A company in the capital of Shandong province was once famous for its "hot metal", but the decline of the local industry poses a dilemma for younger employees.

"To resign, or not to resign, that is the question," said Du Peng, a 36-year-old electrician for the Jinan Steel Group in Jinan, the capital of East China's Shandong province.

For the past two years, Du has only worked at the State-owned company for two days a week. In truth, he has nothing to do at work but sit and chat because since 2013, Shandong's largest steel producer has intermittently suspended production.

Steel town shutdown shatters the 'iron rice bowl'

Jinan Steel, known as Jigang by its employees, has lost nearly 4 billion yuan ($616 million) since 2012. Two years ago, it announced plans to lay off 10,000 workers by the end of this year.

The decline in business has also forced the company to cut wages. Du makes about 3,000 yuan a month, about half of what he earned five years ago. "Wages will continue to fall, which will force more workers to quit," he said.

Most of the company's older workers, those within five years of retirement age, can opt to retire and receive their pensions immediately. However, that's not an option for younger and middle-aged workers such as Du. If they are dissatisfied, their only alternative is to quit.

A working community

Du was born into a Jigang workers' family and grew up in the workers' community, which is home to 40,000 employees and 60,000 immediate family members.

He has a 12-year-old son and his wife, who is from a nearby village, is a homemaker. To make ends meet, he works part-time as a taxi driver. His father Du Zufeng retired from his job as a security guard at Jigang five years ago. The 64-year-old is now recovering from a stroke that left him almost blind. Du Peng's 62-year-old mother spent her entire working life as a sales assistant in a shop owned by the steel mill.

Du Peng's hesitation over quitting his job stems from the difficulties he encountered 10 years ago when he tried to obtain an "iron-rice-bowl", a job for life, at Jigang.

After graduating from a vocational school run by the company, he discovered that his childhood friends had become his rivals in the search for work. If he had been born several years earlier, he could have taken a job in the steel mill once his mother or father retired, but the company decided to only employ college graduates, meaning there was no work for him.

Instead, he applied for a driving license and trained as a bus driver. However, before he could start work, Jigang reversed its employment policy and began hiring non-graduates. In 2005, Du Peng passed an entrance exam Jigang arranged for the children of its employees.

"Jigang children have an ingrained mindset; they are born to become steel workers, nothing else," Du Peng said.

Du Zufeng warned his son: "Once you quit the iron rice bowl, you will never get it back. Maybe the government will help like it did before?"

Du Peng thought a government rescue package was unlikely because the company's products and technology have long lagged behind the market. "This time things are different," he said.

In March, the central government announced that it had set aside 100 bill-ion yuan to help workers laid off in the coal and steel industries this year. According to Yin Weimin, the minister of human resources and social security, about 1.3 million coal workers and 500,000 steel workers will lose their jobs.

Decline is inevitable and the company is the architect of its own failure, according to Du Peng. "The most advanced steel-rolling equipment in the mill was a second-hand machine imported from Ukraine in the 1990s. The Ukrainians had used it since the late 1970s," he said. "Who would rely on such outdated machines to restore a business against today's fierce competition?"