Good points. Couple of additional thoughtsUnit2Sucks said:This is a good point. I also want to note that it's not unique to the US - China is struggling with the exact same thing now that they've made such great strides with economic growth and that 10% growth is unsustainable at scale.calbear93 said:
On the mechanics, I think you are missing a critical secular trends. EV and hybrid cars are making maintenance less frequent and need for mechanics in the future much lower. And there are only limited number of need for mechanics. We should not overpopulate in a dying industry. We should think around the corner and see where the next secular trends are going.
China has been quite successful in building out its middle class. I believe you mentioned in another post recently that the US middle class of the recent past was the most successful middle class in the history of the world, but I think it's arguable that China currently has the best middle class in history. In 2000, just ~3% of China was considered middle class and by some estimates now it's 600-700 million or so. But that has implications, particularly given China's one child policy.
A lot of these kids have been driven to work hard in school from the age of 5 through college graduation with the expectation that suitable jobs will be waiting - as they have been for Chinese college graduates the last few decades. Unfortunately, it's not the case. Unemployment is soaring for young people in China even though they have lots of job openings. The reason is that there is a huge mismatch. They need factory workers, not college graduates. They need more people with vocational training, but everyone is pushing for college degrees in technical fields. A lot of graduates have begun posting photos of despair on social media because they've worked hard for the better part of two decades and there is no career in front of them.
Here's one article about this.Here's another:Quote:
JIN KEYU: You have master's students lining up in cigarette factories or becoming nannies in order to be employed. So that leaves a significant portion of the population and their families quite disgruntled.
RUWITCH: And that, Jin says, could make it harder for the government to address some of China's thorniest long-term challenges.
JIN: Unless their expectations are filled, they're not going to get married, which is a big problem, you know? They might not want to have kids because of the anxiety and the insecurity and the uncertainty. So it leads to a host of present, pressing problems.
RUWITCH: More and more college graduates are punting, applying for graduate programs to delay reality a little bit. Back at the Lama Temple in Beijing, Jose Qiu just shakes his head.
QIU: (Through interpreter) In our school, there were more grad students who entered this year than undergrads. So it feels like there's no advantage to getting a graduate degree. The only thing you can do is suck it up and keep on trying.Quote:
A record 11.6 million college students are expected to enter the job market this summer, but their prospects look bleak. Urban youth unemployment is at record levels, reaching 20.8% in May, and an influx of new job seekers will only increase the competition.
At the same time, the job market they will be competing in is under stress posing a risk to the government, which has so far been unable to reverse a trend partially of its own making. The slowing economy has been battered by the government's now-abandoned strict zero-Covid policy and a regulatory crackdown across the private sector, which accounts for 80% of jobs nationwide.
Among the industries hardest hit are tech and education, two sectors that would normally attract large graduate intakes.
All this makes for a depressing picture for students, many of whom already feel exhausted and discouraged after navigating China's notoriously competitive education system to reach this point with little to show for it.
"This master's degree…is finally…finished," one student wrote on the Chinese app Xiaohongshu, next to a photo of herself on the ground, barely clinging to her graduation cap and thesis packet. In another picture, she pretends to throw her thesis into a recycling bin.
In the comments, some younger students anxiously debate whether it's worth applying for graduate school, while older peers commiserate. One remarked: "Great post, it perfectly reflects the mental state of graduate students."
China, unlike US, will remain a manufacturing powerhouse. They used to be preferred because they had the cheap labor, but now they also have the infrastructure and IP. Companies are diversifying from China because of the geopolitical risk but it will take a while. But they are going to India, Vietnam, and Mexico. They are not all coming back to the US. We want cheaper and better products. That is not going to happen if everything is manufactured in the US. Furthermore, as a country, China, India and most other Asian countries emphasize education and technical knowledge (and maybe less innovation and thinking outside the box) than US. So there will be a bigger mismatch, with a better educated population than US where there are more manual labor and manufacturing jobs than the US. However, we are not going to become a powerhouse again in manufacturing, and we have more jobs in tech than we have able bodies. That is why until recently, tech employees were the most highly paid and most highly in demand, and tech neighborhoods were the richest. What manufacturing community in the US is thriving? It isn't because we don't create enough employees who can do manual labor. It is because we are too expensive. Even the top lawyer I had in China when I was in-house, I paid a small fraction compared to compensation for much inferior lawyers I had in the US or in Europe.
But China will slow down, and companies will not be able to rely on 20% annual growth in their sales in China, and that will impact China's workforce and economy and their leverage. Their population dynamic and gender misalignment will not help. And their heavy reliance on debt to overinflate their real estate development will hurt. That is one of the reasons why China so wants Taiwan. Taiwan dominates the semi-conductor market, and they want that future direction. Different situations in China than US. They are too well educated and have dominant position in manufacturing that don't require that level of education. We are undereducated (and not enough tech workers) and have no dominant position in manufacturing. Social engineer to force manufacturing back in the US means you and I will have to pay a lot more for the products we use now with worse reliability, and our economy and our ability to complete and export finished goods competitively will be destroyed.
My fear is that with automation and with AI, there will be even fewer jobs, and with green initiatives and technology developments, there will be even fewer manufacturing jobs specifically. We need to think ahead and not think that everything is status quo and we can replicate the 60's when GM and Ford were the dominant providers of middle class income. I think you and I see those secular trends.
