has become segmented, creating different conditions for a now heterogeneous labor force. In great contrast to the previous wage grid system which ensured unified wages independent of performance, the unified labor market has been broken up and a variety of labor market segments have evolved creating variations in the consequences faced as marketization efforts are being carried out.the iron rice bowl brought dramatic changes to the Chinese labor market. First, over time the state controlled enterprises increased worker lay-offs. As outlined above these workers were dependent to find subsequent employment in the newly established private sector. People entering the workforce faced a very different scenario from previous generations, now being confronted with a far more flexible labor market, where different criteria determine employment. Searching for job opportunities, portions of the population began to migrate within the country; typically from rural to urban areas. However, constraints due to the household registration system (hukou) put migrant workers in a difficult legal situation, making them susceptible to exploitation. Commonly these jobs are described as three-D-jobs : dangerous, dirty, and demanding. Usually they are attributed to little job security or benefits as the usually informal nature of such jobs makes it easy for employers to evade formal rules regulating the labor market (Cai, Wang and Du, 2005). Second, the market and profit orientation leading to wage deviations along the different segmented sectors of the labor market have increasingly determine wages. The lack of labor market institutions filling the large gap left by the demolition of the iron rice bowl set condition for establishing a flexible labor market with an uneven employer-employee relationship.this stage of the Chinese labor market reform, the evolution of institutions regulating the now more flexible market have been slow to evolve, often providing employers with far more leverage over the average worker. Recent negative developments on the labor market have perhaps convinced the government to introduce stricter rules and regulations. The new Employment Contract Law taking effect January 1st, 2008 is intended to provide employees with improved protection and rights. A core component of the law requires employers to enter into a contract with an employee within 30 days of fulltime employment. Further, the law sets out to provide improved protection of employees rights. Perhaps this move can be seen as a statement to limit full liberalization of the labor market and to set out certain minimum standards, all contributing to a healthier and harmonious relationship between workers and employers. On paper these changes appear impressive but they remain little more than a paper tiger when employers continue to violate existing laws.
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