Migrant workers turn screw on bosses
Never mind the year of the rabbit, it's shaping up to be the year of the worker.
At a time of severe labour shortage, tens of thousands of Hong Kong manufacturers in the Pearl River Delta are trying everything to lure migrant workers to return to work after the Lunar New Year holiday.
Perks and freebies are no longer enough to retain labourers; hard cash, year-end bonuses and annual pay rises are a must in the nationwide race for blue-collar workers.
With costs soaring on all fronts, the labour problem has aggravated the plight of manufacturers already operating on thin profit margins.
And the migrant workers are clearly relishing their new status.
'They are the king,' said Pauline Ngan Po-ling, deputy chairwoman of Mainland Headwear Holdings. 'They want this and that. If their wishes are not granted, you could be in great trouble.'
About 30 migrant workers climbed on to the roof of the group's factory in Shenzhen last month and threatened to jump off collectively if they were not allowed to go home five days early for the holiday.
A frustrated Ngan gave in to their demand but withheld their pay cheques until the end of this month so they would return to work.
'I had no choice but to let them go. What if they had jumped? We will know if they will come back or not today or tomorrow.'
Mainland Headwear - which saw three out of four migrant workers at its Shenzhen factory heading home for the holidays - offered to raise the monthly pay of its labourers by up to 8 per cent this month after an average pay rise of 34 per cent last year.
Even with such increases, the factory is short of 1,000 workers.
Ngan said the average salary of its 3,000 migrant workers, at 2,600 yuan (HK$3,071), exceeded the minimum requirement of 1,100 yuan in Shenzhen. Shenzhen is expected to follow Guangdong's decision to raise the province's minimum wage by an average 18.6 per cent on March 1.
The legacy of the nation's one-child policy, rapidly growing affluence, a more convenient transport network and the availability of jobs in the western and northern parts of the country have made the once-coveted blue-collar jobs in the delta region less attractive.
Jimmy Kwok Chun-wah, Hong Kong owner of a petrochemicals processing plant, Rambo Chemicals, in Shenzhen, said modern recreational facilities, free internet access, better food, and comfortable living and working conditions were basic necessities to retain workers.
'These are no longer sufficient to keep them,' Kwok said. 'They want both - money and freebies.'
Kwok offered to reimburse workers with transport costs including air tickets together with cash bonuses as incentives to get them back to work after the holiday break.
For those workers who did not make the trip home for the holiday, he offered free excursions into nearby towns, dinners and various entertainment activities.
Iris Lam, business promotion director at shoe exporter Onlen Fairyland (HK), said swelling costs had hurt manufacturers so much that there was virtually no leeway for labour-intensive manufacturing to survive on the coastal mainland and in the south.
'I am pessimistic about the industry,' said Lam, whose company outsources manufacturing to six factories to reduce costs and risks. 'I overheard during the past week that some Hong Kong factory owners plan to abandon their factories in the Pearl River Delta to stop losses.'
Academics point out that the future of Hong Kong manufacturers hinges on whether they can succeed in upgrading their value chain and technology levels or relocate to regions where costs are lower, as stipulated in the nation's 12th five-year plan covering 2011 to 2015.
Dr Fang Zhou, assistant chief research officer at the One Country Two Systems Research Institute, said Shenzhen's attitude towards cross-border co-operation had changed significantly since 2003, along with the economic zone's waning need for Hong Kong capital and know-how.
'Shenzhen and other PRD cities in the past were very keen to attract Hong Kong business to set up factories there. [Hong Kong-run] factories were the pillar of the local economy, creating jobs and raising local living standards,' he said. 'But now cities like Shenzhen are no longer interested in those types of factories, which are labour-intensive, polluting and low-tech.'
Fang said that these cities were more interested in developing high-end, large-scale modern manufacturing, which 'Hong Kong cannot provide'.
He said Shenzhen leaders trumpeted cross-border co-operation with Hong Kong, which provided a 'good excuse' to persuade more policy support from the central government.
Additional reporting by Fiona Tam