Street sweepers in Shanghai offer a hint at the economics of China’s job market. The average income in Shanghai is under $15,000 per year. Street sweepers make less than that. Compare the life of these workers to the fact that I rarely see a car on Shanghai’s streets less than three years old. For every Chevrolet, Ford or Honda I see, there are twenty BMWs, Teslas and Bentleys. I am not kidding that almost all cars are new, top of the line luxury brands. You will notice if it you’re in Shanghai. It’s not just a few cars that are old, there are no cars that are old. Why the luxury cars with such small incomes?
The economic answer is pretty simple. In a country of 1.4 billion, if even a small percentage of the population is rich, it’s still a lot of people. These are China’s Average Wealthy. They reside mostly in Shanghai, Beijing and the cities of 10-million-plus like Suzhou surrounding those first-tier cities. Job salaries don’t matter much for the Average Wealthy. They got most of their money from real estate. The government came in, paid a boatload for previously worthless property so the government could build a factory, and suddenly the poor became rich. Buy a new apartment and get bought out by the government again, and the rich become very rich. Wealth from real estate creates odd side effects.
Driving a luxury car in Shanghai doesn’t signal one is educated, professional, career-advanced or particularly capitalist. China’s Average Wealthy wear some of the worst Gucci I’ve ever seen - like white onesies patterned with the Gucci logo from toe to neck. Since all this money is from real estate, it’s not from people getting great incomes from great jobs earned after great educations. For the generation of China’s children who were sent to North America for their educations, incomes are still not great. Twenty-somethings return to China fluent in English and with a solid American education. Many return to China and don’t need to work. Some work good jobs for the family business, and some continue to live off the former sale of a single grandparent's apartment. A professional class is growing, but even for China’s well-educated kids, most aren’t earning incomes anywhere near at par with their equally-educated western counterparts.
It makes me wonder about jobs. Jobs mean income, and income is not wealth. Thomas Piketty summarized the income gap well using data mostly from Europe and the US, but the trend is consistent worldwide. Capital is growing while incomes are falling.
I wonder about kids in China, the US and worldwide. Globalism has pulled much of the world out of poverty, but it’s increased the income gap. What work all our kids will do in the future is a big question for me.
Working in education, I need a longer-term answer. The benefits of education accrue over decades or even lifetimes. Some students need real job training while others need a broad education they can apply to new as-yet unimagined forms of work. Students and parents trust their education systems to know what students need and prepare them for success. School leaders need to ask the hard, long-term questions about what will drive success for today’s kids tomorrow.
John Heintz is a writer, teacher, researcher, editor, podcaster, blogger and thinker. Based in Shanghai, he writes on the education, economic, legal, justice and social issues facing the global community. John Heintz has lived and worked in Scotland, Illinois, California, Texas, France, Spain, the Netherlands and China. He writes regularly for Second Rail and other media outlets.