In 2000, China's labor force was 706 million. In 2001, 50% of civilian employment was in agriculture, 23% in industry; and 27% in services. Unemployment in urban areas was about 10% in 2002, with substantial unemployment and underemployment in rural areas.
China's labor policies have vacillated since 1949 between "to each according to his need," operative during the Great Leap Forward and the Cultural Revolution, and "to each according to his work." The first gave rise to job security—known as the "iron rice bowl" in China—but was generally associated with falling output. In 1978, a new economic formula, known as the "responsibility system," called for agricultural and industrial workers to sign a contract to produce a fixed amount of goods but provided for disposal on the free market for goods produced in excess of contractual levels.
On 27 December 1966, forces within the Cultural Revolution dissolved the All-China Federation of Trade Unions (ACFTU), previously the only nationwide labor organization. Some of its functions were then carried on by "revolutionary" organizations set up in factories, and by workers' congresses and trade unions organized on municipal and provincial levels. Strikes and lockouts became widespread during the Cultural Revolution. Other labor problems encountered during this period were "economism" among workers (i.e., emphasis on wages, bonuses, awards, and benefits, and appropriating factory funds and facilities under various pretexts); breakdowns in labor discipline (referred to as "anarchy"); disorders from fights between rival workers' factions (called "factionalism"); and slowness in developing sensitivity to nonmaterial incentives, as required by the prevailing ideology. Signs of labor unrest stemming from low wages and many of these same issues reemerged during 1974, bringing on notable disruptions among railway workers; in 1975, labor clashes in Hangzhou led to the calling in of the military. In October 1976, the ACFTU was restored to power. A new constitution of trade unions was adopted in 1978 and subsequently revised in 1982 to permit workers the right to strike when conditions are hazardous; strikes for purely economic advantages are forbidden, however.
As of 2002, the Communist Party-Controlled ACFTU was the country's sole labor confederation. It had 16 industry-based, and 31 province-based member unions, as well as 586,000 grassroots-level unions. Over 90% of the ACFTU's reported 103 million members worked in state-owned enterprises. Independent trade unions are illegal, although some allegedly exist in secrecy. Organization and protection of workers is especially difficult in the huge number of rural agricultural laborers. Union officials working outside the official confines of the ACFTU have reported being harassed and detained by authorities. Any union activity outside of the ACFTU is deemed "illegal" by the authorities. However, there is a rise in labor disputes with the changing economy.
There is a minimum working age of 16 but compliance with this is irregular, especially in the burgeoning and unregulated private economy. The huge surplus of adult labor reduces the incentive to employ children. Children are most often found working on farms in poorer, isolated areas. The minimum wage varies depending on the area of the country. It generally provides a decent standard of living for a family. The Labor Law provides that the standard workweek is 40 hours, with a mandatory 24-hour rest period weekly.