Reduced payments 'may boost e-biz'
BY Chen Xin 2012-04-06 20:21:07
BEIJING, April 5 (Xinhuanet) -- The government should consider lowering the individual online retailers' payments to the social security fund to attract more people into e-commerce and boost employment, political advisers suggested.
Xu Hui, a member of the Chinese People's Political Consultative Conference National Committee, said e-commerce provides a good channel to absorb the workforce, but the shortage of coverage by the social security system has made individual online retailers feel insecure about their employment.
E-commerce has created a large number of jobs. Taobao - China's largest online customer-to-customer trade platform - had directly created more than 2.7 million jobs by the end of 2011.
One job directly created in online retailing will indirectly produce 2.85 other jobs, according to the US-based technology research company International Data Corp.
E-commerce retailers, a group deemed as having flexible employment, can freely choose to join the social security system.
It is compulsory for corporate employees to participate in the system.
Workers pay 8 percent of their wages and employers pay an amount equal to 20 percent of workers' wages each month to workers' pension accounts. Workers and employers also collectively pay workers' medical insurance and unemployment insurance while employers are responsible for paying for work injury insurance and maternity insurance.
Lu Quan, an expert at Renmin University of China's social security research center, said that flexibly employed individuals pay a sum equal to 20 percent of the average monthly income of local workers into their pension accounts. They are also responsible for paying for other social insurance, he said.
"The big social security payments are not attractive to e-commerce retailers and have made many of them shy away from the system," he said.
Lu Xuejing, a social security expert at Beijing-based Capital University of Economics and Business, said in big cities such as Beijing and Guangzhou, the average income of workers is comparatively high. That means individual online retailers have to pay a high level of contribution to the social security fund.
In Beijing, for example, individual online retailers have to pay more than 800 yuan (127 U.S. dollars) a month into their pension accounts.
"The threshold is too high for those whose income is not stable," Lu said.
Many young people who run online stores do not care about their pensions, only about making more money, she added, so they are not enthusiastic about joining the social security system.
According to Taobao, more than half of individual retailers on the website are aged between 20 and 32, many of whom are college graduates.
Ding Yaomin, another member of the CPPCC National Committee, suggested an adjustment of social security payments for e-commerce retailers.
"Their payments should be lowered to a certain level, according to the income of individual retailers. The move could help attract more job seekers and the unemployed to the industry," he said.
Chen Miao, a Beijing resident who runs a cosmetics store at Taobao, welcomed the suggestion.
"I would pay into the social security accounts if the payments were not that high and I would feel glad and reassured if I could enjoy social security benefits, such as medical and unemployment insurances, just like corporate employees," said the 25-year-old.
Employment challenges are growing because cities and towns will see 25 million more people join the workforce this year, according to Yin Weimin, minister of human resources and social security.
The trade volume of e-commerce in China stands at around 6 trillion yuan a year, accounting for 13 percent of GDP.
(Source: China Daily)