China's Graduates Face Low Rates of Employment and Reduced Salaries

February 20, 2006 12:00 am Last Updated: February 20, 2006 12:00 am

According to a government survey, there will be over four million college and university graduates in China in 2006. This is 75,000 more than in 2005. These graduates not only face the difficulty of finding a job, but will also see monthly salary offers below 1000 yuan (US$125). Industrial experts believe that China is seeing a period of reduced income.

According to recent information released by China's National Development and Reform Commission, the 2006 forecast for job hunters in urban areas nationwide is about 25 million people. However, there are only 11 million expected job openings, which leaves an oversupply of 14 million job hunters. Compared with 2005, this is an increase of one million jobless.

15 Percent Decrease in Salary Compared to the Same Time Last Year

Chengdu newspaper Tianfu Morning Page reported the results of a survey of typical placements for university graduates in 2005. After six months of employment, the positions with the highest income are professional technical positions, with an average monthly income of 2,000 to 2,185 yuan (US$250 to $275). The second position is management with monthly incomes of 1,650 to 1,880 yuan (US$205 to $235). Manufacturing operations ranked third, with an average monthly income of 1,200 to 1,500 yuan (US$150 to $190). Compared to 2004, monthly salaries have decreased 15%, 12% and 10% respectively.

The study revealed that college graduates in the Beijing area were paid around 1,580 yuan (US$200) in 2005, which is down 16% compared to 2004. Some experts predict that the pay offered to graduates in 2006 may be 22% lower than in 2005.

Undergraduates Hired for 500 yuan (US$62) Per Month

Last year, it was reported that some companies only offered 600 yuan (US$75) per month to senior students from Henan province. This unbelievable situation was the source of much internet discussion by people from all walks of life. This January, real estate companies in Chengdu offered as little as 500 yuan (US$62) per month during the probation period. Despite this low wage, the company hired nearly 40 senior college students.

According to vocational experts, instances of companies offering graduates only 500 yuan (US$62) per month are rare; most companies will offer college students 700 to 800 yuan (US$85–$100) a month. This was the case at all the employment conventions in Chengdu this year.

University professor, Zhu Nan, calculated that it generally costs a family 150,000 yuan (US18,750) to put their child through university. If university graduates can't get higher pay, this means they are not getting a return on their education investment. This will lead some families to think that education is not worthwhile, which is a disadvantage to improving the nation's labor quality.

Supply-and-Demand Dynamics in Big Cities

The monthly salary offered to college graduates has been falling annually in recent years. According to the recruitment industry, many universities take in an ever increasing number of students, which in fact results in a massive increase in the number of graduates each year. However, most graduates still look for jobs in the big cities, thereby creating an ever greater imbalance between the supply and demand of jobs in cities such as Guangzhou and Shenzhen. It is inevitable that wages for these graduates will decrease drastically.