What are the “iron rice bowls” that have disappeared? , county downsizing

On October 14, the 2024 National Civil Service Examination announcement was released, recruiting 39,600 people, an increase of 7% compared to last year, and the trend of enrollment expansion is obvious.

While the national examination enrollment is expanding, news about the downsizing of civil servants and public institutions has also become a hot topic of attention from time to time.

Some counties have not only abolished and streamlined multiple administrative departments, but also reduced the establishment of some public institutions. In some counties, the establishment has been reduced by more than 1,000.

How to reduce county staff reduction? Consolidate institutions and reduce the number of establishments.

In April 2020, Shanxi Province identified the first batch of pilot reforms in counties with small populations. At the beginning of this year, two batches of six pilot counties successively revealed the results of institutional reforms. Among them, Fushan, Hequ and Loufan counties have relatively complete data.

After the reform, the public institutions in these three counties were streamlined, and the number of public institutions was significantly reduced.

Loufan County's reform efforts have intensified, and the institutional establishment has dropped sharply by 88.6%. Fushan and Hequ have also reduced their public institutions by more than half, and the number of public institutions has dropped by more than three-quarters.

In addition to public institutions, party and government agencies are also promoting a flat management approach and integrating and downsizing.

According to statistics, the number of party and government agencies in Fushan, Hequ, Loufan and Shilou counties has been reduced to 22, an average reduction of 38%.

Taking Hequ County as an example, the county merged the Water Conservancy Bureau, Poverty Alleviation Office, and Agriculture Bureau into the County Agriculture, Rural Affairs and Water Conservancy Bureau, referred to as the Agriculture and Water Resources Bureau; at the same time, the County Development and Reform Bureau, Industry and Information Technology Bureau, Energy Bureau and The Education Science and Technology Bureau was also merged into the County Development and Reform and Science and Technology Business Bureau.

While merging institutions, Fushan and Hequ also reduced the number of department-level leadership positions to varying degrees.

Similarly, small-populated counties in Hunan, Inner Mongolia and other places have also begun to reduce their staffing.

For example, in September this year, Maduo County in Qinghai announced the latest reform results, announcing the completion of the pilot task of integrating institutions in small-populated counties. The 25 party and government institutions before the reform were integrated into 20, and the streamlined ratio reached 20%.

One of the current situations is that small counties are often the focus of population outflow.

Take Fushan County and Hequ County as examples. The permanent populations of the two places have been on a downward trend in the past ten years. They will be 124,000 and 143,000 respectively in 2021, a decrease of 11.4% and 4.7% respectively compared with 2011.

During this period, the number of public institutions did not shrink. In other words, fewer people needed services, but the number of service personnel continued to increase.

If the number of permanent residents in Fushan County in 2011 and the number of staff before the reform were calculated, the number of people a single staff member needed to serve was 72. However, with the outflow of the population, this ratio dropped to 1:63.

Maybe you will say that this ratio has not changed much, so why do we need to downsize?

Because from a financial point of view, the cost of employment is not low.

According to its public data in 2022, the proportion of salary and welfare expenditures of government agencies and public institutions in the three places in general public expenditures is around 25%, with the highest in Fushan County reaching 31.3%.

In other words, nearly one-third of the government's fiscal expenditures are spent on employees.

If you put this ratio into a global comparison, you will find that it is astonishingly high.

According to data released by the World Bank, the proportion of labor compensation in government departments in other countries is almost no higher than 20% of fiscal expenditures. The United States is 9.4%, the United Kingdom is 14.2%, and neighboring Japan and South Korea are only 5.9% and 10.1%, far lower than the above three places.

Can local governments afford such high labor costs?

Simply put, the debt ratio can be used to measure the government’s debt pressure and repayment ability.

Internationally, 120% is used as a warning line to measure the ability of local debt to generate revenue.

Fushan County’s debt ratio in 2022 is 63.2%, which is far lower than the international warning line. However, if it is broken down into revenue and expenditure, its shortcomings are exposed.

In Fushan County, transfer payments from higher-level government agencies constitute the bulk of comprehensive financial resources, accounting for 82.2% of total revenue. If this item is removed, Fushan County’s debt ratio skyrockets to 355.9%, almost three times the international warning level.

In other words, it is difficult for Fushan County to support itself.

According to this logic, once the debt balance of the superior government increases and the transfer payments issued by the superior government to small counties decrease, the ability of small counties to repay debts becomes fragile. Consolidating institutions and reducing staff is undoubtedly a way to save money.

So, in addition to the few pilot counties mentioned above, will more cities carry out downsizing?

After all, fifth- and sixth-tier cities are basically facing the problem of population outflow.

According to data from the National Bureau of Statistics, since 2010, the resident population in first- to fourth-tier cities has achieved varying degrees of growth, but the fifth- and sixth-tier cities have been on a downward trend.

Moreover, the population inflow is becoming more and more concentrated, and there are more and more outflow places.

Compared with 2010, the number of areas with population outflow increased by 301 in 2020, accounting for 77.9%.

In these areas, supporting a large number of staff may be a financial burden.

On the other hand, the debt pressure of local governments is not low.

Data from the Ministry of Finance show that since 2017, local government debt balances have grown rapidly at an average annual rate of 16.3%, which is much higher than the nominal economic growth rate of 7.8% in the same period, resulting in rising debt ratios and continuous accumulation of debt risks.

In 2022, the comprehensive financial strength of local governments will be affected by the epidemic, and coupled with the continued growth of debt balances, the debt ratios of most local governments will increase.

However, except for the pilot implementation, there are no obvious signs of downsizing in several counties with high debt across the country.

This article takes the top ten provinces with local government debt ratios in 2022 as examples, selects the county-level administrative units with the largest registered population in each province based on the "China County Statistical Yearbook 2022", and then calculates the statistics of the past three years based on the civil servant position list over the years. The planned administrative establishment numbers of these populous counties.

Data show that in the face of debt pressure, only Tianjin Jizhou reduced the recruitment of civil servants, while more large counties even expanded recruitment plans.

In 2023, the administrative establishments of Yushu in Jilin, Haicheng in Liaoning and Wenchang in Hainan will almost double compared with two years ago. Chongqing Hechuan has grown from 10 establishments to 50 establishments, an increase of 4 times.

It can be seen that more factors should be considered in the adjustment of administrative establishment.

In recent years, the public examination has become more and more popular. Many people believe that if they are admitted to the civil service examination and obtain the official establishment, they can live a more secure life. With the news that the national examination continues to expand enrollment, the competition for taking the civil service examination and the establishment examination may become more popular. More intense.

However, the downsizing of small counties sends a signal that the adjustment of local administrative establishments is closely related to local population size, local government debt ratio and other factors. Once local governments need to revitalize their own economies, downsizing will become a priority way to reduce administrative burdens. , the establishment is no longer an "iron rice bowl". Although there are currently no signs of downsizing in some populous counties, at a time when public examinations have become a trend, downsizing in small counties is still instructive.