However, hastily established, and without effective protection under law, the new union branches are often poorly organized and offer little security to employees. For example, the union branch in Foxconn Shenzhen, ostensily representing more than 200,000 employees, has only five staff members on the payroll of the ACFTU national office, none of whom are Foxconn workers.
In the meantime, the government has also launched various policies to protect workers’ rights and lower barriers preventing migrant workers from gaining access to social welfare. In 2008, the Labor Contract Law was enacted. Last year, a policy was launched to allow migrant workers to transfer their pension between different cities. In April this year, the Beijing municipal government granted the children of migrant workers equal access to local primary schools and junior high schools for the first time.
In the annual policy outline released on January 31, the so called “No.1 Central Government Document,” the Chinese government pledged to “take relevant measures and try to solve the problems facing the new generation of migrant workers.” Premier Wen Jiabao’s mention of “working with dignity” in 2010"s New Years address has also been widely interpreted as an acknowledgement of the difficulties faced by migrant workers.
However, such measures and gestures have fallen short of expectations. Not only have workers launched unexpected strikes, but they have done so through bypassing existing political institutions such as local union branches.
A New Start?
Fortunately and somewhat surprisingly, the government has refrained from labeling wildcat strikes as “mass incidents” that need to be cracked down upon. Instead, local governments have helped to facilitate negotiations between management and the labor force.
Critics have long lambasted local governments for their apparent willingness to ally themselves with big business in order to help keep labor costs low and accelerate economic growth. During the recent strikes, however, many local governments appeared to distance themselves from factory owners, apparently in an effort to avoid antagonizing the workers and prevent the strikes from spreading. The fact that an isolated voluntary strike can spread to several provinces in a very short period of time have seem young workers emerge as a potential political force that may yet have a great impact on China’s political landscape.
In order to control the scale of the strikes, several local governments directly intervened in the negotiation processes. For example, when a strike halted production at the Pingmian textile factory, a domestic plant in Pingdingshan, Henan with more than 5,000 employees on May 16, the local government directly intervened and successfully “persuaded” the plant to raise the monthly salary level by 220 yuan (US32), about a 25 percent raise, equal to 40 percent of the city’s minimum wage at 550 yuan (US81).
Observers believe that such actions indicate that the government has started to adjust its role in the traditional triangular relationship involving government, capital and labor, in order to minimize political risk. On July 1, governments in 27 provinces announced plans to raise the local minimum wage, in most cases by over 20 percent.
But with the raise widely regarded as a mere compensatory measure, the threat of potential future unrest remains far from over.
Some economists warn that an increase in labor costs may lead to reduced foreign investment and therefore result in increased unemployment and a potential slowdown of the economy, especially in the wake of the global economic downturn.
However, optimists argue that the rise in wage levels will in the long run bring more benefits than challenges. The competitive edge of China’s colossal manufacturing export industry has rested largely on cheap labor. However, China only derives a small profit from the overall industrial chain, due to its marginalization in the low value-added end. Now, with China’s economy positioned to overtake Japan to become the world’s second largest, the country has shifted its focus to more value-added products. Salary increases will force enterprises, either homegrown or foreign-funded, to invest more on R&D and profit on high-end rather than low-end products.
Moreover, increased salaries will help spur increased domestic consumption and position China’s economy on a more sustainable track, rather than its current over reliance on State-orchestrated investment and cheap exports.
But the significance and fate of this new generation of migrant workers far surpasses the realm of economics. The political alienation or empowerment of 100 million young workers will have a great impact not only on China’s economic development, but also on its social and political landscape.
August, 2010
