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Category Archives: Employment

Chart: U.S. Initial and Continuing Jobless Claims Rose Last Week

Source : Bloomberg

The 20 Fastest Growing Jobs in the Next Decade

See large image . . . . . .

Source : Visual Capitalist

China’s Gen Z Is Dejected, Underemployed and Slowing the Economy

The most educated generation in China’s history was supposed to blaze a trail towards a more innovative and technologically advanced economy. Instead, about 15 million young people are estimated to be jobless, and many are lowering their ambitions.

A perfect storm of factors has propelled unemployment among 16- to 24-year-old urbanites to a record 19.3%, more than twice the comparable rate in the US. The government’s hardline coronavirus strategy has led to layoffs, while its regulatory crackdown on real estate and education companies has hit the private sector. At the same time, a record number of college and vocational school graduates—some 12 million—are entering the job market this summer. This highly educated cohort has intensified a mismatch between available roles and jobseekers’ expectations.

The result is an increasingly disillusioned young population losing faith in private companies and willing to accept lower pay in the state sector. If the trend continues, growth in the world’s second-largest economy stands to suffer. The sheer number of jobless under-25s amounts to a 2% to 3% reduction in China’s workforce, and fewer workers means lower gross domestic product. Unemployment and underemployment also continue to impact salaries for years—a 2020 review of studies reported a 3.5% reduction in wages among those who had experienced unemployment five years earlier.

More young people taking roles in government may leave fewer jumping into new sectors and fueling innovation.

“The structural adjustment faced by China’s economy right now actually needs more people to become entrepreneurs and strive,” said Zeng Xiangquan, head of the China Institute for Employment Research in Beijing. Lowered expectations have “damaged the utilization of the young labor force,” he added. “It’s not a good thing for the economy.”

Pre-pandemic, 22-year-old Xu Chaoqun was prepared for a career in China’s creative industries. But a fruitless four-month job hunt has left him setting his sights on the state sector. “Under the Covid outbreak, many private companies are very unstable,” said Xu, who majored in visual art at a mid-ranked university. “That’s why I want to be with a state-owned enterprise”.

Xu is not alone. Some 39% of graduates listed state-owned companies as their top choice of employer last year, according to recruitment company 51job Inc. That’s up from 25% in 2017. A further 28% chose government jobs as their first choice.

It’s a rational response in a pandemic-hit labor market. All workplaces have been hit hard by China’s snap lockdowns and strict quarantine measures, but private companies were more likely to lay off workers. Beijing’s main employment-boosting policy has been to order the state sector to increase hiring.

President Xi Jinping may be relieved that the country’s unemployed youth are trying to join the government rather than overthrow it. During a June visit to a university in the southwestern China’s Sichuan province, he advised graduates to “prevent the situation in which one is unfit for a higher position but unwilling to take a lower one.” He added that “to get rich and get fame overnight is not realistic.”

The message is getting through: Graduate expectations for starting salaries fell more than 6% from last year to 6,295 yuan ($932) per month, according to an April survey from recruitment firm Zhilian. State-owned enterprises grew in appeal over the same period, the recruiter said.

But lower income expectations and talent shunning the private sector are likely to lower growth in the long term, challenging the president’s plan to double the size of China’s economy from 2020 levels by 2035—by which point it would likely overtake the U.S. in size.

The phrase “tang ping”—“lying flat”—spread through China’s internet last year. The slogan invokes dropping out of the rat race and doing the bare minimum to get by, and reflected the desire for a better work-life balance in the face of China’s slowing growth. As the unemployment situation has continued to worsen, many young people have adopted an even more fatalistic catchphrase: “bailan,” or “let it rot.”

That concept is “a kind of mental relaxation,” said Hu Xiaoyue, a 24-year old with a psychology masters degree. “This way, even if you fail, you will feel better.” When Hu started looking for work last August, she found it easy to land interviews. “But when it came to spring, only one in 10 companies would offer an interview,” she said. “It fell off a cliff.”

China’s state-owned enterprises (SOEs) aren’t all unproductive behemoths. But the weight of economic evidence suggests they are, on the whole, less efficient and less innovative than privately-owned companies. China’s economic boom has coincided with a falling share of SOE jobs in urban employment—from 40% in 1996 to less than 10% pre-pandemic. That trend could now go into reverse.

Last year, China launched a regulatory crackdown on formerly high-flying sectors dominated by private companies that previously attracted ambitious young people. Internet companies were hit with fines for monopolistic behavior, real estate businesses were starved of financing and the private tutoring sector was almost entirely shuttered.

Regulatory filings show that China’s top five listed education companies reduced their staffing by 135,000 in the last year after the crackdown. The largest tech companies have kept their headcounts stable, and Zhilian says that there were more tech jobs advertised in the first half of this year than the same period in 2021. Even so, the sector’s allure has faded.

A graduate of the highly ranked Central University of Finance and Economics in Beijing, Hu was set for the tech sector—she interned at three internet companies including video-sharing giant Beijing Kuaishou Technology Co. But she has changed her mind. “People who are going to work for Internet companies are all worrying about themselves because they feel like they could be fired any time,” she said.

Instead, Hu landed a position at a research institute within state-owned China Telecom Corp. “The working hours of my future job will be 8:30 a.m. to 5:30 p.m., and the workload will be quite light. Internet companies are too consuming,” she said.

As well as the movement of talent towards state-owned companies, there’s another mechanism at work that can damage long-term growth. Studies by from the US, Europe and Japan have shown that the longer young people are unemployed at the start of their careers, the worse their long-term incomes, an effect known as “scarring.”

That’s the risk facing Beiya, who was laid off from an e-commerce company this year. The 26-year-old, who gave only one name because she feared that talking about losing her job could hit her employment prospects, missed out on a role with TikTok parent company Bytedance Inc. because of her limited experience.

“I’m a good candidate with potential but they want to see me in two years,” she said. “But how can I get the experience if no one gives me a job now?”

The state sector already employs around 80 million people and the figure could grow by as much as 2 million on a net basis this year, according to Lu Feng, a labor economist at Peking University. “But compared with total demand for jobs, it’s still relatively small,” he said. “We still need private firms to hire.”

That will only happen if the economy grows. To meet its employment goals, economists say China needs GDP to increase between 3% and 5% this year. Economists are predicting growth closer to 4%—with the outlook highly uncertain due to the prospect of more lockdowns to contain the spread of the coronavirus. “Lack of clarity on an exit strategy from the Covid-Zero policy makes companies wary of hiring,” said Chang Shu, Bloomberg Economics’ chief Asia economist.

Beijing has launched a version of the job-support programs seen in Europe during the pandemic, offering tax rebates and direct subsidies to companies who promise to retain workers. But the amounts involved are small: The incentive for hiring a new worker is just 1,500 yuan. Provincial subsidies for graduates who start businesses are also small—just 10,000 yuan in the prosperous Guangdong region.

Even if China can return to strong growth in the second half of this year, the youth unemployment problem will persist—the rate has been rising since 2017, reaching 12% pre-pandemic. Economists attribute that to two factors: urbanization and a mismatch between the education system and employers’ needs.

The hundreds of millions of workers who moved from the countryside to cities used to return to their villages during labor market slumps, acting as an economic shock absorber. Now, younger migrants increasingly stay put when they lose their jobs, pushing up urban unemployment.

“A lot of them are not even raised in rural areas. So they regard themselves as urban people,” says Peking University’s Lu. “The constraints for the government have changed substantially, it’s tougher than in the past.”

Second, the annual number of graduates in China has increased tenfold over the last two decades—the fastest higher-education expansion anywhere in the world, at any time. The share of young Chinese people attending college is now almost 60%, similar to developed countries.

The number of vocational graduates lags far behind those receiving academic degrees. Such is the stigma around vocational education that students rioted last year when told their university was being rebranded as a vocational school. Highly educated young people are rejecting factory jobs. “That’s the basic matching problem. It is huge in this country,” said Lu.

That’s left manufacturers complaining about shortages of skilled technicians. “There are not a lot of people applying for those jobs, such as electrician or welder,” said Jiang Cheng, 28, an agent for electronics factories in central China.

Other sectors are oversubscribed. According to a 2021 study of 20,000 randomly selected jobseekers on Zhilian’s website, some 43% of the job applicants wanted to work in the IT industry, while the sector accounted for just 16% of recruitment posts.

Half of jobseekers had a bachelor degree, but only 20% of jobs required one. “There is now compelling evidence of over-education,” the study’s authors wrote, warning that the misalignment “could have profound influences on both individuals and the nation.”

In the longer term, it’s possible that government intervention may get the private sector hiring again, while education reforms and market forces can smooth the misalignment in the labor market.

China is easing its regulatory campaigns, and a vocational education law passed this year aims to improve standards. A study by Wang Zhe, an economist at Caixin Insight, found college majors that attracted a wage premium in 2020 became more popular in 2021. As applicants’ academic choices adapt to demand in the jobs market, mismatches stand to ease.

But the share of graduates from China’s nine top-ranked universities joining the private sector has fallen since the pandemic, according to research from Hong Kong’s Lingnan University. That suggests ideological shifts, and not just market forces, are at play. Some graduates at top universities are adopting “ cadre style,” according to online forums where they seek tips on where to buy the black zippered windbreakers favored by Xi.

Even in the current environment, Kay Lou, 25, would be a leading candidate for any number of private-sector jobs. She has a masters in law from top-ranked Tsinghua University and has interned for a legal firm, an Internet giant, a securities brokerage and a court.

In the end, she won a government position in Zhejiang province—where some roles attract as many as 200 applicants.

“I felt my work wasn’t meaningful,” she said. “I became increasingly opposed to the capitalists’ pursuit of wealth after I read Marx, so in the end I chose to become a civil servant.”

Source : BNN Bloomberg

Bridesmaids Go Professional in China

Fan Yiying and Gu Peng wrote . . . . . . . . .

Xie Yuke has attended over 40 weddings in the past two years and is now making a living from it.

The 22-year-old has flown more than 140,000 kilometers and traveled around China working as a professional bridesmaid.

It’s a fast-growing industry in China and is “expected to grow by 25% to 30% a year,” Cao Zhonghua, an expert at the Chinese Traditional Culture Promotion Council, told state broadcaster CCTV Wednesday.

COVID-19 travel restrictions have made it hard to find friends able to travel to weddings, while some couples complain they can’t find friends that are up to the standard.

A bridesmaid needs to be unmarried, Xie told Sixth Tone on Monday, and it’s important not to be taller than the bride. For aspiring professionals, 155 cm-173 cm is a good height, she said.

“The epidemic is a double-edged sword,” Xie said. “On the one hand, some couples are delaying their weddings, and on the other, many brides’ friends cannot travel due to the epidemic,” she added. Overall, it’s helped the industry.

It’s currently the off-season due to the hot weather in many parts of the country, and she expects the peak season to occur during the National Day holiday in October.

Before becoming a professional, Xie was a bridesmaid for relatives three times. She’s critical of her performance as an amateur: she didn’t know the process, and she didn’t know how to organize games to set the mood.

A couple of years ago, however, she saw an ad for professional bridesmaids and decided to give it a try.

At a wedding, Xie usually pretends to be the bride’s best friend or a classmate. The couple generally cover the travel and accommodation costs. A typical daily rate is between 500 and 2,000 yuan ($74-$296).

When she’s working, Xie gets up at 4:30 a.m., gets dressed, and does light makeup for herself. Then she goes with the bride to take photos, change clothes, provide entertainment, and toast guests until the banquet ends at around 8 p.m.

Professional bridesmaid and groomsman agencies have emerged as a result of the growing demand. The founder of a rental bridesmaid and groomsman service company based in Hangzhou said that the number of registered members on its platform had grown from a few thousand in February when it was just established to some 50,000 at present, state broadcaster CCTV reported Wednesday. On average, the platform has received 10-20 orders per day during the past month.

Xie met her current boyfriend at a wedding, where they were working as a professional bridesmaid and best man. He’s promised to make her the happiest bride. “We will hire 24 groomsmen and bridesmaids,” Xie told Sixth Tone.

Source : Sixth Tone

Chart: Working from Home Is More Common in Big Cities in the U.S.

Source : WFH Research

Charts: Some Notable Changes in Hong Kong Since July 1, 1997

Japan Real Wages in May 2022 Post Biggest Drop in Nearly 2 years on Inflation

Japan’s real wages extended a decline in May to post the biggest year-on-year drop in nearly two years, government data showed, as consumer inflation hovering near a seven-year-high outpaced nominal wage growth, reducing households’ spending power.

Higher living costs amid low-wage growth are likely to curb Japan’s consumption-led economic recovery from the coronavirus pandemic.

Inflation is also a top issue for voters in an upper house election on Sunday, although Prime Minister Fumio Kishida’s ruling party likely to increase the number of seats it holds, according to an opinion poll published on Monday.

In May, inflation-adjusted real wages, a key gauge of consumers’ purchasing power, fell 1.8% from a year earlier, the labour ministry said.

The biggest slump since July 2020 followed a downwardly revised 1.7% decline in April.

The consumer price index the ministry uses to calculate real wages, which includes fresh food items but excludes owners’ equivalent rent, rose 2.9% in May, hovering near 3.0% in April that posted the largest jump since October 2014.

Price inflation outpaced nominal total cash earnings, which rose 1.0% in May, down from a downwardly revised 1.3% rise the previous month, the data showed.

Overtime pay, a barometer of corporate activity strength, rose 5.5% year-on-year in May, which was the biggest advance in nine months and higher than April’s downwardly revised 5.0% growth.

Special payments, which include seasonal bonuses firms often cut when they face headwinds, fell 7.0% in May, yet the reading tends to be highly volatile in months other than the June to August and November to January bonus seasons.

The drop in special payments, which marked the biggest fall in 16 months, was the main reason for the slowdown of total cash earnings from April, a health ministry official said.

Source : Reuters

Dehumanization Is a Feature of Gig Work, Not a Bug

Eric M. Anicich wrote . . . . . . . . .

Of course Friskies Shreds wet cat food was on the bottom shelf of the last aisle I checked. It was just that kind of day. As I crouched into a kneeling position to inspect the inventory, I scanned the customer’s order glowing back at me on my smartphone: “Any seafood shreds with and without cheese. Twenty cans variety of flavors.” But doesn’t “variety of flavors” contradict the more specific request for “seafood shreds with and without cheese”? Or maybe the seafood category includes multiple flavors? Am I overthinking this?

As a business school professor — and, importantly, not a cat owner — my experience that day was atypical. As a driver for Postmates, however, it was just one of the 238 deliveries that I completed for the popular food delivery platform as part of an 18-month immersive research project to better understand the strategies that drivers use to craft a meaningful work identity. During my time as a Postmate, I drove for 130 hours, interviewed other drivers who had collectively completed 170,000 rides and deliveries on similar platforms (Uber, Lyft, DoorDash, Grubhub, Instacart, etc.), attended in-person and virtual company meetings, and reviewed and contributed to driver forums on Facebook, Reddit, and other websites.

In one sense, my recently published findings are not surprising. Like many app workers in the on-demand economy, I too had customers berate me for not having a clairvoyant understanding of their apartment building’s layout, parking restrictions, or door access codes. I too barely managed to earn more than minimum wage, despite selectively driving in some of the most lucrative markets in the country and using the most effective strategies I knew (such as resisting the urge to chase the notoriously quick-to-cool “hot spots” across town, avoiding neighborhoods with too many maze-like apartment buildings, and prioritizing multiple deliveries in one transaction over single orders).

However, my findings also point to something deeper and perhaps more concerning about the changing nature of work and our relationship to it that transcends app work in the on-demand economy. What I observed and experienced was a system that suppresses workers’ uniqueness, experiences, and future aspirations. It was a system that treated people like lines of code to be deployed instead of humans to be developed. This is problematic because work is not simply the translation of physical and intellectual effort into money. What we do on a daily basis for work is part of our broader life narrative that makes us who we are.

Historically, organizations have played a crucial role in defining these evolving stories for employees by providing them with the physical, social, and psychological space needed to process and cope with confusing, disturbing, or anxiety-provoking work situations. For example, traditional organizations offer their employees the appropriate setting and resources to receive or provide advice, encouragement, feedback, and training; to help a colleague solve a problem or work through a negative outcome; to cultivate social connections through a secure and predictable network of coworkers, supervisors, and mentors. Collectively, these features of traditional organizations help employees answer the question “Who am I?” in the context of their work.

Many drivers in the on-demand economy, I found, struggled to answer this question. One driver I interviewed explained, “I try to bring my personality, but the app itself doesn’t really offer that…the app sets the precedent to dehumanize…if you don’t try to inject your personality, it just washes it out…I feel like a robot by the end of the day.” A different driver put it more bluntly: “The driver is invisible [to customers]…the driver doesn’t exist…it’s like you’re not really there.”

It was not until I drove for more than 40 hours in one week in Las Vegas that I finally felt this reality myself. As I wrote in my research paper, what I experienced, and what many of the drivers I interviewed described, was akin to laboring on a stationary bicycle that is literally suspended, unable to gain traction on the path, any path, below – pedaling frantically, yet futilely; technically untethered, yet uninspired; at once dynamic and static.

This contrasts sharply with the messaging that platforms use to attract drivers: You can “move forward without limits” (GrubHub) as you “drive toward what matters” (Lyft). “From aspirations to relationships” (GrubHub) “no matter what your goal is” (Amazon Flex), you can “achieve your…long-term dreams” (DoorDash) because “you move the world” (Uber). At the end of the day, “you’re the boss!” (Waitr). Yet, these possibilities felt elusive, if not insulting to drivers, many of whom felt “stuck in the cycle [of driving]…going nowhere and this is month after month after month,” as one driver explained to me.

Frustrated by the platforms’ unfulfilled promises, many drivers described exploiting a fundamental irony of on-demand work: The same characteristics that drivers experienced as threatening and depersonalizing (exposure to algorithmic management, no access to coworkers, few legal protections) also reduced personal accountability concerns. “You are in a car, in a private setting…you will never see that person again, you have no obligation to them,” said one driver. Another driver added: “If you’re in the corporate world and you are sitting with your boss…you need to be careful what you’re saying, and how you’re reacting…But in driving…if I say I like blue, and you don’t like blue, I don’t care, you know…because my manager is not going to look at me.”

Outside the scrutiny of coworkers, supervisors, and repeat customers, some drivers successfully clung to unchecked fantasies about a more desirable future. (“Every day you meet many people [while driving], one of them can change your life!”) Others rationalized away the more common negative experiences they encountered while driving (one driver claimed to have “a pretty good track record” having “only had one barfer and one person urinate in my car”). In addition to internally shaping, if not distorting their experiences, many drivers retreated to private online driver groups on Facebook and other platforms to exchange stories about the good and the bad; the absurd and the hilarious — seeking to negotiate their personal narratives by connecting with and comparing themselves to other drivers. These identity management tactics provided drivers with just enough psychological relief to continue driving.

When I decided to end my voluntary immersion in the driver community, I could not shake the feeling that the depersonalization of app workers is a feature, not a bug, of an economic model born of and emboldened by transformations that are underway across the global economy. This includes increasingly prevalent work arrangements characterized by weak employer-worker relations (independent contracting), strong reliance on technology (algorithmic management, platform-mediated communication), and social isolation (no coworkers and limited customer interactions).

Importantly, the effects of these transformations reach far beyond the type of low-wage gig workers that I studied; freelancers more broadly face similar existential questions and challenges. With the coronation of agile workforces and customer-first philosophies nearly complete, the psychological contract — the unwritten expectations and obligations between workers and organizations — is at risk of being re-written before our eyes. Indeed, the three C’s underlying strong psychological contracts — a career that offers personal growth and upward mobility, a community that fosters social connections and belongingness, and a cause that infuses one’s work with meaning and purpose — are all but absent for independent workers of all stripes.

At the core of the issue are changing preferences and practices with respect to “renting” instead of “buying” talent to meet organizational objectives. For example, a survey of C-suite executives and senior managers revealed that more than 90% think that leveraging digital freelancing marketplaces is either “very important” or “somewhat important” and more than 50% reported that their expected use of digital talent platforms in the future “will increase significantly.”

From this perspective, the 40 million Americans who have rented out their services to technology platforms like Uber, Lyft, and DoorDash may be canaries in the coal mine of the new world of work. What they experience today, millions more are likely to experience in some form in the future.

Of course, there are no easy solutions to these issues; many are existential and will require a reckoning involving values and priorities at the societal level. In the meantime, familiar ways of becoming and expressing oneself at work may no longer hold. As forces continue to erode traditional forms of identity support, meaningful self-definition at work will increasingly rely on how we collectively use and misuse innovative technologies and business models.

For example, how can companies deploy algorithmic management in a way that doesn’t threaten and depersonalize workers? How can focusing on the narratives that underlie and animate identities help workers reimagine what they really want and deserve out of a career coming out of the pandemic and the Great Resignation? Will increasingly immersive and realistic digital environments like the metaverse function as identity playgrounds for workers in the future? How will Web3 broadly, and the emergence of novel forms of organizing specifically (e.g., decentralized autonomous organizations or DAOs), affect the careers, connections, and causes that are so important to workers? What role can social media platforms, online discussion forums, and other types of virtual water coolers play in helping independent workers craft and sustain a desirable work identity? In short, how can we retain the human element in the face of increasingly shrewd resource management tactics?

Now is the time for us to earnestly engage with these questions — from those who design, lead, and regulate these technologies and business models (software engineers, CEOs, and politicians, respectively) to those who study, teach, and help others cope with the implications of them (researchers, educators, clinical psychologists, respectively).

Hanging in the balance is the well-being of independent workers the world over, many of whom are struggling to answer the question “Who am I?” in the context of their work.

Source : Harvard Business Review

Chart: China’s Youth Unemployment Rate Set New Record in May 2022

China’s youth unemployment rate in urban areas in May was the highest since records began in 2018 as Covid-19 lockdowns restricted mobility and weighed on the labor market, with the government warning the situation could get worse as millions of fresh graduates start looking for work.

The surveyed urban unemployment rate among workers ages 16 to 24 — which captures graduates from high school and college — climbed to 18.4% in May from 18.2% in April, according to figures released Wednesday by the National Bureau of Statistics (NBS).

Source : Caixin

Chart: Unemployment Rates Surge in China

Source : Caixin