China’s Recent Graduate Unemployment Problem

0 Comment

How ya gonna keep ’em down on the farm once they seen Karl Hungus.

–The Dude, The Big Lebowski

The New York Times just published a discussion on unemployment among recent college grads, asking a variety of experts what their take on the subject was and what some of the causes might be.

The basic supply-and-demand problem:

In 1999, the government began a push to expand college education — once considered a golden ticket — to produce more professionals to meet the demands of globalization. This year, more than 6.3 million graduates will enter the job market, up from one million in 1999. But the number of high-skilled, high-paying jobs has not kept pace.

Or maybe it’s a chicken-and-the-egg problem. You push education to develop the economy, but the jobs lag certain other measurements of growth.

First up in the debate was Cindy Fan from UCLA, who downplays the huge numbers of grads (still only 8% of population is college educated) and looks for other explanations:

  • Geography. Lots of kids from small cities are flocking to Beijing and Shanghai, putting pressure on those job markets. At the same time, there is a “brain drain” in these small towns.

Kind of reminds me of my situation when I graduated from law school. The economy was bad, sure, but the biggest problem for my fellow graduates and I was that we wanted to stay in Boston, a medium-sized city with too many law schools and not enough jobs.

  • Sea turtles (?? – hai gui). Chinese students with overseas degrees are returning in record numbers and displacing local grads.

Yes, those folks certainly have a leg up on the local competition. Unfortunately, the market is so bad that many of them have come back to low-paying jobs, if any, earning them the sobriquet kelp (?? – hai dai).

  • Training mismatch. Students these days are more likely to be trained for service sector jobs, but China’s economy is still dominated by industrial firms.

Next up is Huang Yasheng from MIT, who focuses on geography as well. Grads do not want to invest time and money in a college education and then go back to their hometown. (The Karl Hungus problem, see above.)

Professor Huang also sees a skills mismatch, stating what everyone knows about recent grads here: they can’t do much. I can’t tell you how many clients I’ve had over the years who would kill for an experienced Chinese manager who had problem solving skills and who could think creatively. You can’t get that in a college grad (or many older workers, for that matter). I thought this comment by Huang was a particularly nice summary:

Although Chinese universities are not without pockets of excellence, they are churning out people with high expectations and low skills.

Daniel Bell, who teaches at Qinghua, was next. No surprise, he starts off with a quote from Confucius! Bell focuses on the current situation as opposed to the causes, which I think he mostly attributes to a supply-and-demand problem from a boost in education spending.

Bell’s advice is for parents and kids to lower expectations and for China to develop a strong vocational training system. I’ve heard that before, and it certainly is needed. However, if Professor Fan’s 8% figure is correct, it seems like on the whole, China does not have a long-term problem in training this many students.

Next up was Albert Park from Oxford, who is optimistic. He says that given the small percentage of people getting college degrees in China and the trajectory of the economy, everything should work out eventually. Given the short-term pain, however, it sounds as though Professor Park is cautioning grads to modify their expectations.

Last, but not least, was Loren Brandt from the University of Toronto. Professor Brandt points to a mismatch of supply and demand and of skills but is optimistic that economic growth will take care of this problem in the long run, provided that teaching and economic development proceeds forward.

To summarize: too many grads, not enough jobs. Teaching needs to be better, economy needs to grow. Sounds like no short-term solutions and no magic bullet. That does not bode well for recent grads, as the advice given seems limited to “be patient and lower your expectations.”

On the other hand, that’s pretty good advice.

One response on “China’s Recent Graduate Unemployment Problem

  1. Jay (a different one)

    I think a large part of the problem is the lack of skills, low quality of education, multiplied by large numbers (to make it apparently more newsworthy than other countries that have similar issues).
    This view is based partly on what I see from job applicants, most of whom can barely state their name, let alone do/remember anything useful, despite ‘good’ grades from ‘good’ universities. Sure, shy, blah blah blah. But if you write on your CV that you have expert level English for example, then I’d expect just a little more then “hello”, same for other subjects.
    My niece is about to graduate from college and has no clue what she’s actually studied and what kind of job that might possibly qualify her for. Worse yet, neither do her teachers. Neither heard of aptitude tests, job-match tests, just study some vague subject, and then what…?
    While colleges have some sort of entry barrier (which is good) in the form of requiring a certain score from middle-school exams, this can apparently be bypassed with cash payments, e.g. need 550 points to get into college, or 500 points plus 30000 RMB. So, there’s an extra in-flux of dumb ‘rich’ kids.
    Most demoralizing was teaching a master-class at the local university. Out of a class of 60, 30 were asleep throughout the entire course, 20 were busy texting, 10 paid attention, of which half ‘got it’ and participated. The homework assignments always came back copied 55 times word for word, error for error, smudge for smudge. Come exam time, I got several emails from students who admitted they slept through the whole thing, but could I give them a good score anyway, because they really wanted one. Oh please…!
    Multiply this by a few million. Meanwhile, we have vacancies that we just can’t fill no matter what we try (hiring bonus etc).