`People's Daily' columnist -- `Time to defend Chinese workers' rights'

Honda Lock strike in China continues as industrial unrest spreads
By John Chan
12 June 2010, World Socialist web site

Strikes at Honda’s transmission and exhaust system plants in the southern Chinese city of Foshan that won significant pay rises, and ongoing industrial action by Honda Lock workers in Zhongshan, have been followed by strike action in other parts of the country. Workers are demanding higher wages, better conditions, and secure jobs in cities including Shanghai, Zhuhai and Xian, in both foreign- and state-owned enterprises.

The Honda Lock strike, involving 1,700 workers, appears to be intensifying, with employees yesterday morning rallying outside the factory before staging a short protest march, in defiance of black-clad riot police. Police left without clashing with workers. Honda nevertheless threatened workers over loud speakers that they would face “serious consequences” unless they accepted the offered 100 yuan pay rise. Many Honda Lock workers currently earn the local official minimum wage of 900 yuan a month, $US132, for a 42-hour week. They are demanding an additional 800 yuan a month, 89 percent more.

On Thursday, the South China Morning Post reported, workers chanted at a factory fence: “Are we settling for 200? No way. 300? No! How about 400? No way.” A 32-year-old female worker from Hunan said: “We want the same wage level as Nanhai Honda workers. Not a single cent less.” A 33-year-old worker from Guangxi told the newspaper why she had joined the strike: “I am in the paint spraying unit,” she explained. “The air quality is terrible inside. I’ve been sniffing toxic fumes for four years and only earn 1,800 yuan a month. The wage level is too low.”

The workers are not provided with dormitories, and must live in nearby apartments that typically cost $44 a month [300 yuan] for rent and utilities.

Honda Lock workers have also been provoked by oppressive workplace conditions. They are forced to stand for eight hours, with pregnant women allowed to sit only in their last trimester. Workers are not allowed to speak to one another, have to obtain passes before going to toilet, and are strictly monitored by management even when getting a drink of water. The strike was triggered on Wednesday morning when a company security guard denied a female worker entry to the plant because her ID card was supposedly improperly attached to her shirt, and then forced her to the ground after she protested.

Honda Lock employees have elected a council of shop stewards to negotiate with management. The workers’ organisation was formed in opposition to the state-controlled All China Federation of Trade Unions (ACFTU), and some have called for a new independent union. “The [ACFTU] trade union is not representing our views,” one unnamed striker told the New York Times, “we want our own union that will represent us.”

These developments represent a direct challenge to the Chinese Communist Party’s ban on any independent organisation of the working class, which has been in place since Mao’s peasant armies came to power in 1949.

The Financial Times yesterday reported: “At plants where the strikes are continuing, plain-clothes surveillance of workers and reporters is increasing.” The full extent of the strike wave across China remains unclear, as some have reportedly been settled or suppressed shortly after emerging, while other struggles have been deliberately ignored by the state media.

In Zhuhai, Guangdong province, nearly a thousand workers in a Flextronics plant struck on Thursday, demanding a pay rise to bring them in line with the 2,000 yuan received by Foxconn workers. US-owned Flextronics is the world’s second largest outsourcing electronics manufacturer, after Foxconn, and employs 30,000 workers at its Zhuhai plant. Workers complained that they are subject to a brutal production regime similar to Foxconn, but receive just 965 yuan a month. This wage is similar to that at Foxconn before a series of suicides forced the company to offer pay rises.

In Shanghai, 2,000 workers at TPO Displays, partly owned by electronics giant Foxconn, went on strike on Wednesday, protesting against rumoured company plans to relocate the plant to Nanjing. The workers produce LCD screens for mobile phones and GPS devices.

In Xian, Shaanxi province, Japan’s Brother Industries’ two sewing machine plants were shut down by a strike of 900 workers that began on June 3 in demand of higher pay and better conditions. The ACFTU head of the factories claimed that workers had agreed to return to work last Thursday, after the Japanese management made concessions.

In Jiujiang, Jiangxi province, 8,000 workers protested at a Taiwanese-owned sport equipment factory. Last Saturday, a female worker not wearing her ID card was blocked from entering the plant, leading to an argument in which security guards assaulted another worker who tried to mediate. After rumours circulated that he died had from his injuries, the pent-up anger at the plant erupted on Monday and workers smashed the security department, factory gate, equipment and vehicles. The strike ended when 200 police officers arrived and arrested the security guards who had attacked the worker. The police remained to ensure that production resumed.

In Hubei province’s Suizhou city, 400 workers staged an anti-privatisation protest in front of their state-owned textile factory. The plant had been sold to a private business owner who was unable to revive production, and instead plundered workers’ pensions and other benefits. The local authority bought back the enterprise, only to sell it to real estate developers. Workers began protesting the sale last month and the issue remains unresolved.

The international financial press continues to watch the emerging workers’ movement in China with great unease.

A comment by Tom Mitchell in Wednesday’s Financial Times warned that disruption to global supply chains caused by industrial action would likely prove just as damaging to investors as wage concessions. “The complexity of the global supply chain may be something to marvel at—but it comes at a price,” he noted. “The inherent fragility of a farflung system with millions of interactions can lead quickly to negative widespread repercussions for the companies whose futures are bound up with it.

BusinessWeek commented on Thursday that the young generation of Chinese workers “are far more aware of world developments than their parents”, thanks to widespread Internet and mobile phone use. Frank Jaeger, a German factory owner in Dongguan complained: “Every worker is a labour lawyer by himself. They know their rights better than my HR officer.” Harley Seyedin, president of American Chamber of Commerce of South China, said: “There are Internet cafes everywhere, so the workers can get information. They are starting to ask for more. The days of cheap labour are gone.”

Hong Kong’s Economic Daily yesterday warned that strikes may “spread across the country”. It stated that while some large corporations could afford wage concessions, there were limits. Transnational firms could pull out of China if higher profit margins were on offer elsewhere, while many small and medium companies could collapse if forced to issue 20-30 percent wage rises. The Economic Daily also explained that although it was important for Beijing to encourage domestic consumption, granting higher wages carried huge risks: “Given the current sharp social tensions in China, strikes may mix up with other social grievances, evolving into demonstrations and even unrest against the [existing] society and even the government, shaking social stability.”

The CCP is well aware of the dangers posed by the growing strike wave. Currently it is treading a fine line, hesitating to unleash repressive measures against the striking factory workers for fear of triggering a broader oppositional movement, while at the same time preparing for violent confrontation to suppress the working class, as it has done in the past.

URL http://wsws.org/articles/2010/jun2010/hond-j12.shtml

by Lang Yan | 9 June 2010 |
POSTED BY CHINA STUDY GROUP

While I was walking around the Shanghai World Expo on a weekday a couple of weeks ago I met a group of workers from a nearby clothing sweat shop. Their company had sent them to the Expo for the day (for which they had to trade their only day off, Sunday). They were too tired to enjoy the Expo as they worked 14 hours a day, six days a week. While this may seem like a nice gesture on the part of the company, the workers also explained that the company was moving much of their production to another building that week, because a worker burned much of the factory down after not being paid on time. I heard this story just as the news of the Foxconn suicides began to break into the media and shortly after that the Honda strike began.

Within public discussion, the Honda wildcat strike has transformed the meaning of the Foxconn suicides. Early interpretations of the Foxconn suicides tended to argue that the suicides should either be understood as individual psychological issues and as copycat suicides, on the one hand, or a result of the particularly brutal and alienating conditions at Foxconn, on the other. Some marshaled statistics to show that there were no more suicides at Foxconn than the social average when one considers the size of Foxconn (for example, see Tom Holland “Why there’s less to the suicides at Foxconn than meets the eye” and Michael R. Phillips “Foxconn and China’s Suicide Puzzle Workers: may not be taking their own lives for the reasons everyone thinks” ). Statistics average out, in other words, the social difference of the militarized factory space; Foxconn was treated as a normal social space, a city. (For a discussion of suicide rates and Foxconn, see EastSouthWestNorth #19 . Notable also is that the Chinese rate of suicide for people 15 to 34 is quite high. See Suicide main cause of death in 15 to 34-year-olds .)

Analysis of the social and work conditions at Foxconn also appeared. The particularly militarized and alienating work environment at Foxconn is a result of capital’s relentless drive to lower assembly costs and the Asian subcontracting regime; reform-era China and the CCP have been a willing partner in that effort. Activists and scholars have argued that Foxconn is one of the worst factories in terms of it labor regime, with a very long (usually about 70 hours) work week (since the pay structure means that workers must work a lot of overtime) and a very rapid assembly line. Foxconn was able to become the world’s largest assembly company exactly because of its harsh Taylorist production process, which cuts up the process into highly regimented movements, its ability to intensify labor exploitation and its repressive management style (See this article by Andy Xie for some analysis and background on the Taiwanese management style). There are reports that Foxconn initially responded to the suicides by pushing workers to sign contracts that they would not commit suicide, and stating that their families would not receive compensation if they did. It went so far as to state that suicide harmed Foxconn’s reputation.

But the successful Honda wildcat has changed the discussion. The suicides and the strike are being put into the context of changing labor relations in China, with many now arguing that Chinese labor is at a turning point.

For example, NPR’s Marketplace (Honda, Foxconn workers demand more power ) argues that a “labor shortage in China is empowering workers to demand better wages and treatment at their workplaces….” In a discussion of the Honda strike, Reuters notes that “[s]ome other foreign companies have begun to address workers’ discontent over pay and working conditions. Taiwan’s Hon Hai Precision Industry Co Ltd for instance plans to raise salaries by about a fifth at its Foxconn International unit, maker of Apple Inc’s iPhone, as it struggles to stop a spate of suicides and quell public anger.” Foxconn has said that it will raise base salaries by 30% now with more raises to come in the near future. Clearly this wasn’t only caused by the suicides, however. Foxconn was planning a salary increase earlier in the year in response to the difficulty hiring workers due to labor shortages.

The Honda strike (workers’ demands included wage increases from about 1,500 yuan (less than $220 US) to about 2,300 yuan ($337 US) for higher paid workers) is likewise getting more press than any other worker action in recent years.

China’s economic stimulus has given large subsidies for car sales, and car manufactures are attempting to rapidly increase production in China. Honda plans to add a third to its Chinese production by 2012. But its integrated production process is vulnerable to strike activity. This is particularly true of transmission plants, which are highly automated and expense to construct. Thus they are usually put in the most stable regions, notes the New York Times. But the stability of the Chinese working class is now in doubt. According to the Wall Street Journal :

“The strike has exposed unexpected vulnerabilities in Honda’s China
supply chain. Because of the relative absence of labor unrest in
China, Honda makes do with only one source of transmissions there,
the Foshan factory that supplies roughly 80% of demand, according to
Mr. Fujii. The rest are brought in from Japan. Typically, Honda
insists on at least two suppliers of parts, partly to protect
against any industrial action that might cripple production.”

While quick to tamp down any political interpretation of the workers’ activity, the New York Times argues that in the beginning the state allowed media coverage of the strike because it wants to push up internal demand. On the other hand, the China Daily (in an article now taken off their website) used the strike to editorialize that the Chinese state needs to do more to raise the wages of workers. Since the end of the strike, Chinese media coverage has continued while broadening its analysis. At the same time, the government seems to be increasing its efforts at raising the wages and internal consumption. This follows several years of increased investment for rural China, which means there is less pressure for peasants to migrate out for work.

/Broader Implications: First question looking forward:/

What does this mean in terms of the changing Chinese political economy? A few points: Increasing wages in China could help rebalance the global economy. As their wages increase Chinese workers will be able to spend more (the wage share of GDP fell from 56.5 percent in 1983 to 36.7 percent in 2005). A rise in internal demand will mean a drop in the savings rate in turn forcing a rise in the savings rate in the US. This will likely also mean inflation, which is already a problem with the huge Chinese stimulus, yet inflation is also another way–other than a direct change in the exchange rate–for the Chinese state to rebalance its trade relationship with the US. The power of the export manufacturers in China seems to have been able to keep the state from changing the exchange rate to any great extent, but inflation might help take care of this for the state. Of course inflation will eat into wage increases and possibly lead to more social unrest. Meanwhile, the Beijing government announced on June 3rd that it was raising the minimum wage by 20% in response to inflation–the past few years it was raised about 10% per year. Other regions are following suit.

The June 7th issue of The Economic Observer (Jingji guancha bao) has articles on the labor situation noting that both the Honda strike and the situation at Foxconn are symptoms of a broader change going on in the Chinese labor market. One article argues that China has reached the “Lewisian turning point” . Arthur Lewis argued in 1954 that, for a period of time, developing countries could rely on rural surplus labor to keep wages from rising. This would allow them to industrialize without wage inflation. But once rural surplus labor is absorbed by the industrial economy and the labor market unifies wages will begin to increase more rapidly. The influential economist Cai Fang has been predicting this shift for some time, and in 2007 edited a volume on the turning point called “The Coming Lewisian Turning Point and its Policy Implications.”

Arthur Kroeber argued in the March issue of China Economic Quarterly that China’s cheap labor regime was coming to an end and that wage inflation will drive up the consumption share of GDP. In the planning for the 12th Five Year Plan, the CCP itself emphasizes this rebalancing and the important role that raising the wage share of GDP should plays in the process. At the same time, some commentators seem to be taking this argument a bit too far. Andrew Peaple states that “the dynamics of China’s economic development are moving inexorably in favor of the country’s workers.” While this will change the shape of the Chinese economy, its effect on capital will be mixed. Higher wages will mean more consumption, helping many companies as much as it hurts. But the assembly and clothing industry in the Southeast will be hit hard, as those plants are both more easily moved to other, cheaper-wage countries and have thinner profit margins. It is too early to say what this transition (of the Chinese economy and of the Chinese labor process) might mean more globally.

/A second question looking forward:/

Does the Honda strike indicate increasing self-activity of the working class in China? Certainly the example of the success of workers in the Honda strike in winning some wage increases (initially about 24% but in the end much more) might spread to other workers in China. Also, the strike itself was very highly organized, leading to the participation of about 1,900 workers (including a large number of low-paid interns). The workers seemed split, however, when gave in to a lower wage increase than initially demanded. The People’s Daily reports that the hold out group was involved in a confrontation with representatives of the state union, the ACFTU. (The local ACFTU seems to be playing a more conservative role–by protecting Honda–than even the state-run media.) The World Socialist Website details the attempts by the company to split the workers by putting pressure on the interns to sign no-strike pledges in return for smaller wage increases. According to The China Daily , the strikers also demanded changes in work conditions, more transparency in company finances (this seems like a reflection of the history of worker democratic involvement in enterprise management in China), and a change in union representatives. The New York Times points out that workers complained that Japanese employees at the Honda plant make about 50 times that of Chinese workers. It is likely that nationalism has also played a role in how this strike has been reported in China. Most of the workers held out, however, and the agreement reached will lead to high wage increases. Kroeber talking Reuters stated that “Foreign investors have been lulled into a false sense of security that China has a docile work force. There’s nothing intrinsically docile about the Chinese labor force. There was a period when everything was kind of fine; now we are entering a period of more constraint.” Following the Honda strike, workers at a Hyundai factory near Beijing went on strike, but returned to work after they were immediately promised wage increases. Over 5,000 textile workers in Pingdingshan, Henan have been out on strike since May 14th at a factory privatized in 2006.

As the WSWS notes of the Honda strike:

The strike is a sign of sharpening class tensions in China amid the
worsening global economic crisis. While China’s economic growth rate
continues to be high, propped up by huge stimulus spending, the gulf
between rich and poor is widening. Last year there were 98,568
labour disputes filed in Chinese courts, up 59 percent on the
previous year. Most disputes, however, were not reported.

It remains to be seen, however, how successful the CCP’s attempt at economic transition will be. We need to know how much of China’s growth and job creation is due to the stimulus and how sustainable it is. The unsustainable property market is creating an investment bubble. Just as likely as transition to a consumer-based economy, inflation could lead to stagflation once the property bubble bursts and the initial affects of the stimulus wear off. The real question is what then for the activity of the Chinese workers. They are clearly learning important lessons now. The fundamental question is whether their new found strength will lead to a break from the domination of capitalist accumulation or not.

*******************

DATE: June 29, 2010

TO: NLC Contacts

FROM: Charlie Kernaghan

RE: U.S.-owned Hi-tech Jabil Circuit Factory in China--Run like Minimum-Security Prison,
Producing for Whirlpool, GE, HP, IBM - Please Act Now to help these workers!

Today, the National Labor Committee is releasing a 30-page report (http://salsa.democracyinaction.org/dia/track.jsp?v=2&c=iwirwjAo%2FqYHhe…) documenting the illegal and harsh sweatshop conditions at the Jabil Circuit factory in Guangzhou, China, where over 6,000 workers-many of them illegal temporary workers-produce hi-tech products for HP, IBM, Intel, Cisco and Jabil-all of whom are Board members of the Electronic Industry Citizenship Coalition. The new report includes worker interviews, photographs and company documents smuggled out of the factory.

Cruel and inhuman conditions at Jabil:

* The factory operates around the clock, with two 12-hour shifts, seven days a week. Workers are at the factory 84 hours a week.

* Assembly line workers are prohibited from sitting down and must stand for their entire 12-hour shift. Workers report their necks, shoulders, arms and legs become stiff and sore, and their feet swell up.

* Workers are allowed to use the bathroom just once in the regular eight-hour shift.

* Jabil hires a huge number of illegal temp workers and pits them against the full time workers.

* Security guards and managers patrol the shop floor as if they are police overseeing their prisoners. Workers who make a mistake are forced to write a "letter of repentance" begging forgiveness-which they must read aloud in front of all their coworkers. They can also be made to stay after work-unpaid-to clean toilets.

* Six workers share each crowded dorm room, sleeping on double-level bunk beds. Seventy-five percent of the workers say the factory food is "awful."

* Workers paid a base wage of 76 cents an hour through April, when they received a 17-cent increase, to 93 cents an hour, which is well below subsistence levels.

NLC director Charles Kernaghan asks, "What happened to all the promises U.S. companies made-that if they could set up operations in China, they would, by example, lift human, women's and worker rights standards for China's workers? Instead, U.S. companies bought into the 'China model' of exploitation, pitifully low wages, grueling hours, miserable living conditions and zero rights." Kernaghan adds, "Corporate monitoring never works. Five out of eight of the companies on the Board of the Electronic Industry Citizenship Coalition have been producing their goods for years under illegal, harsh sweatshop conditions at the Jabil factory!"

Please Act Now!

Call or write the Electronic Industry Citizenship Coalition (EICC):

Phone: 202-962-0167

1155 15th Street, NW
Suite 500
Washington, DC 20005

Talking Points:

I have read the new National Labor Committee report on the Jabil Circuits factory in China.

With five of eight Electronics Industry Citizenship Coalition (EICC) Board member companies producing at Jabil, how could so many violations and harsh conditions have persisted at the factory?

What will you do to end the violations and abusive treatment of the young workers at the Jabil?
including---
* All overtime must be strictly voluntary,
* Humiliating treatment, including "letters of repentance" the workers must stop,
* Temps should be hired as regular full time workers,
* Workers must have the right to use the bathroom more than once in an eight-hour shift,
* Assembly lines should be re-fitted so workers are not standing 12 hours a day,
* The workers right to organize a democratic, independent union must be respected.

Please let me know how you intend to correct these violations at Jabil.