Paradoxes in China’s job market increasingly apparent

Two recent news reports underscored paradoxes in China’s economic structure, with too few people to work in construction, manufacturing, cleaning and the restaurant sector – positions typically reserved for “migrant workers”. Meanwhile, college graduates face bleak employment prospects, even as the economy hums along at well above 8 percent GDP growth. Women graduates, in particular, are facing difficult employment prospects, and according to a high ranking official of the All-China Women’s Federation, there are five major reasons behind it:

1) The overall employment situation remains grim.

2) The labour market and industrial structure is out of whack, with the relatively underdeveloped services sector unable to provide enough jobs for female graduates and other workers.

3) The traditional social conceptions of which jobs are gender appropriate and outdated sexist prejudices still complicate matters. In this regard, gender-based discrimination is still an important factor.

4) The vocational and specialized skills available at educational institutions aren’t in line with market needs, making it difficult for China to meet the goal of transforming its economic model.

5) The power of legal regulations and supervision isn’t sufficient. For example, the laws defining what constitutes sexual discrimination in the job seeking process are vague.

While young university graduates may have it rough, the country is also experiencing a nationwide “labour famine” (用工荒) that is particularly acute in traditional export-oriented areas in Guangdong. According to a report by the Guangzhou Daily, Guangdong is short over one million workers, with the cities of Guangzhou, Dongguan, and Shenzhen needing 150,000, 200,000, and 800,000 workers, respectively. Many of the new positions that remain unfilled have a salary over 1,000 yuan per month. Employers who pay very little for entry-level positions (ie. 500-600 per month) are finding it very difficult to attract workers. Position that require grueling work are also difficult to staff.

Unsurprisingly, according to the article, employers are primarily resorting to increasing salaries in order to satisfy the workforce needs. Other areas, such as Guangzhou’s Luogang District (萝岗区) are using the “going out to attract workers” strategy – organizing trips to distant places like Gansu and Sichuan to look for workers, and enticing them through free skills training. In Yiwu, a bustling industrial city in Zhejiang, when workers want to discuss work conditions with a potential employer, “everything is on the table” to discuss. Besides providing for free food and accommodation and a base salary of 2,000 yuan, many employers in Yiwu are also offering subsidies and programs for lunches, birthdays, and free training. In some cases workers can earn up to 4,000 yuan.

According to the article, there are two main reasons for the shortage of workers. First, unlike a few years ago in which many migrants would prefer to go to the developed cities on China's eastern coast, now many migrants prefer to go to tier two cities, where they earn roughly the same salary but have higher purchasing power. One worker from Hunan told of how some of her friends prefer Nanchang to Guangzhou, where they can have roughly equal salaries but without the high costs of living in developed and expensive cities. Even places that were former labour-export areas, like Anhui, are seeing labour shortages, which underscores that the phenomenon is nationwide, and not just limited to one single area. Second, supply and demand in the economy are unbalanced. Many of the new jobs are in frontline production, but the education levels of the new labour force is increasingly high, and many do not want to work in production.
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