Younger Chinese spurn factory jobs that power economy
Youth’s rejection of factory work deepens labor shortage
SHENZHEN (Reuters) — Growing up in a Chinese village, Julian Zhu only saw his father a few times a year when he returned for holidays from his exhausting job in a textile mill in southern Guangdong province.
For his father’s generation, factory work was a lifeline out of rural poverty. For Zhu, and millions of other younger Chinese, the low pay, long hours of drudgery and the risk of injuries are no longer sacrifices worth making.
“After a while that work makes your mind numb,” said the 32-yearold, who quit the production lines some years ago and now makes a living selling milk formula and doing scooter deliveries for a supermarket in Shenzhen, China’s southern tech hub. “I couldn’t stand the repetition.”
The rejection of grinding factory work by Zhu and other Chinese in their 20s and 30s is contributing to a deepening 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 Chinese want would risk
eroding their competitive advantage.
And smaller manufacturers say large investments in automation technology are either unaffordable or imprudent when rising inflation and borrowing costs are curbing demand in China’s key export markets.
More than 80 percent of Chinese manufacturers faced labor shortages ranging from hundreds to thousands of workers this year, equivalent to 10 percent to 30 percent of their workforce, a survey by CIIC Consulting showed. China’s Ministry of Education
forecasts a shortage of nearly 30 million manufacturing workers by 2025, larger than Australia’s population.
On paper, labor is in no short supply: roughly 18 percent of Chinese aged 16-24 are unemployed. This year alone, a cohort of 10.8 million graduates entered a job market that, besides manufacturing, is very subdued. China’s economy, pummeled by COVID-19 restrictions, a property market downturn and regulatory crackdowns on tech and other private industries, faces 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 were less than onetenth this year’s numbers and the economy as a whole was about 15 times smaller in current U.S. dollar terms. He runs a factory in Shenzhen with around 50 workers who make magnetically shielded rooms used by hospitals for MRI screenings and other procedures.
Zenkel said China’s breakneck economic growth in recent years had lifted the aspirations of younger generations, who now see his line of work as increasingly unattractive.
“If you are young it’s much easier to do this job, climbing up the ladder, doing some machinery work, handle tools, and so on, but most of our installers are aged 50 to 60,” he said. “Sooner or later we need to get more young people, but it’s very difficult. Applicants will have a quick look and say ‘no, thank you, that’s not for me’.”
The National Development and Reform Commission, China’s macroeconomic management agency, and the education and human resources ministries did not reply to requests for comment.
Modern times
Manufacturers say they have three main options to tackle the labor-market mismatch: sacrifice profit margins to increase wages; invest more in automation; or hop on the decoupling wave set off by the heightened rivalry between China and the West and move to cheaper pastures such as Vietnam or India.
But all those 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 struggle to keep up with the faster gear, or read the data on the screens.
Liu, who like other factory chiefs declined to give his full name so he could speak freely about China’s economic slowdown, said he tried luring younger workers with 5 percent higher wages but was given a cold shoulder.
“It’s like with Charlie Chaplin,” said Liu, describing his workers’ performance, alluding to a scene in the 1936 movie “Modern Times,” about the anxieties of U.S. industrial workers during the Great Depression. The main character, Little Tramp, played by Chaplin, fails to keep up with tightening bolts on a conveyor belt.
Chinese policymakers have emphasized automation and industrial upgrading as a solution to an aging workforce.
The country of 1.4 billion people, on the brink of a demographic downturn, accounted for half of the robot installations in 2021, up 44 percent year-on-year, the International Federation of Robotics said. But automation has its limits. Dotty, a general manager at a stainless-steel treatment factory in the city of Foshan, has automated product packaging and work surface cleaning, but says a similar fix for other functions would be too costly. Yet young workers are vital to keep production moving. “Our products are really heavy and we need people to transfer them from one processing procedure to the next. It’s labor intensive in hot temperatures and we have difficulty hiring for these procedures,” she said.