New generation shakes China labor landscape

BEIJING/HONG KONG Wed Jun 2, 2010 6:56pm IST

A Ssangyong Motor worker sits beside the company's assembly line, which has been stopped, at its factory in Pyeongtaek, about 70 km (40 miles) south of Seoul, in this January 12, 2009 file photo. REUTERS/Jo Yong-Hak/Files

A Ssangyong Motor worker sits beside the company's assembly line, which has been stopped, at its factory in Pyeongtaek, about 70 km (40 miles) south of Seoul, in this January 12, 2009 file photo.

Credit: Reuters/Jo Yong-Hak/Files

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BEIJING/HONG KONG (Reuters) - In a reversal of the classic picket-line clash, Chinese workers at a Honda auto parts plant held out for higher wages this week while men in yellow caps from the government-backed union tried to end their strike.

The strange dynamics of the strike that forced Honda to suspend auto production in China for more than a week reveal a growing impatience by Chinese workers with the state-backed union, and shifting demographics that may eventually give them more leverage than their parents ever had.

"Foreign investors have been lulled into a false sense of security that China has a docile work force," said economist Arthur Kroeber of Dragonomics.

"There's nothing intrinsically docile about the Chinese labor force. There was a period when everything was kind of fine; now we are entering a period of more constraint."

No reliable figures exist on the number of job walk-offs each year by Chinese workers, and many disputes are likely short and go unreported. But anecdotal evidence suggests the Honda clash reflects a larger trend, in which the balance of power may be shifting toward workers.

The number of Chinese between the ages of 15 and 24 has hovered around 200 million to 225 million for the last 20 years. That number is likely to fall by one-third during the next 12 years, Kroeber said, giving more bargaining power to the young people pouring into the workforce.

"Ultimately, the teeth that lies behind (labor conditions) is the workers' notion that 'if we strike, we'll be thrown out of a job and there's another 10,000 people to replace us.' Now the teeth are removed because there aren't another 10,000."

For now though, the decks are still stacked against workers who try to independently press for better wages.

IMPACT OF STIMULUS

Chinese workers collectively tightened their belts in 2008, when the initial shock of the global financial crisis forced some factories out of business and led many others to cut wages.

The economy has since roared back to life, and stimulus measures in smaller cities have kept many workers closer to home, away from the export-oriented factories of the coast.

"It suggests that the stimulus packages have been incredibly successful at creating jobs," said Glenn Maguire, Asia chief economist for Societe Generale.

Multinationals and Chinese exporters have responded by moving production and sourcing to inland regions, where wages are lower, or by hiring students and migrants from remote regions through schools or government agencies.

About 600 of Honda's 1,900 workers at the auto parts plant in Foshan, in southern Guangdong province, dubbed the workshop to the world, were "student interns" contracted out by their schools for between six to 18 months of full-time work on the factory floor.

As its regular workers went on strike, the interns were asked to sign a pledge not "to lead, organize or participate in" any strike.

Chinese workers are not allowed to form unions independent of the All-China Federation of Trade Unions, an umbrella organization run by the Communist Party to which companies pay a percentage of wages. Historically, the ACFTU tries to prevent strikes.

On Monday, workers who refused to accept Honda's wage offer clashed with union representatives, who tried to force them off the factory grounds.

"The trade union doesn't represent us," said a young woman who declined to be named. "They asked the company to negotiate with us, but they didn't help us. They just turned our requests down."

While China's first generation of migrant workers may have been poorly-educated peasants used to a life of back-breaking labor on the farm, the new generation often has no land and no farming experience to fall back on.

"When their parents' generation migrated, they knew nothing about factories," said Lee Chang-hee, senior specialist on industrial relations for the International Labour Organisation in Beijing. "For the second generation, it's different. Some were born in the cities, although they are still registered as rural. Some strive to become urban citizens."

"They have no other life outside the factory, so they have to make the factory work for them."

ORGANISING VIA SOCIAL NETWORKS

Workers organized the Honda strike using social networking tools like Internet-based chatrooms and China's popular messaging service, QQ.

"The chatrooms have now been deleted, but they were clearly saying 'the union is useless, let's do this by ourselves'," said Geoffrey Crothall, editor of the China Labour Bulletin, which documents labor conditions in mainland China.

That could increase Chinese leaders' nervousness over activism by young workers, some of whom were born after the 1989 crackdown on pro-democracy protests on Tiananmen Square.

Workers involved in those protests had also tried to form independent unions.

Strong-arm tactics by bosses, official complicity and difficulties in uniting the transient migrants who staff Chinese factories still works against the labor movement in China.

"It's difficult to do ... in each factory you need leaders with a certain quality to lead the workers. Someone with legal knowledge," said a labor activist and factory worker in southern China who asked not to be named.

A more pressing worry is the policy dilemmas for the Chinese government, which has an official target of raising wages and household income, without deterring the investment in production capacity underpinned by three decades of cheap labor.

A rash of recent suicides at a huge factory belonging to Foxconn, a contract manufacturer for groups such as Apple, Dell and HP, put a harsh spotlight on China's labor conditions.

The potential for other workers to take inspiration from fellow workers at Honda was revealed when workers at a Hyundai Motor auto parts plant near Beijing walked off the job this weekend. They were quickly promised higher wages.

"Other countries' experiences show that once it happens, it spreads very easily under the current situation of labor shortage," said Lee, a native of South Korea.

(Additional reporting by Don Durfee in Hong Kong; Editing by Bill Tarrant)

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