Educated and Fearing the Future in China - Room for Debate Blog

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March 7, 2010, 7:00 pm

Educated and Fearing the Future in China

By THE EDITORS

Reuters/China Daily College graduates at a job fair in Wuhan, Hubei Province, in 2009.

As China’s economy recovers, employers are competing to hire low-skilled workers, but many of China’s best and brightest, its college graduates, are facing a long stretch of unemployment.

In 1999, the government began a push to expand college education — once considered a golden ticket — to produce more professionals to meet the demands of globalization. This year, more than 6.3 million graduates will enter the job market, up from one million in 1999. But the number of high-skilled, high-paying jobs has not kept pace.

What might be done to correct the mismatch between expectations and reality? How is this problem altering Chinese attitudes about upward mobility? If college graduates are not reaping economic rewards, how will the next generation view the value of education?

• C. Cindy Fan, associate dean of social sciences, U.C.L.A.
• Yasheng Huang, professor of political economy, M.I.T.
• Daniel A. Bell, professor of political philosophy, Tsinghua University
• Albert Park, economist, University of Oxford
• Loren Brandt, economist, University of Toronto

Materialism and Social Unrest

C. Cindy Fan is associate dean of social sciences and professor of geography at the University of California, Los Angeles. She is the author of “China on the Move” and numerous articles.

Like prostitution, stocks, private cars, beauty pageants, and McDonald’s, “unemployment,” thanks to collectivization, was practically absent from Chinese life for the three decades after 1949.

The Chinese economy, no longer centrally planned, has not put enough people back to work.

Deng Xiaoping’s economic reforms paved the way for the collapse of inefficient state-owned enterprises, shattering the “iron rice bowl” of millions of workers and creating the first wave of unemployment in post-Mao China.

Unemployment among college graduates is a hot-button issue in China. A large number of young people have little other than materialism and consumerism to believe in — a general description of Chinese society today since socialist ideology lost its grip. Not having a job is a perfect recipe for social unrest.

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Today, China’s official unemployment rate is about 4.3 percent, but it is a gross underestimate because of underemployment among both rural and urban Chinese — they may have a job but their skills are underutilized and they are underpaid.

What explains this situation? No doubt, the global economic crisis has contributed to job loss, but China is considered one of the first economies to recover from the recession.

Another explanation widely cited in the media is the government-directed increase in university enrollment since the late 1990s. But even with that expansion, less than 8 percent of the Chinese population are college-educated compared with more than one in four in the U.S. That suggests there is much room for growth in higher education, especially if the country is to live up to the expectation of “China’s century.”

Instead, three explanations may account for the relatively high unemployment among college graduates. First, geography matters. Young people from smaller places and rural areas, upon obtaining a university degree, are likely eager to go to or stay in big cities. This effect is crowding the labor market in cities like Beijing and Shanghai and hurting the economy of small cities and towns.

Second, globalization matters. By rough estimates, one quarter of the Chinese who have studied overseas have returned. Nicknamed “sea turtles” (haigui), these returnees are highly competitive and can easily push the domestic college graduates down the job hierarchy.

Finally, China’s economy continues to be dominated by the industrial sector, which accounts for about 49 percent of the gross domestic product. While services — the most likely sector for college graduates — account for about 40 percent of the G.D.P., high-skilled, professional jobs are still relatively few compared with low-end service jobs like those in sales.

Creating high-end jobs and increasing the incentives for young people to live in smaller cities are obvious ways to reduce their unemployment. But this is easier said than done. The Chinese economy is no longer centrally planned, and as we have observed on this side of the Pacific, relying on the market alone — even with stimulus packages — has not yet put enough people back to work.

A Terrible Education System

Yasheng Huang is professor of political economy and international management at Sloan School of Management, Massachusetts Institute of Technology. He is the author of “Capitalism with Chinese Characteristics” and will soon begin a large-scale survey of college graduates in China.

In 2007, the job openings for new graduates fell by some 22 percent compared with 2006, according China’s National Development and Reform Commission.

Although Chinese universities have pockets of excellence, they are churning out people with high expectations and low skills.

Some estimate that 30 percent of Chinese engineering students will not find jobs after graduation and that the average pay of the college graduates is now approaching that of rural migrant workers. At the same time, factories in Guangdong province cannot find enough labor. What is going on?

The idea that China is running out of unskilled labor is a myth. The news reports typically concentrate on Guangdong but this does not mean the country as a whole is short of unskilled labor. Development in rural areas in the past six years has meant that rural residents, previously denied economic opportunities close to home, now have a choice between going to Guangdong and staying in their hometowns. Many choose to stay. Any “labor shortage” in Guangdong is mostly evidence that the factories should not be located there in the first place.

But the job market is a problem for college graduates — with the opportunities created in the wrong places. Colleges educate students, but in China they also give a young person a formal right to move to an urban center.

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You cannot tell a Chinese college graduate, “you’ve invested years and money in a college education, but your job prospects are in your home village.” So there is now a geographic mismatch between locations of jobs and locations of college graduates.

Secondly, there is a skills mismatch. In my conversations with Chinese managers and entrepreneurs, they constantly complain about a shortage of people with the right set of skills, capabilities and inclinations. China is so short of the right human capital, and books with titles like, “War for Talent,” are best sellers in China.

The Chinese educational system is terrible at producing workers with innovative skills for Chinese economy. It produces people who memorize existing facts rather than discovering new facts; who fish for existing solutions rather than coming up with new ones; who execute orders rather than inventing new ways of doing things. In other words they do not solve problems for their employers.

You multiply this skills mismatch by a sixfold increase in the college enrollments between 1997 and 2008, you get a sense of scale of the problem. Although Chinese universities are not without pockets of excellence, they are churning out people with high expectations and low skills. That combination cannot be good for any country, let alone a country with a low capita income.

Going Back to Mao?

Daniel A. Bell is professor of political philosophy at Tsinghua University and author of “China’s New Confucianism: Politics and Everyday Life in a Changing Society.”

“In education, there are no social classes,” Confucius said. The value of equal opportunity for education has deep roots in Chinese culture and may help to explain why most Chinese parents, regardless of social background, put so much pressure on their kids to do well in school.

Even at an elite university, students are lowering their aspirations or settling for government jobs.

It also helps to why explain the university entrance examination system — one of the least corrupt institutions in China — is designed at least partly to provide an equal opportunity for all students. Those who make the cut go on to university, regardless of social connections.

In response to societal demands for more educational opportunities, the government has boosted university enrollment by 30 percent annually over the past decade. Even in the context of a booming economy, the predictable consequence is that there are large numbers of unemployed college students. My own students — graduates of the elite Tsinghua University — are also feeling the pinch, though it usually means lowering their aspirations or changing their plans rather than coping with unemployment.

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In the past, it wasn’t too difficult for graduates in the humanities to find highly paid jobs with foreign companies or Chinese financial institutions in Beijing or Shanghai. Many graduates are now considering working in smaller and less developed cities. Others are enrolling in graduate programs that delay the job search. Still others are considering jobs outside of their majors.

One of my graduate students has found a job as a Chinese teacher at a highly regarded secondary school and she says “with this job it will be impossible for me to make a great fortune but I’m quite sure I will be very happy.”

Increasing numbers of graduates are competing to take the civil service exams. Whatever their private misgivings about the government, a government job is increasingly seen as the best option in economically uncertain times.

In response to the job crunch, the government is cutting back on university enrollment growth to 5 percent annually. But the demand for university spots won’t stop growing and the government will find it increasingly difficult to maintain a “harmonious society.”’

The only long-term solution, in my view, is to change parental expectations. Not everyone is destined to be a successful professional or government official, and students will need to be filtered at an earlier age to vocational training, similar to the educational system in Germany.

But parents need to accept that working with hands can be just as socially valuable as working with the mind. A bit of Maoism, in that sense, might need to be reintroduced to China.

Waiting It Out

Albert Park is a reader in the economy of China at the University of Oxford. He has co-directed several surveys on China’s urban workers and is currently leading a World Bank-supported project on the impact of the global economic crisis on employment in China.

China has been confronting the challenge of employing college graduates for some years now. The number of graduates from regular institutions of higher education increased dramatically from 9.5 million in 2000 to 37.8 million in 2006.

The broader trends definitely suggest that the economy will be able to absorb more graduates.

Meanwhile, the urban unemployment rate for college graduates increased from 6.3 percent in 2000 to 11.9 percent in 2005, while declining for those with less education, according to calculations based on census data. It would be surprising if the expectations of college graduates have not begun to adjust to the new reality.

In recent years, many college graduates have been disappointed by the salaries for starting positions. Some may feel they would rather wait for a better first job, since first jobs can strongly influence future career paths. Of course, wages of college graduates tend to rise with experience once employed. Eventually, the costs of waiting will force graduates to accept available job offers.

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But are sufficient jobs available? The economic crisis certainly reduced the job market for recent graduates, but evidence suggests that the Chinese economy has bounced back.

The broader trends definitely suggest that the economy will be able to absorb more graduates. First, the economic returns to college education (the percentage difference in wages for college graduates compared with high school graduates) in urban areas have increased tremendously over time, from less than 12 percent in 1988 to nearly 40 percent by the early 2000s, with no signs of declining, and such economic returns are highest for recent graduates. This suggests that increases in the demand for college-educated workers continues to outpace the increase in supply.

Overall, the percentage of the national urban labor force that is college-educated remains less than 10 percent, while global integration and rapid technological change increasingly place a premium on high-skill workers. China’s college graduates have reason to be optimistic about the future.

College Educations, Needed and Desired

Loren Brandt is a professor of economics at the University of Toronto. He is a research fellow at the Institute for the Study of Labor in Bonn, Germany. He has published widely on the Chinese economy and has been involved in extensive household and enterprise survey work in China. He is the co-editor of China’s Great Economic Transformation.

China’s urban labor market is fairly sharply divided between workers with urban residency permits (hukou) and migrants from rural areas. In general, the overlap in the job market for these two populations is relatively modest, but it has been increasing over time.

China’s emerging middle class will continue to demand expanded educational opportunities for their children.

Of the total urban workforce of 475-500 million, 60 to 65 percent have urban residency permits (hukou) with the remaining being migrants. A majority of those with residency permits (upwards of three-quarters) work in the “formal” sector in jobs that offer more security, higher wages, as well as the benefits of China’s social safety net. The migrants are more likely to be found in the “informal” urban sector, including manufacturing, construction and services.

For migrants, one huge barrier to jobs in the formal urban sector is their significantly lower levels of education. The most recent arrivals from the countryside have an average educational attainment of middle school (9 years in total), or five years less than their urban counterparts. Migrants are also willing to take the less desirable jobs that urban residents usually avoid.

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Estimates suggest that between 2002 and 2008 urban employment grew by nearly 4 percent a year (or 15 million new urban jobs annually), with annual employment growth of migrants outpacing that of urban residents (5.1 percent versus 3.3 percent). Indeed, on the eve of the recent financial crisis, labor markets in many parts of China were fairly tight.

At the end of 2008, total urban employment began to decline and continued to fall through the first half of 2009, but there are indications that urban job growth is now recovering.

The problem facing new college graduates is neither the economy nor the migrants.

Instead, it is the result of a rapid of expansion in higher education and a serious mismatch in the labor market. In 2003, surveys were already pointing to these difficulties. Notably, women, graduates from China’s lower-tier colleges and universities, and those with degrees in education, literature and science were faring more poorly. There were also important regional differences.

Nonetheless, overall there will still be high economic returns for a college degree, and China’s emerging middle class will continue to demand expanded educational opportunities for their children.

China’s educational system needs to do a better job of providing the skills that are valued by the market. On the demand side, other reforms, including those in the financial system, are required to relax constraints facing China’s private sector, which creates jobs. Neither of these changes, however, will happen quickly.

Associated Press Graduates from Jinan University at a job fair in Guangzhou, Guangdong Province, 2009.

The Disposable Worker

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Pay is falling, benefits are vanishing, and no one's job is secure. How companies are making the era of the temp more than temporary

By Peter Coy, Michelle Conlin and Moira Herbst

On a recent Tuesday morning, single mom Tammy DePew Smith woke up in her tidy Florida townhouse in time to shuttle her oldest daughter, a high school freshman, to the 6:11 a.m. bus. At 6:40 she was at the desk in her bedroom, starting her first shift of the day with LiveOps, a Santa Clara (Calif.) provider of call-center workers for everyone from Eastman Kodak (EK) and Pizza Hut (YUM) to infomercial behemoth Tristar Products. She's paid by the minute—25 cents—but only for the time she's actually on the phone with customers.

By 7:40, Smith had grossed $15. But there wasn't much time to reflect on her early morning productivity; the next child had to be roused from bed, fed, and put onto the school bus. Somehow she managed to squeeze three more shifts into her day, pausing only to homeschool her 7-year-old son, make dinner, and do the bedtime routine. "I tell my kids, unless somebody is bleeding or dying, don't mess with me."

As an independent agent, Smith has no health insurance, no retirement benefits, no sick days, no vacation, no severance, and no access to unemployment insurance. But in recession-ravaged Ormond Beach, she's considered lucky. She has had more or less steady work since she signed on with LiveOps in October 2006. "LiveOps was a lifesaver for me," she says.

Image by Getty Images via Daylife

You know American workers are in bad shape when a low-paying, no-benefits job is considered a sweet deal. Their situation isn't likely to improve soon; some economists predict it will be years, not months, before employees regain any semblance of bargaining power. That's because this recession's unusual ferocity has accelerated trends—including offshoring, automation, the decline of labor unions' influence, new management techniques, and regulatory changes—that already had been eroding workers' economic standing.

The forecast for the next five to 10 years: more of the same, with paltry pay gains, worsening working conditions, and little job security. Right on up to the C-suite, more jobs will be freelance and temporary, and even seemingly permanent positions will be at greater risk. "When I hear people talk about temp vs. permanent jobs, I laugh," says Barry Asin, chief analyst at the Los Altos (Calif.) labor-analysis firm Staffing Industry Analysts. "The idea that any job is permanent has been well proven not to be true." As Kelly Services (KELYA) CEO Carl Camden puts it: "We're all temps now."

Peter Cappelli, director of the Center for Human Resources at the University of Pennsylvania's Wharton School, says the brutal recession has prompted more companies to create just-in-time labor forces that can be turned on and off like a spigot. "Employers are trying to get rid of all fixed costs," Cappelli says. "First they did it with employment benefits. Now they're doing it with the jobs themselves. Everything is variable." That means companies hold all the power, and "all the risks are pushed on to employees."

The era of the disposable worker has big implications both for employees and employers. For workers, research shows that chronic unemployment and underemployment cause lasting damage: Older people who lose jobs are often forced into premature retirement, while the careers of younger people are stunted by their early detachment from the working world. Even 15 years out of school, people who graduated from college in a recession earn 2.5% less than if they had graduated in more prosperous times, research has shown.

Diminishing job security is also widening the gap between the highest- and lowest-paid workers. At the top, people with sought-after skills can earn more by jumping from assignment to assignment than they can by sticking with one company. But for the least educated, who have no special skills to sell, the new deal for labor offers nothing but downside.

Employers prize flexibility, of course. But if they aren't careful they can wind up with an alienated, dispirited workforce. A Conference Board survey released on Jan. 5 found that only 45% of workers surveyed were satisfied with their jobs, the lowest in 22 years of polling. Poor morale can devastate performance. After making deep staff cuts following the subprime implosion, UBS (UBS), Credit Suisse (CS), and American Express (AXP) hired Harvard psychology lecturer Shawn Achor to train their remaining employees in positive thinking. Says Achor: "All the employees had just stopped working."

In a typical downturn, the percentage decline in payrolls is about the same as the percentage decline in gross domestic product. But in the recessions that began in 2001 and 2007, the decline for payrolls was much steeper—1.8 percentage points more during the latest downturn. Worse yet, only about 10% of the layoffs are considered temporary, vs. 20% in the recession of the early 1980s.

PERMA-TEMPS

All that cutting has been good for corporate profits. Earnings rebounded smartly as companies kept payrolls down after the 2001 recession; by 2006 profits had hit a 40-year high as a share of national income, at 10.2%, according to Bureau of Economic Analysis data. The credit bust sent that figure plunging to 5.6% during the final quarter of 2008. But over the past year corporate profits' share has rebounded to 7.4% of national income, equaling the 40-year average.

The trend toward a perma-temp world has been developing for years. Bosses are no longer rewarded based on how many people they supervise, so they have less incentive to hang on to staff. Instead, the increasing use of bonuses tied to short-term profit performance gives managers an incentive to slash labor costs. The Iowa Policy Project, a nonpartisan think tank, estimates that 26% of the U.S. workforce had jobs in 2005 that were in one way or another "nonstandard." That includes independent contractors, temps, part-timers, and freelancers. Of those, 73% had no access to a retirement plan from their employer and 61% had no health insurance from their employer, the Iowa group said.

Temp employment in the U.S. fluctuates wildly, by design. The whole purpose of bringing on workers who are employed by temporary staffing firms such as Manpower (MAN), Adecco (ADO), and Kelly Services is that they're easy to shuck off when unneeded. While the number of temps fell sharply during the recent recession, the ranks of involuntary part-timers soared. The tally of Americans working part-time for economic reasons—that is, because full-time work is unavailable—has doubled since the recession began, to 9.2 million.

Companies that seized on the recession as an opportunity to make drastic organizational changes for greater efficiency and flexibility aren't likely to reverse those changes once the economy begins growing again, says David H. Autor, a labor economist at Massachusetts Institute of Technology. In other words, most of the jobs shipped to China will stay in China. And companies that turned labor into a just-in-time, flexible factor of production won't return to an old-fashioned job-for-life arrangement. "For the last 10 years, I and others have been saying that these trends aren't just for a fringe workforce but increasingly are for the mainstream," says Sara Horowitz, founder and executive director of the Freelancers Union, a 130,000-member advocacy group for contract workers. "This recession has shown us that the future is here."

Boeing (BA) typifies the companies that are taking advantage of flexibility. In 2009, it cut 1,500 contingent workers from its commercial division. Says spokesman Jim Proulx: "The first imperative was to reduce all of the contract and contingent labor that we possibly could to shield our regular employees from those layoffs." Boeing says less than 3% of its workforce is contingent. It has also reduced its dependence on costly permanent staff in the U.S. by making new hires abroad. Last March it announced a research and development center in Bangalore that will "coordinate the work of more than 1,500 technologists, including 100 advanced technology researchers, from across India." Bill Dugovich, a spokesman for Boeing's white-collar union in the U.S., the SPEEA, complains that the Indian workers "are basically contract labor."

For years Microsoft (MSFT) has been an avid user of temporary-staffing firms such as Volt Information Sciences (VOL) for a variety of short-term projects, including writing chunks of software, says Microsoft spokesman Lou Gellos. "Our contingent workforce fluctuates wildly depending on the different projects that are going on," Gellos says. "Somebody does just part of a project. They're experts in it. Boom, boom, they're finished." Temps are especially appealing to companies in cyclical industries. "We have been able to get really good talent. Off the charts," says Jeff Barrett, CEO of Eggrock, a manufacturer of pre-built bathrooms based in Littleton, Mass. It has brought on dozens of plumbers, electricians, and administrative workers through Manpower to handle a spike in orders.

With the economy expanding again, and employers loath to add permanent workers, temp employment is one of the few sectors of the labor market that is growing rapidly. Stock prices for the big temp firms have doubled since last March, while analysts surveyed by Bloomberg expect profits to double in 2010 at Robert Half International (RHI) and to jump about 50% at Manpower. LiveOps is among the biggest beneficiaries of the just-in-time labor trend; its revenues grew by a double-digit percentage in 2009 and the company is planning an initial public offering. "We want to do for the world of work what eBay did for commerce," says LiveOps CEO Maynard Webb, a former chief operating officer of eBay (EBAY). "You have access to the talent you need. And when the need is gone, the talent goes away."

"LEADERSHIP ON DEMAND"

The world of temporary work used to be the domain of sneaker-footed admins. No longer. Last year, Kelly Services placed more than 100 people—including lawyers and scientists—in interim stints that paid more than $250,000 a year. At the forefront of the "leadership on demand" movement in the U.S. is the Business Talent Group, whose roster of 1,000 executives has done jobs at companies like mobile-phone content provider Fox Mobile (NWS), health-care company Healthways (HWAY), and private equity firm Carlyle Group. BTG says its client demand rose 50% in 2009.

Sydney Reiner, of Southern California, has had five assignments in five years as an interim chief marketing officer at companies like Coffee Bean & Tea Leaf and Godiva Chocolatier. "I got a call from Godiva on a Wednesday asking if I could be on a plane to Japan on Saturday," says Reiner. "I was." For the past two months, she's been the interim chief marketing officer at beverage maker POM Wonderful. Reiner prefers the challenge of working in short, adrenaline-packed chunks. But like Smith, the University of Chicago MBA has no access to employer-sponsored health insurance and other benefits. Says Reiner: "To some extent I end up working as hard as a permanent employee, without a lot of the benefits."

Reiner relishes the flexibility of the free-agent lifestyle. While there are others like her, many upscale, white-collar workers aren't contingent laborers by choice. Matthew Bradford, who is 38 and married with three young children, could scarcely believe it when he was laid off in early 2009 by a national law firm in Cleveland. He eventually set up as a one-man "legal professional association" in Akron, handling overflow from other lawyers while he slowly builds up his own practice. Meanwhile he's responsible for his own health insurance and a share of office overhead, things he never considered when he was on track to making partner back in Cleveland. "I never would have thought this would have happened," says Bradford. "I thought, 'Hey, I've got a law degree and an MBA. I'm not going to be out of work.' It's just not the case anymore."

During the boom-time 1990s, employers sold the move away from secure full-time jobs as pure upside for workers—a step toward greater flexibility and freedom. To compete with dot-coms, corporations like IBM (IBM) started replacing some fixed pay with variable compensation: stock options, bonuses, and other cash incentives that have to be renegotiated each year. It was attractive for awhile, but the Great Recession is showing workers the downside of that deal. Employers' unspoken message to employees, says Cornell University labor economist Kevin F. Hallock, is this: "You can absorb more risk, or you're going to lose your job. Which would you prefer?"

At the bottom of the ladder, workers are so powerless that simply getting the minimum wage they're entitled to can be a struggle. A study released in September and financed by the Ford, Joyce, Haynes, and Russell Sage Foundations found that low-wage workers are routinely denied proper overtime pay and are often paid less than the minimum wage. It followed a Government Accountability Office report from March 2009 that found that poor oversight by the Labor Dept.'s Wage & Hour Div. leaves low-wage workers "vulnerable to wage theft." Some companies have been fined for misclassifying employees as freelancers and then denying them benefits. Meanwhile, the George W. Bush Administration made it easier for people earning as little as $23,600 a year not to be covered by overtime-pay rules.

Workers hired for temporary or contract work face a higher risk of developing mental health problems like depression, according to research presented in 2009 by Amélie Quesnel-Vallée of McGill University. A lack of job security and health-care benefits, as well as social ties to the rest of the workforce, increase stress levels for temps and contractors. A survey conducted in September by the National Alliance on Mental Illness found that people who experienced a forced change in their employment during the last year were twice as likely to report symptoms consistent with severe mental illness as individuals who hadn't experienced one.

The situation is especially difficult for young people, many of whom haven't been able to get a first foot on the career ladder. The percentage of people 16 to 24 who have jobs has plummeted by 13 percentage points since the beginning of 2000, while the share of workers 55 and over who have jobs has edged up over the period, despite the recession. Some young people are so desperate to get a start, they're working for free as semi-permanent interns. "Companies that used to use only one or two interns are now asking me for five or six at a time," says Lauren Berger, who runs a company that matches interns with entertainment, marketing, and media companies. Berger also reports a rise in the number of "adult interns," who work for free while trying to break into a new career.

Those internships might look like plum spots in years to come, for the gloomy trends in the labor market show no sign of abating. Consider some statistics. In the 2001 recession cycle, the economy lost 2% of its jobs and took four years to get them back. This time it has lost more than 5% of its jobs. Even after the recession is history, employers are likely to continue to offshore and automate jobs out of existence. If they don't, they'll lose out to competitors that do. In a November update of previous research, Princeton University economist Alan S. Blinder estimated that 22% to 29% of all U.S. jobs will be offshorable within two decades. Of course, even working in a job that's not offshorable—say, landscaping—is no guarantee of job security or decent pay. That's because people in those jobs must compete with the millions of former factory workers and such whose jobs have already been offshored, notes Josh Bivens, an economist at the Economic Policy Institute in Washington.

IBM may strike many people as the quintessential American company, but 71% of its workforce was outside the U.S. at the end of 2008, a figure even higher than the non-U.S. share of its revenue (65%). In 2009 the company reduced its U.S. employment by about 10,000, or 8%. It also announced a program offering certain employees the opportunity to move their jobs to emerging markets; in turn, the company will foot some of the relocation costs.

PAY CUTS

When employment in the U.S. eventually recovers, it's likely to be because American workers swallow hard and accept lower pay. That has been the pattern for decades now: Shockingly, pay for production and nonsupervisory workers—80% of the private workforce—is 9% lower than it was in 1973, adjusted for inflation. Sure, back in the 1950s pillars of the economy such as General Motors paid generously, because they could. Contracts between GM and the United Auto Workers set a pattern for pay throughout the economy, says Harley Shaiken, a professor at the University of California at Berkeley who specializes in labor issues. But while unions covered 36% of private-sector workers in 1953, the figure plunged to less than 8% by 2008. "Today, working conditions are set either by trends in the global economy or by nonunion firms in the U.S.," says Shaiken. He points out that while GM was the largest U.S. employer in the 1950s, "today that role is played by Wal-Mart (WMT), with very different consequences."

The best solution to relieve the pressure on workers would be rapid economic growth sustained over a long period, possibly enabled by some technological breakthrough. The Internet boom pushed unemployment to less than 4% in 2000. But few economists expect such a renaissance anytime soon. That's why labor unions and politically liberal economists argue for New Dealesque public jobs programs and against free-trade pacts like the North American Free Trade Agreement. In 2007, Ralph E. Gomory, former head of IBM's research department and later a senior vice-president at the company, declared before a U.S. House panel: "In this new era of globalization the interests of companies and countries have diverged. In contrast with the past, what is good for America's global corporations is no longer necessarily good for the American people."

Conservative economists, in contrast, say the real problem is too much government intervention in the economy. Employers who might be adding jobs are frozen in place by uncertainty over the impact of pending legislation on health care, global warming, and other big-ticket items, says economist Steven J. Davis of the University of Chicago's Booth School of Business. "I can't think of another time during my professional lifetime when there was so much riding on policy decisions that could get made in the next year or two."

For a glimpse of where things might be headed in the U.S., look at Europe, which makes a lot more use of temporary and part-time workers than U.S. employers do. That's in large part because of Europe's famously rigid labor laws; rather than hiring permanent workers, employers turn to temps and contractors who can be let go more easily during a downturn. In Spain, 85% of recent job losses in this recession were by temps or contractors. One big difference: Most European countries cover temps and part-timers with government health insurance and require that they receive wages and benefits comparable to those for permanent employees doing similar work.

Look far enough into the future and it's possible to see better times ahead for labor. A decade from now the retirement of the baby boom generation could cause labor shortages and hand some bargaining power back to younger workers, says Robert Mellman, a senior economist at JPMorgan Chase Bank (JPM). If that happens, woe unto employers. A survey in 2009 by the benefits consultant now known as Towers Watson found that top-performing employees will be ready to jump ship as soon as a better offer comes along. Says Wharton's Cappelli: "The idea of loyalty—'I will stick with you and you will reward me'—that is effectively gone."

But those are issues for another day. Right now the face of American labor is more like that of Jamila Godfrey, 35, of Seattle. A licensed naturopathic physician, she ran an alternative medicine practice but decided to scoop up another degree, this time in nursing, for greater job security. Though she graduated in June, and health care is the strongest sector in the economy, she hasn't been able to find a job because hospitals can't spare the money for three months of on-the-job training. To support herself and her 12-year-old daughter, the single mother has been working as a temp for the past several months, but that project ends in several weeks. "I'll be jobless again," says Godfrey. "I thought the [RN] qualification would make it easy to find a job, but it's not working out that way."

With Carol Matlack in Paris

Skype and Job Interviews: Webcam Meetings on the Rise - Time

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By Barbara Kiviat

Get ready for a closeup: your next job interview might be on webcam. Looking to save time and money, companies are turning to video-chat software as a cheap, low-hassle way to vet job candidates. That means a growing number of people looking for work are meeting their prospective new bosses not at the office but in the comfort of their own home.

Naturally, the transition from in-person to online isn't without its hiccups. Fuzzy transmissions, dropped calls (especially on wireless networks) and unusual disruptions are all par for the course. Tip No. 1: Get your dog out of barking range before you start the interview. (We'll return to the pointers in a bit.) (See pictures of the history of the cell phone.)

What's the draw? Largely money. Last year, as executives at online retailer Zappos.com looked to cut expenses, they noticed how much the firm spent on travel. In HR alone, it easily cost $1,000 a pop to fly out job candidates and put them up for the night. The firm had used Skype internally, so about six months ago, recruiters started trying it for interviews. (Watch TIME's video "How to Ace a Job Interview on Skype.")

Their opinion: a video link does a pretty good job of replacing an in-person meeting — and in a way that a phone call can't. "If you see facial expressions and body language, you have a different sense of what a person is saying," says recruiting manager Christa Foley. Now, instead of flying out 20 finalists for a job, the company first screens with Skype and then brings in only the best two or three candidates. (See 10 ways Twitter will change American business.)

Job seekers are hopping on board too. Last spring, after Stephen Bhadran got laid off, he quickly realized there were more openings for computer programmers in Dallas, Atlanta and Los Angeles than in South Florida, where he lived. So he cast a wide net — and got a bite from the University of California, Los Angeles. The university wanted to interview him but wouldn't pay the airfare. "I was laid off and running out of funds," says Bhadran. "I couldn't fly on my own dime." He suggested interviewing by Skype. He got his request — and the job. (See the best social-networking applications.)

Things don't always run smoothly. Bobby Fitzgerald, a restaurateur who has been interviewing job candidates by Skype since March, has had his share of amusements. For instance: the candidate who leaned forward while he spoke, giving Fitzgerald an intimate view of his nose. Another, a college senior, didn't bother cleaning up his dorm room before the interview; the mess was painfully visible in the background.

And then there was the dog that wouldn't stop barking. Fitzgerald cut the interview short and said he'd have to reschedule. Did the disruption influence his decision? "Well," he says, "a big part of management is handling problems as they arise."

Still, webcam interviews are entirely worth it, he says. Fitzgerald runs restaurants in four states and likes to hire from the nation's top culinary and hospitality schools. It's rare that he, the job candidate and the job are all in the same time zone. And the benefit of video-interviewing for him isn't just saved money — it's also saved time. "More than once, I've flown someone in and within an hour, I realize it's not a fit," he says. "But I'm stuck with that person for six more hours." (See 25 must-have travel gadgets.)

So what should you do if you're asked to interview by Skype — or even brave enough to suggest it yourself?

First off, realize that we perceive people differently through a camera than we do in person. Bill McGowan, a former news anchor who now trains people to go on TV, starts his list of pointers with lighting: whether you're sitting in your kitchen or an office borrowed from a friend, make sure there's no bright light (like from a window) behind you. That will only darken your face. When your interviewer is talking, it's fine to look at his image on the screen, but when you answer, look at the camera. That's how to make "eye contact." Avoid wearing patterns and the color white, since we notice white spots on a screen first — you want your interviewer drawn to your teeth and eyes, not to your shirt. And don't forget that what's behind you is visible too. "It's best to put away the Mad Men bar," says McGowan.

Next, think about framing. Sitting flush with a plain white wall will make you look like you're in a police lineup, so angle your knees to the corner of your computer screen, and then turn your head slightly back to look at the camera. Sit tall in your chair, but not too close to the camera: the first three buttons of your shirt should be visible, or else you risk looking like a floating head, counsels Priscilla Shanks, a coach for broadcast journalists and public speakers. Most important, do a dry run with a friend to check your color, sound and facial expressions — neutral often comes off as glum onscreen. (See pictures of vintage computers.)

After all that, don't forget that this is still a job interview. Even though you're not meeting face to face, dress as though you are. When you "walk in," have your résumé ready — this time, as an e-mail attachment. And don't forget to do all the standard prep work. Are you ready to talk about your greatest weakness? "This adds another layer, but people will still expect you to be prepared to have a conversation with them," says career counselor Judith Gerberg.

Though that's not to say you can't acknowledge the medium. This past summer, Deanna Reed, principal of the Marie Murphy School in suburban Chicago, started doing Skype interviews and has already considered candidates from as far away as Asia. "The time difference was so great, it was like 1 in the morning for him," she says about a teacher in Japan. "I said, 'Oh, you had to get on your suit in the middle of the night?' And he said, 'No, I have my pajamas on the bottom.' He was fun — he had a real sense of humor." Even over video, it's possible to make a great first impression.

For Twins in New York, a Long Struggle in a Tough Job Market - NYTimes.com

Image via Wikipedia

By N. R. KLEINFIELD

SEVENTEEN months out of Rutgers University, they live in an unwelcome continuum of mass rejection. Between them, Kristy and Katie Barry, identical twins who grew up in Ohio, have applied for some 150 jobs: a magazine for diabetics, a Web site about board games and a commercial for green tea-flavored gum; fact-checking at Scholastic Books, copy editing for the celebrity baby section of People.com, road-tripping for College Sports Television.

They did not get any of these. More than a year has lapsed without so much as an interview. Apparently, even a canned response was impossible in New York.

“I wake up hopeful and check my e-mail and then all there is is the Merriam-Webster word of the day,” Katie lamented. “Or a stupid Facebook thing. So-and-so sent you a puppy. Or a drink. Great!”

Kristy recently friended an editor on Facebook, thinking that was the ticket. Zip. She talked up a guy on the subway, found out he worked at a radio station, dispatched a résumé. Zip.

They play softball, asking teammates what they are up to, sifting for leads. They took an improv class, something that might lead to something that actually led to nothing.

To imprint themselves on potential employers’ minds, they send Buckeyes, a chocolate-coated peanut-butter confection that is an Ohio specialty they make to perfection. “I’m going to send some out today,” Kristy said the other morning.

Eyes crusted with sleep, Katie rummaged through Craigslist, journalismjobs.com, Whisper Jobs. She fastened on a notice for an editorial assistant at Cure magazine, aimed at cancer patients.

A résumé entered cyberspace. “I’ve sent out something,” she noted. “I’m not wishing on milkweed seeds.”

Kristy: “I’m so tired of coming up with cover letters that I think are interesting, and then nothing.”

Katie: “You think, O.K., do I kick somebody’s door in?”

Kristy: “My computer is burning up. It’s saying, ‘I’ve uploaded your résumé so many times, I’m exhausted.’ ”

Good kids who went to good schools, the brassy, effervescent Barry twins, 24, always envisioned their young adulthood in New York City as a lush time of stimulating work, picturesque travel and a rich social orbit. But they graduated into a downbeat nightmare of a job market. According to an analysis of government data by the Economic Policy Institute, the unemployment rate for college graduates under 27 so far this year averaged 7.1 percent, nearly double what it was in 2007 and the highest yearly average in the 30 years this data point has been tracked.

And so Kristy and Katie and most of their friends are forever hunting for jobs, both mundane interim work to sustain them and long-term positions that could mean a career. Many days, it is as if they are stalking something on the endangered species list.

•

They were born in Columbus, Ohio, the middle of six siblings. Their parents divorced when they were 15, and they don’t stay in touch with their father but are close to their mother. She is remarried and lives in Weehawken, N.J., selling items for estates and art dealers and doing freelance writing.

The twins began at Marietta College in Ohio, then transferred as juniors to Rutgers’s campus in Newark. They graduated in May 2008 with journalism degrees, internships under their belt and student loans totaling $39,000 apiece.

Their dream is to work together in sports reporting or have a TV show, but they are flexible. They talk of teaching piano, or inventing, say, a lipstick-case microphone. “If you’re in a bar you would hold it up and say, ‘This guy is creepy, get out of here,’ ” Kristy explained.

She works as a bartender, three nights a week, at Dive 75 on West 75th Street, making about $800 a week. Katie had been working at another bar, but was fired in June after landing in Cancun to begin a vacation. Her boss said she played the music too loud.

This summer, the twins moved from Newark into a cozy two-bedroom fourth-floor walk-up on West 73rd Street, $2,900 a month. They share it with their brother Zack, 22, a junior at Parsons the New School for Design. Occupying the living room couch is Zack’s classmate, Rostislav Roznoshchik, who works part time at the Blue Donkey Bar. He wants to be a public artist.

Growing up, they mowed lawns, shoveled snow, fetched mail for the elderly. And, of course, there was the squirrel lady, who could not countenance roadkill not receiving respectful burials. She gave the twins $5 an animal to shovel corpses off the streets and bring them to her. Money is money.

Those weren’t perfect jobs, and the last one they had in Ohio was what convinced them it was time to head East. They worked as clerks at the Dancing Donkey, a crafts store with a donkey out back named Donk for kids to feed. Business leaned toward slow. The twins invented games to endure the tedium, like who could stay the longest in her chair without moving.

Now, jobless, days going by one at a time, Katie found herself saying things like: “It’s driving me bonkers. Like what has my existence come to?” And: “I’m going to stab myself.”

She showed her nails: nibbled beyond existence. “I’ve been like a woodchuck,” she said. “My hands hurt.”

Kristy held up hers: gone.

•

The dogs today. To pick up spare money, Katie fills in for a dog walker when he’s away, which is not that often.

It’s not nanotechnology, but you do need to know technique. The first dog, Cassie, for instance, does not like to budge. The trick passed on from the owner was to drop a box of tissues on the dog’s hindquarters.

Sure enough: tissues dropped, dog out the door.

Dogs were fine, but the work got Katie’s thoughts going the wrong way. There’s a guy she sees around the neighborhood who wears plastic bags for shoes. When she’s walking dogs she begins to worry that that is going to be her, without work, stumbling along in plastic bags.

Of course the twins have no health insurance. Not long ago, Katie had a bad earache — felt like a screwdriver pushing into her ear — that she self-medicated with tea and over-the-counter pills. Kristy has been sensing pain on the right side of her jaw. It hurts when she eats something hard or yawns widely.

What they do have is friends, and they support one another. A guy who manages a tomato-canning plant gives them canned tomatoes, olive oil and coconut milk. An accountant ex-boyfriend of Kristy’s does their taxes. He also sends gifts, like a CD to learn Russian, although Kristy has never expressed even tepid interest in learning Russian. They, in turn, rake the leaves at his New Jersey home and wash his car.

Another friend works as a waiter at an Italian restaurant while he tries to locate voiceover work. The twins drop in with a big group, then he’ll round up people to run up a tab at Kristy’s bar.

One night at Prohibition, a bar on Columbus Avenue near 84th Street, they slid into outdoor tables with a dozen comrades. Their brother Zack told how he and a friend had been handing out homemade cards to strangers to lift their spirits. One says on the outside, “I would be lying if I said ...” And then inside it says, “That you aren’t gorgeous, because you are. Please pass this on to someone you feel is gorgeous.”

One member of the group was in law school, another training for a career in ophthalmology. Others were doing things like sleeping in a museum as part of an exhibition, selling at Bloomingdale’s, bartending.

A guy hoping to start an online business was taking a $600 aptitude test to tell him what he’s good at.

•

Mom came in for lunch, at a Chipotle on 42nd Street. They began by joining hands and saying what they were thankful for, then Mom said, “Tell me something new.”

Katie mentioned a baby-sitting job: two days.

They had gotten some good buys at a thrift shop: a coin belt for $3, an “Animal House” DVD for $2, an X-Men tennis racket for $3.27.

The twins love Mom, whose name is Tyna Walker-Lay, but she can get to them at times. Like when she says she can’t tell the relatives back home they’re bartenders. She says that just about every time they talk.

Katie said: “Relatives in Ohio think working in a bar is a step down from prostitution.”

Katie said to Mom: “You know, you once thought we should be schoolteachers and have the summers off.”

Mom: “That’s still a thought down the road.”

Mom points out, with regularity, that they need jobs with benefits. She has noted that a prison guard gets benefits.

Grandma e-mails from Columbus, telling the twins she prays for them. Or that Ohio has openings for office clerks. A few months ago, when Katie wrote that she had split up with a boyfriend, Grandma came back with: “Are you girls ever going to get married?”

Mom had to run: “Some of us have to be productive, have benefits, 401(k)’s.”

She told them she loved them.

•

They claimed a couch upstairs at the Aroma Espresso Bar on West 72nd Street, where they like to ingest caffeine and comb the Web: Think, think, think.

The other day, a brainstorm hit. They would devise a blog called Twin Town, write about their lives and invite guest material, somehow woo advertisers.

Kristy said she could do a photo display with the gnome bank that she had lugged around Newark, snapping pictures of it at the park, at a beauty store, in a police car.

Katie said she could list idiotic reasons people give for breakups. Kristy liked that one, mentioned the guy who ditched her because he said her jokes weren’t funny. Katie brought up the friend whose boyfriend left after telling her she slammed his car door too hard.

“Excellent,” Kristy said.

•

Happy Hour at Dive 75, Kristy at the bar. Familiar faces trickled in, spat out orders. Here was Ren Quiroz, the friend who manages the canning plant. Another friend, involved in pharmaceutical pricing, showed his new tattoo. Their roommate, Rostislav, arrived. He said he earned $4 at the Blue Donkey today. Katie showed up for a beer.

Kristy worked the crowd, playing Hot Dice and Connect Four. She doesn’t mind bartending, but it’s no career, not for her. As she put it: “Bartending is like dating a guy you know you’re not going to marry.”

And: “I keep wondering how do I propel myself out of the bar world, where I look cute and pour beer, into a world where I have thoughtful conversation about the world rather than stuff like why do people clap at the end of good movies. Or, why do you think Heidi Klum married Seal? I don’t care why!”

Katie was moping a bit, saying, “I’ve eaten so many canned beans lately.”

And: “I need a life coach to come in and tell me what I’m doing wrong. I keep singing that song, ‘Something’s Got to Give.’ ”

•

The wind picked up. They got drinks from Starbucks and sat in the park on Columbus and 66th Street, the acceleration of life around them.

Katie said that a friend put her on a list to get into focus groups: “They pay you to say if you like green ketchup or hate Lysol. I can do that.”

Kristy said the bar had been so slow one night that she found herself singing Celine Dion to the fish tank: “There’s got to be a way out of this,” she said.

They had been chewing over ways to get noticed, inject some news into their lives. Mom always told them: “If you continue to do what you’ve always done, you’ll always be what you’ve always been.”

Kristy suggested hiring a helicopter to scatter her résumé over Manhattan.

They had a saxophone, so Katie thought of playing in the subway with a sign inviting job offers. “I could have Mom sing,” she said.

She dug out her phone and called Mom. Mom did not embrace the idea, mentioning how mortified she would be, saying she would have to wear a hat and dark glasses.

They looked up to find Michael Moore shambling past with a small entourage. They caught up to him, told him they admired him and were looking for jobs and wondered when he knew what he wanted to do. He told them how he was unemployed, collecting $98 a week, saw the General Motors chairman on TV, and on and on.

And: “I realized when bad things happen it’s really just the window to the next good thing happening. That’s not too hippy-dippy a thing to say, but that’s what I found.”

Kristy said, “Yeah, I know what you mean.”

And Michael Moore said, “On the other hand, when things are going really well, it’s like, when’s the next shoe going to drop.”

He laughed. They laughed.

He said, “Thank you very much and good luck.”

•

Katie launched into “Nowhere Man,” then “In My Life,” the sax’s mournful wail ringing through the tunnels in the Times Square subway station on a Friday afternoon. Her sign read: “Don’t Give Money, Give Business Cards.”

Kristy had come along, lugging the milk cases that served as a music stand. It was their luck that a seven-piece band roared away on a nearby platform.

Some people took pictures. Most did nothing. A few cards fluttered into Katie’s case: a music combo, a realtor, a music editing firm, a comic book store, a placement agency and a dentist in Kentucky. Plus 54 cents.

They had had a meeting with Deadspin, a sports blog, but no real jobs there, just the suggestion to join an Australian football team and write about it. Katie was pursuing an internship at the United Nations. Kristy decided to try to interest New York magazine in an article about the effect on kids who appear in unflattering YouTube videos. From a posting on Monster.com, she heard from someone who wondered if she could translate Arabic.

“That was like the world laughing at me,” she said.

And so it went, and so it went. Jobs were out there somewhere. Something had to give.

Twitter as a Job-Searching Tool - WSJ.com

By SARAH E. NEEDLEMAN

More companies are tweeting for hires.

As online job boards have grown crowded amid the recession, many big companies, including Microsoft Corp., Verizon Communications Inc., Raytheon Corp. and Viacom Inc.'s MTV Networks, now list job openings on the Twitter microblogging site.

For employers, Twitter—where users post updates, or "tweets," of no more than 140 characters—offers one more way to find and attract candidates, and a cheaper alternative to big online job boards. It also helps companies target social-media-savvy job hunters and convey an innovative image. For job seekers, Twitter offers the chance to interact one-on-one with companies' recruiters and can be more convenient than job boards.

Job hunters can sign up to follow a company's listings on Twitter or receive tweets about jobs through a third-party service. They usually need to click a link in the tweet to access the listing online, where they can submit their résumé or application. They can also reply to the tweet with a question or comment; sometimes, employers tweet back.

With so many people looking for jobs now, some employers say they like that Twitter yields just enough job leads—but not too many. Job boards have "become saturated," says Mike Rickheim, vice president of global talent acquisition for Newell Rubbermaid Inc., a global manufacturer based in Atlanta.

"With Twitter, we don't have to go through that huge pile of résumés." Mr. Rickheim says the company uses Twitter to fill positions that tend to attract tons of applicants on job boards, such as administrative roles, as well as to share company news.

(Of course, recruiters note, the more popular Twitter gets, the more applicants it will likely attract.)

People who respond to job tweets typically have social-media skills, and some employers say they use the service to target them. In March, MediaSource Inc., a video-production and publicity firm in Columbus, Ohio, advertised a media-relations specialist job only on Twitter, LinkedIn and two niche job boards, says Lisa Arledge Powell, MediaSource's president.

"We needed someone that understood social media, so we thought, 'Why not go to where these people go?' " she says.

Andrea Slesinski, who was following the company's Twitter feed, saw the job listing and quickly tweeted her interest. She got an interview request within a week and was hired.

Image is a big part of Twitter's appeal to employers, as using it to engage with job seekers can suggest they're cutting-edge. "Verizon is a technology company so we need to be out there," says Asif Zulfiqar, a talent-management specialist at the New York-based telecommunications firm, which began listing jobs on Twitter in March.

But the image issue cuts both ways, he notes, and job seekers don't always pay enough attention to how they appear to employers on Twitter. Recently a follower of Verizon's jobs feed tweeted to the company something along the lines of, "Hey dude, you got any jobs in California?" says Mr. Zulfiqar.

The writer's casual tone made a poor impression, he says. "I want to see something more professional," he says. "You want to put your best foot forward."

Indeed, people trolling for jobs on Twitter need to tweet with care—not just when they're interacting with employers, says Cynthia Shapiro, a former human-resources executive and career coach in Woodland Hills, Calif. Hiring managers could use information they find on Twitter, just as on Facebook, to form opinions about an applicant's employability. People sometimes disclose personal things over Twitter, like work-family challenges, that an employer couldn't ask about in an interview but which might color their impression if they knew. For example, if an employer sees on Twitter that a candidate is going through a messy divorce, they might "assume you're going to be distracted," Ms. Shapiro says.

Job seekers can do their own sleuthing on Twitter to research prospective employers. In June, Rob Totaro landed an interview for an account-manager job at Potratz Partners Advertising, a small agency in Schenectady, N.Y., after learning about the position on Twitter. In the meeting, he joked that he wasn't sure he could work for a firm that supports the Red Sox, which he had discovered from reading tweets the company posted about a recent employee outing to a ballgame. "It was a great ice breaker," says Mr. Totaro. He got the job.

Twitter users say the service can be more convenient than online job boards, allowing users to follow feeds that list jobs from a variety of companies rather than trolling through thousands of job-board listings. "It's an efficient way to get a general idea of what type of jobs are out there," says Ryan Kellett, a senior at Middlebury College in Middlebury, Vt.

He subscribes to about a half-dozen job feeds on Twitter. "It's a little bit more of a chore to go on [job boards] on a daily basis," he says. "You don't know if there's new content on there."

Twitter's interactivity also can provide a new source of advice for candidates. Subscribers to Google Inc.'s jobs feed, which went live on June 29, can pose employment questions to recruiters at the Mountain View, Calif., company, says a spokeswoman. Recently someone posted a tweet asking what job candidates should wear to interviews at Google.

A little over an hour later, a recruiter tweeted back: "We care more about your mind than your clothes," the spokeswoman says.

Cost is a main draw for employers, many of which post jobs on their own Twitter feeds free. Some services distribute job listings for employers on Twitter for a fee, but they are generally less than the cost of posting on a big job board.

U.K.-based InterContinental Hotels Group PLC, which has U.S. headquarters in Atlanta, began listing jobs on Twitter in July through a distribution service called TweetMyJobs, which charges 99 cents to promote one position for a day. The service also offers volume discounts. Francene Taylor, a talent-acquisition technology manager for InterContinental, says the service is more affordable than most job boards and she expects it to help the hospitality company save money as more job seekers turn to the company's Twitter feed to look for postings.

"We will see a decline in a need to use the major job boards and that will mean we won't have to spend quite as much," she says.

Ms. Taylor says the quality of the candidates, for all positions including room attendant and housekeeper supervisor, is the same as what comes through job boards.

But sometimes, Twitter produces enough leads that InterContinental doesn't need to advertise the jobs elsewhere. During the last week of August, she says, 4,622 people clicked through to the company's job-listings section from Twitter.

China Says Migrants Are Employed Again

By ANDREW BATSON

BEIJING -- China's government said most rural migrant workers have found new jobs after mass layoffs last year, indicating the effects of its stimulus are filtering into the job market. But the downturn is still being felt in weaker growth of household incomes, which could hold back consumer spending.

Less than 3% of migrant workers who have returned to cities in recent months are still looking for jobs, said Wang Yadong, a deputy director-general at China's labor ministry. He said 95% of migrant workers preferred to seek work in cities this year rather than go back to farming. He declined to give more detailed figures, and didn't explain how the estimates were made. Mr. Wang's report is the first official update since February on the migrant job situation.

Itinerant rural workers are the backbone of China's manufacturing and construction industries, with tens of millions crossing the country every year for work. Officials previously estimated that 18 million to 23 million of them -- about 13% to 15% of the migrant-worker population -- had lost their jobs as of January.

Since then, China's economy has pulled back from the brink, thanks to a huge expansion of government investment and lending from state banks. "Our economic stimulus plan has had a clear impact on employment," said Liu Yuanchun, an economist at Renmin University in Beijing.

He noted that while the job market is performing better than many expected a few months ago, the picture is cloudy because government figures aren't reliable. "The actual number of migrant workers who have returned to the cities and found jobs may not be as high as the official figures say," he said.

• China Journal: Fears of Migrant Unrest Have Faded

Yet there are other scattered signs of an improving job market. Recent purchasing managers' index surveys indicate many manufacturers added jobs in May and June. And the government's revenue from income taxes rose 2% in the second quarter, according to economist Stephen Green of Standard Chartered, which also suggests payrolls are expanding.

The International Monetary Fund says businesses such as consumer-durables manufacturing and infrastructure construction are absorbing the laid-off workers.

Mr. Wang said the government's estimate of the total migrant worker population had increased by about 10 million since the end of 2008, to 150 million people in June. That figure could be evidence that job opportunities are still drawing more people off the farm this year.

He said the government will continue measures to boost employment, as three million recent college graduates have yet to find a job. "China's employment situation is still very serious," Mr. Wang said. "There are still a lot of companies whose businesses are in trouble, and the risk of job losses is still high."

New jobs for migrants this year may not be as good as those they had before. Some scholars report that migrant workers have often had to accept lower wages to find new work in recent months. The southern city of Shenzhen, long a magnet for migrant workers, recognized this trend by cutting its average wage guideline for this year by 3.8%, to 2,750 yuan ($402) a month.

Official measures of income and consumption are still rising this year, although at a slower rate. The government's survey of rural households shows average income from migrant work grew 7.7% in the first half of 2009, down sharply from 19.6% growth in the same period last year.

Yet a central-bank survey in May found urban households' satisfaction with their income was at its lowest level since 1999. Mr. Liu, the Renmin University economist, said official income figures don't include commissions or bonuses, which are likely to be down sharply. "Many people feel their incomes are declining, and their expectations for future income are not so great, so they are cutting back on their daily consumption," he said.

Write to Andrew Batson at andrew.batson@wsj.com