Posts Tagged ‘China’

Union members in the developed and developing world have different values … we need to work around this

Posted: September 9, 2012 in Rights around the world
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Telephone wires

Telephone wires (Photo credit: Stuart Barr)

I’m still working through Global Restructuring, Labour and the Challenges for Transnational Solidarity but one contribution merits attention of its own.

A chapter by Jonas Sjolander details the failed collaboration circa 1980 between Swedish and Colombian unions representing Ericsson workers. The latter were employed to build landline infrastructure.

The tale has “missed opportunity” written all over it. It sounded good in theory: The under-resourced Colombians could have advice from the long-established Swedish union Metall, which in turn could amplify the workers’ message right in Ericsson’s home nation, making it harder to ignore.

Alas, it fizzled out and the main impediment was the global union federation for manufacturing workers, the IMF, which ironically was established to facilitate cross-border co-operation between unions.

The Colombian workers considered the local IMF affiliate, Ultramicol, to be too close to the company and formed another, more radical union called Sintraericsson. Sweden’s Metall, however, was affiliated to the IMF and found it too awkward to promote the un-recognised Sintraericsson over their comrades in Ultramicol.

If you take a step back, this is no accident. Metall espoused values of company-union co-operation which make a lot more sense in the Scandanavian context than they do in Colombia which is about as unfriendly to unionists as they come. It’s no surprise that the radicalised Colombian workers didn’t feel at home with this model.

No one thought of a way to handle this. How different things might have been. In the decades since, the unionisation rate in Colombia has declined, Sintraericsson eventually died and Ericsson Colombia outsourced many jobs to third-party suppliers where they are held on short-term contracts. Now that people no longer work for the same company, the odds of fostering any form of transnational solidarity are even remoter.

The gorilla in the union movement’s room

This is not just a 30-year old case study but has relevance today.

The international trade union movement consists of 7 global union federations (including IndustriALL, the IMF’s successor) which collectively boast a membership of 175 million workers worldwide. They all talk, all co-operate and all work together.

Excluded from that count are the 193 million members of the All China Federation of Trade Unions (ACFTU). The ACFTU is shunned by the global movement principally because it is not by any means democratic.

Perhaps its time to look at whether this policy is hindering more than helping.

Think about it. China’s Communist leaders travel around the world and are greeted with warm handshakes and White House receptions etc, while Taiwan’s non-Communist leaders find themselves systematically pushed out of one forum after another. Money talks. No one boycotts Lenovo computers or Huawei mobile phones which are made by companies that are also, let’s face it, controlled by Beijing. Same goes for all those state-owned construction companies that BHP-Billiton and the like sell iron ore to.

So I find it odd that the ACFTU is still singled out and wonder for how much longer this will remain the case.

Perhaps these Chinese unionists could do more to improve their members’ working conditions if they weren’t so isolated and had more opportunity to learn what unions elsewhere are doing.

The Finnish peak union body SAK has decided to do just that, meeting with the ACFTU just a couple of weeks ago.

What people really fear is that giving the ACFTU a voting seat in international forums will allow the Chinese Government to use it as a means to promote their state agenda, yet it should still be possible to work around this and co-operate in some fashion.

Just imagine how different things might be if Foxconn workers’ stories were able to come to us directly instead of via SACOM’s heroic undercover efforts and Mike Daisey’s re-telling. Even now, we don’t know the real name of a single worker who makes iPhones.

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Source:

  • Sjolander J Detours of solidarity: experiences from Ericsson in Colombia in Bieler A & Lindberg I (eds) Global Restructuring, Labour and the Challenges for Transnational Solidarity (2011) Routledge, London & New York, pp. 48-57

The cultural gap between Equity and Equality

Posted: October 28, 2011 in Ethical decision-making
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The second paragraph of the Declaration of Independence of the United States of America begins:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights,

More than two centuries later, Americans and other Westerners still stride the planet convinced of the obvious universality of their values. They can hardly be blamed, as there is a lot of apparent evidence to support this view: Western brands have been on the march. Visit any city around the world and, upon disembarking, you’ll be greeted by the familiar sights of KFC, Coco Chanel, even Marlboro. Similarly parliamentary, electoral democracy has spread in past decades. It seems to be a one-way story of the adoption of enlightened Western ways and rising prosperity to follow.

Tiananmen Square Protest (tian_med)

This guy is a hero in the West but 1989 fizzled in China. Why?

Research shows that countries retain sharp divisions in the emphasis they place on individual versus collective values. Generally countries in the Western tradition have a higher emphasis on the individual and those in the Confucian tradition have a high emphasis on the collective. These traditional values have persisted into modern times despite the removal of Confucianism as the official Chinese religion.

These findings are known and accepted but do not seem to be translating into managerial education.

The result is that American or British businesspeople turn up in ‘non-Anglo’ countries poorly equipped to motivate and build rapport with local workers. Notably they carry with them the baggage of America’s highly antagonistic labour relations but for now I want to highlight something else: compensation.

The central motivational factor under a manager’s control is the allocation of extrinsic rewards. (Ralston et al., p. 70)

How is compensation to be divided?

The dominant view in the West is that reward should be, to some extent, related to the person’s output. This is equity-based reward.  The dominant Confucian assumption, however, is that an equal distribution -regardless of output- is ‘fairer’ because it is more conducive to the group cohesion. This is equality-based reward.

(Incidentially there is a third approach: Rewards are distributed according to need. Under this approach a breadwinner for a large family would be paid more than a single person without dependents doing the same job)

What flows from this? For one, it explains how executive pay has been able to run so far ahead of average workers’ pay in the United States especially.

More relevantly, it explains why many national and plant managers make their own lives difficult by implementing reward-for-output. Not only is it not appreciated, it probably causes friction.

This is not to say that rewards can never be shaped towards encouraging performance in Eastern cultures, just that they need to be directed towards the group.

My point in all this is that well-meaning labour activists in the West who want to assist their brethren in the developing world ought to consider that it might not be appropriate to promote a wage-setting apparatus similar to the one in their home country, complete with tiered salary grades and assumptions about the relative worth of different kinds of work. It might be like forcing a square peg into a round hole.

Source:

  • Ralston D, et al, The relevance of equity values in Eastern cultures, in ‘Whose Business Values? Some Asian and Cross Cultural Perspectives’ (1995) edited by Sally Stewart and Gabriel Donleavy

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More strikes in China … very unharmonious

Posted: September 13, 2011 in China
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Chongqing Taxi

Image by foxxyz via Flickr

Evidence continues to mount that the Chinese authorities are deliberately looking the other way when it comes to labour unrest. They don’t really have a choice. They either allow workers to get what they want in the form of moderate wage increases or face massive social dislocation from people who can’t keep their heads above water, financially.

In the last few years the number of known strikes has continued to increase, most visibly amongst taxi drivers in cities including Hangzhou, Zhengzhou, Qionghai, Foshan, Mengzi and Shanghai.

The particular issues vary but they are all essentially protesting over the same thing: meeting rising costs of living. In some cities the issue is the cost of fuel, in others it the government’s failure to increase taxi fares, in others it is over the proliferation of unlicensed taxi cabs.

Interestingly not only has this taken place without any sort of crackdown, the mainstream press has been allowed to report on it, suggesting that it is less frowned on.

Demographic pressure

Even though the Chinese labour market seems inexhaustible to the ears of Westerners, it is still fairly mobile and low-end manufacturers are under pressure to find people who will work bottom-end wages. There are now more options out there. Their response has been to move up the value chain, making more high-end goods such as laptop computers and iPads where the output justifies the higher pay. The same progression took place in Japan and then Korea.

Where does China’s anemic official state union fit into this? Hardly at all, it seems. Generally wage increases have been won by ad hoc worker coalitions working on their own. Supply and demand seems to be enough to force up wages when people feel the pressure enough. I wonder what will happen in five to ten years when, analysts suggest, growth slows down.

Sources:

China’s Grand Experiment Finally Hits the Buffers

Posted: May 7, 2011 in China, Economic Development
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In January 1984 then-premier of China Deng Xiaoping toured a sleepy village in the country’s Southeast called Shenzhen. He had some changes in mind.

Today the province is the most prodigious manufacturing area in the world. I’ve put together a video clip to give a sense of the scale of it:

The Pearl River Delta is the answer to the question, What if we were to just continue to grow indefinitely? What are the limits to growth?

Will you eventually end up producing more goods than people can buy? Once you make a ballpoint pen for every man, woman and child on the planet, that’s it right? Well apparently not. China makes 85 billion ballpoint pens a year; 12 a year for everyone on earth. No problem there.

Uniquely, the workers haven’t risen up. The state controlled unions keep their demands in check.

The end of the affair seems to be coming about because of rising prosperity coupled with labour mobility. In two separate articles this week, BusinessWeek reports that other parts of China now look much more attractive for new factories and that, as China closes the wages gap on the rich world, manufacturers may start calculating that it’s not worth their while to relocate at all. Foxconn, the iPad/iPhone manufacturer has been leading the charge, moving to set up operations in Turkey, Slovakia and Brazil.

Will we ever again see so much produced in one small place? Well never say never but it’s hard to imagine.

The struggle for better working conditions is far from being over in the Pearl River Delta, but its share of the world’s low-paid workforce has begun a long decline.

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Poisoned Battery Workers Seek Justice

Posted: April 18, 2011 in China
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Ni-Cd batteries

Image via Wikipedia

GP (Gold Peak) is a brand of nickel cadmium battery sold in Asia.

Like many light manufacturing exporters, the company is headquartered in Hong Kong but the batteries are made in the Pearl River Delta. GP owns two factories in Huizhou.

The workers at these factories have been exposed to unacceptably high levels of cadmium in production of the batteries. Unsafe work practices include handling cadmium with bare hands. Several employees were poisoned by their exposure to toxic chemicals.

The company at first refused to reveal the results of medical tests which revealed that workers had excessively high levels of cadmium in their blood, and only did so after 500 workers went on strike. Even so, privately-arranged tests showed cadmium levels up to 86 times higher than the ‘official’ results.

Advocacy group Globalisation Monitor has assisted individual workers in obtaining press coverage and taking legal action against the company for improved practices and compensation. GM asserts  that the poisonings occurred as a result of:

  1. ongoing managerial negligence,
  2. noncompliance with Occupational Health and Safety laws, and
  3. failure to provide adequate training

A number of the lawsuits have been successful, with around ¥240,000 (roughly 50,000 USD) awarded in compensation and out-of-court settlements in 2009. However only a handful of the 250 affected workers have been compensated.

No Choice But to Fight cover image

The struggle has now gone on for more than six years. Globalisation Monitor has published the workers’ story in a 196-page book, No Choice But to Fight. You can order a printed paperback copy on their website or you can view the complete 189-page PDF by clicking the cover image at right.

Minimum Wages go up in Pearl River Delta, but not fast enough

Posted: April 1, 2011 in China, Economic Development
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DSC_0590

Image by IK's World Trip via Flickr

Today, 1 April, the minimum wage in China’s Guangdong province increases from 1100 to 1320 yuan per month (about 200 USD).

That is a 20% wage increase (on top of a similar increase last year) which, to Western ears, probably sounds generous. Moreover there have been reports elsewhere of foreign companies deciding that China is no longer so attractive as a low-cost manufacturing centre, and deciding to invest elsewhere.

It might sound like the game is up; Chinese workers have attained higher wages and fair wage campaigners can move their focus elsewhere. However those seemingly generous figures mask the reality that runaway growth is accompanied by runaway price increases and a 20% pay increase may still not be enough to keep pace.

I recently spoke with Geoffrey Crothall of China Labour Bulletin who explained that cost of living expenses in the Pearl River Delta are increasing faster than the minimum wage:

  • Housing costs in the region are rising fast with small one-bedroom apartments renting at about 500-700 yuan a month; over half the minimum wage. The alternative is to live in employer-provided dormitories.
  • Food is vulnerable to unpredictable cost spikes and has been for some time. Garlic for example recently increased tenfold in price, although it did later return to a more reasonable level. To use a slightly tacky but perhaps surprising example, the cost of a Big Mac will increase by 70% this year. Overall, food price increases of 10-20% are not unusual.
  • Transport costs are also increasing.

Workers in the manufacturing sector are less affected as their wages currently average 2000-3000 yuan a month. It is those in the white collar service industries who are being hit hardest, e.g. teachers are only paid the minimum wage. Why the difference? Manufacturing workers are currently in a stronger bargaining position and have been able to negotiate wage increases higher than the minimum wage. White collar workers are not organised and suffer as a result.

Also the factories of the PRD were built in the first stage of China’s economic boom, 20 years ago. If you were a manufacturing worker, wouldn’t you rather work in a more modern factory such as the ones in Shanghai’s hinterland? Raising wages is a good step but the best thing Guangdong can do to improve its labour shortage problem is improve its working conditions.

References:

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Book Review: Factory Girls: Voices from the Heart of Modern China

Posted: March 21, 2011 in Books, China
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Yue Yuen factory near Dongguan

Yue Yuen shoewear factory, where one of the interviewees worked

What a happy coincidence that Factory Girls should be my book review for Women’s Month!

It is an extraordinary book, as engaging as any novel or famous person’s biography.

How much do we really know about China’s Pearl River Delta, source of so many goods in our households? (including, for example, 75% of the world’s toys)

Author Leslie Chang from the Wall Street Journal had heard the stories of woe, which have been known for some time, about the less-than-desirable working conditions in the factories of the PRD. She explains in the endnotes:

[The Western press] had already published stories about the terrible conditions in the factories. They tended to portray migration as a desperate act without much of a payoff for people. I had a suspicion that there must be more to this, that perhaps things were not so black and white. For a teenager from a farming village, the whole experience of going out to the city might appear very different than it does to us as Americans. What’s it like to leave your village at the age of sixteen, to go to a city where you don’t know anyone, to work on an assembly line, to earn money for the first time, to date whoever you want? How does your relationship with your family change? How do your friendships change? How does your world view change?

She answers these and many more questions.

The book, and Chang as an author, have many strengths. One is persisting with the interviewees over a very long time (about three years), long enough to see them change and mature in a critical moment of their lives. Another is her ability to avoid moralising about how terrible the working conditions are. She mentions it in passing once or twice but, as the quote above suggests, she feels enough has already been said on that subject. While she is sometimes taken aback at the way her subjects act, she never opines that they should have acted differently. This empathy carries the book through. The result is a ground-level portrait of life in today’s Guangzhou, the aspirations and daily routines of its untold millions of migrant workers.

These people are, of course, not drones. They are actually quite plucky. It turns out that they buy self improvement books in large quantities – apparently bookstores in the region stock little else. They attend night classes to learn extra skills. They readily sign up for direct marketing schemes. They look for love – mostly online, where potential suitors can be reviewed at a rate of several dozen an hour. They couldn’t give two hoots about Communism or the central government in Beijing. And often, having tasted city life, they have no desire to move back to their rural origins.

Chang goes to lengths to explore all facets of life in the factories. She paints an impressive portrait of the chaotic ‘unplannedness’ of it all. With the PRD’s population nearing 80 million and a neck-breaking pace of change, people can purport to be whoever they want. You can readily find someone who will issue a fake identification card or a fake diploma. ‘Everyone’ lies about their past work experience, because no one ever checks. Moreover, technical training is somewhat pointless given the rate of technological change. As with individuals, so it is with companies that are little more than an office and a box of business cards, striving to make their break by landing a first contract.

One question on my mind was answered: Why don’t the workers of the PRD form unions? The answer: Generally they don’t intend to stay at their current place of employment much longer. They are constantly hopping from one to the next (or at least they were five years ago when this book was being researched), constantly looking for a slightly better job.

Well done to Ms Chang for turning a story of overwhelming numbers into something personal. As I neared the end of the book I found myself wishing a photo of the main interviewees had been included, but then I thought no, theirs could be anyone’s story. Not just anyone in the PRD, but anyone who has ever left home.

China Experiences Growing Pains – Part 2

Posted: February 21, 2011 in China, Economic Development, India
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A couple of weeks ago I wrote this post about increased labour unrest in China caused by a reduction in exports. It seems there is more to this story.
At least two commentators, The Economist and China Briefing, believe that China’s Central Government is intentionally allowing this unrest to go unchecked.
Two reasons are suggested. The first is that any anger directed at the foreign multinationals who source goods from China is anger not directed at the Government. This is a speculative claim. The second is more clearly supported by the facts: that China wants the workers to succeed in raising their living standards, even if it means we see less of those low-cost factories churning out goods stamped “Made in China”.
China’s Government naturally wants the country to become more prosperous generally and in the next phase it wants its vast manufacturing sector to increasingly sell goods for the country’s internal market. For that to be possible, average wages have to increase so that Chinese citizens can afford to buy more goods. So if the workers succeed in their claims for higher wages, more power to them.
And succeed they have. Migrant workers wages increased 17% in 2009. In the province of Guangdong the minimum wage was increased 20-21% in 2010 and will increase a further 18.6% in a week’s time, on 1 March. That is a 66% wage increase in just three years. In a few years, Malaysia will be the only developing nation in Southeast Asia with higher wages.
As it stands, China’s minimum wage is already twice as high as India’s and 50% more than Indonesia’s. A survey of buyers of China products who expect to start sourcing elsewhere found that 57% expect to increase sourcing from India.
Meanwhile in Guangdong and elsewhere wages are only half of the story. Conditions of work continue to be highly demanding, with long hours and draconian restrictions on freedom and until those improve we will see more protests.

China's manufacturing hub, soon to be officially one megacity. Image:The Telegraph

Sources:

In our shrinking world, the Values Gap persists

Posted: February 4, 2011 in Responsible business, Statistics
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Pro-government demonstrators (front) face-off against anti-Mubarak supporters near Tahrir, 2 Feb 2011. Photo: Reuters/Mohamed Abdel Ghany

So many news stories result from differences in values. Just in the last few months we have seen front page stories about uprisings in the Arab world, Wikileaks and of course America’s Congressional elections.

It often comes up in the discussion of human rights, along the lines of “You are attempting to impose your values”. I might find child labour unacceptable but try telling that to a Bangladeshi family who rely on their children’s income to subsist.

The folks at World Values Survey have taken the trouble to illustrate how people in particular countries and even groups of countries really do tend to share certain values.

The graphs can seem a bit like a Magic Eye puzzle and may require a few moments’ stillness before they make sense, but the revelation is worth it.

Here are two that are quite startling:

In this first, the left axis measures people’s preference for traditional, what you might call “village” values (bottom) versus bureaucratic values like the rule of law (top).

The bottom axis measures preference for survival values (group cohesion, saving money) versus self-expressive, individualistic values such as entrepreneurialism and pluralism.

Of course the results are an average and there would be huge diversity of answers within national borders.

Nonetheless, countries with similar cultural histories average out to have similar scores. So the notion of ’Asian Values’ has some empirical weight.

Sociologist Max Weber first identified this a century ago in his book The Protestant Ethic and the Spirit of Capitalism. He observed that the predominantly Protestant Northern European countries industrialised faster than the predominantly Catholic Southern European countries. If the Values Survey is to be believed, one might expect that Catholic countries inculcate more non-mercantile values such as:

  • traditional roles for women / large families / extended family ties
  • hierarchy
  • abstract learning (e.g. theology)

whereas Protestant countries inculcate values such as:

  • female suffragism
  • shared authority / egalitarianism
  • practical learning that can be used in building God’s Kingdom on earth

The latter values naturally lend themselves to economic advancement. What strikes me, though, is that the Catholic-Protestant divide is 500 years old. Happily relations between denominations have been more congenial in the last half-century, yet the differences in cultural values persist.

So it’s well and good to talk about ‘universal’ values set down in International law, but if a human rights agenda runs afoul of prevailing cultural values, it will go nowhere fast.

OK one more:

This one a little less subtle! Citizens who enjoy the most freedoms also report the greatest sense of ‘happiness and satisfaction with life as a whole’ (Someone should mention this to Egypt’s President Mubarak!)

China doesn’t follow the pattern though, and if the dots were displayed in proportion to population it would completely spoil the intended message of the chart. China’s score of zero on the freedom scale seems perhaps exaggerated … I think citizens of North Korea would have something to say about that, if they were able to see it … but is still striking that the Chinese report greater satisfaction with life than the Portugese and are even creeping up on the French.

China experiences growing pains

Posted: February 2, 2011 in China, Economic Development
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China’s growth has been ‘the’ economics story of the past decade. Last time I checked, it was projected that China would become the world’s largest economy in 2026 (fifteen years from now … not such a long time really).

200 million people have migrated from rural to urban China to work in the factories powering this miracle. It is the largest migration in human history; significantly more than moved from Europe and Africa to the Americas -and also significantly faster.

Just as quickly, we are beginning to see the next stage of the story.

The global financial crisis brought about job losses. Workers have begun to demand wage rises – successfully. Manufacturing companies such as Yue Yuen, maker of 250 millions pairs of shoes annually, have responded by locating their new operations in even lower cost countries such as India, Indonesia and Bangladesh.

China now has to begin a transition to a service-based economy. In the West this took a century or more; in China it has only taken a few decades.

Update 21/2: I’ve written a new post carrying on this subject

See also