Lawyers Take Out Loans to Work, Xi Jinping’s "Bright Employment Outlook" Theory Backfires

The Five Pillars of Control Under Xi's CCP Rule (Meiqing / People News)

[People News] Youth unemployment remains high, recent college graduates face immediate joblessness, and China’s economy is mired in recession. On November 1, Xi Jinping published an article titled "Promoting High-Quality and Sufficient Employment" in the Party’s Qiushi magazine. The article avoided discussing China’s unemployment rate and instead lauded the CCP’s employment policies, emphasizing "the comprehensive leadership of the Party over employment" as a guarantee and best practice for promoting employment and improving job quality.

However, Xi Jinping and Party media have been refuted. On October 31, Economic Observer published a report titled "Are Lawyers Really Taking Out Loans Just to Go to Work?" which sparked widespread discussion.

The report noted that at a recent legal services expo in Shenzhen, a young lawyer named Huang Ling encountered a new "lawyer-exclusive credit loan." This loan is available to full-time lawyers working in law firms, with a maximum limit of 2 million yuan and an annual interest rate as low as 3.5%. Huang Ling hoped to use this loan to relieve the financial strain caused by her three consecutive months of zero income.

Earlier this year, Huang Ling left salaried law practice to become an independent practitioner, but her income has been minimal. Meanwhile, her firm repeatedly pressured her to pay various fees, including social insurance, workspace fees, and printing fees (3,000 yuan per month for social insurance and 1,500 yuan for workspace), making her expenses often exceed her income. She worries that if things continue this way, she’ll soon need to take out a loan just to keep working.

The media also interviewed other legal professionals, all of whom noted that the legal industry is highly competitive. A partner at a law firm in Guangdong, who has worked in the field for more than a decade, admitted, "In the past, a lawyer might charge tens of thousands of yuan for issuing a legal letter. Now, some lawyers are willing to do it for just 500, 800, or 1,000 yuan." He added that if his income continues to decline, he’ll have to rely on savings or work as a part-time driver for DiDi, deliver food, or drive for Huolala.

In the comments section, a netizen remarked, "I’ve heard that young lawyers at some large firms are not only pretending to work but actually taking out loans to work..." Another user commented, "I’m working on a case where the lawyer defaulted on a loan. In another case, a lawyer only charged 1,000 yuan, but after the trial, they told me they only actually earned 100 yuan after other channels took 900 yuan."

In mainland China, the legal profession used to be highly desirable due to the high crime rate, particularly in economic crimes involving large sums of money. Industry insiders on Zhihu have revealed that diligent lawyers with seven to eight years of experience could earn around 2 million yuan annually. The top lawyers in China reportedly earned 20 to 30 million yuan in agency fees per year, with about 10 million yuan left after taxes, commissions, and assistant salaries, plus law firm dividends. This was roughly the state of affairs in 2018.

Now, however, the situation has changed. With the rapid economic downturn, widespread stagnation, and a decline in living standards, no sector is unaffected. During this year’s National People’s Congress, Sohu reported four negative developments in the legal industry: 1) A top-tier "Red Circle" firm in China announced a 20% pay cut while the staff were singing at their annual meeting. 2) A major U.S.-based law firm laid off capital market lawyers in its Greater China offices. 3) A well-known law firm announced that legal assistants working in data compliance and capital markets would earn 10,000 to 11,000 yuan per month, compared to 30,000 yuan for first-year lawyers in 2021. 4) A WeChat dating group shared a professional law firm’s promotional image offering "free legal consultations," a service usually prohibited by the Lawyers Association.

These events suggest that the legal profession already felt the chill of an economic winter earlier this year. Months later, as the economy has continued to worsen, the legal industry has devolved into a "zombie sector," with some lawyers relying on loans to keep working.

China’s youth unemployment rate peaked at a historic 21.3% in June 2023, after which the country stopped publishing youth unemployment data. When the data was later re-released, current university students were excluded from the calculation, artificially lowering the unemployment rate. Despite these attempts to hide the numbers, youth unemployment still reached 18.8% in August.

In 2024, as China’s economy continues to decline, mass layoffs and salary cuts have hit white-collar industries like finance and trust. Major companies like Tesla, IBM, and ByteDance have also implemented layoffs in recent months. Government employees have seen widespread pay cuts, and temporary staff positions have been eliminated. A record 11.79 million college graduates face an unprecedented shortage of jobs, compounded by the presence of 200 million migrant workers, creating an employment crisis in mainland China.

Several Chinese media outlets have reported severe cases of young people relying on their parents in rural areas. According to Half-Monthly Talk, some rural middle-aged people need financial support from elderly parents after years of working, while others rely on family support for marriage and housing expenses.

In Shanxi, a 24-year-old named Ning Bo (pseudonym) told NetEase News that despite working for several years after graduating from vocational school, he still occasionally needs his parents’ help. His parents bore the entire 400,000 yuan cost for his wedding and apartment, with Ning explaining, "It’s hard to save money with high expenses while working away from home; I’m already doing well by not asking for more help."

This trend of young adults relying on parental support is not limited to rural areas; many urban youths also live at home and depend on their parents. In 2023, Peking University economics professor Zhang Dandan estimated China’s youth unemployment rate at 46.5%, far exceeding official figures.

Recently, the People’s Bank of China and the Ministry of Finance have launched a package of policies to stimulate the economy but have avoided addressing the real need to boost domestic demand and increase household incomes to solve the rising unemployment crisis. According to a Wall Street Journal article on November 4, "Many economists have urged China’s leadership to focus on putting more money in Chinese consumers’ pockets rather than on factories. But these economists say China is unlikely to make such a strategic policy shift anytime soon."

The market predicts that China may issue 10 trillion yuan in government bonds to further stimulate the economy. Government-aligned economists have suggested allowing mild inflation, which essentially means gradually and persistently draining public wealth.

(People News Exclusive)