Traditionally, people considered to have such positions include military personnel, members of the civil service, as well as employees of various state-owned enterprises (through the mechanism of the work unit).
The state not only paid employees' salaries, but also provided social benefits, which ranged from gifts in Chinese festivals and holidays to welfare and retirement plans.
[6] Initiated from the establishment of the PRC, the iron rice bowl was one of the main slogans for communism: the Chinese Communist Party (CCP) was supposed to provide job opportunities for everyone.
[6] The CCP's promise to the Chinese people was crucial because almost half of the urban labor force was experiencing unemployment when the party took control.
[7] When Deng Xiaoping began his labor reforms in the People's Republic of China in the 1980s to boost economic productivity, the government iron rice bowl jobs were some of the first to go.
During the 1978 Rural Revolution, Deng Xiaoping implicitly set an end to the iron rice bowl with the implementation of a number of economic reforms that were meant to embrace free markets.
[10] This meant that farmers were able to personally benefit financially from their own crops, as households were able to get rid of surpluses in production as long as they were able to fulfill the collective quotas.
Workers were additionally to refrain from arguing with an unsatisfied customer to the point of losing a sale, which was particularly relevant in customer-based industries, such as restaurant businesses and retail.
[12] The Chinese Constitution was amended in 1992, when Deng Xiaoping garnered the political backing and CCP general secretary Jiang Zemin provided the initiative.
He proposed two new initiatives: major lay-offs (laid-off workers in China still receive minimal salaries) and divestiture of smaller state enterprises through mergers, leasing, selloffs, and, in some cases, bankruptcy.
[6] As a condition for joining the World Trade Organization in 2001, China had to "break the Iron Rice bowl", a step that was disputed by some economists.
[15]: 31 Efforts to break the iron rice bowl continued in Guangdong province in 2011 with a new plan of grassroots recruitment, employment by contract, and pay based on performance.
Up to this day, government officials (公务员; 公務員; gōngwùyuán) still have "iron rice bowl" lifelong job security, a circumstance often blamed for inefficiency and corruption.
[18][page needed] Scholars argue that "The crux of the issue of workers' incentives lay with the state-oriented ethos rather than the practice of lifetime employment".
If the government fails to settle or compensate the newly unemployed, the CCP potentially faces the destruction of the social stability that has sustained its reform program, laying the groundwork for possible grassroots uprisings.
[12] During the time of China's economic reform in 1978, with soft budget constraints and the requirement to implement the government's goal of full-employment, the SOE sector had substantial redundant labor and many state owned firms were operating at a loss.
Taiwan has fewer state-owned enterprises (SOEs) and more foreign-owned companies, and therefore lacks the infrastructure for a state welfare system like the one China had maintained.
In this respect, Taiwan has also not experienced the unrest from workers who have lost their job security and benefits, largely escaping the destabilizing effects of rapid modernization.
[22] The popular conception of the security of government jobs contrasts with the perception in other parts of China, where young students still see the bureaucracy as a promising chance for employment and upward mobility.
It has been popularized by Richard Lindzen in reference to government-funded scientists and labs that use their research results to justify continued government funding.