December 15, 2010 / 5:29 AM / in 7 years

Middle class dream fades for China white collar workers

SHANGHAI (Reuters) - Shanghai native Wu Xiaodong has a solid job as a human resource supervisor in a technology company and earns around 4000 yuan ($600) a month. But he is still single at 28 and lives with his parents.

“At this age, things we would be looking at would be marriage and children,” he said, adding that he is daunted by the costs of an apartment, a wedding, education for his future children and the price of medical care as his parents age.

A university degree has long been seen as a ticket away from poverty, but China’s version of the “middle class dream” is fast fading as graduate job seekers are faced with the stark reality of high living costs, low wages and dim career prospects.

The competition for white collar jobs is heating up as companies in China’s top-tier cities such as Shanghai look for talent among an ever-widening pool of more than 6 million graduate job seekers every year.

University education has been a key to China’s aim to create a broad urban tier of middle class families with “well-off characteristics” nationwide. The country began expanding university enrollment in 1996 to meet growing personnel demands as China’s economy boomed, leading to a surge of graduates.

But signs of economic trouble have put additional financial pressure on companies already struggling with the after effects of the global financial crisis, keeping wages tight.

China’s inflation soared past forecasts to a 28-month high in November and showed signs of spreading beyond food prices, putting pressure on the government to tighten monetary policy.

A recent study by a top Chinese labor economist showed that China’s university graduates on average earned only 300 yuan ($44) more than a blue collar migrant worker per month, setting off hot debate on the worth of a university education.

“During my father’s generation, university education produced the elite,” said 24-year-old Zhu Feng, a post-graduate student at a Shanghai job fair.

“But today, university graduates are everywhere, and there are also many people with masters and doctorates. So the worth of a degree is very much devalued.”

As a result, thousands of university graduates crowd job fairs in Shanghai at every opportunity, hoping to find a starting point for their white collar career.

Job seekers do quick face-to-face interviews with recruiters before dropping off a resumes from a thick stack.

CITY LIGHTS

Since Chinese cities began booming in the 1990s and the workforce began to favor degree-holders over traditional state-run factory workers, people from poorer parts of China have migrated into cities for an education and then a job.

Top-tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen are now the favored destinations for graduates.

But reality is biting hard into these dreams as the increasingly high cost of living in these big cities set in.

Rising property prices have been one of the key factors affecting the Chinese middle class, pushing away the chance of owning a home for many young couples.

With China’s property sector crucial for the broader economy, authorities have been at pains to balance the needs of economic stability with those of ordinary citizens.

The growing ranks of white collar job seekers is posing a policy challenge for Beijing’s Communist Party leaders and some experts have suggest the authorities should divert young professionals into second-tier cities such as Chengdu and Xiamen to take pressure off Beijing and Shanghai.

Cost pressures are a huge concern for out-of-town graduates, who live on the edge of poverty in China’s biggest cities.

Known as the “ant tribe,” a rising number of these struggling graduates are living in cheap and basic housing in the suburbs and traveling on crowded public transportation for more than an hour to reach their workplaces in the city center.

22-year-old Li Hanli, a native of central Hunan province, shares a room with two other people at a dorm-like hotel in the city’s suburbs.

Her clothes hang from the ceiling of her small windowless room, and internet and power cables line the floor in disarray.

Li has just started work at an internet software company as a sales executive earning 1500 yuan ($225) a month. She and others like her can only afford places like hers, which charge around 500 yuan ($75) a month.

Despite the difficulties, she is undaunted.

“With such a big market, it would definitely bring me more opportunities to develop myself. I also have my own dreams for my career. I believe I can reach the peak of my career in Shanghai.”

Editing by Elaine Lies

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