country is acceptable.
In times of economic downturn, when the company's performance declines and there is a significant reduction in workforce, a large number of workers are thrown into society, requiring more social resources for retraining or creating more job positions to absorb these workers. This becomes a significant burden for the country.
After the population decreases in the future, the cost of hiring new employees will increase. When the cost of hiring new employees is equal to the cost of retraining existing employees, companies will be more inclined to provide retraining or job reassignment for existing employees.
Based on the birth rate and the number of graduates in a given year, there has already been a significant decrease in the population. Currently, the country is vigorously developing the manufacturing industry, which is mainly labor-intensive. It should not be a problem to absorb millions of new graduates every year. Therefore, aside from the current economic downturn, I am optimistic about the employment situation after the economy improves.