College Graduates Fighting Uphill Battle for Jobs

In the past decade, it has become increasingly difficult for university students to find jobs after graduation, which is a problem that coexists with a shortage of willing applicants for lower-skilled jobs.

By guest writer Shu Taifeng, staff reporter Tian Peng and intern reporter Hu Meng

In 2013, 6.99 million college graduates are facing what some are calling the toughest job market in China's history.

Li Yang, director of the Career Center at China Agricultural University, predicted that a GDP growth rate of 7.5 percent in 2013 would create around 9 million new jobs, which is the lowest figure in years and only 1.28 times the number of new graduates.

As the number of university graduates hits a historic high this year, 9 million new jobs will not all go to new college graduates. A considerable number of returned overseas students, as well as secondary school, vocational school, and high school graduates will also compete for the limited employment opportunities. The total population waiting for employment has already reached 25 million people in 2013, putting tremendous pressure on the macro economy.

In comparison, in 2003 the number of new university graduates was 2.12 million, China had a GDP growth rate of 9.3 percent, and 8.5 million new jobs were created. With four times as many jobs as new university graduates, China had little trouble with its employment capacity.

The central government made the decision to expand the scale of higher education in 1999, causing the number of fresh college graduates to rise sharply starting in 2003. In the past decade, it has become increasingly difficult for university students to find jobs after graduation, which is a problem that coexists with a shortage of willing applicants for lower-skilled jobs. "Interestingly, the two phenomena appeared around the same time. The shortage of low-skilled labor started in 2004, which is the same year university graduates started having difficulty securing employment," said Liu Erduo, assistant dean of the School of Labor and Human Resources at Renmin University.

Behind the paradox is a prevailing philosophy in Chinese society that "he who excels in study can follow an official career," though the underlying problem is more about the poor allocation of higher education specialties which fail to meet market demand.

The Chinese College Graduates' Employment Annual Report issued by MyCOS Data, a third-party higher education consulting and outcome evaluation agency, classifies employment for university specialties with a system featuring red, yellow, and green cards.

Red cards are assigned to specialties with high unemployment, whereas green cards are given to majors that are highly sought after by employers. Red card specialties include animation, law, biotechnology, bio-science and engineering, mathematics and applied mathematics, physical education, bio-engineering, and English. Moreover, these majors have been assigned red card status for three consecutive years.

Meanwhile, it is much easier for applied technology majors such as geological engineering and petroleum engineering to gain market favor.

From the demand side of the labor market, the household registration system and its supporting systems form barriers that effectively divide the labor market into several sub-markets. This structural division, besides resulting in obvious differences in the work environment, wages, social security, and promotion opportunities between different markets, has also created high thresholds that restrict job mobility. If a new graduate does not obtain permanent residence status in a large city during their term of initial employment, it is highly unlikely they will ever get it. As a result, new graduates are prone to seeking out employment in big cities, and the resulting competition has made it difficult for many to find jobs.

The employment problem for college graduates must be addressed from not only the supply side, i.e. universities, but also from the demand side, i.e. the labor market. "The key is to establish a unified competitive labor market and give full play to the basic role of the market in the allocation of labor resources," said Lai Desheng, dean of the School of Economics and Business Administration at Beijing Normal University. "We need to overcome institutional labor market segmentation by getting rid of the household registration system, eliminating barriers which limit labor mobility, breaking up monopolies in industries and sectors, standardizing income distribution, and narrowing the income gap."