China’s new labor challenge: Too many workers, not enough jobs

BEIJING - The sun is only just visible above the rooftops, but hundreds of job seekers are already getting restless in the 80-degree-and-rising morning. Then there’s the economic heat resulting from China’s post-COVID slowdown.

When a minivan pulls up to the curb on a commercial street in Majuqiao, on the outskirts of Beijing, dozens charge at it. “What’s the gig?” they shout at the man inside, shoving forward in hopes of a payday and an escape from the summer sun.

The selection process looks more like an argument than a job interview. The crowd and the driver shout back and forth for a hot minute before a handful of younger men climb into the vehicle. The burly driver blocks the rejected from joining them, slams the door and speeds off.

The frantic scene — repeated again and again every morning here at an intersection where day laborers hope to pick up shifts — is testament to the bleak job prospects in the world’s second-largest economy.

China’s economy is having more difficulty emerging from three years of “zero COVID” lockdowns than expected, with the latest data showing that growth remains sluggish.

The property market and the construction work it generates, responsible for about a quarter of economic growth, is in decline. Consumption remains tepid as households are cautious about big purchases. Indebted local governments are flirting with defaults.

Together these economic challenges have caused a big spike in joblessness, particularly among young people. The unemployment rate for 16- to 24-year-olds hit a record 21% last month, although one economist thinks the real number may nearer to half.

Widespread concerns about getting a job and earning an income — whether for a manual laborer looking for short-term construction work in a city far from home, or a recent university graduate looking for work at an internet company — are troubling for the Chinese Communist Party and its powerful leader, Xi Jinping.

The leadership has long justified its autocratic rule by promising a better economic future. Xi has gone further with ambitious pledges to tackle inequality and deliver “common prosperity” across Chinese society. But the old engines of China’s rapid economic ascent — a construction boom and mass urbanization — are sputtering, meaning fewer jobs across the board.

“When businesspeople are not certain about economic prospects, companies are unwilling to expand employment,” said Zhang Jun, dean of economics at Fudan University in Shanghai. And that in turn means less spending. “Because of the epidemic shock, many people’s incomes have not increased or may have even decreased, and many families have become more cautious,” he said.

The weak economic statistics are palpable on the streets of Majuqiao, one of the few places remaining in the Chinese capital where out-of-town workers can hope to find employment by the day.

Their dreams of making good money in the big city are fading. Falling wages and fewer jobs are near-universal complaints. Many are considering leaving.

Zhong Hui, 47, was one of those left behind after the morning scrum, his shaved head steadily turning redder as he hung about just in case something turned up.

Originally from Inner Mongolia, he has been coming to Beijing for years but finds it ever harder to secure jobs. He said he often accepts lower pay rates than he would have earned five years ago.

Soon, the rental on his small, windowless room will be up, and he is undecided whether to stay or try another city. He still expects to do day jobs rather than trying to find a long-term contract, because that usually requires going through agents, and they often cheat you or take a big cut.

Mostly, however, he doesn’t see any other option. “We say it’s freer [to do day work], but in reality we don’t have a choice,” he said.

Zhong is part of the first generations of internal migrant workers, the people who left their homes in rural regions in the 1990s and 2000s to build the high-rises that now adorn cities like Beijing, Shanghai and Hangzhou.

Although wages have risen for manual laborers, they haven’t kept up with inflation, and these workers face a bleak future, according to research that recently went viral and was quickly censored.

Many migrant workers expect to keep working until they can’t any longer, because they lack the savings, pensions or social support to stop, Qiu Fengxian, a sociologist at Anhui Normal University, found in extensive surveys.

There were 86 million migrant workers older than 50 in China last year, and a new policy prohibits those over 55 from working on construction sites.

Relaying questions from her surveys, Qui said workers often ask themselves: Where do I go when I’m old? Once sick, whom can I depend on? When I can’t work anymore, what will the future hold?

But it’s not just the older population and manual workers who are struggling.

At the other end of the job market are China’s new graduates. A record 11.6 million people left college this summer and began hunting for jobs. They are finding it a tough slog, with far too many applicants for even fewer jobs than usual.

Some are lucky enough to get highly competitive spots in the best industries or relatively secure civil service jobs; others are taking whatever they can get.

But a whole swath of them are opting out of the rat race. Why work a “996″ job — 9 a.m. to 9 p.m., six days a week — for little money, when you could move home to live with your parents and make a living by producing short videos?

“They go home and quit the labor market,” said Zhang, the Fudan economist, talking about this trend of opting out. “I think we need to be concerned about whether this phenomenon will become irreversible in the future.”

Online, there is a whole lexicon of disillusionment. Twenty-somethings talk about how working too hard is just “involution” without results, like running on a hamster wheel. So, they say, you may as well “lie flat” and do the bare minimum to get by.

These people won’t even be included in the official unemployment count because youth figures include only people who are actively seeking jobs. Zhang Dandan, an economist at Peking University, estimates the real number could be as high as 46.5%.

Some of the unemployed young have started to jokingly describe themselves as being “full-time children” again, back home with their parents. They, like many day laborers, are feeling pessimistic about their prospects.

Liu Qianyi, an interior design graduate, is one of the 20-somethings who has partly regressed to childhood. She has been living at home with her parents in the central Chinese city of Changsha since May, when she quit a graphic design job because the pay was low.

She had planned to look for a new position, but instead decided to chill out and train to be a primary school teacher.

Unlike in her grandparents’ generation, when everyone was poor and working hard for a better life, “now the gap between the rich and the poor is huge,” she said. The government’s promises that everyone can be “moderately prosperous” are “superficial,” because there is too much competition for the limited number of jobs available.

“Even if I looked for a job now, the boss will pay minimum wage and ask for maximum work,” Liu said. It’s easier to — she deploys one of the new phrases meaning to give in to circumstance — just “let it rot.”