The social security payment that was postponed for six years has now been initiated. Many people have noticed a hot search: The actual payment of social security is under strict investigation. This year, more than 10 provinces and cities including Shanghai, Jiangsu, Hunan, Guangdong, etc. have gradually launched the work of "consolidating" the base, requiring full payment within 3-5 years, and some good units to achieve the goal within the year. How do you view this matter? 1. Background In fact, the actual payment of social security began in 2019, when the Golden Tax Phase IV connected individual income tax, wages, and social security. That year, the collection of social security was transferred from the Human Resources and Social Security Bureau to the Tax Bureau. With technical support and departmental execution, it was supposed to start that year. But as we all know, the epidemic has arrived and the business has been struggling for three years, so it was postponed for six years until it was restarted again this year. 2. Reason The main reason for the actual payment of social security is actually the population. one side: The social security fund for aging population is tight. In China, it is a pay as you go system, which means that working people pay for social security services and retirement. However, with the increasing aging population, there will be 320 million elderly people aged 60 and above by 2025, and 400 million in a few years. At present, China only has 800 million labor force, of which more than 200 million are still in flexible employment, and the pay as you go mechanism is under too much pressure. So, not only are actual contributions required, but flexible employment is also encouraged to pay social security. The main reason is that the social security fund is relatively tight. one side: The trend of declining birth rates cannot be reversed in the short term. Since 2021, the number of newborns has continued to drop below 10 million, and the recently announced marriage rate has also hit a new low. The peak of the childbearing age population has passed, and the trend of low birth rates can only be gradually improved in the future. With each increase and decrease, the pressure on the pay as you go social security mechanism will increase over time. So, the actual payment has to be implemented. 3. Impact There are two main impacts: One is the impact on enterprises: It will increase the labor costs of enterprises, mainly including the following types of enterprises: 1) Labor intensive industries (catering, retail, logistics, security, manufacturing). 2) Industries with complex salary structures (intermediaries, exhibitions, sales). 3) Outsourcing service companies (human resources companies, ITO companies). These companies will face significant compliance pressure and profit compression, and perhaps many companies will also have to pay fines. One is the impact of employment: Why are many employment practices not standardized? One practical reason is: The social security payment base is relatively high. For example, for catering service personnel, their salary may be as low as 3000, but the local minimum social security base is 7000. The comprehensive social security cost is almost catching up with the salary, and in some places it is even inverted. The fundamental reason is that the labor income of some jobs cannot increase. For compliance considerations: Part of the work will be converted to flexible employment, and individuals may become gig workers. That is to say, some positions will not hire full-time employees, and flexible employment personnel will be recruited on the platform when there is work, and payment will be made after the work is completed. Flexible employment is expected to increase significantly in the future. 4. Evaluation I think the impact of strict social security inspections is ripple. On a personal level, the overall situation is still good, and paying social security is also a form of protection, although it may temporarily have some impact on employment. In terms of enterprises, it is also equivalent to a supply side reform, which can clear out some enterprises that are not profitable and cannot comply with regulations, and also belongs to anti internal competition. In terms of social security, in addition to strictly inspecting actual payments and encouraging individuals to pay, it is actually necessary to broaden channels, such as transferring state-owned assets and entering social security funds into the market. At present, it depends on the specific implementation: Technically, it's not a problem, it depends on the company's ability to bear it. I hope that while paying in, it can also reduce the burden on the enterprise.