Young Chinese turn down factory jobs as labor shortages grow

Growing up in a Chinese village, Julian Zhu only saw his father a few times a year, when he returned for holidays from his grueling job at a textile factory in southern Guangdong province.

For her father’s generation, factory work was the only way out of rural poverty. For Zhu and millions of other younger Chinese, the low wages, the long hours of drudgery and the risk of injury are no longer worth the sacrifices.

“After a while, this work makes your mind go numb,” said the 32-year-old, who stepped off the production lines a few years ago and now makes a living selling powdered milk and delivering on a scooter to a supermarket in Shenzhen. , technology center in southern China. “I couldn’t stand the routine.”

The rejection of repetitive factory work by Zhu and other Chinese in their 20s and 30s is contributing to the 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 younger people want would risk eroding their competitive advantage.

And smaller manufacturers say big investments in automation technology are unaffordable or unwise when rising inflation and borrowing costs are reducing 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, according to research by CIIC Consulting. China’s Ministry of Education predicts a shortage of nearly 30 million industrial workers by 2025, larger than the population of Australia.

On paper, there is no shortage of manpower: about 18% of Chinese aged 16 to 24 are unemployed. This year alone, a group of 10.8 million graduates entered a job market that, apart from manufacturing, is very restricted. China’s economy, hit by Covid-19 restrictions, a housing market downturn and regulatory crackdowns on tech and other private sectors, is grappling with its slowest growth in decades.

Klaus Zenkel, president of the European Chamber of Commerce in southern China, moved to the region about two decades ago, when university graduates were less than a tenth of this year’s number and the economy as a whole about 15 times smaller in US dollar terms. He runs a factory in Shenzhen with about 50 workers that makes magnetically shielded rooms used by hospitals for MRI scans and other procedures.

Zenkel said China’s breakneck economic growth in recent years has raised the aspirations of younger generations, who now find their line of work unattractive.

“If you’re young, it’s much easier to do this work, move up the profession, do some machine work, handle tools and so on, but most of our installers are in their 50s and 60s,” he said. “Sooner or later we need to attract more young people, but it’s very difficult. Candidates will take one look and say ‘no thanks, that’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 for dealing with the labor market slump: sacrificing profit margins to raise wages; invest more in automation; or ride the wave of distancing brought about by the growing rivalry between China and the West and move to cheaper areas like Vietnam or India.

But all these options 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 faster pace or read data on screens.

Liu, who like other factory bosses declined to give his full name so he could speak freely about the country’s economic slowdown, said he tried to attract younger workers with 5% higher wages but was ignored.

“It’s like Charlie Chaplin,” Liu said, describing the performance of his workers, alluding to a scene from the 1936 film “Modern Times” about the anxieties of American industrial workers during the Great Depression. The main character, “Carlito”, is unable to keep up with tightening screws on a conveyor belt.

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

The country of 1.4 billion people, on the brink of a demographic crisis, accounted for half of all robot installations in 2021, up 44% from the previous year, the International Federation of Robotics said.

But automation has its limits.

Dotty, general manager of a stainless steel treatment plant in Foshan City, has automated product packaging and work surface cleaning, but says a similar fix for other roles would be too expensive. However, young workers are vital to keeping production going.

“Our products are very heavy and we need people to transfer them from one processing step to another. It’s labor intensive in hot temperatures, and we have trouble hiring for these procedures,” she said.

Brett, manager of a game console and keyboard factory in Dongguan, said orders had halved in recent months and that many of his colleagues were moving to Vietnam and Thailand.

He is “just thinking about how to survive this moment”, he said, adding that he envisages laying off 15% of his 200 employees, although he still wants younger muscle on his assembly lines.

conflicting aspirations

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

Preserving that status quo is now at odds with the aspirations of a generation of more educated Chinese for a life more comfortable than the sleep-and-work-to-eat-tomorrow routine their parents endured.

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

Many young people are also increasingly embracing a minimalist lifestyle known as “laying down”, doing just enough to get by and rejecting the China Inc rat race.

Economists say market forces could force both young Chinese and manufacturers to lower their aspirations.

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

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

‘Do you feel free’

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

His colleagues told horrific stories of workplace injuries involving sharp metal sheets.

Realizing he could avoid the life his father had, he gave up.

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

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

Xiaojing, 27, now earns 5,000 to 6,000 yuan a month as a massage therapist in an upscale area of ​​Shenzhen, after working for three years at a printing factory where he earned 4,000 yuan a month.

“All my friends my age have left the factory,” she said, adding that it would be difficult to get her to come back.

“If they paid 8,000 plus overtime, that would be great.”

Translated by Luiz Roberto M. Gonçalves