Young Degree-Holders May End Up Doing Delivery Jobs
Thu, April 22, 2021

Young Degree-Holders May End Up Doing Delivery Jobs

 

Many Chinese are left empty-handed because of the pandemic./ Photo by chainarong06 via Shutterstock

 

Some people complain that the youth of today are too entitled or lazy, or that their parents worked hard while they remain unemployed for a long period after graduation. But new degree-holders would probably reply that during the time their parents got a job, they were not in student debt, automation was not replacing people, and unemployment was not yet rampant. Some graduate without realizing that the economic promise of education will not come into fruition fast and easy.

Shuli Ren, Bloomberg's opinion columnist specializing in Asian markets, wrote that even degree-holders may soon become delivery boys. This is because many young degree holders will flood the labor force, along with migrant workers.

 

Economic stimulus loans ending up in wrong places

Ren cited the case of China, where people do not have the same financial aid called helicopter money. It is a monetary policy when a country prints money and distributes it among the public to stimulate the economy during a recession. Many Chinese are left empty-handed because of the pandemic. Among the stimulus policies adapted by Beijing is one in which 500 billion yuan or 0.5% GDP is reserved for social security expense relief. The funds distributed to stimulate the economy have failed to reach the right places. For instance, the 1.8 trillion yuan of re-lending facilities that offer inclusive and low-cost credit for smaller enterprises to resume their production and work amid Covid-19 and to provide salaries to their employees have ended up as investments in wealth management products. Instead of using the money as working capital, Chinese borrowers have also invested in real estate by purchasing apartments.

China has offered these stimuli so that small businesses and entrepreneurs will supposedly continue to pay their workers and will help halt the economic fallout caused by the outbreak. However, the endeavor ended in chaos.

 

 

Urban unemployment rate

China may state that jobs still exist at state-owned businesses and its labor market is resilient, but the urban unemployment rate stood at 5.9% in March and 6.2% in February. In the US, about 30 million people have already filed their unemployment claims since the shutdowns. Ren believes that China’s jobless number is not what it claims it to be. More than that, out of the 442 million urban workers in China, 174 million or more than one-third of them are migrants. Yet, China’s statistics bureau does not consider these migrants as unemployed but only outside the local labor force. This means millions of people cannot return to their cities because of gloomy job prospects and virus-related lockdowns. The number is “gross omission,” she said.

There were also speculations in 2008 that China launched a 4 trillion yuan stimulus package after 20 million migrants in the country lost employment. These migrants found work in infrastructure projects. How come China is not announcing stimulus relief for migrants this time?

Of the 174 million migrants out of a job, policymakers may consider them as flexible workers. In the past, they were able to transfer from one low-skilled job to another. If migrant workers managed to find jobs as construction workers in the post-crisis, they may end up as delivery boys in the boom of e-commerce.

Policymakers in China are instead giving more attention to university students as an estimated 8.7 million people will graduate this year. They are wondering what to do with these highly educated people. Before the International Worker’s Day, Premier of State Council Li Keqian, who is also an economist by trade, highlighted in his speech the need to help the migrants in the country. He urged the local governments to offer these laborers the minimum living guarantees and unemployment benefits they needed. Currently, these migrants are ineligible as they don’t have a permanent residency card called the city “hukou.”

 

For decades, Beijing has been considering reforming the hukou system but there is still little progress. / Photo by Nitchy35 via Shutterstock

 

Migrant workers in China

Database company Statista shares that migrant laborers, also called the “floating population” in China, comprise 66.4% of males and nearly 62% of them graduated from middle school. In 2018, 15.5% of migrant laborers in China had an elementary diploma, 55.8% had a middle school diploma, 16.6% had a high school diploma, and 10.9% entered junior college.

On average, a migrant worker in China earned 2,290 yuan (US$370) per month. The transport industry paid migrant workers the best with an average of 2,735 yuan ($442) per month compared to other sectors in the country. The sectors that paid the lowest are the household sector, including car washers, cleaners, cooks, masseurs, and housekeepers, at an average of 2,058 yuan ($333 a month). The service sector employed 12.2% of the migrant workers in China, the construction industry employed 18.4%, and the manufacturing industry 35.7% as of 2019.

Nearly 44% of these migrant workers signed a labor contract. Workers in the construction sector were the least likely to sign a labor contract with only 25% of them have done so.

Ren opined that there are holes in the plan of providing minimum living guarantees and unemployment benefits to migrant workers in the country. This is because different cities also offer different amounts. A migrant working outside Wuhan may earn 680 yuan per month but it would be 1,050 yuan should he or she be in Shenzhen. Where would the worker collect his or her check then?

 

 

There is also that hukou system in China that divides their society into castes from birth. It is a form of social stratification. For decades, Beijing has been considering reforming the hukou system but there is still little progress. This is why Li’s speech is seen by others as slogans that may be forgotten in weeks.

Migrant workers have been trying to make ends meet in China and, in the Covid-19 age, laborers may have less job security, protection, and satisfaction. With plenty of graduates searching for jobs too, some university degree holders may find jobs as milk tea delivery boys.

But since the economy is mostly controlled by companies also that decide whether they hire someone or not, a person may be out of luck if these companies don’t need his or her skills. There is another framework that people can consider instead of focusing on the education system. That is, to be the job creator, instead of a job taker. Everyone can be an entrepreneur in their own ways.