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Journey
to My Home: Hong Kong and China Rediscovering the Meaning of Labor Activism, Being Chinese and Chinese Nationalism By: Lee Siu Hin |
Part Five: Labor in Hong Kong & China 201
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| Photo: Symbol of American culture: Wal-Marts and KFC are everywhere in China, like this one at Tianjin, China. it sounds strange but there's dozen Wal-Mart superstores in China, selling item generally better then their stories in U.S.--some even high end products from Europe and Japan |
How can western activists accurately understand the complex labor situation in China?
Unlike in many other countries, in factories in China the employer generally provides free food (lunch) and housing for the workers (the housing and the factory are always next to each other). This is an established part of Chinese labor culture, and one of the ways employers attract workers to come to work for them. It is a plus because as long as migrant workers have jobs, they will not go hungry or homeless, unlike what happens in Tijuana, Mexico, where workers need to travel for miles from slums across the city to go to work.
Keep in mind that China is a big country. Different people invest differently in different regions, and the social and labor conditions can vary enormously. Fujian's export industries are primarily owned by Taiwanese businesspeople, whereas Shanghai's and Beijing's are primarily from Taiwan and foreign corporations, who also invest in many high-tech and heavy industries in those cities. In addition, many Chinese private and state-owned industries across China are also involved in export-oriented businesses.
And let's not forget politics. Foreign investments by overseas Chinese from Hong Kong, Taiwan, and the United States not only help the Chinese economy, but also unify Chinese around the world and improve relations with the U.S--a win-win strategy, like saying you're giving us money to make our life better and inviting us into the international arena. The labor problems, the environmental problems and even the problem of Taiwanese businessmen getting mistresses are troublesome issues to be dealt with; but eventually it'll all work itself out. Overall, people tells me the company runs by the westerners (Americans or Europeans) threat the workers better then the company runs by the Taiwan or Hong Kong, worse are generally the company run by the small family Hong Kong business.
It's true that overall working and economic conditions of foreign-invested export oriented industries in China, although now sweatshops, will get better over time, and the overall living standards for the region will also greatly improve. Unlike Tijuana or Juarez, where Maquiladoras are the standard, the city of Shenzhen in many ways is more modern then Los Angeles.
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| Photo: one of the main business street in Shenzhen, China, within this 1/4 miles strips there's hundreds of electronic and computer-hardware related companies, selling billions of dollars of items to all around the World annually. |
With help from friends, I met with a Department of Labor official from one of the industry districts in Shenzhen, to talk about labor conditions in the city. According to this official, Chinese labor law is clear that food and housing provided by employers should be a benefit, not part of the salary. "There's no law in China requiring employers to provide housing and food for the employees. If they provide these to the workers, it should be considered a benefit and the employer cannot charge them." The official says that deducting food and housing costs from employees' wages is illegal.
His statement is only half right, based on my observations. While the working conditions in big companies and big factories are generally fair, it really depends on who runs the management, and just like in the U.S. it also depends on how much local government and labor departments cooperate on improving labor rights.
It doesn't means that there are no labor laws, or that no one enforces them, but again it depends on the government's willingness. In some cases, some local government officials are closely linked with the company (because of bribes), so they let them do whatever they want to do. In other cases, the local government is afraid if they take too strong measures against the factory, they will move away; or the city government simply just doesn't have enough resources to deal with such a massive expansion of factories and workers in their region. Shenzhen, for example, was only a small border town of twenty thousand in the 1970's. Within 25 years, it has now grown 200 times to a city of 10 million, equivalent to the size of Los Angeles. And in other cases the government simply doesn't care about labor law violations, as long as their tax revenue is guaranteed.
Labor unions are another issue. Contrary to the common notion, China is a highly unionized country. Most government employees, state or collective enterprise (semi-state/private capitals) workers, or employees of major joint-venture companies whose Chinese side is owned by the state, have joined the union, backed by All China Federation of Labor Unions--AFLU (equivalent to the AFL-CIO in the United States) which is controlled by the Chinese Communist Party.
However, non-state or non-collectively owned enterprises have a very low unionization rate. According to the AFLU, as of 1998, only 7.3 percent of the non collectively owned enterprises had labor unions and just 4 percent of privately owned companies. And there is almost no union representation in export-oriented factories owned by overseas Chinese from Hong Kong or Taiwan. Although the AFLU and many other government officials repeatedly complain about the private companies' violations of labor rights and preventing workers from joining the union, they don't seem to be able to suggest any good solutions.
" Most foreign-owned factories in China don't have a union, because they don't like union!" Many Chinese workers told me.
In many cases, the company fires workers who try to organize a union. And in many bizarre cases, under pressure from workers the union is able to form, but the leadership is controlled by the management. "It's a widespread problem, because they don't want workers to organize unions, and the government won't do anything about it," many people told me.
I again ask the Shenzhen labor official, while he is complaining about foreign companies keeping workers from joining a union, why they cannot form their own independent union when the major unions didn't help them. The official just replies: "It's a violation of Chinese law; we do not allow the formation of unauthorized unions."
According to government estimates, 22.6% of all Chinese are considered industrial working class. That includes the 100 million farmers-turned-migrant workers, known as "Ming Gong". To understand the massive scale of people involved, during January's Chinese Spring Festival (aka Chinese New Year or Lunar New Year) holiday, most of them will travel back to their home for the holiday. According to the government, there'll be approximately 1.9 billion (that's billion with a b) travelers during the Lunar New Year holiday traffic, most of whom are Ming Gong, students and tourists planning to travel back home.
Based on my observations, there are many myths about Chinese migrant
workers preventing activists from correctly understanding the labor conditions
in
China:
1) Most Ming Gong in China do not work for foreign-owned factories in
coastal cities: rather, most of them are working in construction, transportation,
domestic manufacturing, mining and service industries across China, and
have nothing to do with export business.
An estimated 20-30% of all migrant workers work in foreign-owned factories--including sub-contractors for western brands, generally owned by overseas Chinese from Hong Kong, Taiwan and the United States/Canada.
2) Not all migrant workers are young females: it depends on the industry. While female workers dominate the manufacturing and service sectors, male workers predominate in the construction, transportation and mining sectors.
3) It's still about the money. It's common knowledge that western-owned companies and their large projects in China, or large Chinese state-foreign joint ventures generally have the best working conditions; next come the large Taiwanese-owned companies in the Shanghai area, and then the Chinese state-owned industries. Farther on down the line, in Hong Kong- and Taiwan owned factories, and in the small family-type Taiwan- and Hong Kong-owned companies, subcontractors for western brands, the problems are generally low pay, hazardous working conditions, poor industrial safety and sexual harassment.
4) The lowest wage, worst sweatshops in China are generally run by Chinese
private businesspeople, for example in the construction and mining sectors;
they generally have nothing to do with export business. Especially in
the private coal mining sectors, the owner of the mine will typically
pay bribes to local officials to ignore safety violations, causing many
tragic
accidents and resulting in hundreds of deaths every year.
According to the recent government census, in 2001 the highest paying companies were foreign-owned major manufacturing industries (such as General Motors or Honda auto factories in China). Their workers' annual wages were 15,358 YMB (USD $1,970), 46% higher then state-owned workers in China, 10515 YMB (USD $1,348); subcontractors for western brands owned by over-seas Chinese, 11,039 YMB annually (USD $1,415). Chinese-owned private companies, on the other hand, only paid their workers 7,740 YMB annually (USD $992).
So what are the key areas of labor struggle in China? Based on different
reports it is concentrated in the following four areas:
1) Violation of Labor Laws: The subcontractors in privately owned or foreign-based
companies generally don't give any benefits and worker securities (if
you're sick, you lose pay). In addition, they force workers to work overtime
without overtime pay, with enormous working pressures, serious violations
of health and safety codes, sexual harassment, and preventing workers
from joining a union: all direct violations of Chinese labor law.
In many cases, when workers were injured or even lost a hand or finger due to an industrial accident, they lost their job without any financial compensation. Some Taiwanese factory owners recently told the newspapers they refuse to pay compensation or medical bills because they accuse the workers of "deliberately injuring themselves to blackmail the company for money."
Except in some high-profile cases, the government generally does not actively help workers, and without unions or public/media pressure, they don't have enough power to demand collective bargaining.
2) Housing and Food: This is a big deal in China, and poorly understood by westerners. Traditionally, Chinese workers live in a dormitory provided by the factory, and eat at the factory's cafeteria, both for free. "There's no law requiring employers to provide free housing and food for workers," a Chinese labor official told me; "it should be considered part of the benefits."
He says that in order to attract migrant workers to come to work, many factories promise to provide housing and food for workers. "But they cannot force workers to pay for the housing and food," he says. Some subcontractors force workers to pay their housing and food. "It's a violation of the law, and also another way to cut their wages," the official says.
3) Declining wages or income inequality: Although overall income for factory workers is rising, some Hong Kong and Taiwan subcontractors are "forced" to cut workers' wages, in order to cut costs to win contracts with foreign firms such as Wal-Mart. It's a much discussed issue at the factories in the Pearl River Delta region. The workers blame the greedy factory owners, while the factory owners blame the American companies and too much competition in China willing to work for less. One typical example: Chinese-made microwave ovens sold for only $30 last Christmas season in stores across the U.S. The factory owner claims that in order to able to meet the less then $10 manufacturing price, he needs to slash worker's wages, require overtime without overtime pay and take almost no profit on the ovens.
Most Ming Gong I talked to who work in factories or private stores or restaurants earn about 700 to 900 RMB (Chinese currency) monthly ($90 to $115 USD), which let's say is like $1000 USD per month income, equivalent to a minimum wage job in the United States. However, unlike state-owned companies, they don't get benefits.
During my visit across eastern China, in talking to many people, my overall impression was that the labor conditions in China are getting better then 20 years ago. However, the income gap between rich and poor is getting wider. Working class farmers and the general working class earn more then before but their rate of increase is far behind the wealthy urban middle-class or private entrepreneurs. According to a recent government report, in 2003 the per capita income of urban residents (35% of Chinese population) was 8,472 RMB ($1,033 USD), an increase of 9.0% from the previous year; whereas for rural residents (65 % of Chinese population) per capita income was 2,622 RMB ($320 USD), one-third of urban incomes and only increased 4.3% from the previous year. As more wealth is concentrated in the cities and the middle-class (which, depending on the definition, ranges between 10 and 30% of the Chinese population), it's like the old, wry adage: the rich get richer, and the poor are not getting richer yet.
With these huge economic pressures, it's rational that workers from poor rural regions are willing to take low wage factory, construction or service area jobs. These are not good paying jobs by urban standards, but they are still considered better than unemployment or working at low-pay farming jobs in the countryside. These jobs used to be taken by workers from the city 20 years ago, but now most of them are much wealthier than before and have moved on from their working class life, in some cases starting their own business in the city.
It's true that in Shenzhen or Dongguan, the factory workers employed by the Hong Kong or Taiwanese companies 25 years ago were local people; but now most of these people have better income jobs or are running their own business, and the business owners are hiring people from still-undeveloped regions of China.
Rule of thumb: although the exchange rate of Chinese currency is 1 USD = 8.20 RMB, the actual purchasing power can be anywhere from 50 cents to $1.50, depending on what you purchase.
4) "Deadbeat Wages": this is the biggest labor problem currently in China. According to the news reports, there are up to 17 million workers whose employers, primarily from Chinese owned private companies (but also some Hong Kong- and Taiwanese-based subcontractors) owe workers back wages. Estimated amounts are in the range of 10 billion YMB ($1.25 USD). Some employers even owe workers over 3 years' back pay.
Culturally, workers need to get their money so they can go back home for the January Spring festival holiday month. The "deadbeat wages" issue creates huge tensions between local government, employers and workers. Everyday in the Chinese press, you'll read many stories about "deadbeat wages" and how local government officials fight to get money for the workers from the deadbeat bosses, so workers can go back home for the holiday. These stories are touted as part of the government officials' political achievements, or simply as a media human-interest story.
There's no doubt that working conditions in many factories in China,
compared with those of 10 years ago, are getting better. Overall, workers'
income is rising, and government is working hard to enforce labor laws,
but the labor violations are still widespread, and income gaps between
the rich and the poor are widening.