Rising Unemployment Forces Chinese Graduates into Tough Bargains

By Ryan Woo, Ethan Wang
BEIJING (Reuters)
Rising unemployment in China is pushing millions of college graduates into a tough bargain, with some forced to accept low-paying work or even subsist on their parents’ pensions, creating a new class of “rotten-tail kids”.

The phrase has become a social media buzzword this year, drawing parallels to “rotten-tail buildings” for the tens of millions of unfinished homes that have plagued China’s economy since 2021.

A record number of college graduates are hunting for jobs in a labor market depressed by COVID-19-induced disruptions and regulatory crackdowns on the finance, tech, and education sectors.

The jobless rate for approximately 100 million Chinese youth aged 16-24 crept above 20% for the first time in April last year. It reached an all-time high of 21.3% in June 2023, after which officials suspended the data series to reassess the compilation methods.

Youth unemployment remains a headache, with the reconfigured jobless rate spiking to 17.1% in July 2024, as 11.79 million college students graduated this summer in an economy still burdened by a real estate crisis.

President Xi Jinping has stressed that ensuring jobs for young people remains a top priority. The government has called for more channels for youth to access potential employers, such as job fairs, and has rolled out supportive business policies to boost hiring.

Yun Zhou, an assistant professor of sociology at the University of Michigan, notes that many Chinese college graduates find better job prospects and upward mobility elusive—promises once associated with a college degree.

Some jobless young individuals have returned to their hometowns to be “full-time children,” relying on their parents’ retirement pensions and savings. Even post-graduate degree holders are struggling to find employment.

After spending years on the academic ladder, “rotten-tail kids” are discovering that their qualifications fail to secure jobs in a bleak economy. Options are limited: they must either lower expectations or find any job to make ends meet; some have resorted to crime.

Zephyr Cao, who obtained a master’s degree from China Foreign Affairs University in Beijing last year, has returned to his home province of Hebei. He stopped job hunting after lower-than-expected wages made him question the value of his education. He considers pursuing a Ph.D. to improve prospects.

Amada Chen, a recent graduate from Hubei University of Chinese Medicine, quit her job at a state-owned enterprise after just one month due to a toxic work culture. Despite her qualifications, she was offered mostly sales or e-commerce positions after sending over 130 job applications.

UNCERTAIN OUTLOOK
Joblessness among college graduates is not new. In 1999, China expanded its university enrollment substantially to create a better-educated workforce. However, supply of graduates has consistently outpaced job availability.

Shou Chen, a third-year student majoring in artificial intelligence at Beijing University of Posts and Telecommunications, remains pessimistic about her job prospects despite having a highly sought-after major, as she hasn’t secured an internship after multiple applications.

According to a study published in June by China Higher Education Research, the supply of graduates is expected to exceed demand from 2024 through 2037, only narrowing after falling fertility rates take effect. New college graduates are likely to peak at around 18 million in 2034.

($1 = 7.1436 Chinese yuan renminbi)