China is facing a growing crisis as millions of college graduates are unable to find adequate employment, leading to the rise of a new “rotten-tail kids” working class.

The jobless rate for Chinese youth aged 16-24 surpassed 20% for the first time in April 2022, reaching an all-time high of 21.3% in June 2023. Faced with this troubling trend, Chinese officials have even suspended the data series on youth unemployment to reassess how the numbers are calculated.

The plight of these college graduates has become a major social media talking point, drawing parallels to the “rotten-tail buildings” crisis - the tens of millions of unfinished homes that have plagued China’s economy since 2021. Many graduates are now forced to accept low-paying jobs or even rely on their parents’ pensions to get by.

Experts attribute this surge in graduate unemployment to a combination of factors, including the ongoing economic disruptions from the COVID-19 pandemic as well as regulatory crackdowns in China’s finance, tech, and education sectors. With a record number of college graduates entering the job market this year, the labor market appears increasingly depressed and unable to absorb the influx of new workers.

One year later, the issue of youth unemployment in China remains a major headache for the government. The reconfigured jobless rate for those aged 16-24 spiked to a 2024 high of 17.1% in July, as a record 11.79 million college students graduated this summer into an economy still weighed down by the ongoing real estate crisis.

President Xi Jinping has repeatedly stated that finding jobs for young people is a top priority. The government has called for more employment channels like job fairs, and has rolled out supportive business policies aimed at boosting hiring.

However, for many Chinese college graduates, the promises of a degree - better job prospects, social mobility, and a brighter future outlook - are increasingly elusive, according to Yun Zhou, an assistant professor of sociology at the University of Michigan.

Some jobless young people have resorted to returning to their hometowns to become “full-time children”, relying on their parents’ retirement pensions and savings to get by. Even those with advanced degrees have not been spared from the bleak job market.

The issue of joblessness among college graduates in China is not a new phenomenon. In 1999, the Chinese government dramatically expanded university enrollment capacity in an effort to cultivate a more educated workforce to drive the country’s rapidly growing economy.

However, the supply of graduates has consistently exceeded the available jobs, with authorities expressing concerns as early as 2007 about the lack of sufficient employment opportunities for these young, educated individuals. This issue has persisted, even as more youth armed with degrees entered the job market.

According to a study published in June by China Higher Education Research, a journal under the education ministry, the supply of tertiary students in China is expected to exceed demand from 2024 through 2037. After this period, the effects of declining fertility rates will begin to narrow the gap. The study projects that new college graduates will likely peak at around 18 million in 2034.

“Rotten-tail kids” - a social media term referring to the plight of these college graduates - are discovering that their hard-earned qualifications are failing to secure them the high-paying jobs they expected. Faced with limited options, they must either lower their salary expectations or take any job they can find to make ends meet. Some have even turned to criminal activities.

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