How China’s growing unemployment has given rise to ‘rotten tail kids’

China is grappling with a major economic issue - rising unemployment among youth. This has given rise to the term “rotten-tail kids”.

The condition of college graduates is such that some are readily accepting low-paying work while others have to depend on pensions provided by their parents.

The world’s second-largest economy indicates an overall decline in vigour and lack of consumer confidence and business optimism. The youth unemployment rate has exceeded 20 per cent as about 100 million youth between the ages of 16-24 years were jobless for the first time in April last year. It reached an all-time high of 21.3 per cent in June 2023 forcing authorities to suspend the data series to reassess how numbers were compiled.

The situation remains the same even after a year. In July this year, the jobless rate spiked to 17.1 per cent as 11.79 million college students graduated this summer in an economy that is still struggling to revive itself.

Why the term ‘rotten tail kids’?

The phrase has become a social media buzzword this year, and has its roots in the catchword “rotten-tail buildings”. The term refers to the tens of millions of unfinished homes that have plagued China’s economy since 2021.

What is the government doing?

President Xi Jinping has repeatedly stressed that finding jobs for young people remains a top priority. The government has called for more channels for the youth to access potential employers, such as job fairs, and has rolled out supportive business policies to help boost hiring.

“For many Chinese college graduates, better job prospects, upward social mobility, a sunnier life outlook - all things once promised by a college degree - have increasingly become elusive,” said Yun Zhou, assistant professor of sociology, the University of Michigan.

Despite government efforts to create more job opportunities, the outlook remains uncertain, leading to widespread pessimism among young job seekers. The situation is compounded by scams targeting desperate job seekers, further underscoring the bleakness of the current job market.

Chinese state-owned media agency the Global Times called the country’s employment situation “largely stable,” citing growth in high-tech industries and the service sector. The outlet attributed the youth unemployment number to a “seasonal increase” caused by the flood of newly graduated students into the labour force.

What is the situation like for the youth?

After spending years climbing China’s ultra-competitive academic ladder, “rotten-tail kids” are discovering that their qualifications are failing to secure their jobs in a bleak economy. Their options are limited. Either they cut their expectations for top-paying jobs or find any job to make ends meet. Some have also turned to crime.

Zephyr Cao obtained a master’s degree from the prestigious China Foreign Affairs University in Beijing last year. Now 27, and back in his home province of Hebei, Cao has stopped seeking full-time work after lower-than-expected wages made him question the value of his education.

“If I worked for three or four years after my undergraduate studies, my salary would probably be similar to what I get now with a master’s degree,” Cao said. He further said he was considering pursuing a PhD in hopes his prospects would improve in a few years.

Amada Chen, a recent graduate from the Hubei University of Chinese Medicine, quit her sales job at a state-owned enterprise last week after just one month. She blamed her decision on the toxic work culture and her boss’s unrealistic expectations. For the first 15 days of her probation, she was also getting just 60 yuan ($8.40) a day despite having to work 12 hours daily.

“I cried every day for a week,” she said. Chen had wanted to become a quality inspector or a researcher, jobs she thought would match her skills as a traditional Chinese medicine major. But over 130 job application letters later, she was offered mostly sales or e-commerce related positions. Chen said she was reconsidering her career path altogether and might turn to modelling.

What is the root cause of the problem?

The issue of joblessness among college graduates has not cropped up overnight. In 1999, China dramatically expanded the enrolment capacity of universities in a bid to produce a better-educated workforce to drive its fast-growing economy.

But the supply of graduates had kept exceeding jobs, with authorities expressing concern in 2007 over job availability, an issue that receded but never fully faded, opens new tab as more youth armed with degrees entered the market.

Supply of tertiary students will exceed demand from 2024 through 2037, after which the effects of falling fertility rates will kick in and sharply narrow the gap, according to a study published in June by China Higher Education Research, a journal under the education ministry. New college graduates will likely peak at around 18 million in 2034, it said.

With inputs from Reuters