Chinese Workers Ramp Up Demand for Better Wages

(Aug.15) -- China's image as a place where workers will meekly put up with long hours, low pay and lousy working conditions might need updating. And as that changes, so too might the legendary low price of Chinese products.

In the latest in a series of developments indicating a shifting balance between labor and Chinese managers, 10 laid-off workers at a Panasonic electronics factory in Shanghai reportedly are negotiating for better severance packages after a strike last week.

Earlier in the summer, in the wake of a dramatic series of suicides among workers at electronics manufacturer Foxconn, workers at suppliers for high-profile foreign companies pressed for and got concessions on shorter hours and more humane treatment. And amid reports of yet another death at Foxconn this month, workers are expected to ratchet up their demands.

"You see wages increasing in companies as well as cities and areas increasing their mandatory minimum wage," said Mary Gallagher, director of the Center for Chinese Studies at the University of Michigan. "I think that's an indication that there at least continues to be quiet pressure on companies."

Experts and labor activists say there is evidence of greater government tolerance of these overt demands for better working conditions.

"There have been some changes in government attitudes toward these strikes," said Li Qiang of China Labor Watch, a New York-based organization that tracks labor conditions in China. "In the past they'd arrest the leaders, but now the attitude is more likely to solve the problems rather than just break up the protest."

Li says labor protests and strikes are becoming more common. And though authorities still sometimes arrest strike leaders, the penalties are often lighter than before.

"Now the government is doing a lot of research, collecting the information and data about labor movements," he said. "They understand that to just crack down on the workers' labor movement is not the solution, and they are trying to figure out how to meet their workers' needs."

Since new labor laws were put in place in 2008, workers can now take their cases to court as well, though courts are still not independent of the government.

Workers are not just emboldened by these political changes, but larger economic and demographic shifts have also increased expectations. There are fewer young workers in the labor pool now because of the one-child policy, which increases demand for workers and gives them more leverage. But in addition to policy changes and economics, experts also point to social changes: younger workers are less likely to put up with the labor conditions their parents did.

Cindy Fan, a geography professor at UCLA, says this second generation has a different perspective. Whereas the previous generation moved to the city for a few years to make enough money to build a better life in the countryside, Fan says this generation, who are often educated in the city, want to stay there.

"They grew up without any farming experience. They might have come to the city very early on in their life. It's hard to expect that they will ever return to farming," she said.

Many experts point to these greater expectations to explain at least 10 suicides this year at factories operated by Foxconn, a manufacturer of Apple and Sony products. Foxconn says it continues to investigate the causes of the suicides and it responded to workers' demands for higher wages by increasing pay in May.

These concessions to labor, like others recently accorded to workers at Honda and Toyota suppliers in China, send a message to other workers, Fan says.

"It's really one of the first times when management yielded to workers' pressure on such a big scale," she said. "It's both symbolic and real in terms of impact. I think it sent a message to other workers in China that they could use strikes to affect management."

New provincial regulations even stipulate how to deal with strike behavior, suggesting that strikes might even become legal. "I think that's an indication that strikes are becoming legal," Gallagher said, "though right now it's unclear whether they are legal."

Though the government seems to be more and more open to hearing the demands of striking workers and companies may have no choice but to continue to raise wages as the labor pool shrinks, broader changes, like organizing independent unions, are still off the table.

"It's an open question as to whether Chinese workers will get, in the short term, the political rights that workers in other countries enjoy," Gallagher said.

And longtime China watchers caution against predicting when those changes might come. Li, the New York-based labor activist, says he expects to see a significant rise in wages over the next few years, but the Chinese government's plans remain unclear.

"The policies are very changeable," he said. "The decision-making process is not very transparent and we don't know what stage of the process the government is at, so it's very unpredictable."