Draft:Youth unemployment in China

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Overview

Youth Unemployment in China is the measure of unemployment for viable Chinese citizens ranging from the ages of 16 to 24. In June of 2023, the rate of youth unemployment in China hit a record high of 21.3%, subsequently causing international conversation surrounding the strength of the Chinese economy, and ultimately the Chinese government's decision to suspend publications of youth unemployment statistics.[1] Historically, youth unemployment in China reaches an annual peak in July, due to recent High School and University graduates entering the job market, so it is predicted that the current rate is higher than 21.3%.[1] The high-level of youth unemployment has largely become a crisis in China as it threatens Chinese economic strength on the world stage and the ruling stability of the Chinese Communist Party.[1] The roots of crisis can be traced to the early 1990s and can be seen as a factor of economic and social changes, such as shifting social pressures, the labour market, COVID-19, and government intervention.[2]

History of Youth Unemployment

Historically, youth unemployment in China has been relatively stable and low until the 1990's when the country started experiencing a continuous incline, with rates of ~4.3% in 1991 and ~9.8% in 2010, however, since 2018 the rate of unemployed youths has drastically and exponentially increased.[3] In January of 2018, the rate of unemployment was around ~11%, with the beginning of COVID-19 causing the first exponential increase to over 15%, with this increase sustaining to the current 21.3% unemployed youth in June of 2023.[2] The increase in unemployment rates from the early 1990's is largely due to the shifting of jobs that youths are inclined to pursue, due to the social focus on a college education, despite the lack of demand for these jobs in the labour market, which was greatly exacerbated by the COVID pandemic.[2]

Significance

Youth unemployment in China is an extremely significant issue, as it can culminate in both economic and social unrest. Youth unemployment is often linked to decreased economic conditions, due to the decrease in productive output, future earnings, lower private and public sector investment, and low birth rates.[4] Socially, youth unemployment is linked to increased social unrest and political instability, which can threaten the regime stability of the Chinese Communist Party and can already be seen as a factor behind the "full-time children" and "tang ping" movements[5].[6] The combination of social and economic degradation threatens the stability of Chinese strength on the world stage, and the power of the CCP within the country.

Causes of youth unemployment

1. COVID-19

Historically, the main cause for youth unemployment in China seems to be the faltering of the economy. During the late 1990s the conducted widespread layoffs in state-owned enterprises posed a threat for youth employment.[7] China's youth unemployment rate has doubled during the period of COVID-19, as the "zero Covid" measures left companies cautious of hiring, and interrupted education and so, made it harder for students to get internships which could lead to job offers. Additionally, during the lockdown, the Chinese government cracked down on sectors such as the technology, real estate, and education industries, where a vast number of young Chinese had looked for jobs.[8] Consequently, a gap opened between the number of college graduates and the number of available service jobs, which diminished during the pandemic.[9]

2. Mismatch of Jobs

Another reason for growing youth unemployment is the mismatch between the jobs that college graduates want and the jobs that are available.[8] Researchers found that the skills that are being acquired in universities differ significantly from the skills that employers require for jobs.[10] Because of the expanding higher education system in China, there are more and more graduates every year who do not want to settle for factory jobs.[7] Young Chinese thus look more to the service industry, which employs half the national workforce.[9] Growing youth unemployment in the countryside is also related to this. Because of the changing society, young Chinese today want good working environments in sectors such as education, culture, and entertainment. However, these jobs, for the most part, are not located in the countryside.[8]

3. Social Trends

Recent social trends have also contributed to growing youth unemployment. One example of this is the lying flat movement, an anti-work movement.[7] The lying flat movement calls on young workers to opt out of the struggle for success in the work environment, and to reject the promise of consumer fulfilment.[11] The background to this social movement is the shrinking of the Chinese labour market, as there are less jobs available, so current employees are under more pressure and must work longer hours.[12] Additionally, gig employment, where people take on flexible and temporary jobs have also become more popular among young workers, which furthers youth unemployment.[2]

Social Effects

1. Social isolation

Unemployed youth in China may be at risk of social isolation as they have fewer instrumental ties.[13] This involves young people's potential social contacts beyond their families and relatives, so losing a job reduces the source of social contacts.[14] Moreover, unemployed youth may face financial crises as they have no source of income, which can negatively affect their social lives. One important activity for bonding with social contacts in China is having dinner together, and participants need to pay "social contacts over dinner" which is unaffordable to them.[15]

Another factor that promotes social isolation is "lose face". This is a sociological concept deeply rooted in Chinese culture, which encompasses respect, honour, and social standing of individuals. It plays an important role in shaping one's self-construction, which posits that the "self in relationship" lies at the very heart of this process,[16] and "face" serves as a guiding principle for Chinese people to position themselves within a social context. In circumstances where unemployment is rare within one's social circle, the sense of shame and loss of "face" experienced by young jobless individuals may compel them to avoid social interactions.

2. Mental Health Risks

Experiencing youth unemployment in China can lead to mental health risks. Recent studies show the prevalence of probable depression among unemployed youths in China is 49.3%,[17] surpassing the rate among Chinese adolescents (36.6%)[18] and Chinese universities students (37.0%),[19] due to the lower level of perceived social support and emotion regulation difficulties.[17]

Economic Impact

At least 20% of China's recent graduates are unemployed due to structural factors and a mismatch of qualifications and skills needed by the job market.[20] Xi Jinping has criticised the rise in youth unemployment and urged graduates to "eat bitterness", take up industrial jobs often in rural areas, for China's economic growth.[21] Zhou Hao, chief economist at Guotai Junan International, points to a slowdown in consumption as the main factor of China's economic slowed growth, this can be seen in the similar reduction of growth for salaries of employed graduates of 3% in 2022 from 7% in 2021.[22] This in-turn has a knock-on effect on childbirth and marriage, as China faces its first year of population decline since the 1960's with a total fertility rate of 1.09 which is lower than Japan's.[23] As China's population continues to age and its working population declines, more strain will be put on the economy to sustain its pension fund and find workers to care for ageing population.[24]

Furthermore, about 25% of recent college graduates in China are underemployed.[25] Underemployment is considered a waste of resources due to the underutilisation of educated workers in the labour market and fuels urban poverty.[20] The economic inefficiencies have manifested in the growth of the 'ant tribe', a group of college hardworking educated workers employed in low skill jobs who live in small, cramped housing and are likened to ants.[20] 'Ants' are estimated to have cost the Chinese economy 6.8 million yuan between 2006 and 2008 due to their underemployment.[20] When compounded with China's cost of living crisis, scholars argue that there will be less money invested back into the economy to boost internal consumption as youths make up about 20% of China's consumption.[25]

Social Movements

This combination of low demand and a growing supply of highly qualified candidates creates a hypercompetitive market. This results in societal pressures for graduates to be even more overworked and overqualified, which in turn gave rise to the 996 working-hour system.[21] Similar pressures have resulted in graduates accepting underpaid jobs, like internships, in the hopes of using it as a stepping stone for a more stable full-time job in the future.[25] With decreasing salary expectations and a rise in pessimism, anti-work culture and social movements like 'tang ping' and 'full-time children' have gained popularity.[22] Netizens voice that they are increasingly disillusioned or burnt out and consider the hypercompetitive labour market a rat race with few benefits for participation and choose to opt out of overwhelming societal pressures imposed on youths to succeed.[21] Netizens have also popularised the idea of becoming paid full-time live-in carers for their parents, as China faces growing elderly care needs with an ageing population, to either fulfil filial piety or delay the chance of unemployment or both.[26]

Chinese Social Policy

Before 1979, Chinese social policy guaranteed full employment in urban areas through the danwei system, which assigned citizens lifetime jobs that provided housing, health care, and social protection.[27] The economic reforms of the 1970s prioritised the economic development of coastal cities, and subsequent waves of economic reform placed increasing emphasis on personal responsibility for employment and social protection. Full employment as government policy was formally abolished in the mid-1990s, and has been replaced by a system of unemployment insurance and minimum subsistence allowances for urban workers.[28] Despite such programmes, unemployment has become a major issue for the Chinese government, and a creeping pattern of "workfare" policies has developed to pair social protection with proactive measures by individuals to seek employment.[29] This indicates "productivist" tendencies in China's welfare model.

Productivist welfare models link social protection to employment and productivity in order to ensure citizens contribute positively towards economic growth and social stability.[30] Such models are common in East Asia, with similar welfare regimes existing in Singapore and Hong Kong, and often see social policy as an extension of economic policy.[31] This approach has combined with economic liberalisation and infusion of market forces into Chinese society to enable greater flexibility within the Chinese economic model. As these reforms came into being, the government sought to expand university enrolment in order to boost domestic demand and shift towards a globalised economic outlook.[32] This, combined with the retreat from full employment, led over time to an overproduction of graduates with too few jobs commensurate to their level of education and saw graduate wages outpaced by less-skilled wages in many areas.[33]

Youth Unemployment Crisis in Context

The Chinese government's response to the crisis has combined its productivist social policy with censorship and repression of information. The National Bureau of Statistics ceased reporting on youth unemployment data in August 2023.[8] The government has moved to minimise discourse on the issue, but its productivist model has dictates some more proactive moves as well. Government responses have been characterised by a continuing reliance on market forces rather than a return to full employment policies, with the government directing local governments to hire as many graduates as their budgets allowed and has incentivised firms and state owned enterprises to hire graduates in return for tax breaks and subsidies.[34] This indicates a reliance on "passive" labour market policies and indicates a reluctance to directly intervene in social policy. Thus, the government's response to the crisis is indicative of path dependence, whereby past events and decisions constrain later ones. Due to the long history of privatisation and retreat from policies to support full employment, it is unlikely that Chinese leaders will reverse course and promote heavy spending to directly employ young graduates. Thus, censorship and passive labour market action are the preferred methods for addressing the crisis.

References[edit]

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  3. ^ "Youth Labour Market Indicators". International Labour Organization. 2023.
  4. ^ Mroz, T.A.; Savage, T.H. (2006). "The long-term effects of youth unemployment". Journal of Human Resources. 41 (2): 259–293. doi:10.3368/jhr.XLI.2.259. S2CID 27330821.
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  17. ^ a b Hua, Z.; Ma, D. (2022). "Depression and Perceived Social Support among Unemployed Youths in China: Investigating the Roles of Emotion-Regulation Difficulties and Self-Efficacy". International Journal of Environmental Research and Public Health. 19 (8): 46–76. doi:10.3390/ijerph19084676. PMC 9029286. PMID 35457545.
  18. ^ Chen, X.; Qi, H.; Liu, R.; Feng, Y.; Li, W.; Xiang, M.; Cheung, T.; Jackson, T.; Wang, G.; Xiang, Y.T. (2021). "Depression, anxiety and associated factors among Chinese adolescents during the COVID-19 outbreak: a comparison of two cross-sectional studies". Translational Psychiatry. 11 (1): 148. doi:10.1038/s41398-021-01271-4. PMC 7921611. PMID 33654058.
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  23. ^ Hawkins, A. (16 August 2023). "China's fertility rate dropped to record low in 2022, estimates show, The Guardian". The Guardian. Retrieved 7 November 2023.
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  32. ^ Xiong, W.; Yang, J.; Shen, W. (2022). "Higher Eduction Reform in China: A comprehensive review of policymaking, implementation, and outcomes since 1978". China Economic Review. 72: 101752. doi:10.1016/j.chieco.2022.101752.
  33. ^ Bram, B. (2022). "The 19 percent: the social consequences of China's Youth Unemployment Rate". Asia Society. Retrieved 26 October 2023.
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