Things Just Keep Getting Worse in China; Now, They Are Running Out of Jobs

July 05, 2023

Remember all those stories in the New York Times, Washington Post, National Public Radio, and elsewhere telling us about the looming disaster facing China because of its declining population. The problem was that the declining population meant a smaller workforce, which would be a drag on the economy.

It turns out that things in China are even worse than we were previously told. Not only is the country running out of workers, it turns out that it is also running out of jobs. At least that is what a New York Times article told readers. According to the piece, there is a serious shortage of jobs, which is making it hard for older workers to get employed. Apparently, employers would prefer to higher younger workers when they have a choice.

If it seems contradictory that a country could both face a labor shortage and have a shortage of jobs for the people seeking employment, then you are far too committed to logic and common sense to ever be taken seriously in Washington policy debates.

There are situations where an economy can have too few jobs, which is a situation of inadequate demand like the United States faced in the Great Depression or the Great Recession. It can also face a situation where it has a shortage of workers, like the U.S. arguably did in 2022.

Of course, that is likely to be a mixed picture from a social standpoint, since a shortage of workers means that workers have their choice of jobs. Anyhow, it is only in Washington policy debates, not in the real world, that both these problems can be hitting a country at the same time. 

There is one other point worth noting in this article. It tells readers:

“It’s hard to trust employment data from the Chinese government, which counts anyone who has worked one hour a week. That low bar has kept the urban unemployment rate at a little over 5 percent for much of this year, better than in 2019.”

The Bureau of Labor Statistics also counts a person as being employed if they worked at least one hour in the reference week for the monthly Current Population Survey.


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