The role of U.S. companies in China and
the truth about factory conditions
Major Issues
1. Wages
North American companies say they and their factory contractors in China pay decent subsistence wages, wages which are very competitive given the low cost of living in China.
Fact: Twenty-five cents an hour is not enough. The wages in China's export assembly industry do provide a subsistence level existence--if it is meant in the sense that VF/H.H. Cutler's CEO said of the 28-cent-an-hour wages they paid in Haiti: “Well, the workers are alive aren't they? So they must be subsistence wages."
This is exactly the point. The factory workers in China do survive on their wages, because they work 12 to 14 hours a day, seven days a week during peak seasons, often with just one day off a month. They survive because most factory workers are migrants from rural areas who, once they arrive at the factory are housed 10 to 20 people to one small, crowded company dorm room. For the years they are at the factory, their “home" is a 2 ½ by 2 ½ by 6 ½-foot space on a metal bunk bed. They subsist on two or three dismal meals a day provided at the factory canteen.
The North American companies want us to think of these workers as individuals, young people out on a lark, travelling to the cities to try their hand at industry. This is untrue. They are working to help their families survive back home. They need to save to send money home. And those who are lucky enough to come from families who are not living at the edge of abject poverty need to save money for what comes afterwards, since no one last more than three to four years in these factories, given the grueling overtime hours and harsh conditions.
Can you live on the 25-cent-an-hour wages U.S. companies and their factory contractors pay in China, which come to about $65 a month?
Not even close: It costs $12.05 a month in China just to provide milk for one six-month old infant. So this expense alone would consume 19 percent of your total wage. A very modest diet for a three-person family costs approximately $72.29 a month, which is more than most factory workers earn.
Some expenses in China:
U.S. companies claim they are developing a middle class in China.
But how could a factory workers afford a new 15 by 17-inch color TV that
costs $343.37, which is nearly half a year's wages. Just the tax
on purchasing a new car is $1,205, and to install a phone, the cost is
$361.
In fact, between 1990 and 1998, the share of total urban income in Chine
shrunk for the bottom 20 percent of the people to 5.5 percent from 9 percent,
while the share held by the top 20 percent leapt from 38.1 percent to 52.3
percent. Since 1985, family income as a percentage of China's GDP
has fallen from 57.7 percent to 45.5 percent as wealth has shifted to the
corporations. China now has a more unequal distribution of wealth
than the United States has.
2. Spreading U.S. Values…
But then, how do you explain conditions of indentured
servitude?
North American companies have consistently claimed that their presence in China would set an example of respect for human and worker rights, and that this example would spread throughout China.
Fact: Wal-Mart's Indentured Servants: Wal-Mart has been in China for over a decade and is the largest importer into the U.S. of goods made in China. Kathie Lee handbags were made for Wal-Mart in China by workers forced to work 12 to 14 hours a day, seven days a week, with one day off a month, for an average wage of three cents an hour. However, many of the workers--in one sample, 46 percent of them--earned nothing at all after having worked three to four months making Wal-Mart handbags and in fact even owed money to the company. They were housed 16 to a small dorm room and fed two dismal company meals a day. Their identification documents were confiscated and they were allowed outside the factory for at most 1 ½ hours a day. Many did not even have the bus fare to leave to look for other work, and when they protested the grueling mandatory overtime work for literally pennies an hour, or nothing at all, 800 workers were fired.
Now, surely the Wal-Mart case of indentured servitude is at one extreme, and while it is true that Wal-Mart is usually found in a country's worst factories, and is the worst sweatshop abuser in the world today, still, how can we be sure that there are not other such factories across China, hundreds or even thousands of them, producing goods for export to the U.S. under similar conditions? It is unlikely that this factory is completely unique. But the North American companies continue to hide their production locations across China, refusing to even release to the American people the names and addresses of the factories they use in China to make the goods we purchase. Until the U.S. companies come clean and stop hiding their production in China, we can only assume that there are many more such cases of indentured servitude in factories producing for U.S. companies.
Two New Balance contractors in China, the Freetrend and Lizhan factories,
deny their workers freedom of movement. Both factories are locked
down at 9:00 p.m. every night, after which no one can enter or leave.
At the Freetrend factory, workers need prior permission to even leave the
factory compound during their lunch break.
3. Women's Rights:
North American companies are particularly sensitive to the issue of women's rights, and they go out of their way to proclaim their steadfast commitment to protecting and guaranteeing the rights of women. They tell us they have zero tolerance for abuses of women rights.
Fact: The companies only hire single women 17 to 25 years of age, after which they are replaced with another crop of young women.
In China, approximately 80 percent of the factory workers are young women, 17 to 25 years old. Why is this the case?
Consider a recruitment ad posted by a Nike contractor in China, the
Wei Li Textile Factory, which calls for “Females only…17-21…[with]single
certificate..."
Nike Contractor Wei Li Textile Factory Recruitment Ad
| Because of production needs, we are looking for experienced workers
in the computerized stitching and sewing sections.
Requirements:
Nice working environment, comprehensive living facility, sufficient orders. Wages are paid on piece rate. More work done, more profit. Welcome to join us! |
Or, consider a similar recruitment notice posted by a New Balance contractor, the Lizhan Factory:
Lizhan Factory / New Balance Want Ad
| Recruitment Notice
In order to fulfill production demands, our factory must now recruit a large number of workers and supervisors in the cutting, stitching and shaping sections. Requirements: 1.) female only
Skilled ones will be preferable. Please bring necessary documents to enroll and join the interviews! |
At the Lizhan factory, as is typical across the export assembly industry in China, there is also an unwritten rule--that if a worker becomes pregnant she will be fired.
So it is quite clear that the U.S. companies and their contractors want to hire predominantly young women, 17 to 25 years of age, presumably because they feel that the young women will cause less trouble, will talk back less, and will be less likely to demand their rights. At any rate, that is exactly the rationale given by the U.S. companies and their maquila contractors across Central America, who also prefer young women employees.
Why is it fairly rare in China to find a factory worker over 26 years of age making goods for export to the U.S.? Because after working 12 to 14 hours a day, seven days a week, with perhaps only one day off a month during the long peak seasons, the women become “worn out," “exhausted," and “used up" after just a few years, maybe three or four, working under such conditions. Living conditions are similarly harsh--sharing bunk beds with 10 to 20 other workers in a crowded dorm room and existing on two or three company meals a day. No one lasts long working under these conditions, so the women either leave or are pushed out after they reach 26 years of age. At any rate, they are replaced with another batch of young women, and the work goes on.
Not only do the women leave the factories after a few years exhausted and with little or no savings, they also depart with no skills, having learned nothing beyond the few piece-rate operations they repeated hour after hour, day after long day.
The women at the Pou Yuen factory who sewed New Balance sneakers explained that “once you are in the production line working, your hands and your eyes cannot stop for a minute." One worker said, “my whole life is only work, and it is meaningless. There are no promotions in the factory."
The workers agreed that their jobs were “hard and backbreaking."
The women at the Lizhan factory echoed those feelings: “Once you are employed as a worker you will always be a worker." There is no possibility for advancement or promotion. The factory workers are in a trap, going nowhere.
It is difficult to understand the claim of the American companies that
such conditions are promoting women's rights.
4. Hours and Working Conditions
The North American companies say they have strict factory guidelines, or Corporate Codes of Conduct, which guarantee healthy and safe working conditions and which reasonably and humanely limit the number of hours worked at their contractors' plants in China.
Fact: Mandatory 14-hour shifts, 7 days a week are quite common, as are 100-degree factory temperatures and the handling of toxic glues and paints.
Low wages and excessively long mandatory overtime hours are the chief complaints heard from factory workers in China. During the busy season it is not uncommon for the workers to be forced to work 12 to 14 hours a day, seven days a week, with just one or two Sundays off each month.
At the Baoan factory in China, workers making Huffy bicycles are at the plant from 7:00 a.m. to 11:00 p.m., seven days a week. No overtime premium is paid, but failure to work all the overtime hours is punished with loss of two days' wages. During working hours you are not allowed to talk, and strong chemical odors permeate the painting department. At the Action Electronics factory making RCA TVs, there is a special overtime rate of 36 cents an hour, which kicks in after midnight. At the Keng Tau Handbag factory, during the peak season young women are at the factory from 8:00 a.m. to 10:00 p.m. making Nike backpacks, seven days a week. Failure to work overtime is punished with the loss of 3 ½ hours' wages as well as the entire month's attendance bonus. Further, the offending worker receives a warning letter and her name and crime are broadcast over the factory's loudspeakers.
If you arrive a minute late to your 8:00 a.m. to 11:00 p.m. seven-day shift sewing Spiegel women's clothing, you are fined two hours' wages. If you come five minutes late to the Hung Wah factory making Nike clothing, you will be fined 5 ½ hours' wages.
Sixteen-year-old girls assembling Keds sneakers at the Sun Hwa Footwear factory apply the toxic glue with their bare hands, the only tool they are given, a toothbrush.
Sixteen and seventeen year olds making Timberland shoes at the Pou Yuen factory report handling toxic glues and solvents without gloves, some working in temperatures exceeding 100 degrees Fahrenheit and breathing in leather dust particles which fill the air. At another Pou Yuen factory making New Balance sneakers the women complained of skin rashes brought on by exposure to abrasive chemicals.
At the Freetrend Factory, workers making New Balance sneakers need permission to use the bathroom, and the time they take is monitored.
At the Action Electronics factory many of the young women making RCA TVs said they would like to be able to study English or computers at night, but because of the long overtime hours demanded each night, there was no time to do so. Also, they said they were too exhausted at the end of the day.
Most of the factories even cheat the workers out of Social Security health care, pension and unemployment insurance coverage, leaving them with no safety net whatsoever. The companies complain that Social Security benefits cost too much, and so with the help of local government authorities, they find ways to avoid the legal mandate that companies inscribe their workers in Social Security and contribute their share of the fees, which could add another 30 percent to their labor costs.
At several factories, such as Pou Yuen where workers make Timberland
shoes, they are threatened and coached to lie to any North American auditors
regarding factory conditions. The same is true at the Lizhan factory,
where they make New Balance. AT the Keng Tau factory, where they
make Nike bags, the workers are instructed not to punch their time cards
for evening or Sunday work, in order to hide the number of overtime hours
actually worked each week.
5. Freedom of Association and the Right to Organize:
Many U.S. companies have corporate Codes of Conduct which claim they recognize and will respect the right of workers to organize free of reprisals and to bargain collectively. Of course, everyone agrees that the right to organize is the most fundamental of the internationally recognized worker rights.
Fact: There are no worker rights in China, and least of all the right to organize an independent union. Any such attempt will be met with firing, arrest and imprisonment.
Independent religious, political and labor organizations are not tolerated by the authoritarian government of China. Attempts to form independent unions are met with firings, arrests and imprisonment without trial, usually for three to eight years in a hard labor camp. Nor are strikes, demonstrations or raising grievances allowed.
When the workers in the polishing section of the Lizhan shoe factory could no longer take the excessively long mandatory overtime hours and the below-subsistence wages, they went out on a wildcat strike. All 30 of the most active participants were fired. After the firings, management let the remaining workers know that: “the workers should behave. Otherwise they too will be fired. Strikes are not permitted in the factory, and anyone who tries will be fired."
At the Baoam factory where the workers make Huffy bikes, the delivery workers went out on strike to protest the excessively heavy workloads, the long overtime demands and the very low wages. All the strikers were fired.
No dissent is allowed.
Better These Jobs Than None:
This is the million-dollar question that the companies like to raise as a matter of last resort when things are not going well and their factory conditions are being exposed publicly.
Fact: There is huge unemployment and poverty in China. But misery does not give the companies license to exploit. What the companies are really doing is trying to pit American workers against the people of China in a race to the bottom over who will accept the lowest wages and benefits and the most miserable living and working conditions.
No one is saying that there is not enormous unemployment in China, with 20 million people, or 10 percent of the urban population, out of work. In rural areas, 30 percent, a staggering 250 million people are classified as redundant labor. Young people from agricultural provinces are being pushed by joblessness to go south, to the cities, lured by the factories and the hope of finding work.
But the American companies and their contractors want us to believe that high unemployment rates and poverty--misery--gives them license to exploit people. It does not.
And if we allow the companies to take this step, then we will have helped unleash this race to the bottom, in which the multinationals are able to pit American workers against desperately poor people in China, in a race to the bottom over who will accept the lowest wages and benefits and the most miserable working conditions.
The companies benefit from this race to the bottom, especially as they want the American people to see the people of China as the enemy. They want us to believe that it is the people of China who are stealing our jobs, driving down wages and busting our unions, when in fact, the people of China are not our enemies, but rather our sisters and brothers.
Our focus must remain on the role of the North American companies and their contractors in China in denying worker and human rights. We must do everything possible to support the struggle of the people of China to win those rights. We are in the global economy together. And together we will either hold the multinational companies accountable to respect human and worker rights and to pay a living wage, or together we will sink lower.
The only way to put a human face on the global economy is to guarantee that human and worker rights standards and payment of a fair wage are made a condition of trade, in a system that is verifiable and enforceable.