Some unemployed workers in Shanghai receive only what is known as the Minimum Living Allowance - currently set at around 280 yuan ($34; £24) a month.
In less wealthy parts of China, even this would be a luxury. In many towns, local governments have struggled to pay pensions, sometimes for months or years at a time.
Protests
And the contradictory system of struggling state firms being responsible for paying unemployment benefits to the same workers they have just laid-off is clearly breaking down in some parts of the country.
Chinese girl signs up for the Communist Party
Young people hope joining the Communist Party will improve their prospects
Such problems have provoked a series of protests - this month up to 50,000 laid-off workers have demonstrated in Daqing in north-eastern China, demanding unpaid benefits and pensions.
And 30,000 workers in another north-eastern town, Liaoyang, have staged two weeks of protests against non-payment of wages and official corruption.
Prime Minister Zhu Rongji acknowledged that urban unemployment is one of the country's most pressing problems, and officials are now describing it openly as a potential threat to social stability.