COLLAPSE
The Chinese government is looking to make big cuts in its military personnel. What impact will that have on the labor market? Has anything like this ever happened in US history? What impact did it have in the US?
Article Summary:Chinese President Xi Jinping has a plan to overhaul the worldâs largest army. Representing the biggest shake-up of the Peopleâs Liberation Army (PLA) since the Cold War, President Xi wants to shed 300,000 troops from the 2.3 million-member military. To accomplish this goal as quickly and quietly as possible, President Xi has been paying soldiers as an incentive to leave the army.
Military personnel have been getting generous buyouts to retire early. Packages include severance payments worth tens of thousands of dollars and promises to keep paying some soldiers as much as 80 percent of their pre-retirement wages. These buyouts are also seen as a tool to reduce the risk that demobilized troops end up disgruntled and on the streets, creating a new source of citizen unrest at a time of slowing growth. Chinese authorities have already ordered state-owned enterprises to hire former soldiers, in part to ensure social harmony and stability