Hard-hit workers out to make firms pay

PUBLISHED : Tuesday, 21 December, 2010, 12:00am
UPDATED : Tuesday, 21 December, 2010, 12:00am

Honda Auto parts workers who fought hard for a pay rise in May and June this year found their victory was short-lived.

The increase was quickly eaten up by runaway inflation in the following months.

One of the worker representatives during the strikes, who declined to be named for fear of reprisals, said he could hardly afford his favourite Master Kang instant noodles any more after a price rise of 10 per cent last month.

If he wants a couple of thin pork slices and vegetables instead, he still has to dig deeper into his pocket.

The price of that meal has risen from five yuan to seven yuan.

'With overtime work plus benefits and allowances, I got 1,900 yuan (HK$2,217) in pay last month,' said the worker, 22, from Qingyuan , Guangdong, who works at the Honda parts factory in Foshan .

His basic salary was raised from 995 yuan to 1,300 yuan after two weeks of strikes by workers at the plant, owned by Japan's second biggest carmaker, in May.

But the National Bureau of Statistics announced the Consumer Price Index for last month stood at 5.1 per cent.

The price of grain rose 14.7 per cent, oil 14.3 per cent, fruits 28.1 per cent and eggs 17.6 per cent.

'Rent has shot up to 300 yuan for a shared apartment,' the worker complained. 'Food plus energy bills and mobile phone total as much as 1,000 yuan.

'I have to deprive myself of all sorts of entertainment to save a couple of hundred a month to take home during the Lunar New Year.'

From May to July, a tidal wave of labour disputes swept through mainland factories.

Taiwanese-owned gadget maker Foxconn and Japanese automobile and parts makers in the Pearl River Delta were hit hardest.

Factories owned by foreign companies endured a spate of labour unrest that spread like a virus.

But the workers won out. One of the highest pay rises was 800 yuan a month, accepted by workers at Denso, a parts maker affiliated with Toyota. Since May, the minimum wage across the mainland rose by an average 20 per cent, even 30 per cent in some provinces, although rises were suspended last year because of the global financial crisis.

Even before the Honda strikes, Guangzhou said it would raise the minimum wage from 860 yuan a month to 1,100 yuan from May 1.

Shenzhen, where two Foxconn factories are located, agreed to raise minimum wages by 15.8 per cent to 1,100 yuan in July.

Yet a broader demand for wage increases among mainland workers has again emerged.

Strikes, although of a smaller scale because of the government's quick intervention, erupted sporadically in the Pearl River Delta.

According to Hong Hua Cao, a mainland labour rights advocacy group, at least three protests for pay rises took place in Shenzhen before the Asian Games opened.

Police intervention broke up two of them - one at the Baoan district plant of Shenzhen Ricoh Elemex, which produces quartz watches and parts, on October 26.

The other was at the Shenzhen Sanyo Huaqiang in Longhua district on November 12. The group said there were also reports of strikes in other parts of Guangdong. Pun Ngai, an associate professor at Hong Kong Polytechnic University who special-ises in China labour research, has sympathy for mainland migrants.

'There are nearly 200 million migrant workers in China. No matter how high the minimum wage has been lifted so far, it's still nowhere near enough to cover urban living expenses,' Pun said.

According to Pun, China's average minimum wage stood around 300 yuan a month in the 1990s. In 2000, it was about 1,000 yuan and this year, it is about 1,500 yuan.

The rise could hardly keep pace with living expenses in mainland cities, she said. The setting of a minimum wage was originally meant to protect the poorest 10 per cent income earners in the city, Pun said.

'But the minimum wage is a twisted concept in China. Whether it's in Shenzhen or Guangzhou, the minimum wage set by the government automatically served as a wage ceiling for migrant workers,' she said.

'Calculating today's minimum wage in China is not based on the urban consumer index. All along the way, migrant workers' right to earn a living wage in the city has never been dealt with officially.

'Even though the minimum wage has risen 30 per cent, it is still not enough for them to make a living in the cities.' As long as that stays the case, Pun predicted there would be more intense labour disputes and more frequent strikes.

Professor Mary Gallagher, director for Chinese Studies at the University of Michigan, said Chinese workers would probably keep protesting if pay did not keep pace with inflation.

'Given that labour disputes generally have continued to rise in China in 2009 and 2010, it's safe to say that other forms of labour unrest have also continued. But we don't know the real number of strikes,' she said.

'The central government also indicated its desire for rising wages, which further emboldened workers.'

In September, Huang Mengfu, vice chairman of the National Committee of Chinese People's Political Consultative Conference (CPPCC) and chairman of the All-China Federation of Industry and Commerce, said Beijing planned to raise the minimum wage by at least 20 per cent annually in the next five years to boost domestic spending power.

Huang said the CPPCC would propose that government fees and administrative charges levied on factories be reduced in return for raising salaries. But other factors that could increase tensions include labour shortages in coastal areas, the demands of young migrant workers who no longer easily accept poor working conditions, social discrimination and growing media attention.

Gallagher added: 'Recent inflation has only added fuel to the fire of these other more structural changes that are occurring in China's political economy.'

But Cindy Fan, associate dean of social sciences at the University of California, said large-scale disputes caused by inflation were unlikely.

She said: 'First, Chinese labour is not organised. Most strikes we've seen so far are ad hoc and factory-based. Without the backing and clout of large-scale labour organisations, workers' protests tend to be short-lived and scattered.'

She added that migrant work had already become an essential means of livelihood for rural residents because the resources to make a livelihood in the countryside were meagre. 'Most workers cannot afford to lose their migrant work,' Fan said.

'In a word, they don't have much leverage when faced with the rising cost of living, other than putting pressure on management as best as they can and looking for migrant work elsewhere.'