College students among a disaffected young generation were key participants in protests across China against draconian Covid-19 restrictions last month. This is not surprising.
While their political demands for freedom and democracy have been extensively analyzed, the economic dimensions are no less important in understanding what fuels their discontent.
The headlines on China’s economic slowdown do not always illustrate the human impact which has been disproportionally borne by the country’s youth.
Amid the Covid-19 pandemic, China’s unemployment rate among the young, or those aged 16 to 25, climbed to 19.9% in July before falling to 18.7% in August. This was against the overall jobless rate of around 5%.
Youth unemployment has been hovering at over 10% for the last few years, but this recent spike paints a bleak picture. Grim statistics do not quite capture the visible feelings of anxiety.
The impact of China’s “zero-Covid” policy for the last three years is not only reflected in national GDP, but also in the layoffs, hiring freezes, and disappearing job opportunities for those entering the market.
The policy has also exacerbated a long-term increase in youth unemployment that reflects structural shifts in China’s economy. Few would have predicted that the world’s second-largest economy would be failing to create enough new jobs for its young people.
Having been the workshop of the world and an economic powerhouse for decades, China has generated a massive number of new opportunities across sectors from manufacturing and services to high-paying white-collar jobs.
The fact that a fifth of young Chinese is now unable to land a job is a significant reversal of a decades-old trend in strong employment creation that brought social mobility and prosperity.
The last time China had serious unemployment issues was in the 1990s, during a particularly painful period of economic reforms. As China’s state enterprises were restructured and privatized, tens of millions of mostly older workers were laid off.
This caused social dislocation and massive protests – something any government is desperate to avoid. Since then, especially for young workers, the labor market has more often faced shortages than a lack of employment opportunities.
But that has changed. In recent years, labor-intensive manufacturing has relocated out of China. In turn, the government has promoted industrial upgrading and automation. As for the service sector, it has not sufficiently absorbed workers who have left their manufacturing jobs.
Regulatory crackdowns on tech companies have also dampened hiring for university graduates.
Beijing has recognized the urgency of the problem and announced measures at national and local levels to support youth employment.
Civil service switch
Credit subsidies for the unemployed, skills training for manufacturing workers, and incentives for young people to create their own start-ups can all be helpful. But how much these measures alone can reverse structural youth unemployment remains unclear.
One dimension of this crisis is that jobs are often insecure. Some flexibility may be useful, but too much of it produces anxiety.
This is the case with jobs created in the service sector and by the burgeoning platform economy, as well as previously highly prized white-collar jobs. More and more workers, especially those with university degrees, opt to compete for civil service openings.
These used to be frowned upon by young people but are now seen as secure and attractive.
The second dimension of this crisis is disillusionment. Young people have spoken out about feeling burnout from their work.
The issue is not only long working hours, encapsulated in the infamous “996” regime of working from 9 am to 9 pm, six days a week, but one of moving up the social ladder. Young workers refer to this as “involution” or a sense of working harder with fewer rewards.
While China has not seen the same “Great Resignation” phenomenon during the pandemic as Western countries, the nation’s youth have become less satisfied with just picking any job.
They look for work that provides a degree of security, work-life balance, a path for upward social mobility, and for many, meaning. Rising youth unemployment may exacerbate this discontent, limiting options and pushing them into less desirable work.
Recognizing and addressing these issues would start by empowering workers to have a voice, increasing job security at a time of intense economic anxiety, and tackling inequality.
High levels of youth unemployment and underemployment, combined with disaffection with their jobs, are a recipe for despair and disaffection. Without addressing these concerns, China will see a lost generation who may look for disruptive ways to voice their despair.
Kevin Lin is the Managing Editor of Asian Labour Review. His research is focused on the development of the labor movement, migrant worker organizing, labor NGOs, and civil society in China.
The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy of China Factor.