Ціна нафти падає за два тижні до того, як у Євросоюзі набере чинності ембарго на постачання майже всієї російської нафти
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Growing up in a Chinese village, Julian Zhu saw his father only a few times a year when he returned for holidays from his exhausting job in a textile mill in southern Guangdong province. 
For his father’s generation, factory work was a lifeline out of rural poverty. For Zhu, and millions of other younger Chinese, the low pay, long hours of drudgery and the risk of injuries are no longer sacrifices worth making. 

“After a while, that work makes your mind numb,” said the 32-year-old, who quit the production lines some years ago and now makes a living selling milk formula and doing scooter deliveries for a supermarket in Shenzhen, China’s southern tech hub. “I couldn’t stand the repetition.” 

The rejection of grinding factory work by Zhu and other Chinese in their 20s and 30s is contributing to a deepening labor shortage that is frustrating manufacturers in China, which produces a third of the goods consumed globally. 

Factory bosses say they would produce more, and faster, with younger blood replacing their aging workforce. But offering the higher wages and better working conditions that younger Chinese want would risk eroding their competitive advantage.

And smaller manufacturers say large investments in automation technology are either unaffordable or imprudent when rising inflation and borrowing costs are curbing demand in China’s key export markets.

More than 80% of Chinese manufacturers faced labor shortages ranging from hundreds to thousands of workers this year, equivalent to 10% to 30% of their workforce, a survey by CIIC Consulting showed. China’s Ministry of Education forecasts a shortage of nearly 30 million manufacturing workers by 2025, larger than Australia’s population. 

On paper, labor is in no short supply: roughly 18% of Chinese ages 16-24 are unemployed. This year alone, a cohort of 10.8 million graduates entered a job market that, besides manufacturing, is very subdued. China’s economy, pummeled by COVID-19 restrictions, a property market downturn and regulatory crackdowns on tech and other private industries, faces its slowest growth in decades.

Klaus Zenkel, who chairs the European Chamber of Commerce in South China, moved to the region about two decades ago, when university graduates were less than one-tenth this year’s numbers and the economy as a whole was about 15 times smaller in current U.S. dollar terms. He runs a factory in Shenzhen with around 50 workers who make magnetically shielded rooms used by hospitals for MRI screenings and other procedures.

Zenkel said China’s breakneck economic growth in recent years had lifted the aspirations of younger generations, who now see his line of work as increasingly unattractive.

“If you are young, it’s much easier to do this job, climbing up the ladder, doing some machinery work, handle tools, and so on, but most of our installers are aged 50 to 60,” he said. “Sooner or later, we need to get more young people, but it’s very difficult. Applicants will have a quick look and say ‘no, thank you, that’s not for me.'”

The National Development and Reform Commission, China’s macroeconomic management agency, and the education and human resources ministries did not reply to requests for comment.

Modern times

Manufacturers say they have three main options to tackle the labor-market mismatch: sacrifice profit margins to increase wages; invest more in automation; or move to cheaper pastures such as Vietnam or India.

But all those choices are difficult to implement.

Liu, who runs a factory in the electric battery supply chain, has invested in more-advanced production equipment with better digital measurements. He said his older workers struggle to keep up with the faster gear or read the data on the screens.

Liu, who like other factory chiefs declined to give his full name so he could speak freely about China’s economic slowdown, said he tried luring younger workers with 5% higher wages but was given a cold shoulder.

Liu described his workers’ performance this way.

“It’s like with Charlie Chaplin,” he said, alluding to a scene in the 1936 movie “Modern Times,” about the anxieties of U.S. industrial workers during the Great Depression. The main character, Little Tramp, played by Chaplin, fails to keep up with tightening bolts on a conveyer belt.

Chinese policymakers have emphasized automation and industrial upgrading as a solution to an aging workforce.

The country of 1.4 billion people, on the brink of a demographic downturn, accounted for half of the robot installations in 2021, up 44% year-on-year, the International Federation of Robotics said.

But automation has its limits.

Dotty, a general manager at a stainless-steel treatment factory in the city of Foshan, has automated product packaging and work surface cleaning, but says a similar fix for other functions would be too costly. And young workers are vital to keep production moving.

“Our products are really heavy, and we need people to transfer them from one processing procedure to the next. It’s labor intensive in hot temperatures and we have difficulty hiring for these procedures,” she said.

Brett, a manager at a factory making video game controllers and keyboards in Dongguan, said orders have halved in recent months, and that many of his peers were moving to Vietnam and Thailand. 

He is “just thinking about how to survive this moment,” he said, adding he expected to lay off 15% of his 200 workers even as he still wanted younger muscles on his assembly lines.

Conflicting aspirations

The competitiveness of China’s export-oriented manufacturing sector has been built over several decades on state-subsidized investment in production capacity and low labor costs.

The preservation of that status quo is now clashing with the aspirations of a generation of better-educated Chinese for a more comfortable life than the sleep-work-sleep daily grind for tomorrow’s meal their parents endured.

Rather than settling for jobs below their education level, a record 4.6 million Chinese applied for postgraduate studies this year. There are 6,000 applications for each civil service job, state media reported this month.

Many young Chinese are also increasingly adopting a minimal lifestyle known as “lying flat,” doing just enough to get by and rejecting the rat race of China Inc.

Economists say market forces may compel both young Chinese and manufacturers to curb their aspirations.

“The unemployment situation for young people may have to be much worse before the mismatch could be corrected,” said Zhiwu Chen, professor of finance at the University of Hong Kong.

By 2025, he said, there may not be much of a worker shortfall “as the demand will for sure go down.”

‘You feel free’

Zhu’s first job was to screw fake diamonds into wristwatches. After that he worked in another factory, molding tin boxes for mooncakes, a traditional Chinese bakery product.

His colleagues shared gruesome stories about workplace injuries involving sharp metal sheets.

Realizing he could avoid reliving his father’s life, he quit.

Now doing sales and deliveries, he earns at least 10,000 yuan ($1,421.04) a month, depending on how many hours he puts in. That’s almost double what he would earn in a factory, though some of the difference pays for accommodation, as many factories have their own dorms.

“It’s hard work. It’s dangerous on the busy roads, in the wind and rain, but for younger people, it’s much better than factories,” Zhu said. “You feel free.”

Xiaojing, 27, now earns 5,000 to 6,000 yuan a month as a masseuse in an upscale area of Shenzhen after a three-year stint at a printer factory where she made 4,000 yuan a month.

“All my friends who are my age left the factory,” she said, adding that it would be a tall order to get her to return. 

“If they paid 8,000 before overtime, sure.” 
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Let the sticker shock begin: The upcoming U.S. Thanksgiving holiday, a time when families and friends typically celebrate with groaning sideboards, a stuffed turkey, and a more-is-better-than-less attitude, is going to cost roughly 20% more than last year, according to estimates compiled by the American Farm Bureau Federation in an annual survey of grocery prices.

Blame it on the weather, Russia’s invasion of Ukraine or corporations’ drive to maximize profits, all of which have had a hand in rising food prices, but this year’s jump is the largest since the Farm Bureau’s first Thanksgiving dinner cost survey in 1986.

Coupled with last year’s 14% increase, which was the second-largest, the price of a “classic” meal of turkey, stuffing, green peas, sweet potatoes, cranberries, rolls and pumpkin pie for 10 people has risen more than a third since 2020, at the outset of the worst U.S. inflation surge in 40 years, from $46.90 to $64.05.

“That kind of increase we recognize is a burden on some families, no question about that,” said Roger Cryan, the Farm Bureau’s chief economist, though he noted that discounting as the holiday approaches may allow consumers to lower the bill.

U.S. consumer prices rose 7.7% on an annual basis in October and had been increasing by as much as 9.1% earlier this year, triggering a Federal Reserve effort to tame price pressures with aggressive interest rate increases.

Food prices, particularly items bought for home consumption, have risen even faster, hitting a 13.5% annual rate in August and still rising 12.4% annually last month, a shock to one part of the household budget where prices had dependably increased less than incomes.

As food prices have risen, a U.S Census survey showed the share of households reporting food scarcity rising from 7.8% in August 2021 to 11.4% as of early October.

“If you’re in the grocery store right now, you see it, in any grocery store you go to, people making tradeoffs,” San Francisco Fed President Mary Daly said last week. “How many people can they invite? What are they going to serve? Are they going to trade down? Are we having a different kind of meal? Are we not having as many options?”

Skip the stuffing?

As with other goods and services, there is a broad set of forces behind the Thanksgiving food spike.

An outbreak of avian flu cut turkey flocks, and while supply is adequate the Farm Bureau said the harvest of smaller birds along with higher feed prices has raised the cost of that Thanksgiving centerpiece by 21%, to an average $1.81 per pound in the 224 stores where surveyors checked prices during the Oct. 18-31 period.

That accounted for about half of the $10.74 increase in the full price of the classic meal this year. The largest percentage rise was for packaged stuffing, up 69% to $3.88, while a 1-pound tray of carrots and celery was up just 8%, to $0.88, and the price of cranberries fell 14%, to $2.57 for a 12-ounce bag.

For food items generally, key inputs like fuel and fertilizer prices have skyrocketed, said Wendiam Sawadgo, an agricultural economics professor at Auburn University, with some fruit farmers in Alabama, for example, now spending $1,000 an acre on fertilizer compared to around $600 in 2018.

“A big chunk was Ukraine and Europe not having fertilizer production for a good while. That was a big problem,” he said.

Grocery store margins also rose during the COVID-19 pandemic. Net profit after taxes hit 3% in 2020 and 2.9% in 2021, compared with an average of around 1.2% from 2015 through 2019, according to data from the Food Industry Association. Those were the highest margins the association has seen in reports dating back to 1984.

Andy Harig, a vice president at the association, said high demand for food at home early in the pandemic, when restaurants were closed or in-person dining was considered risky, gave food retailers leverage to boost profits. He said consumers also bought more higher-margin products like seafood during the crisis, while changes in shopping — including the rise in food delivery — let stores trim labor costs.

But he also said the net profit figure is expected to fall back to the long-run industry average of between 1% and 2%.

“It’s a penny industry,” Harig said. With restaurants recovering and wages rising, margins are likely already declining.

Last-minute bargains

Still, the rising cost of necessities has been top of mind for U.S. officials, with consumer sentiment near a low point after a year when average gas prices reached $5 a gallon. Thanksgiving-related travel this year may at least be cheaper than it was, with airline and fuel prices having declined recently.

And there may be some respite on the food front as well.

Walmart Inc., for example, said earlier this month that it would leave prices for Thanksgiving staples unchanged from last year and keep them in effect through Christmas, including turkey for under $1 a pound.

Discounted turkey prices often lure consumers to grocery stores and supermarkets, and bargains intensify as the holiday approaches. The Farm Bureau noted that frozen turkey prices had fallen to 95 cents a pound as of this week.

Auburn’s Sawadgo said that shopping for alternatives can also bring down the cost, with one of his personal favorites, collard greens, selling right now at $1.14 a pound, down 3 cents from last year, according to U.S. Department of Agriculture data.

Sawadgo recently priced the goods for a Thanksgiving dinner for six at about $70.76, up 19% from $59.50 for the same basket last year.

“If you are not someone who shops the ads, this might be the year to do that,” he said.
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In Bangkok, U.S. Vice President Kamala Harris said San Francisco will host next year’s Asia Pacific Economic Cooperation meeting. She also met with Chinese President Xi Jinping, reiterating the importance of communication. VOA’s White House Bureau Chief Patsy Widakuswara reports from Bangkok.
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