Extraordinary Genius

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When Secretary Xu was about to ask Feng Yu to leave, Feng Yuasked suddenly: “What are your views on Social Security Insurance?”

Secretary Xu was puzzled. Why did Feng Yu bring up thissubject so suddenly? Zhang Ruiqiang looked at Feng Yu. Was Feng Yu trying tochange the subject to stop the awkwardness?

Zhang Ruqiang cannot let Secretary Xu answer this question,and he replied: “Social Security insurance is just a form of retirement fund.In the past, it is the companies that take care of the retired staffs and theirpensions. That means 20 to 30 workers had to support a retired staff, and thisnumber is increasing as more people retires. Also, many people could not retirebecause they are not working for any companies. They had to work even at oldage. We learned this social security insurance from developed countries.”

Secretary Xu looked at Feng Yu. Zhang Ruiqiang had given a goodreply, and he wanted to hear what Feng Yu have to say about this SocialSecurity Insurance.

“Mayor Zhang’s reply is very simple. But have you all everthought how long it will take to implement this policy? Now, our government isforcing the companies in China to pay the social security insurance for theirstaffs. But you all should know how effective this policy is.”

“What are you trying to say? Stop beating around the bush!”Zhang Ruiqiang was p.i.s.sed. This Feng Yu always like to flaunt his knowledge.Zhang Ruiqiang did not really research into this policy, and even the people atthe Central Government were not very sure about social security insurance. Theyonly treat this as an experiment.

“I dare to say that this policy will not succeed even afteryou all have retired!”

“What did you say? Are you joking with us?! This is anational policy, and how can it take such a long time to succeed?” ZhangRuiqiang was furious, especially Feng Yu brought up the subject of retirement.He was afraid that Secretary Xu would be affected. Furthermore, Zhang Ruiqianghas at least more than 10 years before his retirement. Why Feng Yu dare toclaim that this policy will not succeed?

Feng Yu laughed: “Did our Family Planning Policy succeed?How many people really followed this policy?”

Secretary Xu had wanted to retort Feng Yu. You are not acivil servant, and how dare you criticize the government’s policy?

But when Feng Yu used the Family Planning Policy as anexample, Secretary Xu kept quiet.

This policy was suggested in 1971 and started promoting thisidea in 1980. They started with the CPC members and their youth members. Thiswas enforced on their CPC members. In 1982, this policy became official and wa.s.set as a law. To date, this policy had been in force for more than a decade.But the population was still increasing every year. The government had theirhands tied. They can’t be strangling all those babies once they are born.

In the villages, the population is very important to thefarmers. This policy might be fine in the cities, but in the farmlands andvillages, people ignored this policy. Even when the government increases itsefforts in enforcing this policy in 1991, it was still not successful.

A basic government’s policy and law were still notsuccessful after more than a decade. The government had wasted lots ofresources and manpower on this implementation. Moreover, this Social Securityinsurance policy was still not set up as China’s basic law, and how could itsucceed?

Most importantly, social security insurance needs both thecompany and employees to pay. Firstly, many employees will oppose to this. Whyshould their salary be deducted? All those people who retired in the past alsodid not pay a single cent for their pension. Why can’t the companies orfactories take care of them after they retire? They had contributed almost alltheir life for the company!

The workers will want the companies to pay for all thepremiums of Social Security Insurance. But no companies can afford to do this.This would not be a small amount if they were to consider those workers whowere about to retire. Some companies that were not doing very well wentstraight to the local government. We cannot afford to pay for this socialsecurity insurance. If you force us to pay, then the company will be bankrupt,and all the workers will be out of jobs!

“To make this policy success, it is important to implementboth the company’s insurance and social security insurance together. But how toget the right balance? If they"re too many people are accepted into the socialsecurity insurance, the premiums collected by the government will not be enoughto take care of the people. If the premiums are too high, the companies willnot be willing to accept this policy.”

In other countries, there are many ways those governmentscollect premiums for their social security insurance. It was more common forthem to implement proportional contributions from both the companies and theindividuals, or equal contributions from both the companies and individuals.

These two methods were more common in other countries. Butboth have its pros and cons. What China was trying to implement wascontributions from both the companies and employees based on a fixedproportion. This policy was still in force even before Feng Yu returned back tohis current life.

Implement both company and social security insurancestogether? Zhang Ruiqiang and Secretary Xu looked at each other. It would behard to implement both together. But the reality was like what Feng Yu hadsaid. If both types of insurances were not implemented together, this policy wouldnot succeed. The companies will have to take care of their retired staffs andpay social security insurance. It will be hard on the company’s finances.

Secretary Xu looked at Feng Yu: “How does Bing CityMachinery Company pay the social security insurance for the workers?”

“Our company and employees are paying the premiums together.Isn’t this want the government wanted?” This was only suggested by the CentralGovernment and was not compulsory for the companies to follow. This was becausethe government was not sure how the workers would react.

“All your workers agreed to this arrangement?” Secretary Xuasked curiously. He had heard from his men that many workers were creatingtrouble for their companies because of this social security insurance. Some ofthem went on strike, and some went to the higher-ups. All of them do not wantthis policy.

“It is very simple. Just raise those workers’ salaries. Ifthey have to pay 40 RMB a month for social security insurance, then I willraise their salaries by 100 RMB a month. Why would they object? The companywill still be paying for most of the premiums. If we make things clear with theworkers, they will understand.” Feng Yu had a “why are you asking such a stupidquestion?” expression on his face.

Secretary Xu was at a loss of words. You think all companiesin China are like your Bing City Machinery Company? How can they afford toincrease their workers’ salaries? What do you mean by making things clear withthe workers and they will understand? A pay raise is the main reason theyaccepted this social security insurance.

What matters the most to employees? It’s their salaries!

Secretary Xu sighed in his heart. This Bing City MachineryCompany was really rich. They were already paying their workers" high salariesand were still willing to increase their salaries by 100 RMB? This means theirgrade 8 workers will get more than 1,000 RMB a month? The average annual salaryfor Bing City was only slightly more than 5,000 RMB last year. Will thisaverage salary increase to over 6,000 RMB this year because of Feng Yu?

“Feng Yu, your method will not work for other companies. Howcan other companies increase their worker’s salary by so much?” Zhang Ruiqiangfrowned.

“They still must increase their workers’ salaries. Didn’tall the workers have their salaries increased because of inflation last year?The economy this year is much better than last year. Why can’t the companiesincrease their salaries? Are you expecting those companies to pay thegovernment more taxes and let the government pay for the workers’ socialsecurity insurances?” Feng Yu asked.

Increasing the workers’ salaries was equivalent to increasethe cost of the companies and lowering their profits. As such, the taxes paidby the companies will also be lowered, resulting in the local governmentsgetting lesser tax incomes.

But if the companies do not increase the workers’ salaries,this social security insurance policy could not be implemented successfully.Feng Yu suspects the separation of the national tax and land usage tax lastyear had something to do with this social security insurance. On the surface,the local government will be receiving more tax income, but in reality, theirresponsibility had increased.

Secretary Xu and Zhang Ruiqiang were deep in thoughts. FengYu was right, but should they go ahead with what Feng Yu had said?

Translator’snotes:

China’sFamily planning policy

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