Taiwan's problem? Too many college graduates, too few machinists

TAICHUNG, Taiwan—As the United States pushes to get more young people to go to college, this island nation faces the opposite problem: too many college graduates.

Victor Taichung Machinery Works Co. is a "smart" manufacturing company. It crafts million-dollar machines that make the machines that build the products we use every day.

But while business is booming, finding workers is a drag on production, say managers.

"Young people today don't want 'black hands,'" said Wayne Hsueh, a director at Victor Taichung. That's a Chinese phrase that carries a positive implication, a meaning of someone whose hands-on experience has left their hands greasy and dirty, someone capable who's not afraid of hard work.

Hsueh's company builds 140 highly technical machines a month that it sells to factories worldwide in the aerospace, chemical, automative and electronics industries. These machines can cost $50,000 each or more.

But even though he pays a minimum of $1,000 a month, with some of his highly skilled workers making much more, it's still hard for him to find staff.

Over the whine of metal being precisely ground by a lathe, Hsueh raises his voice to be heard. "They all want to study literature!" he says, and shakes his head. "But if you get a degree in literature, maybe you can't get a job."

Today's problem is a surprising downside of Taiwan's legacy as a nation with a strong Confucian history that revers learning.

"Chinese parents all want their children to study as high as possible. And they don't think it's good to get a 'dirty job,'" said Sam Shen, with the Market Intelligence & Consulting Institute at Taiwan's Institute for Information Industry.

That thirst for learning drove the Taiwanese economic miracle that transformed an agricultural nation into an electronics and manufacturing powerhouse in a few short decades after the Second World War.

But things may now have gone too far.

Taiwan currently has 160 universities in a country with just 23 million people. It's also got one of the world's lowest birthrates, 1.3 children per woman. Already high schools and middle schools are seeing empty seats. In 2014 just 200,000 babies were born in Taiwan, according to the Taipei Times.

Because of that, the Ministry of Education wants to cut the number of universities by one-third in the coming years.

At the same time, the nation has too few vocational schools. There was a push in the 2000s to turn them into universities. That switch came at the expense of high-level technical training, which was a major part of Taiwan's economic development strategy.

Shen says just 25% of his high school class got into college in the 1980s. Instead, many studied at vocational schools and went to work in factories--the same factories that made Taiwan a go-to nation for precision, technically difficult machine construction.

"Now the percentage for entry into college is almost 95%," he said.

Hordes of new college graduates who don't honor the 'black hands' won't help as Taiwan's manufacturing sector pushes to keep high end work in the country.

At Giant Manufacturing Co., one of the largest bicycle makers in the world, "we moved our low end bicycle production to China--but we kept the high end models here in Taiwan," said CEO Anthony Lo.

"The whole society knows this is a serious shortage," said Shen. "The universities understand and they're increasing the proportion of practical training in their programs. But it takes time," he said.

Taiwan's president, Ying-jeou Ma, is very clear that retaining the most sophisticated work in Taiwan is important."The industries we want to keep in Taiwan are capital intensive and technology intensive," he told USA TODAY.

But to do that, the country needs workers to run the machines.

Down the road from Victor Taichung is the headquarters of HIWIN Technologies Corp., whose eight plants build motion-control systems used in precision machines and production. They, too, are finding it hard to get the staff they need.

"The problem in general in Taiwan is that young people don't want to work in a machine shop," said Chao-Kun Chyu, senior general manager for research and development at HIWIN.

For a nation that raised itself by its own boot straps in a remarkable 40 years of effort, those words rings poorly.

"I just don't understand the students today," says Hsueh of Victor Taichung. "They all want to be in a clean office. But we get to make things!"