New Chinese Revolution: Worker Power and the Soft Landing

June 8, 2010 - PRLog -- Even with China’s continued outstanding growth, its future has been far from clear, with three broad scenarios dominating discussion about it:

continuation of its prosperity without any major problems;

a so-called “soft landing,” in which there is a perceptible slowdown, but without any sort of serious or long-lasting trauma, as in the case of Japan, or, it now seems, the US and Europe;

and, finally, the often self-proclaimed “bust” proponents, who argue China has radically overheated its economy and is going to collapse in a radical way

that will make it impossible for both for it and much of the rest of the world to move forward again for many years.

Yet it now appears there is a fourth possibility, one to which few have given much thought,

but which has emerged in recent weeks with perceptible problems for significant Chinese factories in general, and foreign-owned ones in particular.

And ironically enough, given that China is, at least formally, still a “Communist” country,

THIS scenario might well be called “worker power”,

in which a major change in both the Chinese and world economies arises as a result of the –

admittedly unexpected, but nevertheless seemingly robust – anger and frustration of the "new" Chinese working class,

whose parents' hard work and strenuous effort have, in combination with low wages, made possible both the Chinese and global “economic miracles,”

but which now appear to have reached a height of anger, frustration and a point of no return –

with results for both China and the world that may be quite a bit different than anyone has been expecting.

The first sign that China’s workers were getting restive was a suicide that occurred at the end of January.

The body of a 19-year-old worker named Ma Xiangqian was found in front of his high-rise dormitory at 4:30 a.m.

Police investigators concluded that he had leapt from a high floor, and they ruled it a suicide.

His family, including his 22-year-old sister who worked at the same company, Foxconn Technology, said he hated the job he had held only since November —

an 11-hour overnight shift, seven nights a week, forging plastic and metal into electronics parts amid fumes and dust.

Or at least that was Mr. Ma’s job until, after a run-in with his supervisor, he was demoted in December to cleaning toilets.

Mr. Ma’s pay stub shows that he worked 286 hours in the month before he died, including 112 hours of overtime, about three times the legal limit.

For all of that, even with extra pay for overtime, he earned the equivalent of $1 an hour, according to this article in the New York Times.

Since Mr. Ma’s death, there have been 12 other suicides or suicide attempts — eight men and four women — on two Foxconn campuses in Shenzhen, where employees live and work.

The factories here, with about 400,000 employees, make products for global companies like Apple, Dell and Hewlett-Packard.

Most of the other suicide cases fit a similar profile: ages 18 to 24, relatively new to the factory, and falling from a campus building.

The rash of suicides has intensified scrutiny of the working and living conditions at Foxconn, the world’s biggest contract electronics supplier.

Responding to the clamor, Foxconn has raised salaries steeply twice in the last several days.

The company announced the latest increase on Sunday, saying that after a three-month trial period,

the basic salaries of many of its workers in China could reach nearly $300 a month,

more than double what they were a few weeks ago.

Sociologists and other academics see the deaths as extreme signals of a more pervasive trend:

a generation of workers rejecting the regimented hardships their predecessors endured as the cheap labor army behind China’s economic miracle.

Rather than take their own lives, many more workers at Foxconn — tens of thousands more — have simply quit.

In recent interviews here, employees said the typical Foxconn hire lasted just a few months at the factory before leaving, demoralized.

They complain about military-style drills, verbal abuse by superiors and “self-criticisms” they are forced to read aloud,

as well as occasionally being pressured to work as many 13 consecutive days to complete a big customer order — even when it means sleeping on the factory floor.

Although the legal limit in China is 36 hours of overtime a month, several workers interviewed here said they regularly exceeded that by wide margins.

“They leave so soon because they can’t adjust to factory life,” said Wang Xueliu, a production team leader who has worked at Foxconn for six years.

He, too, plans to leave soon, to join a new business with his brother making candles for export.

Many other manufacturers in China also struggle with high turnover.

Throughout southern China, the country’s industrial heartland, there is an acute labor shortage,

as the legions of rural migrants who formerly journeyed thousands of miles from the interior provinces are now choosing other options.

Many seek positions in the service sector, or jobs closer to home.

“There’s no doubt about it: they don’t want to work on the assembly line,”

Jing Jun, a sociologist at Tsinghua University in Beijing, says of the young migrant workers moving into southern China.

“They have a different expectation. And once people’s attitudes about being in a factory change, other things will change.”

Sociologists say China’s new generation of migrant workers — many of them born in the 1990s — are better educated and more conscious of their rights.

And their ambivalence about factory life coincides with a demographic shift that has resulted in a decline in the number of young people entering the work force.

While it’s usually not mentioned, we here at Economy Watch think this can only be seen as the beginning of a wave of changes affecting China’s labor force as a result of the “one child” policy.

Economists say the changes are already eroding some of China’s competitive advantages in the global economy

by raising wages, the cost of production and, soon, the prices of a wide range of consumer goods that China exports.

“The factory model has run into some serious limitations,” says Huang Yasheng,

a professor of management at M.I.T. and the author of “Capitalism With Chinese Characteristics.”

“Now, they have to find a new model and move to a more innovative economy,” Professor Huang said.

“The problem, though, is that those kinds of companies don’t create a lot of opportunities for young, migrant workers.”

Foxconn, founded by the Taiwanese industrialist Terry Gou, is a $60 billion manufacturer with a reputation for military-style efficiency that includes mapping out assembly line workers’ movements in great detail and monitoring tasks with a stopwatch.

The company is also known for the scale of its operations.

Foxconn has defended its operation, saying it treats workers with respect. But it also says that it intends to address management weakness and the ills of some of its workers, by adding counselors, hot lines and consulting monks.

Apple, Dell and Hewlett-Packard have already said they are looking into conditions at Foxconn —

although Apple’s chief executive, Steven P. Jobs, said recently that he was troubled by the suicides but that Foxconn was “not a sweatshop.”

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