It's time to look after mainland workers

PUBLISHED : Thursday, 10 June, 2010, 12:00am
UPDATED : Thursday, 10 June, 2010, 12:00am

There is more than a touch of irony in recent clashes on mainland factory floors. Marxist theory holds that workers are the most important force in communism. Yet on the mainland, it is an increasingly restive and long discontented manufacturing workforce that is causing disquiet for the Communist Party. But no matter whether leaders are staying true to their ideological roots or embracing capitalism, it is clear that the nation can only move steadily forward if wages are fair, working conditions reasonable and rights are protected.

Spreading strikes indicate that some workers have had enough. It is not clear whether some of the unrest is sanctioned by authorities. The most recent strikes seem aimed at foreign or Taiwanese-owned ventures. The party is not threatened; Poland in the late 1980s, when the trade union Solidarity was knocking on the government's door, was a much different place. But history still serves as a reminder that workers deserve respect and have to be treated well.

In the majority of instances, this has not been the case. China's rush for economic growth has meant that workers have been given short shrift. Hong Kong, Taiwanese and foreign companies have poured in to take advantage of the cheap labour and conditions that would not be acceptable at home. Overseas manufacturers and retailers have used their buying power to keep salaries to a minimum so that their profit margins can remain high and consumers' demands for good quality products at low prices can be met.

Up to now, the government has mostly been on the side of factory owners and foreign buyers. Workers have been denied the ability to get better terms. The state-run All-China Federation of Trade Unions is, by law, supposed to protect employees' rights, but has instead kept close to local officials and company bosses to ensure that production targets were met. Independent unions have been outlawed and non-governmental groups and lawyers working on labour issues discouraged. Such a model has also served authorities well. It has been the engine of the country's growth, keeping export earnings rolling in, generating taxes and creating employment. One-third of China's 1.3 billion people can now call themselves members of the upper and middle classes. Where it has failed is that a vast population of factory workers has been denied its share of prosperity. And, the country has had to bear massive environmental degradation as a by-product of low-cost manufacturing.

The global economic crisis in 2008 has changed much. Inflation and dwindling exports meant that economic growth targets could only be attained through higher domestic consumption. But rocketing property prices and the knock-on effects have emptied pockets. Those with spare cash have preferred to hold on to it for future needs like education, health emergencies and pensions.

China's labour supply is fast peaking. By 2015, the number of workers between the ages of 16 and 64 will start to decline. The world cannot continue to expect to pay less and less for what it gets from the nation's factories. To generate domestic consumption, employees have to be paid a decent wage so that they have the means to spend. There is now clearly support for workers' pay to increase. The Japanese carmaker Honda and the Taiwanese hi-tech company Foxconn promptly came up with big pay rises when confronted with pressure. Tempers at a Taiwan-funded firm in Jiangsu that erupted in clashes with police on Monday will calm only with a similar response. Reasonable wages and conditions and proper worker protection is the only way forward.