China’s big unemployment problem

Rob Schmitz Feb 15, 2011

China’s big unemployment problem

Rob Schmitz Feb 15, 2011


Kai Ryssdal: The common economic thread across a lot of the Middle East the past couple of weeks has been jobs: Frustrated young people who are unemployed and without much prospect of getting ahead. Keep going east around the globe and you’ll see similar problems in a place you might not expect. For all its economic growth, China has a big unemployment problem, and it’s the young and educated who’re being hit the hardest.

Our China correspondent Rob Schmitz is on the line from Shanghai with more. Hey, Rob.

Rob Schmitz: Hey Kai.

Ryssdal: I was saying that China’s got an unemployment problem, but if you look at the actual numbers, like I did before I came in here, urban unemployment in China last year: 4.1 percent. Which actually sounds pretty good.

Schmitz: Doesn’t sound too bad. Now that’s what’s the called the “urban registered unemployment rate.” I emphasize “registered,” because it only counts people who officially live in urban areas. Many people are off the books. These are the hundreds of millions of migrant workers who move to the cities and they make up a huge labor pool. So when you factor in that population, China’s actual unemployment rate comes out to be 22 percent. That’s around 200 million people who don’t have work.

Ryssdal: OK, so that’s a problem, but when you say migrant workers, I’m thinking about the guys who come in from the countryside to do manual labor.

Schmitz: Actually, those are the people finding jobs these days, because fewer people are willing to do that kind of work. There’s a new population of migrants in China and they’re young college graduates. There are six times the number of college grads nowadays than they were a decade ago. And many of them are from the countryside. Urban Chinese have a funny name for them; they call them the “ant colony.” They’re called that because after they move to the big city, they tend to live together in these cramped neighborhoods like ants. And they’re all looking for work. Problem is, they’re not finding it. Nearly a quarter of last year’s graduates haven’t found jobs.

Ryssdal: Why not? What’s going on? I mean, the economy’s booming.

Schmitz: Right. Part of the problem is that there’s a big disconnect between how China’s colleges are preparing its young people and the reality of China’s economy. China’s economy is still mostly dependent on manufacturing and building things. At the same time, you have six million college students a year graduating with degrees from everything from the sciences to liberal arts. And China’s economy simply hasn’t evolved to the point where enough employers are looking for workers with those skills. So, for all you liberal arts majors, here’s yet another economy where you really won’t fit in very well.

Ryssdal: Well, let’s say that point again: The best educated Chinese, the youngest, most energetic Chinese don’t have a place in the Chinese economy.

Schmitz: Yeah, that’s right. And even those who do find work aren’t finding jobs they studied four years for. I had lunch this week with a guy named Ming. He graduated a few years ago from a university here in Shanghai. He majored in Japanese and he was hoping to find a job translating for a Japanese company. But the competition was really stiff. So instead, Ming’s parents used their connections to land him a job in a state-owned enterprise. He was making $300 a month for basically sitting around and reading books and surfing the web.

Ryssdal: That was his whole job, just doing that?

Schmitz: Ming’s job was supposed to be selling sports equipment, but he said he never had any customers. So he just sat around all day. After two years of this, he was bored out of his mind, so he quit and took a job with a public relations firm. Now, he makes even less money. But instead of surfing the web when he’s supposed to be working, now his work is surfing the web. He gets paid to find blogs and websites that criticize his clients’ products. His clients then use that information to improve their product.

Ryssdal: Is he using the Japanese degree that he got?

Schmitz: He’s not using it at all. And he told me that he wishes he could’ve added another major — something like information technology to make himself more marketable. But as a general rule, colleges in China don’t allow students to do that, so they’re stuck with one discipline. I asked him if he ever considered working in construction, ’cause construction work pays at least twice as much as he’s making now. He said his parents wouldn’t let him, because they considered it a “shameful” job. And that’s the other problem: Nearly everyone else his age in China — Ming’s an only child — and the pressure from his parents is not helping. In fact, Ming’s girlfriend just broke up with him, because her parents thought he wasn’t making enough money. So this guy’s got pressure from all sides. And he’s fairly miserable, as a result. The thing is, there are millions of young Chinese just like him.

Ryssdal: Rob Schmitz in Shanghai with a story of the Chinese labor market. Rob, thanks a lot.

Schmitz: Thanks Kai.

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