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Shanghai Helping the Hard-to-Market Help Themselves

China: Entrepreneurs get tax breaks for employing some of the port city's million jobless. But willingness to do grunt tasks is in short supply.


SHANGHAI — The first time she lifted a dead body, she turned as cold as the corpse.

But Wang Qin wouldn't let her staff see her shaking.

It was her job to comb the dead woman's hair, cut her nails and put on her makeup.

"It was total cultural shock at first," said the 46-year-old laid-off office clerk who now owns a funeral home. "I didn't know how to do anything else. But I knew if I wanted to work, I had to find something no one else was willing to do."

Immigrants all over the world have mastered that simple rule of survival. But China's "iron rice bowl" generation is just now getting a crash course in it.

Five decades of Communist rule fostered a widespread culture of dependency. The members of the Chinese working class leaned on the state for cradle-to-grave social services. They savored their status as masters of the proletariat. They never expected to stoop so low--fending for themselves in a competitive market economy.

But the era of cushy state jobs is gone forever. Harsh economic reforms have produced an unemployment avalanche. Every year, the nation's growing jobless figure swells up against an economy unable to generate enough jobs. Mass labor protests across the country, particularly in the northern rust belt, provide blunt reminders of the dire consequences China faces if the unemployed millions fail to adjust to the fall from a workers' paradise.

A dynamic city with old-economy woes and new-economy wealth, Shanghai is in an ideal position to push its labor force toward more financial independence.

A first-of-its-kind program started by the city government and known as Project 4050 targets the least marketable members of China's old command economy--women over 40 and men over 50. Lacking skills, they have long been tagged the weakest link in China's bloated labor force and face the toughest time finding new work.

Rather than expecting them to make do on about $30 a month in unemployment benefits, the city urges them to become their own bosses. If they start a business and hire fellow 4050 workers, they can enjoy tax breaks and management guidance. Whether that be delivering food or dressing the dead, it's up to them to figure out what the market needs and profit from it.

"Shanghai's goal is to promote an entrepreneurial culture," said Wang Zhenhuan, a project manager. "If 20% of the unemployed state workers could start their own businesses, they could help employ the rest of the 80%."

Since it started last year, the program has produced more than 700 small businesses and about 33,000 jobs, according to Wang. That's a drop in the bucket considering the city's more than 1 million unemployed, but the Shanghai model is a closely watched experiment rich with lessons about the hardships of transforming an idle labor force.

"Any work is better than staying home and doing nothing," 49-year-old Wang Zhiming said. From the time he was 17, he was a chef at Shanghai's once renowned People's Restaurant. But he was let go in 1996 after poor business forced the government to trim staff at the state-owned eatery.

For half the pay and twice the work, he became foreman at the Green Dining Table, a 4050 enterprise that cooks, packs and delivers school lunches. But Wang is learning to take pride in his job, hollering at and hustling five dozen workers, making sure they put hot meals into 7,000 children's hands without a glitch.

"It was really hard to get used to," Wang said, pausing only after the last truck drove off. "Now I tell my crew all the time, 'If you don't work hard today, you have to work harder tomorrow to find a new job.' "

But the iron rice bowl is a hard habit to break.

Many new entrepreneurs have discovered that it is easy to create jobs but much harder to find good help.

At the Green Dinning Table, washing the dishes became a daily test of the will to work.

When the first batch of 4050 workers saw the mountains of dirty trays, they chickened out and fled.

"They told me this work is not meant for humans," said Han Zhiqiang, 51, who was laid off as the manager at a state-owned meat and produce market. He and his wife opened the lunch business last year on the top floor of a bankrupt clock factory.

"My wife and I had no choice but to roll up our sleeves and start washing," Han said. "We didn't finish until 3:30 in the morning."

It's easy to get lazy after staying home too long, said Ho Jingzhen, 46, a single mother who was laid off from a textile factory four years ago. She now wakes up every day before dawn to make soy milk from scratch for her Do Bao Bao beverage stand.

She said many job-seekers she has interviewed simply don't understand what an employer needs. Some have told her upfront that they don't want to work hard.

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