College grads in China are in a tough spot, as unemployment among the young is at a record high. As a result, some of them have no choice but to accept low-paying jobs or positions that are beneath their abilities. The official data shows that in April, the urban jobless rate in China set a record 20.4% among those aged 16 to 24; this is approximately four times the average for the entire country, despite the fact that millions more college students are anticipated to graduate this year.
Yao Lu, a professor of sociology at Columbia University in New York, recently remarked, “This college bubble is finally bursting.” There is a mismatch between the demand for and supply of highly qualified people, which was precipitated by the increase in college enrollment in the late 1990s. However, the economy has not kept pace. Underemployment is a serious problem that both young people in China and the government must address. Lu and Xiaogang Li, a professor at Xi’an Jiaotong University, calculated that, on top of the rising young unemployment rate, at least another quarter of college graduates in China are underemployed in a report they co-authored.
College grads are “taking up positions that are not commensurate with their training and credentials” to avoid unemployment, Lu told CNBC. When people are unable to find full-time occupations that are a good fit for their skills, they may settle for low-skilled or low-paying professions, or work only part-time. “These are the kinds of jobs that were traditionally filled by people without four-year degrees,” Lu said.
It is well-documented that graduating during an economic downturn can leave lasting scars. According to studies conducted at Stanford University, college grads who enter the workforce during a recession or other economic slump tend to have lower earnings for the next decade to fifteen. According to Goldman Sachs, the present high youth unemployment rate may be a result of a slowdown in the services sector at the beginning of the year, before China reopened. However, researchers at a U.S. investment bank predict that with the flood of new college graduates in China, the country’s youth unemployment rate will peak in July and August.
Getting young people back to work, argue experts at Goldman Sachs, would aid China’s economic recovery by restoring the purchasing power of the young, who account for about 20% of China’s total consumer spending. But the positions might not be what they want or what they’re qualified for.
News on SNBC13.com
