MCLC: faltering economy dims jobs prospects

[Denton, Kirk]

MCLC LIST
From: Sean Macdonald <smacdon2005 at gmail.com>
Subject: faltering economy dims job prospects
***********************************************************

Source: NYT (6/16/13):
http://www.nytimes.com/2013/06/17/business/global/faltering-economy-in-chin
a-dims-job-prospects-for-graduates.html?pagewanted=all

Faltering Economy in China Dims Job Prospects for Graduates
By KEITH BRADSHER and SUE-LIN WONG

HONG KONG — A record seven million students will graduate from
universities and colleges across China in the coming weeks, but their job
prospects appear bleak — the latest sign of a troubled Chinese economy.

Businesses say they are swamped with job applications but have few
positions to offer as economic growth has begun to falter. Twitter-like
microblogging sites in China are full of laments from graduates with dim
prospects.

The Chinese government is worried, saying that the problem could affect
social stability, and it has ordered schools, government agencies and
state-owned enterprises to hire more graduates at least temporarily to
help relieve joblessness. “The only thing that worries them more than an
unemployed low-skilled person is an unemployed educated person,” said
Shang-Jin Wei, a Columbia Business School economist.

Lu Mai, the secretary general of the elite, government-backed China
Development Research Foundation, acknowledged in a speech this month that
less than half of this year’s graduates had found jobs so far.

Graduating seniors at all but a few of China’s top universities say that
very few people they know are finding jobs — and that those who did
receive offers over the winter were seeing them rescinded as the economy
has weakened in recent weeks.

“Many companies are not expanding at all, while some of my classmates have
been hired and fired in the same month when the companies realized that
they could not afford the salaries after all,” said Yan Shuang, a
graduating senior in labor and human resources at the Beijing Institute of
Technology.

Ms. Yan said she had been promised a job at a sports clothing company over
the winter. But the company canceled all hiring plans in March as the
economy weakened.

China quadrupled the number of students enrolled in universities and
colleges over the last decade. But its economy is still driven by
manufacturing, with a preponderance of blue-collar jobs. Prime Minister Li
Keqiang personally led the cabinet meeting, on May 16, that produced the
directive for schools, government agencies and state-owned enterprises to
hire more graduates, a strategy that has been used with increasing
frequency in recent years to absorb jobless but educated youths.

“Any country with an expanding middle class and a rising number of
unemployed graduates is in for trouble,” said Gerard A. Postiglione, the
director of the Wah Ching Center of Research on Education in China at Hong
Kong University.

A national survey released last winter found that in the age bracket of
21- to 25-year-olds, 16 percent of the men and women with college degrees
were unemployed.

But only 4 percent of those with an elementary school education were
unemployed, a sign of voracious corporate demand persisting for
blue-collar workers. Wages for workers who have come in from rural areas
to urban factories have surged 70 percent in the last four years; wages
for young people in white-collar sectors have barely stayed steady or have
even declined.

Economists have long estimated that the Chinese economy needs to grow 7 or
8 percent annually to avoid large-scale unemployment. But that rule of
thumb has become less reliable in recent years as the labor market has
split.

Relatively slow growth is still creating enough jobs to provide full
employment for the country’s blue-collar workers. But much faster growth
may be needed to create white-collar jobs for the graduates pouring out of
universities.

The International Monetary Fund predicts the Chinese economy will grow
7.75 percent this year — slower than the growth of 10 to 14 percent before
2008, but still a much faster pace than in the West. The main problem for
China lies in the sheer growth in graduates; the United States produces
three million graduates a year, while China has increased its annual
number of graduates by more than five million in a single decade.

One response, endorsed by the State Council, is to urge more graduates to
take jobs at small, private companies. But a generation of people who grew
up under the government’s “one child” policy has proved risk-averse and
slow to join or set up new companies.

“I would not work for private companies, that is not secure — only
state-owned ones,” Ms. Yan said.

Many graduating seniors, seeing limited job opportunities, are applying to
the country’s fast-expanding graduate schools. Yang Yi, a senior majoring
in applied economics at the Beijing Institute of Technology, said that
after applying unsuccessfully for jobs through the winter, he was prepared
to seek a master’s degree.

“Hopefully the economy will have recovered when I graduate in two years,”
he said. “Getting a master’s degree is always better than working in small
companies that might not even last long.”

Chinese students have been gravitating toward majors that are perceived as
academically less demanding but likely to lead to careers in banking.
Business administration and economics majors have proliferated, partly
because the country’s many new private universities find them inexpensive
subjects to teach. Programs in engineering and other sciences, with their
requirements for costly labs, have grown more slowly.

As in the West in recent years, financial services is an extremely popular
field among college graduates, who besiege banks, brokerage firms and
other businesses in the sector with job applications. Ministry of Human
Resources statistics show that average pay for banking sector employees,
at $14,500 a year, is twice the level of pay in sectors like health care
and education.

Graduates from the best universities still have a strong chance of finding
a job, particularly if they do not set their sights too high. Lin Yinbi, a
senior graduating in trade and economics from the prestigious Renmin
University in Beijing, said that he had job offers from a heating company
and a supermarket chain, but was still applying for a well-paid bank job.

“The question is, What kind of job is it?” he said. “Does it align with
our major? Does it pay enough? Do we have room to grow?”

Wang Zhian, a prominent Chinese broadcaster whose microblog has more than
200,000 followers, created a stir this spring by recommending that college
graduates take jobs packing and unpacking homes for moving companies.

“The most important thing for graduating seniors is to figure out a way to
survive, and if that means you have to become a moving company worker,
then so be it,” he said. “You can’t live off your parents forever.”

Keith Bradsher reported from Hong Kong and Sue-Lin Wong from Beijing.
Chris Buckley contributed reporting from Hong Kong, and Mia Li contributed
research from Beijing.