Few Promising Opportunities
December 4, 2010,
Gordon G. Chang is the author of "The Coming Collapse of China" and a columnist at Forbes.com.
Is a Chinese college degree important? It is if you want to shovel excrement in Wenzhou. The prosperous city in Zhejiang province this year advertised for college graduates to fill eight spots collecting “night soil.” More than 1,100 of them applied for the jobs. In these circumstances, skipping college to work as a migrant laborer looks like a smart career move.
So does joining the People’s Liberation Army. It wasn’t long ago that the military couldn’t attract degree-holders. No more. In 2009, 120,000 college graduates joined the P.L.A. That was three times the number in the preceding year and 12 times more than in 2006.
The People’s Liberation Army -- and the armies of night soil collectors -- have begun to attract college graduates because few promising opportunities are available for them in other fields. These days, they'd even covet jobs as domestic servants and nannies.
Experts say that salaries for college students generally rise after graduation. Yet the pay prospects for migrants and blue-collar workers may be even brighter. Why? Beijing’s poorly conceived population policies created an extraordinary bulge in the work force, and the members of the bulge are now retiring in great numbers.
As they retire, China’s work force will quickly shrink. The country has been short of labor since 2004, and the number of workers will level off soon. Chinese demographers think that will happen sometime between 2013 and 2016.
It doesn’t take a college degree to figure out that migrant and blue-collar pay is set to increase. The pool of laborers that is shrinking the fastest is at the bottom end of the wage scale. The number of college graduates, however, has been soaring by about 30 percent a year this decade. The law of supply and demand says that lower-rung pay packets will climb -- and the salaries of degree-holders will fall.
Some say China’s dynamic economy will “upscale” so fast that bottom-tier manufacturing will migrate to Vietnam and Bangladesh. Yes, outsourcing will act as a brake on worker compensation, but the effect will not be great. Companies will move out of China -- and lose the substantial advantages of superb infrastructure and large networks of suppliers -- only after wages have risen substantially and it becomes clear they will climb indefinitely. For the foreseeable future, blue-collar wages will go up at a far greater rate than higher-level compensation.
My wife and I stopped to talk to two peddlers outside the Foxconn plant in Longhua this August. They had laid out a blanket on the sidewalk to display their wares, balsa model kits. “The workers have lots of money,” said one of them. They, on the other hand, did not. The pair, part of a bigger group of street hawkers, had not sold many kits that week. One was a college student in faraway Sichuan province, majoring in petroleum. The other hoped to be an engineer. They said peddling was the best job they could find.
It doesn’t take a college degree to figure out why blue-collar pay will increase, while the salaries of degree-holders will go down.
The People’s Liberation Army -- and the armies of night soil collectors -- have begun to attract college graduates because few promising opportunities are available for them in other fields. These days, they'd even covet jobs as domestic servants and nannies.
Experts say that salaries for college students generally rise after graduation. Yet the pay prospects for migrants and blue-collar workers may be even brighter. Why? Beijing’s poorly conceived population policies created an extraordinary bulge in the work force, and the members of the bulge are now retiring in great numbers.
As they retire, China’s work force will quickly shrink. The country has been short of labor since 2004, and the number of workers will level off soon. Chinese demographers think that will happen sometime between 2013 and 2016.
It doesn’t take a college degree to figure out that migrant and blue-collar pay is set to increase. The pool of laborers that is shrinking the fastest is at the bottom end of the wage scale. The number of college graduates, however, has been soaring by about 30 percent a year this decade. The law of supply and demand says that lower-rung pay packets will climb -- and the salaries of degree-holders will fall.
Some say China’s dynamic economy will “upscale” so fast that bottom-tier manufacturing will migrate to Vietnam and Bangladesh. Yes, outsourcing will act as a brake on worker compensation, but the effect will not be great. Companies will move out of China -- and lose the substantial advantages of superb infrastructure and large networks of suppliers -- only after wages have risen substantially and it becomes clear they will climb indefinitely. For the foreseeable future, blue-collar wages will go up at a far greater rate than higher-level compensation.
My wife and I stopped to talk to two peddlers outside the Foxconn plant in Longhua this August. They had laid out a blanket on the sidewalk to display their wares, balsa model kits. “The workers have lots of money,” said one of them. They, on the other hand, did not. The pair, part of a bigger group of street hawkers, had not sold many kits that week. One was a college student in faraway Sichuan province, majoring in petroleum. The other hoped to be an engineer. They said peddling was the best job they could find.
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