Lizhan Footwear is a Taiwanese-owned sneaker and shoe manufacturer with three plants in Dongguan City in the south of China.Lizhan Factory II produces for New Balance, while Factory I produces K-Swiss.Factory III makes various brands, including ones for local consumption.

There are approximately 3,500 workers in Lizhan Factory II assembling New Balance sneakers.The vast majority of the workers are young women, 18 to 25 years of age, who have migrated to Dongguan City from rural agarian provinces.There appear to be several 15 year old minors illegally employed at the factory.The workers report that the company does not accept married women.

Summary - New Balance Made in the Lizhan Footwear Factory:

·<>In June 1999, the sole section was working up to 84 hours a week.

·<>The base wage is less than 18 cents an hour, or $1.46 for an 8½ hour day, including all overtime bonuses and incentives.Hourly wages range from 24 to 34 cents an hour.

·<>Workers need permission to even leave the factory grounds and the factory and dorms are locked down at 9:00 p.m.Anyone returning after 9:00 p.m. will be locked out for the night.

·<>20 workers share a crowded dorm room, sleeping in triple-level bunk beds.

·<>The young workers are threatened, coached and told to lie to any U.S. company auditors.Whenever asked, they are instructed to say they are working just 8 hours a day.

·<>At 25 years of age the workers are fired as the company feels they are "used up" from the grinding schedule.

·<>When a production line fails to complete its daily production quota, the workers must remain working overtime, with no overtime bonus until they reach the goal the company sets.Sometimes wages are deducted as a punishment for not reaching their quota.

·<>Through illegal wage deductions and deposits, the factory withholds up to five weeks of the workers’ wages.

·<>When the workers in the polishing section could no longer stand the long hours and low wages and spontaneously went out on strike, they were all fired.The company will not accept an independent union, strikers, or worker grievances.When asked why the fired workers did not approach the local government’s labor bureau for help, the leader of the strike responded, "It is useless to approach the Labor Bureau even if there are deaths in the factory."

·<>The workers feel trapped and helpless.There are no promotions.

Hours: At the Factory 11 to 14 Hours a Day, Six and Seven Days a Week

The "regular" shift would be:

·<>7:00 a.m. – 7:30 a.m. (an exercise period which is voluntary)

·<>7:30 a.m. - 12:00 noon

·<>12:00 noon – 1:30 p.m. (lunch break)

·<>1:30 p.m. – 6:30 p.m.

There is an hour and a half break for lunch though most of the workers must rush to finish their lunch in 15 minutes in order to make room for others, as the canteen area is too small to accommodate everyone.

So the workers are at the factory 11 or 11½ hours a day, six days a week, or for 69 hours while being paid for only 9½ hours a day, or a 57 hour work week.

However, if an assembly line fails to reach its daily production quota in the 9½ hour shift, the workers are required to remain – without receiving any overtime bonus – for however many hours it may take to reach the goal the company sets.Not only are they not paid any overtime premium, but failure to reach the production goal may also be punished through wage deductions.

In June, 1999 workers in the sole section reported working 11 to 12 hours a day, sometimes seven days a week. Their shift was: 

·<>7:30 a.m. – 12:00 noon

·<>12:00 noon – 1:30 (lunch break)

·<>1:30 p.m. – 6:30 p.m.

·<>6:30 p.m. to 7:00 p.m. (supper break)

·<>7:00 p.m. to 8:30 or 9:30 p.m.

Working this shift the women would be at the factory 14½ hours a day, after which they would be locked in the dorms.

In the cutting and sole section of the factory there are two shifts with a second grueling 11½ hour night shift from 7:30 p.m. to 7:00 a.m., which has recently been cut back by management for fear of exposure and the reaction of North American consumers.

The workers receive one day off a week.However when there are large rush orders, Sunday work is mandatory.

Wages: 18 cents an hour base wage.  With overtime and incentives added, wages range from 24 to 34 cents an hour or $13.90 to $19.46 for a 6 day, 57 hour workweek.

However the majority of workers are paid by piece rate, according to how many operations they complete.In the sole section of the Lizhan Factory the workers report earning on average between 500 rmb to 600 rmb per month, or $60.24 to $72.29.This would amount to weekly wages of $13.90 to $16.68, or 24 cents to 29 cents an hour, for a six day, 57 hour workweek.

Low piece rate(all incentives included)

·<>24 cents an hour

·<>$2.28 a day (for a 9½ hour shift)

·<>$13.90 a week (for a 57 hour, 6 day week)

·<>$60.24 month

·<>$722.87 a year

In the molding section wages are a little higher, where skilled workers earn from 600 rmb to 700 rmb per month, or $72.29 to $84.34.For a six day, 57 hour workweek, a molder’s pay would amount to between $16.68 and $19.46, or 29 cents to 34 cents an hour.

High piece rate (all incentives included)

·<>34 cents an hour

·<>$3.23 a day (for a 9½hour shift)

·<>$19.46 week (for a 6 day, 57 hour week)

·<>$84.34 a month

·<>    $1,012.50 year

Mandatory overtime work on Sundays is compensated at 36 cents an hour, or twice the base wage of 18 cents.

In a practice which appears to be fairly standard in the shoe industry in China, as an incentive to keep the workers at the factory, after the first three months their wages are raised $1.20 each month, or 30 cents a week.For the 57-hour workweek at Lizhan, this would amount to ½ cent an hour increase in pay each month for the workers making New Balance.

The workers are charged a small fee each month for the use of toilet paper.Also anyone late for her shift will be fined approximately three hours wages.Those who lose their factory I.D. cards will be fined $2.20, or two days wages.

Another constant complaint is that the workers have no idea how their salary is calculated by the company since they do not understand the specific rates for the various categories of work.Nor can they understand all the deductions or how their incentives are set.In fact, it appears that the line supervisors have the control to arbitrarily distribute each worker’s incentive.Also, the workers cannot understand why their wages vary so much from month to month.For example, in just a two month period one worker’s wages fell from $19.46 a week, or 34 cents an hour, to $11.12 a week or 20 cents an hour, for the exact same 57 hours of work.

Assistant supervisors earn about 1000 rmb per month, or $120.48, which is about twice what the production workers earn.

Illegal Deposits and Wage Deductions:

First, as migrant workers they are charged more than 200 rmb-over $24.00 U.S., or nearly a week and a half’s wages – for temporary residency and work permits.(The Chinese people are not free to move around their country.The government controls population movement by requiring temporary residency and work permits for anyone leaving their home to find work in another province.)
 

To keep new employees from leaving to find work in another factory which may have better conditions or pay more, Lizhan Footwear management illegally requires the workers to pay a deposit of 100 rmb, ($12.05 U.S.) before they can begin working at the factory.Next, the company withholds the worker’s first month wages, which would amount to about $60.Only at the end of the second month will a worker receive their first paycheck.If anyone leaves the factory before their first year is out, their deposit will not be returned.The withheld wages will not be returned if a worker leaves the factory without providing sufficient advance notice.

No Legal Work Contract

No Paid Vacations

No Social Security Insurance

Denial of Freedom of Movement

The workers complain that even their freedom of movement is strictly constrained, and it is sad for them since it makes it difficult to visit with their friends in other factories who are from the same province and hometown as they are.

Twenty-eight People to Dorm Room

Workers Told to Lie to Inspectors

Fired For Raising a Grievance – Busting a Strike

After firing the workers, management let it be known: "that the workers should behave, otherwise they too would be fired.Strikes are not permitted in the factory, and anyone who tries will be fired."The manager went on to explain to the workers how easy it is to recruit new staff to replace those fired.

No independent union is allowed in this, or any other factory in China.Workers daring to raise a grievance will be fired.

One of the fired strike leaders was asked why they did not run to the local government’s labor bureau for help in protecting the worker’s legal rights. He responded: "It’s useless to approach the Labor Bureau even if there are deaths in the factory."

No Chance for Advancement

Most of the male workers said it was impossible on their little wages to save money or send money home, explaining that their wages just barely met their own living expenses, which included food to supplement their modest dorm meals, cigarettes and entertainment.

Some of the young women however, through great personal sacrifice tried to send home as much as $40 a month.Locked in the factory and dorm, working at least six days a week, they had little time or opportunity to spend money.The women try to save money so their young brothers back home can go to school.

SA 8000 Corporate Monitors Show up – The Workers Have No Idea What It Is

SA 8000 is sponsored by the Council on Economic Priorities and various auditing and manufacturing corporations.