China’s College Educated: The Ant Tribe

The NY Times has a great article on China and its new graduates: China’s Army of Graduates is Struggling.  In the article, the author writes about how there exists a glut of college graduates whom the economy doesn’t yet support. People with degrees in accounting, computer programming, and finance are having trouble finding work. Factory blue collar jobs are booming, but the white collar sector is falling. The article says:

Between 2003 and 2009, the average starting salary for migrant laborers grew by nearly 80 percent; during the same period, starting pay for college graduates stayed the same, although their wages actually decreased if inflation is taken into account.

Chinese sociologists have come up with a new term for educated young people who move in search of work like Ms. Liu: the ant tribe. It is a reference to their immense numbers — at least 100,000 in Beijing alone — and to the fact that they often settle into crowded neighborhoods, toiling for wages that would give even low-paid factory workers pause.

I think things are different in India, where software and call centers are king. It reminds me of The White Tiger by Aravind Adiga–India has entrepreneurs. China has the infrastructure, but most of the economy revolves around manufacturing.

This is probably killing these graduates as much as anything else:

Their undergraduate degrees, many from the growing crop of third-tier provincial schools, earn them little respect in the big city. And as the children of peasants or factory workers, they lack the essential social lubricant known as guanxi, or personal connections, that greases the way for the offspring of China’s nouveau riche and the politically connected.

Maybe China has to do more to encourage entrepreneurship.

It’s very strange because I know lots of college grads here in the U.S. who don’t have full time (or sometimes even part time) employment. These poor people put tons of work into getting their degree, graduate with loads of debt, and can’t find suitable work. We live in a very different world now. People say that the jobs are all moving to China, but it looks like that’s just the factory jobs. The white collar jobs…well, those are all moving to India. I guess. Or maybe they aren’t moving anywhere, just disappearing?

I wonder if it’s true that education is oversold these days. I think college degrees do confer social status to their owners, but I wonder if the entrepreneurial instinct and experience is more important for financial success. It’s sad if that is the way we’re headed.

8 thoughts on “China’s College Educated: The Ant Tribe

  1. Korea is experiencing the same phenomenon.

    You are exactly right when you say that education is oversold these days. Perhaps you should tell Obama that. After all, he is pushing for EVERYONE to have a college degree, because this will somehow make the US more competitive. I agree with you that college degrees confer social status upon their owners. But that’s the problem right there. It is less about learning useful skills and more about the social status. Social status, however, is a zero sum game. I recommend that you read “Real Education” by Charles Murray.

    I wonder if it is inefficient mis-allocation of human capital that is causing the problem in China (i.e. these college graduates could use their skills to be productive somewhere, but can’t, because of market distortions) or if it is that the market, in reality, doesn’t need all these “skills” that have been learned.

    Did you see the latest PISA scores from Shanghai? Unbelievable. I think it might validate my belief that Chinese people are the greatest.

  2. according to the segment, there’s no shortage of small startups in China. the problem appears to be a glut of college graduates and not enough infrastructure for white collar positions.

    the other thing to account for is that technology has rendered useless many of previously desk jobs that needed several people.

  3. We had an interesting discussion about manual labor a while back:

    I really do think education is oversold. One does learn interesting things about life, relationships, power, etc in college, and I guess it’s good that brains are respected in society, but I can’t help but think that it’s a waste of time for people who would rather jump right into the job market and show their entrepreneurial spirit. Many very bright and successful people never went to college: Mark Twain, Tony Robbins, and Ryan Seacrest, for example; and many never graduated: Gates, Jobs, Ellison, Zuckerberg (granted, all these people in the latter category had their prestigious university connections just from being there a short time).

  4. Agreed in the sense that education is oversold. I’m a firm believer in having good work experiences that provide foundations. When I used to interview candidates, it was never their education that impressed me, it was always the different experiences and backgrounds. But young people today have it hard in this economy; if they can’t find work, how are they to “experience” all that sets the foundation for their future? And one cannot learn work ethic with no work. In the present time, many college-educated are taking jobs for hs students, and that leaves the hs students with no jobs. I’m hopeful that the future is not going to be bleak and that the economy will pick up.

  5. I think education is really important. Even if it’s overrated, getting a college education is a given if you want to have a certain level of success. Gates, Jobs, Zuckerberg, etc., while not having college degrees, can say that they went to college but chose to drop out.

    As much as the economy sucks right now, and college-educated white-collar workers are getting denied lower-paying jobs because employers think they’re overqualified, being college educated still pays out in the end.

    Another way of putting it, I’d rather have 15+ years of gradually-increasing pay from my white-collar job, only to be unable to find work after getting laid off, even if it means a couple of years of being unable to find work, than being employed for 17+ years in the same blue-collar job with minimal pay increases.

    If you go by dollars alone, the now-unemployed person with a white-collar job that required a college education still made more money than what a blue-collar worker with a job makes. What they should’ve done is saved up during those 15+ years, so that when times are tough, they can absorb being unemployed until they can find another job.

    But as a side note, people who are in the business of providing blue-collar work are making a killing out there, so that’s where that entrepreneurial drive puts you at an advantage. For example, my cousin, originally from the Philippines and now lives in the UK, could’ve made decent money with her accounting degree. But instead, she chose to open a business that recruits Filipino nannies (from the Philippines), puts them through UK-certified first-aid and child-care training, and she’s doing really well for herself. I have another friend here with a graduate degree in education, but she opened two successful daycares instead. Now she can be a stay-at-home mom because she had people looking after her daycares.

    People are so busy trying to be successful and make more money that there’s a killing to be made for those that can provide services for doing menial labor. But you want to be the person running that business, rather than the one hired to do the work.

  6. Apparently ALL governments of the world FAILED to do a timeline on how to integrate education and the transitioning into the future; so that their citizens could continue an upward movement to a better life.

    I live in first world USA; the bankrupt State of Illinois; in a blighted neighborhood East Garfield Park, Chicago.

    The theory of globalization is that as societies they become more civilized and prosperous…the workforce can continually be trained for easier, better paying jobs and trickle down economics will pull even the poorest up from the bottom ring of the ladder.

    Sounds good but MOST governments have FAILED to provide the supports required for this mobility. Instead Big Business and Big Unions stifle innovation and try to stay stuck in the past by killing innovation and creativity. Don’t believe for a moment the hype that we in the US are doing everything right and are the peacekeepers of the world. Bigger does not mean better. War does not bring prosperity.

    Our local government failed to transition/educate/plan for jobs for inner city residents. The educated flee to suburbs if they want their children to be educated because education is horrible. More than 50% of high school entrants fail to graduate high school! My neighborhood is too dangerous for the majority to live in because police do not arrest gang/drug people who control the streets. We have lost more than 50% of our population.

    Union workers do a horrible job and have to come 10, 20, plus times to fix simple 2-4 hour jobs. The result is that Chicago residents pay far more in taxes for simple city services than the call for service merits. These same union workers and their leadership help keep the same stale, non-innovative politicians in place that at best are technologically ignorant. Sometimes police drive by a gang/drug controlled corner 600 times and only arrest 23 people; all the whilst saying they are understaffed. Driving by and doing nothing does absolutely nothing to solve crime problems. What it does is insure that the union employing 37% of the city budget gets lots of more members because they are dedicated to “helping” each other. 600 drivebys with 3% arrests in gangland s considered good service! How misguided!

    Chicago, a Democratic stronghold, has neglected 2/3rds of the city territory. More than half the city is blighted wasteland with no job, no meaningful education reform, no police reform, no housing reform in sight. There is lots of talk, but no funding because the city is for all effective purposes bankrupt.

    Perhaps the internet can help all of those STUCK in situations where government failures have caused their poverty. It is a truly amazing place where those who have never met can meet :-). The creative just have to create the new paradim for the millineum.

    China has pulled more people out of poverty in 20 years than any other country. In the same 20 years our mayor demolished half the neighborhood. Something is really wrong in Chicago politics. Our poor are in worse shape than the ant tribe kids. They have had no jobs for decades.

    The US failed to transform urban industrial cities into the new service economy. Those same cities are mostly Democratic union strongholds.

    Will we make a new world of small business entrepreneurs of the world connecting to solve the problems of the old stodgy ineffective? Or, will those dinnsours continue to destroy cities that were once thriving because there is no real concern for those left behind?

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