Young Chinese reject factory jobs that fuel economy

Young Chinese reject factory jobs that fuel economy

SHENZHEN, Nov 21 (Reuters) – Julian Zhu, who grew up in a Chinese village, only saw his father a few times a year when he returned for vacation from his grueling job at a textile factory in southern Guangdong province .

For his father’s generation, factory work was a lifeline out of rural poverty. For Zhu, and millions of other young Chinese, low wages, long hours of drudgery and the risk of injury are no longer sacrifices worth making.

“After a while this work numbs you,” said the 32-year-old, who left the production lines a few years ago and now makes a living selling formula and making deliveries. of scooters for a supermarket in Shenzhen, the technology hub of southern China. . “I couldn’t bear the repetition.”

The rejection of grinding factory work by Zhu and other Chinese in their 20s and 30s is contributing to a growing labor shortage that is frustrating manufacturers in China, which produces a third of the goods consumed globally.

Factory bosses say they would produce more and faster, with younger blood replacing their aging workforce. But offering the higher wages and better working conditions that young Chinese want would risk eroding their competitive advantage.

And smaller manufacturers say big investments in automation technology are either unaffordable or unwise as rising inflation and borrowing costs dampen demand in China’s key export markets.

More than 80% of Chinese manufacturers have faced labor shortages ranging from hundreds to thousands of workers this year, equivalent to 10% to 30% of their workforce, survey finds of CIIC Consulting. China’s Ministry of Education predicts a shortage of nearly 30 million manufacturing workers by 2025, more than Australia’s population.

On paper, the workforce is not lacking: around 18% of Chinese aged 16 to 24 are unemployed. This year alone, a cohort of 10.8 million graduates entered a labor market which, apart from the manufacturing sector, is very sluggish. China’s economy, plagued by COVID-19 restrictions, a slowing property market and regulatory crackdown on tech and other private industries, is facing its slowest growth in decades.

Klaus Zenkel, who chairs the European Chamber of Commerce in South China, moved to the region about two decades ago, when university graduates made up less than a tenth of that year’s numbers and the economy as a whole together was about 15 times smaller in current US dollars. terms. He runs a factory in Shenzhen with about 50 workers that manufactures magnetically shielded chambers used by hospitals for MRI scans and other procedures.

Zenkel said China’s meteoric economic growth in recent years has boosted the aspirations of younger generations, who now see his work as less and less appealing.

“If you are young, it is much easier to do this job, to climb the ladder, to do machinery work, to handle tools, etc., but most of our installers are between 50 and 60 years old”, did he declare. “Sooner or later we have to attract more young people, but it’s very difficult. Candidates will take a quick look and say ‘no thanks, it’s not for me’.”

The National Development and Reform Commission, China’s macroeconomic management agency, and the ministries of education and human resources did not respond to requests for comment.

MODERN TIMES

Manufacturers say they have three main options to tackle labor market mismatch: Sacrificing profit margins to raise wages; invest more in automation; or jump on the wave of decoupling triggered by heightened rivalry between China and the West and move to cheaper pastures like Vietnam or India.

But all these choices are difficult to implement.

Liu, who runs a factory in the electric battery supply chain, has invested in more advanced production equipment with better digital measurements. He said his older workers struggled to keep up with the speed or read the data on the screens.

Liu, who like other factory bosses declined to give his full name so he could speak freely about China’s economic slowdown, said he had tried to attract young workers with wages 5% higher high, but that he had been poorly received.

“It’s like with Charlie Chaplin,” Liu said, describing his workers’ performance, alluding to a scene from the 1936 film “Modern Times,” about the anxieties of American industrial workers during the Great Depression. The main character, Little Tramp, played by Chaplin, fails to tighten the bolts of a treadmill.

Chinese policymakers have emphasized automation and industrial upgrading as a solution to an aging workforce.

The country of 1.4 billion people, on the verge of a demographic slowdown, accounted for half of robot installations in 2021, up 44% year on year, the International Federation of Robotics said.

But automation has its limits.

Dotty, general manager of a stainless steel processing plant in the city of Foshan, has automated product packaging and cleaning work surfaces, but says a similar solution for other functions would be too expensive. . Yet young workers are key to keeping production moving.

“Our products are really heavy and we need people to transfer them from one processing procedure to another. It is very labor intensive in hot weather and we have difficulty hiring for these procedures,” she said.

Brett, manager of a video game controller and keyboard factory in Dongguan, said orders had halved in recent months and many of his peers had moved to Vietnam and Thailand.

He’s “just thinking about how to survive this moment,” he said, adding that he plans to lay off 15% of his 200 workers even though he still wants younger muscle on his assembly lines.

CONTRACTUAL ASPIRATIONS

The competitiveness of China’s export-oriented manufacturing sector has been built over decades through state-subsidized investment in production capacity and low labor costs.

Preserving this status quo now clashes with the aspirations of a better-educated generation of Chinese for a more comfortable life than the daily sleep-work-sleep for the next day meal that their parents endured.

Rather than settling for jobs below their level of education, a record 4.6 million Chinese applied for postgraduate studies this year. There are 6,000 applications for every job in the civil service, state media reported this month.

Many young Chinese people are also increasingly embracing a minimal lifestyle known as “lying flat”, doing just enough to get by and rejecting the rampant China Inc.

Economists say market forces may force young Chinese and manufacturers to curb their aspirations.

“The youth unemployment situation may have to be much worse before the mismatch can be corrected,” said Zhiwu Chen, a finance professor at the University of Hong Kong.

By 2025, he said, there may not be much of a labor shortage “because the demand is sure to decline.”

“YOU FEEL FREE”

Zhu’s first job was screwing fake diamonds into wristwatches. After that, he worked at another factory, molding tin cans for mooncakes, a traditional Chinese bakery product.

His co-workers shared horrific stories of workplace injuries involving sharp metal sheets.

Realizing he could avoid reliving his father’s life, he quit.

Now doing sales and deliveries, he earns at least 10,000 yuan ($1,421.04) a month, depending on how many hours he puts in. This is almost double what he would earn in a factory, although part of the difference is in housing, as many factories have their own dormitories.

“It’s hard work. It’s dangerous on busy roads, in the wind and rain, but for young people it’s much better than factories,” Zhu said. “You feel free.”

Xiaojing, 27, now earns 5,000-6,000 yuan a month as a masseuse in an upscale Shenzhen neighborhood after a three-year stint at a printing factory where she earned 4,000 yuan a month.

“All my friends who are my age have left the factory,” she said, adding that it would be a tall order to get her back.

“If they paid 8,000 before overtime, of course.”

($1 = 7.0371 Chinese yuan renminbi)

Editing by Marius Zaharia and David Crawshaw

Our standards: The Thomson Reuters Trust Principles.

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