Special Report: China’s Labor Struggles
Understanding the Chinese Workforce that Supports the Subcontractor Industry in our Special Report: China’s Labor Struggles
In the connector and cable assembly world, global contract manufacturers play a key role. Today, the largest facilities are located in China. In recent months a few of these manufacturers drew media attention after several of their workers jumped to their death from factory buildings. Consumer and buyers may question whether it is ethical for the consumer to buy products assembled in such factories.
Living in China and working in this industry has given me insights into the situation. I would like to share with you my opinion and assessment, to help us understand why such tragedies may have happened.
The first question is, what brings someone to such a desperate act? Are the companies and their working conditions to blame? The media suggests that these manufacturers are responsible for the tragedies. However, a careful analysis shows that these suicides are indicators of a far broader problem and challenge to China.
Today, suicide is the second most common cause of death among China’s youth and young adults, after traffic accidents. In comparison, suicide is the third most common cause of death in the United States, after traffic accidents and homicide. Statistics from the World Health Organization (2009) show a significantly higher suicide rate in China, with 28 out of 100,000 people, compared to 13 in the U.K. and 22 in the U.S., per year.
At first glance, the high suicide rate is difficult to understand, since China has developed, changed, and dramatically improved their working and living conditions in just the past 15 years. Living standards for so many in China have become exceptionally better, compared with common standard of the recent past. What then are the challenges and burdens which makes life desperately difficult and, in some instances, unbearable for some young Chinese people? A number of critical factors are involved:
- Change of social networks
- Change of formative years upbringing
- Living conditions
- Working conditions
- Social injustice
Change of Social Networks
The dramatic progress of the economy has taken place primarily within the coastal provinces of China, particular in Guangdong, next to Hong Kong/Shenzhen; the wider Yangtze delta around Shanghai; and the wider Beijing area. In the provinces along the China Sea coastline, factory jobs offer a much higher income than could be earned in the rural hinterland provinces. This fact results in worker migration away from their home provinces. Generally, young workers leave home, family, and their social network of friends to travel far distances for better job opportunities. These trips may take a few days on bus or rail, as air travel is unaffordable for them. When the new workers arrive, alone in the unfamiliar world of a mega-city, some of them are not able to quickly make friends, and tend to become very lonely and potentially depressed. Going back home is not an option. Home is too far away for a weekend trip. The journey is only feasible once a year, during the lunar New Year holidays.
Change of Formative Years Upbringing
The young workers currently entering the job market are from the first generation born under the restrictions of the one-child policy. Through this policy, the government intended to limit the country’s population growth. Growing up as an only child, and having all of the attention of the parents and grandparents, had a strong impact on their life skills. This generation often expects others to handle their problems. The traditional Chinese old strength of character and ability to endure tough and difficult situations has weakened. Isolation from family and friends can lead to apathy, loneliness, and melancholy.
Difficult Living Conditions
Moving into expensive, extremely densely populated mega-cities forces migrant workers to live in factory dormitories. This can be very challenging, as these dorms offer no privacy or space, and they are usually very sparsely equipped. Workers might share a room with up to 10 people. An additional burden is that the workers have to spend not only their workdays together, but also their time off. Huge factories, with up to 300,000 employees, can give the workers the feeling of being an anonymous body. They feel like just another statistic in a nameless assembly line of factory workers where nobody cares about them.
In such large factories, the accepted authoritarian management style can create a relationship of fear and dependency between the workers and their supervisor.
In the past, employees had to work up to 13 hours a day. In recent years, new government regulations have implemented limitations, which allow employees to work only 36 hours of overtime per month. Only in the past few years, these overtime rules have been more strictly enforced. In the recent past it was not uncommon for a worker to perform another 80 hours of overtime in a month, creating further stress and fatigue.
Contrary to what you may think, small companies may have harsher work conditions than larger ones, as the large companies are more closely monitored by the government through the labor bureau. This also applies to those companies that have been mentioned in the media. These companies, in particular, are concerned about their image and reputation and do not want any “bad press” to tarnish this image.
Today the wealth difference between the rich, including the upper middle class, and workers, is incomprehensibly large. While the rich and the upper middle class enjoy a life style similar if not identical to their peers in the U.S. and Europe, worker incomes have seen almost no changes. Today, the minimum income for a factory worker, depending on the Province of China, is as low as 920 RMB (US$135) per month. To increase this salary, the workers are expected to work overtime.
Even if you consider that the dormitory and canteen meals are usually provided for free, incomes remain very low, hardly allowing the workers any comforts. Goods such as mobile phones, TVs, jewelry, new clothing, and shoes are barely affordable. Cars or apartments are completely out of reach. The reason that this situation does not initiate an outcry is that people living in the countryside have even lower incomes.
Since living in the city is becoming even more difficult on such low salaries, in 2009 the central government enacted a new labor law, which significantly protects the interest of employees. In late July 2010, a draft of a more stringent law was proposed with the purpose of establishing a legally binding wage negotiation mechanism and to improve the welfare of workers. The new regulation will require companies to fulfill their social responsibility, pay attention to the mental and physical health of their workers, and improve their cultural and spiritual life on the factory campus. However, the global economic crisis has currently put the implementation on hold.
To summarize, I believe the reasons behind China’s workplace tragedies are not just the low wages paid to these migrant workers or the harsh working conditions, but a combination of many factors; the result of the rapid speed of social change in China; the intense competition for financial success; the breakdown of traditional family structures; the more fragile coping skills of children from one-child families; and China’s dramatic rural-to-urban migration. A combination of these factors are connected to a corresponding rise in psychological stress, mental illness, and in unfortunate cases, suicides.
China’s society is becoming aware of these issues and is working on ways to address them. The recent labor law revisions, the increased social welfare of the factory worker’s living conditions, and China’s desire to polish their world image are helping to improve the basic situation. Let’s just hope these changes move at a pace fast enough to avoid any further tragedies.
Managing Director, Asia Pacific-Hong Kong, Bishop & Associates Inc.
Andreas Limbert has held key management positions and worked on diverse engineering projects throughout Europe, the Middle East, and Asia for more than 20 years. He has helped lead numerous team projects and international companies to financial success. Limbert’s expertise in China includes a China-based sales and manufacturing structure he established and managed for Thyssen Elevators, the fourth-largest elevator manufacturer in the world. He also established and managed a Asia Pacific regional sales, service, and manufacturing organization for connector manufacturer HARTING KGaA. Since 2004, Limbert has been a management consultant with FaberConsult, which helps global companies establish and perform operations in Asia, particularly in China. In this capacity, he also represents Bishop & Associate Inc.Limbert has a post-graduate engineering degree in mechanical engineering from the Technische Hochschule of Karlsruhe in Germany.