Posted: March 23rd, 2023

Youth Unemployment Crisis in China

Introduction

The ILO (International Labor Organization) indicates that the challenge of youth unemployment in China threatens the future of the economic stability of the country (Ali, 2014, p. 17). It is worth appreciating that the challenge is a global issue with many of the countries facing a high rate of unemployment, especially for the youths. The challenge of youth unemployment is as serious in the developed world as it is within the developing economies. Nevertheless, the prevalence of the unemployment is illustrated to be higher in the developing economies like China than it is in the first world countries like in the United States (Miles, 2015, p. 1). Among other policies that have been highlighted by the ILO as possible solutions to the challenge of youth unemployment is the policy of creating more opportunities for employment (Miles, 2015, p. 1). However, the effectiveness of the policy would be questionable; hence, the focus of this paper. Therefore, the justification for paper is to evaluate other possible tools and policies that would be effective in addressing the challenge of rampant youth unemployment in China apart from focusing on increasing the employment positions or job openings.

Background Information

The ILO statistics illustrate that the youth unemployment rates are falling in the rich or developed countries, while rising in China and other OECD countries like Brazil (Miles, 2015, p. 1). The global trends in unemployment statistics for individuals aged between 15 and 24 years and who are willing to work but cannot access an opportunity keep falling as evaluated between 2009 and 2014. Nevertheless, the trend is reversed in the case of China, where from 9.3% in 2010, the rates rose to 10.6% in 2014 (Miles, 2015, p. 1). In fact, the ILO argues that without proper and effective intervention mechanisms, the current rate of unemployment threatens the future of the country and the economy (Bell & Blanchflower, 2011, p. 241). The Chinese projected statistics indicate that the youth unemployment rates are likely to surpass 11.1% in 2016 (Miles, 2015, p. 1).

Various factors explain the increase in rates of unemployment among the youths. First, poor educational policies that fail to equip the grandaunts with the necessary skills in the industry or market make many youths irrelevant in the positions available (Mathews, 2014, p. 1). Secondly, the modern economies have realized population explosion and frequent economic downturns thereby explaining the unlatching industrial workforce needs and the many people looking for the opportunities (Grigoryeva, 2012, p. 3-4). Finally, the persistence of the unemployment has caused many of the youths to be discouraged and, therefore, result in a poor job search (Mathews, 2014, p. 1). Therefore, effective policies to address the challenges depend on the ability of the policies to overcome the above-discussed challenges among others. While the factors may differ in effect from one country to another, the overall effect of the factors is to increase the unemployment rates in the global scale.

Global situation

The United States, like many other developed countries, record high levels of unemployment, especially with the youth (Ausick, 2015, p. 1). However, in comparative analysis, the unemployment rates within the United States ranks lower when compared with China’s rates of unemployment (Bai, 2006, p. 128). Among other factors contributing to the rampant unemployment rates with the youths in the country are the lower skills, un-matching employment opportunities with population growth, ethnic and social cultural factors, as well as poor economic performance in the country (Ausick, 2015, p. 1). Accordingly, the bureau of labor statistics confirms that the youths are the most affected group in the United States by the rampant rates of unemployment.

The international labor organization advocates for improved employment rates across the globe. However, when comparing the statistics from one region to another, the Middle East and the Northern Africa countries rank poorest in employment statistics (Behrmann, 2014, p. 1). In fact, according to a report released in 2015, the Middle East countries and the countries in the North of Africa continues to lead in high unemployment rates. Therefore, the ILO warns that the crisis of youth unemployment remains acute, and that appropriate measures should be devised and embraced to overcome the looming challenge (Gibbs, 2015, p. 1). However, the report indicates that the unemployment rates are slowly reducing in many of the countries, thus recording a positive trend. The challenge is that the recovery rate is not uniform, and thus, some countries are hardly hit than others (Wassell, 2003, p. 1). In fact, China ranks among the hard-hit countries with very high scores of unemployment rates when compared to the other countries.

Youth Unemployment in China

China has had the legacy of being the most populous country in the world (Bi, 2003, p. 1). However, being considered as the world’s only current economic powerhouse, the one would only expect to have the country rank first in low unemployment rates (Jacobs, 2014, p. 1). Nevertheless, the labor statistics of the country reveal that the unemployment rates for the people aged between sixteen years and twenty-four years remain quite high. According to the China Household Finance Survey conducted in 2012, the youth unemployment rates were rated at 8.1% (Jacobs, 2014, p. 1). Besides, other people argue that the youth unemployment rates in the country would be as high as 20% as against the quoted rates (Bi, 2003, p. 1). However, one must appreciate that even while the unemployment rates for the youths could be debated, the issue of rampant youth unemployment rates is prevalent in the country (Tse & Esposito, 2014, p. 1).

The 9.1% scale produced by the China Household Finance Survey may not be perceived as quite high, but the breakdown of the statistics and the demographics give a worrying trend (Tse & Esposito, 2014, p. 1). In China, the higher educated persons in the country would be more likely to miss employment opportunities, while the less educated persons secure employment opportunities (Choudhry, Marelli & Signorelli, 2012, p. 77). Otherwise stated, there is an inverse correlation between education and employment in China with more of the uneducated people being employed while the educated people are being unemployed (Tse & Esposito, 2014, p. 1). The correlation would be contrasted with the correlation within the developed economies such as the United States and the United Kingdom. In essence, the correlation between education levels and the employment rates in the UK and US are directly related. In fact, in the two countries, the higher the education level a person attains, the higher the likelihood the person would be employed (Wang, Wang, & Wang, 2012, p. 557). According to the international labor relations, the high levels of unemployment are explained by the lack of highly educated and competent candidates while there are millions of job opportunities (Tse & Esposito, 2014, p. 1). Therefore, the governments of these countries strive to facilitate attainment of higher education competencies while the challenge is reversed in China.

The economy of China depends largely on the export-driven manufacturing, capital-intensive heavy industries, and the construction sector, which are not dependent on the high level of education as seen with the graduates. As such, the majority of the educated youths fail to secure employment opportunities as would be expected, while the uneducated lot secures the majority of the employment opportunities. Approximately, the annual graduation rate in the country is at seven million who seek for employment opportunities. The un-matching level of job creation and the level of school leavers lead to a rising rate of unemployment in the country as compared to the majority of the other countries (Riach, 2006, 552). The reason the unemployment rates keep surging is that the more the youth attain higher education competencies, the industrial needs of the education and the skills acquired are not well paid. In fact, the majority of the positions available would be lowly paid; hence, more suited for the less educated youth. In such instances, the graduates fail to get the enticement to enroll for the employment opportunities due to low labor remunerations, low security, and inadequate or no pension schemes (Riach, 2006, 552). As such, in spite of the country realizing higher levels of education, the rate of formal employment keeps falling, a situation that contributes to the rising unemployment rates for the youths. In fact, the majority of the Chinese scholars keep furthering studies instead of participating in economic activities; hence, contributing to rising levels of unemployment. The government has also failed in devising and embracing the appropriate policies to overcome the challenge of the increasing unemployment rates for the youths (Ausick, 2015, p. 1). Therefore, the government should move faster in embracing the right means of boosting the economic performance of the country instead of investing more in the manufacturing sector, which has a limited requirement for the education competencies (Miles, 2015, p. 1). In fact, the economic experts have the opinion that the country should embrace such policies that would expand in the professional service sector as against the manufacturing to absorb more of the highly qualified youths in the country. Without focusing on the levels of unemployment in the country, the youth unemployment rates threaten to become a social crisis.

Youth Unemployment Policies

The government of China has had various efforts towards overcoming the challenge of youth unemployment in the past. For instance, the country has embraced the proactive employment policy, which depends on the principles of workers finding an own job, employment by government regulation, as well as the employment through market regulation. The government, therefore, uses the policy to increase the rate of absorption of the youth in job opportunities as among the most fundamental pillars of the macro policies in the future (Choudhry, Marelli & Signorelli, 2012, p. 77). The employment creation features in the principle of expanding the domestic demand and ensuring equitable and balanced regional economic demand in the country. Through the development policies, the government would ensure that the youths are enticed to stick to the rural areas with the creation of job opportunities; hence, overcome the challenge of overcrowding in the urban areas.

Secondly, the government has shown interest and commitment to expanding the tertiary industry with the aim of absorbing as many youths as possible into the employment opportunities created. The government also encourages the youth to seek for employment opportunities through diverse and flexible ways and supports labor movements as they lobby for increased opportunities for the youth. Furthermore, the government has shown commitment and efforts towards improving the public employment systems (Miles, 2015, p. 1). There is, therefore, the participation of both the governmental and nongovernmental agencies in creating opportunities for employment for the youth across the country.

Another element of the employment policies embraced by the government in China is the policy of ensuring that laid off personnel are easily absorbed in various other roles (Ausick, 2015, p. 1). For instance, the transition period when the majority of the traditional industries was converted into modern production units saw many employees being laid off. The government would then be concerned with the welfare of the laid off employees by ensuring that the competent talents are absorbed elsewhere to foster productivity while at the same time lowering the rates of unemployment (Miles, 2015, p. 1). More efforts by the government to reduce the youth unemployment rates in China are aimed at encouraging the youth to work in rural areas with the promise of support for higher education, inspiring the youth to establish own businesses, and supporting the graduates to enroll for internship opportunities before being absorbed into the workforce. Furthermore, the government has been investing highly in promoting different kinds of educational programs, enhancing vocational training, improving the working conditions of the employees, and ensuring equal employment policies for the people with disabilities and the women (Ausick, 2015, p. 1).

Therefore, the government has the potential to decrease youth unemployment through absorbing graduates who spends half a year after graduation before securing any form of employment. Through the social development programs and department in the government, such youths would be absorbed into internship opportunities, part-time social jobs or even further training. While the policy would be more academic, the applicability of the policy would work greatly towards reducing the rampant rates of unemployment among the youth in the country. Nevertheless, the Chinese high rate of youth unemployment could be addressed by embracing other policies as effectively utilized in other countries.

Policies to Reduce Youth Unemployment in the US and other Countries

In the United States, the federal government is known as the largest employer and has been actively engaged in designing and enforcing the appropriate policies to lower the rates of youth unemployment in the country. For instance, the policy of equal employment opportunities to all ensures that the available opportunities are filled in the merit of competence and not based on physical abilities or inabilities. In particular, the executive order signed by President Obama regarding disability and employment requires that all agencies create employment landscape that is representative of the people with disabilities (Ausick, 2015, p. 1). Besides, through the policy of affordable and quality education, the federal government ensures that the youth attains highest levels of education standards to ensure that they compete favorably in the job market. Other policies embraced in the United States are together with the online advertisement and open recruitment procedures and the investment in more productive activities and industries. Through the policy of higher industrialization, the federal government ensures that many employment opportunities are created to take in the unemployed youths (Wu, 2003, p. 297). The workforce recruitment program also presents a way by which the government ensures that high unemployment rates with the youths are addressed.

Other countries have also been actively engaged in formulating the appropriate policies meant to curb the rampant cases of youth unemployment (Eubanks & Wiczer, 2014, p. 24). For instance, the Republic of South Korea embraces the policy of enticing young graduates into trade and business by which more opportunities for employment are created. Other OECD countries set up funds to offer as startup capital to highly competitive youths and groups to establish businesses (Agarwal, 2011, p. 4-5). The governments also invest in setting aside funds to boost the small and medium size enterprises for high productivity to ensure the ventures absorb more of the unemployed youths. Furthermore, the developing countries are getting support from the developed countries towards facilitating programs and policies aimed at lowering the rates of youth unemployment. For instance, the education exchange programs facilitated by higher institutions of learning enable the students from other countries to interact and benefit from the expertise and quality education with the aim of improving marketability and productivity (Siebert & Zaidi, 1994, p. 503). Therefore, other countries are equally faced with the challenge of rampant youth unemployment and are committing all efforts towards ensuring that the unemployment rates remain manageable.

Discussion

The topic of youth unemployment has been seen as a global challenge as against a challenge to a specific country. However, the severity of the challenge differs from one country to another with the developing countries suffering the hardest. For instance, China ranks the top in high rates of youth unemployment when compared with the other countries in the OECD bloc (Kahraman, 2011, p. 1). Similarly, countries in the Middle East and North Africa suffer such rampant unemployment rates. All the countries have had some efforts being directed towards making policies that would be effective in lowering the rates of unemployment for the youths (Ona & Ranceva, 2014, p. 1). Although the policies differ in their capacity to address the challenge, China would benefit from embracing a mix of the various policies, which have been considered to work excellently in other countries (Maguire, Cockx, Dolado, Felgueroso, & Al, 2013, p. 197). Therefore, besides increasing the number of jobs in the country to absorb the unemployed youths, the government would embrace other policies and programs, which would improve the unemployment status in the country. This paper recommends the diversification of the economy to rely on both the traditional manufacturing industries as well as the service industries. The modern service industry promises higher opportunities of employment for the youths, especially the graduates who are well situated to embrace technology and such other resources like the internet for wealth creation. Other strategies would include effective policies to ensure that graduates get some placement in the governmental and private sector, offer subsidies to encourage investing in businesses, and providing qualitative internship opportunities. The government would also invest highly in higher education, research, and development to set the pace of innovation, which will ensure that graduating students do not seek employment, but rather become job creators (Millman, Matlay & Liu, 2008, p. 80-805). Finally, the government would strive to ensure that there are good foreign relations, which would ensure that the local youths get opportunities to work across the borders (Nguyen, 2012, p. 1).

Conclusion

As is evident from the above analysis, the paper illustrates that China is among the hard-hit countries by the challenge of rampant youth unemployment. However, none of the modern countries would confirm having zero rates of unemployment, but the magnitude varies from one country to another. The policies that China should embrace to lower the current rates as discussed, are together with increasing job opportunities, encouraging more start-up businesses, facilitating education attainment, as well as improving foreign relations to have exchange programs. Moreover, maintaining internal stability in the economic performance and political situation would boost the performance of industries to have more youths absorbed in the sector.