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Jobs That Don’t Deliver

For years, China’s younger migrant workers have been abandoning factory jobs, once a backbone of growth, for delivery and courier work offering better pay and greater flexibility. This ongoing trend has only increased during the coronavirus pandemic and is stirring concerns over the future of China’s manufacturing industry

By NewsChina Updated Oct.1

After waiting months for production to resume, Miao Sen, 22, quit his job at a machinery factory in Hebei Province. He went to neighboring Beijing in April to start a job as a takeaway delivery driver. Since the coronavirus pandemic broke out in late January, over two million more delivery drivers joined China’s two largest food delivery platforms, Meituan Dianping and Ele.me. Thirty percent came from manufacturing jobs. More than 80 percent are under 40.  

More people like Miao are leaving their jobs in manufacturing for the booming delivery industry, which offers higher salaries and flexible hours with little training. This trend sped up during the pandemic, which severely hit manufacturing and caused a surge in unemployment. 

In 2019, express delivery volume grew to 63.5 billion items, seven times that of 2013, with companies employing more than 10 million people, according to data from the State Post Bureau. The scale of the takeaway delivery industry grew to 653.6 billion yuan (US$93.3b) and employed seven million delivery drivers, according to chinairn.com, an industry research network. 

Unlike their predecessors who propped up the rapid growth of the Chinese economy on assembly lines, China’s newest generation of migrant workers is helping bolster China’s burgeoning e-commerce sector on two, three and four wheels. They also share the same trepidations about the future. 

Changing Times
Miao began working at a factory straight out of high school. He made 3,000 yuan (US$428) a month, which didn’t change in the years he was there. He found it hard to keep going as more people his age gave up factory work to become couriers or food delivery drivers. Some were earning up to 10,000 yuan (US$1,428) a month. But Miao said his parents had tried to talk him out of it, believing that factory jobs are more stable. 

A factory position was a dream job for farmers like Miao’s parents during the start of China’s economic reform and opening-up. The 1980s was a golden age for manufacturing, and the first wave of migrant workers swarmed to the factories of China’s eastern coastal areas. In the manufacturing powerhouse of Guangzhou, Guangdong Province, the number of migrant workers rose from fewer than 20,000 to 450,000 between 1976 and 1987.  

But things have changed. Miao believes his generation has more options, especially since China’s economic rise and the rapid development of the service sector.  

Statistics show that most migrant workers born after 1980 are not following the path of the previous generation. The National Bureau of Statistics’ (NBS) annual report on migrant workers shows that in 2019, 51 percent of migrant workers were engaged in the tertiary industry, while the proportion of migrant workers in manufacturing shrunk on average 2.84 percent annually between 2008 and 2018, contrary to population growth. The average age of those engaged in manufacturing has also increased, which points to a decreasing factory workforce.  

Younger migrant workers, who are generally better educated than previous generations, are instead choosing entry-level positions with logistics-based companies, such as courier and food delivery, which offer higher salaries.  

A report release by Chinese listings platform 58.com in 2019 showed that food delivery drivers earned an average monthly salary of 7,750 yuan (US$1,107) in 2018. This wage was rarely seen among factory workers, particularly in the most severely hit sections of manufacturing duringthe pandemic.  

Factories are feeling the labor pinch. Many find it difficult to recruit workers between 20 and 40. Most delivery drivers from Meituan Dianping and Ele.me are between 20 and 40, data from the two platforms show.  

Miao told NewsChina that factory work is exhausting and he often worked unpaid overtime. “You have to stay in the factory all day long and get bossed around for a measly rigid salary. Who in my age group would choose to do that?” Miao said.  

Factory automation is also behind the trend. In Dongguan, a clothing manufacturing center in Guangdong Province, most large factories have automated production lines. Even in smaller factories, automated equipment has replaced manual labor in some links of production.  

Pan Jigang, vice president of human resources with lingerie brand Cosmo Lady, told NewsChina that their factory turned to automation to stave off increasing labor prices. “Now most links in the production line are performed by machines. It saves us 20 percent in labor costs annually.” 

Every new industrial robot put into use will cut 1.6 jobs, Oxford Economics, a UK-based think tank, said in a June 2019 report. By 2030, 20 million manufacturing jobs will disappear globally, the report read.  

New technologies will replace 19.6 percent of manual labor in China’s manufacturing industry, said Qu Xiaobo, a research fellow with the Chinese Academy of Social Sciences (CASS) in a report published in December 2019. 

A food delivery driver gets his temperature checked before picking up an order at a restaurant in Changsha, Hunan Province, February 14

A man receives a parcel from a deliveryman over a fence in Beijing, March 2

Factories Floored
Zhang Zheng, a scholar from the Guanghua School of Management at Peking University, said the numbers of young migrant workers have been declining since 2004. Data from the NBS shows that between 2011 and 2019, the proportion of migrant workers aged between 21 and 30 dropped from 32.7 percent to 23.1 percent. “Supply and demand for migrant workers is balanced, but there is higher demand for young workers,” Zhang said. 

Factories are losing out to emerging service industries like delivery. “China’s services sector, which remains labor intensive, will play an increasingly larger role in absorbing labor. It’s an irreversible trend,” said Sun Wenkai, a research fellow at the National Academy of Development and Strategy at the Renmin University of China. 

Cao Dewang, founder of Fuyao Group, China's largest vehicle glass manufacturer, partially blames young people choosing jobs as delivery drivers or security guards for manufacturing’s woes. “This has led to domestic manufacturing’s current dilemma,” Cao said during a 2019 interview.  

Pan Jigang from Cosmo Lady said there is a general shortage of skilled workers, particularly experienced technicians. His company is offering over 10,000 yuan (US$1,428) a month and is still struggling to fill positions. 

Chen Bin, 33, used to be a paint sprayer at an auto factory in Baoding, Hebei Province. Over four years, his monthly salary grew from 3,500 (US$500) to 5,000 yuan (US$714). “Pay increases were too slow and I couldn’t make ends meet,” Chen said. In July 2018, Chen became a delivery driver in Beijing. He earns between 8,000 (US$1,142) and 10,000 yuan (US$1,428) a month, the same as a senior auto mechanic at a car dealership back home. 

Lack of experienced technicians in the job market has been a long-standing problem for China’s manufacturing. “The shortage has spread from eastern coastal areas to central and western regions. Atfirst it was seasonal, but now it is a regular phenomenon,” Sun said.  

While there have been calls for workforce training to fill the gap, technical jobs still cannot attract younger people. Compared to courier and food delivery drivers, which offer similar wages and require little training, vocational jobs take more up-front investment. They seem more risky.  

Technical skills are often highly specialized for a particular industry, which makes them less viable on the wider job market. The risk increases as technologies develop more quickly. Workers must not only consider market demand for such skills but also their life span.  

“Some companies may pay a lot more for experienced technicians, but it is usually on unstable terms: How long the contract lasts depends on their needs,” said Zhang, adding that more technical school students turn to other professions after graduation. “That is why there are never enough technicians.” 

“If businesses would offer more on-the-job training and job security, technicians might be more reluctant to leave. But in reality, not all manufacturing companies can do this,” Zhang said.  

“Overall, manufacturing’s young labor force is shrinking. Besides income, young people are increasingly considering how they feel about a job, whether it brings respect, and their work environment. Factories need to figure out how to improve these factors if they want to keep young workers,” Sun said. 

A worker monitors robots as they sort packages at an express mail service distribution center in Jiangsu Province, November 10, 2019

Jobbing to Survive
Giving up a factory job does not always lead to success. After more than two months as a delivery driver, Miao hadn’t earned the 10,000 yuan (US$1,428) a month he expected. After the coronavirus pandemic hit China, food delivery was an expedient choice for many newly unemployed. But since drivers are paid per delivery, this sudden increase in labor has thinned out incomes overall. “Even our experienced drivers are not earning as much as last year,” Miao said. 

Also, orders plunged in the pandemic’s wake. First-quarter revenues for Meituan Dianping declined by 11.4 percent year-on-year, with takeout orders dropping 46 percent as stores and restaurants closed and neighborhoods quarantined.  

With many businesses forced to shut their doors, many employees turned to part-time delivery driving. Full-time drivers found revenue streams as vendors on platforms such as WeChat, a 37-year-old woman who works as a delivery driver told NewsChina.  

The high salaries luring workers to delivery companies come with long hours. A Chinese Academy of Social Sciences (CASS) survey from March 2019 showed that couriers earned 4,859 yuan (US$694) a month on average in 2017. However, they worked 10-12 hours a day, which translates to 23.9 yuan (US$3.4) an hour - just above the country’s minimum wage. Delivery workers do not receive basic social insurance, which employers skip to save on cost. Many do not sign a formal labor contract, which can expose them to labor abuses. “Not covered by the social insurance system, delivery work is not a stable job yet,” Qu said. 

The CASS survey showed that among the 5,279 interviewed, 39 percent quit within a year. Only 11.9 percent worked in the field for more than seven years. Age, income, marital status and health are all factors for the industry’s low retention.  

Wang Yixuan, a postdoctoral research fellow at Tsinghua University who has also surveyed delivery workers, said that many younger workers suffer from occupational conditions like lower back strain and rheumatism. 

Many have few options other than returning to their hometowns or finding another line of work. But in the current job climate, unskilled jobs are becoming more difficult to come by. According to Wang’s survey, 68 percent of delivery workers ultimately return home after a few years.  

“Despite their hard work, delivery work is not a respected line of work in China. Workers have a weak sense of belonging in big cities, and there are no basic guarantees for them. Going back home is what most end up choosing,” Zhang said.  

Delivery workers who spoke with NewsChina said they plan to work hard and earn more money while they can so they can start their own business back home. “That’s their last and most realistic choice,” Chen said.