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January 25th, 2013 at 10:58 am

Chinese college graduates reluctant to pursue blue collar jobs

Graduates in China say no thank you to factory jobs.

Guangzhou, China, a city with a population of 15 million, is the hub of a manufacturing region where factories make everything from T-shirts and shoes to auto parts, tablet computers and solar panels. Despite the factories offering double-digit annual pay increases and better benefits, many are desperate for workers.

 

 

 

Wang Zengsong is desperate for a steady job. He has been unemployed for most of the three years since he graduated from a community college here after growing up on a rice farm. Mr. Wang, 25, has worked only several months at a time in low-paying jobs, once as a shopping mall guard, another time as a restaurant waiter and most recently as an office building security guard.

But he will not consider applying for a full-time factory job because Mr. Wang, as a college graduate, thinks that is beneath him. Instead, he searches every day for an office job, which would initially pay as little as a third of factory wages.

“I have never and will never consider a factory job — what’s the point of sitting there hour after hour, doing repetitive work?” he asked.

Millions of recent college graduates in China like Mr. Wang are asking the same question. A result is an anomaly: Jobs go begging in factories while many educated young workers are unemployed or underemployed. A national survey of urban residents, released this winter by a Chinese university, showed that among people in their early 20s, those with a college degree were four times as likely to be unemployed as those with only an elementary school education.

It is a problem that Chinese officials are acutely aware of.

“There is a structural mismatch — on the one hand, the factories cannot find skilled labor, and, on the other hand, the universities produce students who do not want the jobs available,” said Ye Zhihong, a deputy secretary general of China’s Education Ministry.

China’s swift expansion in education over the last decade, including a quadrupling of the number of college graduates each year, has created millions of engineers and scientists. The best can have their pick of jobs at Chinese companies that are aiming to become even more competitive globally.

But China is also churning out millions of graduates with few marketable skills, coupled with a conviction that they are entitled to office jobs with respectable salaries.

Part of the problem seems to be a proliferation of fairly narrow majors — Mr. Wang has a three-year associate degree in the design of offices and trade show booths. At the same time, business and economics majors are rapidly gaining favor on Chinese campuses at the expense of majors like engineering, contributing to the glut of graduates with little interest in soiling their hands on factory floors.

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“This also has to do with the banking sector — they offer high-paying jobs, so their parents want their children to go in this direction,” Ms. Ye said.

Mr. Wang and other young, educated Chinese without steady jobs pose a potential long-term challenge to social stability. They spend long hours surfing the Internet, getting together with friends and complaining about the shortage of office jobs for which they believe they were trained.

China now has 11 times as many college students as it did at the time of the Tiananmen Square protests in the spring of 1989, and an economy that has been very slow to produce white-collar jobs. The younger generation has shown less interest in political activism, although that could change if the growing numbers of graduates cannot find satisfying work.

Prime Minister Wen Jiabao acknowledged last March that only 78 percent of the previous year’s college graduates had found jobs. But even that figure may overstate employment for the young and educated.

The government includes not just people in long-term jobs but also freelancers, temporary workers, graduate students and people who have signed job contracts but not started work yet, as well as many people in make-work jobs that state-controlled companies across China have been ordered to create for new graduates.

Yin Weimin, the minister of human resources and social security, said in a speech last spring that “the major emphasis will be on solving the employment problem among college graduates.”

Picky College Graduates

Mr. Wang is the youngest of four children. He was born in late 1987, as the “one child policy” was barely beginning to be enforced in rural areas. His less-educated siblings have also been leery of taking well-paid factory jobs. A brother, who got a one-year degree in mobile phone equipment after high school, opened a luggage shop. Neither of his sisters attended high school. One is a saleswoman in a clothing store, and the other is a homemaker and mother who married a factory worker.

An aversion to factory labor is common in China today, said Mary E. Gallagher, the director of the Center for Chinese Studies at the University of Michigan and a specialist in Chinese labor issues.

“Students themselves have not adjusted to the concept of mass education, so students are accustomed to seeing themselves as becoming part of an elite when they enter college,” she said.

China has a millenniums-old Confucian tradition in which educated people do not engage in manual labor. But its economy still largely produces blue-collar jobs. Manufacturing, mining and construction represent 47 percent of China’s economic output, twice their share in the United States, and the service sector is far less developed.

The glut of college graduates is eroding wages even for those with more marketable majors, like computer science. In 2000, the prevailing wage at top companies for fresh graduates with computer science degrees was about $725 a month in Shenzhen, roughly 10 times the wage then of a blue-collar worker who had not finished high school, said an executive who insisted on anonymity because of controversy in China over wages.

But today, new computer science graduates are so plentiful that their pay in Shenzhen has fallen to just $550 a month, less than double the wage of a blue-collar worker. And that is without adjusting for inflation over the last decade. Consumer prices have risen 29 percent in Shenzhen, according to official data that many economists say understates the true increase in consumer prices.

If Mr. Wang were willing to take a factory job, his interest in indoor design might take him to Hongyuan Furniture, a manufacturer of home saunas a 45-minute drive south across Guangzhou from his home.

The factory now offers newcomers 2,500 renminbi a month, about $395, before overtime. Six-person dorm rooms have been replaced with two-person apartments. Workers no longer have to hand over part of their wages to the foreman. Instead, the factory now pays a bonus to foremen of $8 to $16 for each month that a new blue-collar employee stays on the job. Yet the factory still struggles to find workers.

The company’s labor costs per worker — wages plus benefits — have been rising 30 percent or more each year. That is faster than the national pace of 21 percent for migrant workers, although there have been signs that pace may have slowed recently with a broader deceleration in the Chinese economy. And it is considerably faster than the 13 percent annual increase in minimum wages — roughly three times inflation — that the government has mandated through 2015.

Wages at Hongyuan Furniture are rising particularly fast because it is in an area of Guangzhou that was slower to develop. Before wages began surging five years ago, the company paid $90 to $120 a month to new workers without experience. Workers then were also expected to pay $13 to $40 of their monthly pay for the first six months to their foreman in a sort of informal apprenticeship, said Ni Bingbing, the company’s vice general manager.

Plenty of college graduates apply for jobs at the company, but they are not desperate enough to accept blue-collar tasks, Ms. Ni said. The sauna factory has better ventilation than many Chinese factories, but it is not air-conditioned. The many power tools kick up a fine mist of sawdust that coats every surface — not the sort of place where a college graduate can go to work in a dress shirt and then head straight to a restaurant or nightclub in the evening.

Subsidized by Parents

One unusual social dynamic created by the one-child policy is that many college graduates are only children with parents and grandparents who continue to nurture them into adulthood.

“Their parents, their grandparents give them money; they have six people to support them,” Ms. Ni said. “They say, Why do I need to work? I can stay home and get 2,000 renminbi a month, why should I get on a bus every day to earn 2,500 a month?” That is how Mr. Wang has managed to get by for most of the last three years without a job. Despite some grumbling, his parents send him money to help support his modest lifestyle.

He rents a small but tidy studio apartment. It consists of a bedroom with a pink tile floor roughly 10 feet on a side, holding a low bed and a bedside table with a laptop on it. A plugged hole in the wall shows that a previous occupant had an air-conditioner to cope with Guangzhou’s heat, but Mr. Wang makes do with a fan. An adjacent room, about 10 feet long and just three feet wide, holds a tiny kitchen, shower and toilet.

The apartment costs $64 a month. Food, Internet cafe visits and the occasional date cost him $80 a month; fixed-line Internet service costs $8 a month; and electricity and water bills together are another $8 a month, for a total of $160 a month.

In addition to covering these expenses, Mr. Wang’s parents also paid back the money he borrowed from friends to pay for his three-year degree, which cost $1,270 a year in tuition and another $320 a year in living costs.

As was common in rural China until very recently, his mother never went to school while his father attended elementary school for several years before dropping out. Now in their 60s, his parents had to give up their rice farm when the local government redeveloped the land it was on; Mr. Wang’s father does odd jobs as a construction worker to help support his son.

Not surprisingly, they have urged Mr. Wang to take one of the many factory jobs available. “You can get paid 4,000 renminbi [$635] a month for taking such work, but I wouldn’t do it,” Mr. Wang said. “Your hands are dirty, you’re all dirty. It’s not for me.”

He has worked brief stints. After a nearly yearlong stretch out of work, he took a job several months ago as an office building security guard. It pays just $320 a month — but he already is thinking of quitting after Chinese New Year celebrations next month, and dedicating himself full time once again to the search for an office job that would allow him to use his degree. Entry-level positions in his field pay only $240 a month, but the work is clean and safe and there is the prospect of promotion. Even better would be to find a municipal agency willing to hire him, he said.

“The best is a government job; you have job security and a retirement fund,” Mr. Wang said.

Mr. Wang counts himself fortunate to have a girlfriend. She has tried to sell Amway cosmetics to her friends, but in her best month only earned $160, and often earns nothing at all in a month. Her apartment costs 1,200 renminbi, about $190, a month, and she is also subsidized by her parents — her father is a salesman for construction materials while her mother is a nanny.

“My girlfriend says, ‘What you’re earning now is definitely not enough for marriage, you need at least 10,000 renminbi a month, 26,000 would be good,’ so I’m under extreme stress right now,” Mr. Wang said. “All the women are like that now — they want the car, they want the apartment, they want the appliances — of course, I always say yes to my girlfriend.”

Young college graduates like Mr. Wang do not want factory jobs even though companies increasingly offer blue-collar workers the kinds of benefits that many white-collar workers could not aspire to until recently.

TAL Group, a large manufacturer of high-end shirts headquartered in Hong Kong, not only air-conditions its sprawling shirt factory in southeastern China, something many American factories still do not do, but it has even opened a library with 50 Internet-connected desktop computers for employees to use after work.

The combination of the one-child policy and rising rates of college education is only starting to hit the core of China’s factory work force: 18- to 21-year-olds not in college. Their numbers are on track to plunge by 29 percent from 2010 to 2020 even if enrollments in higher education hold steady.

Decline of Technical Training

As hundreds of thousands of factories have opened across the country over the last decade, they have struggled to find workers who can operate their complicated equipment, much less fix it. Yet the number of those receiving vocational training has stagnated to the point that they are now outnumbered roughly two to one by students pursuing more academic courses of study.

“We have jobs and positions for which skilled workers cannot be found, and on the other hand, we have talented people who cannot find jobs; technical and vocational education and training is the answer,” said Lu Xin, the vice minister of education, at a conference last June.

China’s vocational secondary schools and training programs are unpopular because they are seen as dead-ends, with virtually no chance of moving on to a four-year university. They also suffer from a stigma: they are seen as schools for people from peasant backgrounds, and are seldom chosen by more affluent and better-educated students from towns and cities.

Many youths from rural areas who graduate from college, like Mr. Wang, are also hostile to factory jobs. He is toying with other ideas to earn a living, but learning vocational skills is not one of them. One idea is to buy rabbits from wholesalers in the countryside, set out a mat along a Guangzhou street and sell the animals as pets or food.

When told that this might involve competing with older, uneducated rural migrants willing to work for almost nothing as sidewalk vendors, he shrugged and reiterated his hostility to factory labor.

“I’m not afraid of hard work; it’s the lack of status,” he said. “The more educated people are, the less they want to work in a factory.”

Photo credit: WSJ

Via New York Times

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