The Louder Voices of China Workers

When Honda and Toyota opened plants through joint ventures with local automobile makers in China, they might not have imagined that strikes would take place in China. But it happens.

On June 18th, Honda’s lock factory (Chinese) in the Zhongshan city of Guangdong ended the third strike for Honda by increasing wages by RMB 280 per month for its 1,200 employees, including RMB 80 as housing allowance. Toyota did not manage to avoid similar labor conflicts; the automaker experienced three such strikes (Chinese) in June 2010.

Unlike the employees in these car part-making factories, who are mainly requesting higher wages, some employees from Foxconn chose to voice their frustrations and complaints at the expense of their own lives.Ten suicides and two attempted suicides took place in Foxconn’s complex. One of Foxconn’s follow-up actions has been to increase salaries by 30% even though the employees were not necessarily asking for salary increases.

All this news conveys several strong messages. First of all, low labor costs are fading away for the Chinese manufacturing sector. Due to various economic factors, the workers nowadays can hardly survive if they are only paid the local minimum wage, even though local minimum wages have risen throughout China since the beginning of this year. The second message is that the workers are more courageous to express themselves for certain purposes without the presence of trade unions.

There is one important fact behind the 2nd message. According to the Monitoring and Investigation Report of Migrant Workers 2009 published by the State Statistics Bureau, among the 0.23 billion migrant workers in China, the “new generation”, whose ages range from 16 to 30, make up approximately 62% of the total migrant workforce. Compared with the previous generation, this new generation has better education and improved access to online legal information. Therefore, they are more aware of their rights and are more confident to ask for better treatment.

Given what we’ve heard from this “new generation”, factories should consider the following two points in their responses. First, pay more attention to the workers. Proactive listening might help prevent the complaints from escalating. Simply put, grievance mechanisms are an easily-ignored topic for further study and implementation.

Secondly, factories need to realize that offering reasonable wage raises is very necessary for ensuring a stable workforce and is the industrial trend. Offering better packages to the employees has become an increasingly crucial factor to reliable production capability, because of the labor shortage mentioned in a previous blog.

It is true that some of the brands that source in China may consider sourcing in alternative countries. But this is not an easy step to take, and China continues to have many strengths. Despite the recent labor unrest, China still has a relatively stable social and political atmosphere, as well as a well-developed transportation infrastructure, all of which are key issues that any sourcing department takes into account.

Generally speaking, while it is getting tougher for labor-intensive exporters and international brands to source in China, the benefits still outweigh the recent labor challenges. These effects of these labor strikes, led by the younger generation of migrant workers, might be lessened if factories and companies collaborate and comprise.