Reports

May 18, 2000  |  Share

Made in China. The Role of U.S. Companies in Denying Human and Worker Rights

TABLE OF CONTENTS

I.  INTRODUCTION

II. U.S. CONTRACTORS IN CHINA / FACTORY CONDITIONS

         1. Timberland shoes   

         2. Wal-Mart / Kathie Lee handbags

         3. Labor Law in China  

         4. Huffy bicycles  

         5. Cost of Living:  Trying to live on 25 cents an hour  

         6. Visiting a company dorm  

         7. Alpine car stereos   

         8. New Balance sneakers  

                  - Freetrend factory 

                  - Lizhan factory 

                  - Pou Yen factory 

         9. Looking for Fubu and Deep E in China  

         10. Fubu and Deep E 

         11. Where Keds are made in China

         12. Nike in China and proud of it  

                 - Sewon factory 

                 - Hung Wah and Hung Yi factories 

                 - Keng Tau factory  

                 - Tong Ji factory   

                 - Wei Li Textile, Ltd.  

         13. RCA TVs 

         14. Finding Spiegel in China 

III.  LABOR ACTIVISTS IMPRISONED IN CHINA

IV.  RHETORIC VERSUS REALITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


INTRODUCTION

For years, and now again with renewed vigor, U.S. companies have claimed that their mere presence in China would help open that society to American values.  In effect, we are told that U.S. companies operating in China will also be on the front lines, acting as mini-universities of a sort, doing the heavy lifting in inculcating and spreading respect for human, women’s and worker rights and democratic freedoms by their own example.

On one hand, there is no doubt that U.S. companies have a major presence in China.  In 1997, of the $45.3 billion in direct foreign investments made in China, investment by U.S. companies was second only to that of Hong Kong.  Of the total foreign investment, 62 percent went into funding 14,716 new manufacturing facilities.  Today U.S. companies import a full 36 percent of China’s total exports worldwide.

On the other hand, can we believe the U.S. corporations when they claim that they have improved human and worker rights conditions in China?  Unfortunately, we cannot.  Their record all too clearly demonstrates otherwise.

Recent in-depth investigations of 16 factories in China producing car stereos, bikes, shoes, sneakers, clothing, TVs, hats and bags for some of the largest U.S. companies clearly demonstrate that Wal-Mart, Nike, Huffy and others and their contractors in China continue to systematically violate the most fundamental human and worker rights, while paying below subsistence wages.  The U.S. companies and their contractors operate with impunity in China, often in open collaboration with repressive and corrupt local government authorities.

[Picture: Fubu sneakers are made by young women locked in a walled compound with four guard towers at the corners, and paid 23 cents an hour to work 12 hours a day. Local security police keep an eye on the factory.]

Take Wal-Mart for example, the largest retailer in the world and the largest importer of goods into the United States.  The best estimate is that Wal-Mart uses 1,000 contractors in China, with factories hidden across the country.  (We can only estimate this, because Wal-Mart refuses to provide the American people with even a list of the factories the company uses in China to make the goods we purchase--though Wal-Mart does provide the same information to the government of China!)

Recently we discovered Kathie Lee handbags being made for Wal-Mart at the Qin Shi factory, where 1,000 workers were being held under conditions of indentured servitude, forced to work 12 to 14 hours a day, seven days a week, with only one day off a month, while earning an average wage of 3 cents an hour.  However, even after months of work, 46 percent of the workers surveyed earned nothing at all--in fact they owed money to the company.  The workers were allowed out of the factory for just an hour and a half a day.  The workers were fed two dismal meals a day and housed 16 people to one small, crammed dorm room.  Many of the workers did not even have enough money  to pay for bus fare to leave the factory to look for other work.  And when the workers protested being forced to work from 7:30 a.m. to 11:00 p.m., seven days a week, for literally pennies an hour, 800 workers were fired.

How is Wal-Mart’s behavior in China spreading respect for human rights?

Nike is another example, with approximately 50 contractors in China, employing more than 110,000 workers.  One can see the “swoosh” and “Just Do It” slogan painted on the walls of Nike’s contractor’s factory, Sewon, right behind the locked metal gate and the iron bars and grates covering the windows.  People in the community told us that the young workers are paid 20 cents an hour and work 11 to 12-hour shifts.  Also, they explained, they factory will not hire anyone over 25 years of age.

At the Hung Wah factory, young women work from 7:30 a.m. to 10:30 p.m., seven days a week, sewing Nike clothing for an average wage of 22 cents an hour.

At the Keng Tau Handbag company, young women work seven days a week during the busy season sewing Nike bags and backpacks from 8:00 a.m. to 10:00 p.m., receiving just one day off a month.  Some workers earned as little as 8 cents an hour.  To hide the amount of illegal overtime hours, factory managers told the workers not to punch their time cards for night or Sunday work.

How is Nike’s actual behavior in China spreading respect for human rights?

A recruitment ad for the Lizhan factory where New Balance sneakers are made advertised for “Females only, age 18-25.”  The base wage at the factory is 18 cents an hour, and the workers need permission to leave the factory grounds.  Factory and dorms--where 20 women share one small dorm room, sleeping on triple-level bunk beds--are locked down at 9:00 p.m. every night.  When workers in the polishing section could no longer stand the grueling overtime hours and low pay and went on strike, they were all fired.  Factory management then lectured the remaining workers that they would not tolerate unions, strikes, bad behavior or the raising of grievances.

[Picture: Far from defending human rights, the record shows that U.S. companies and their contractors in China are actively involved in the systematic denial of worker rights.]

How is New Balance’s behavior helping to develop respect for human rights in China?

Does it get better with other U.S. companies?

  • Huffy bikes are made in China by workers forced to work from 7:00 a.m. to 11:00 p.m., 7 days a week, earning as little as 25 cents an hour.  Failure to work overtime is punished with the loss of two-day’s wages.  Twelve workers are housed in tiny, dark dorm rooms.
  • Timberland shoes are made in China by 16 and 17-year-old girls forced to work 14 hours a day, seven days a week for 22 cents an hour, often in temperatures over 100 degrees Fahrenheit.  The young women are threatened and coached to lie to any auditors visiting the factory.
  • Alpine car stereos made by young women working 9 ½ hours a day, 6 days a week, staring into microscopes as they solder the fine pieces of the stereo for 27 cents an hour.  An electronic scoreboard traces their progress in meeting their daily production goal.
  • Keds made in China by 16-year-old girls applying toxic glue with their bare hands, the only tool given them, a toothbrush.  At the end of the day, they must line up and leave the factory single file.  The factory is surrounded by a 15-foot wall topped with barbed wire.
  • Spiegel clothing are made in China by women forced to work from 8:00 a.m. to 11:00 p.m., seven days a week.  If they arrive a minute late, they are fined two hours’ wages.
  • Fubu sneakers are made by young women locked in a walled compound with four guard towers at the corners, and paid 23 cents an hour to work 12 hours a day.  Local security police keep an eye on the factory.
  • RCA TVs are made by young women--some just 14 years old--working from 7:30 a.m. to 9:00 p.m. or even midnight, seven days a week, for a base wage of 25 cents an hour.  Workers are fined 10 hours’ pay if they make a mistake on the production line.

There is no doubt that U.S. companies are in the front lines in China, importing for example 1.2 billion garments a year made in China, as well as shoes, sneakers, toys and sporting goods made in China that will retail in the U.S. for over $39 billion a year.  But the fastest growing U.S. imports from China are computers and computer parts, which are increasing by 74 percent each year;  phones and other telecommunications equipment which are up 72 percent annually, and electrical goods which are up by 127.6 percent.

But, far from defending human rights, the record shows that U.S. companies and their contractors in China are actively involved in the systematic denial of worker rights.  U.S. companies are milking a system that does not allow for dissent and where anyone trying to form an independent union will be fired, arrested and imprisoned for 5 to 8 years without a trial.

Just ask Liu Dingkui about labor rights in China. He was arrested in January 1999 for organizing a demonstration of 500 steelworkers demanding back wages from the state-owned Peijiang Iron and Steel factory in Jiangyou City.  He is now serving 1 ½ years in a hard labor camp for “re-education.”

Or, ask Zhang Shanguang who was sentenced on December 27, 1998 to 10 years imprisonment for “supplying intelligence to organizations outside China.”  He had filed stories with foreign radio stations describing widespread labor and peasant unrest in his home county of Shupu.  The list goes on.

There are no workers rights in China, and U.S. companies are, unfortunately, a part of the problem.

[Picture: Nike contractor in Northern China]

How the Research Was Done

China is a hot topic these days, as it should be.  China is currently the world’s seventh largest economy and may well be the world’s largest in the next 25 years.  What happens in China will have a profound impact in shaping the global economy and determining whether or not fair trade will be linked to respect for human and worker rights and payment of living wages.  Yet, despite the vast importance of China’s position there is precious little known about the role of U.S. multinational corporations in China, and about conditions in their own and their contractors’ factories.

This research project was undertaken to help fill this enormous void.  The research for “Made in China” began in March 1999, and will continue into the future.  This is just the first of a series of planned reports documenting factory conditions and the struggle of workers in China to win their rights.

[Picture: Shoe factory in China]

The National Labor Committee made two trips to China, in July 1999 and again in January 2000.  But the vast majority of the research was done by very brave and dedicated human rights organizations in the region, along with courageous labor rights activists, some of whom are operating inside mainland China.  For obvious security reasons, we will not identify the names of our colleagues or their organizations.

Hopefully, this report will provide more than just documentation on factory conditions.  We hope that it will also help build an active international solidarity movement in the United States to support the workers’ struggle for human and worker rights in China.

 


Timberland in China

Timberland shoes are produced at:
Pou Yuen Factory V
Zhongshan City
Guangdong Province, China

[Picture: Timberland - Pou Yen factory #5]

Summary: Timberland/Pou Yen factory

  • During the busy season, 16 and 17-year-old girls work at the factory up to 14 hours a day, seven days a week, putting in a 98-hour workweek.
  • "Regular" daily shift from 7:30 am to 9:30 pm.
  • Earning 22 cents an hour, or $16.13 for over 70 hours of work.
  • Excessively high daily production quotas, which cannot be reached in eight hours.
  • Cheated on overtime pay: all overtime work is mandatory, and is either unpaid, or compensated at just the standard piece rate.
  • Factory temperature reaches more than 100 degrees F.
  • Workers report handling toxic glues and other solvents without gloves, and complain of high dust levels, excessive noise, and strong chemical odors.
  • Workers are housed 12 to a small dorm room; more than two dozen people share one bathroom.
  • Workers are threatened and coached to lie to U.S. company auditors.
  • Both factories and dorms are under 24-hour surveillance by private security guards.
  • As is standard practice in China, any workers attempting to defend their rights or form an independent union will be imprisoned.

[Picture: Timberland shoes made in China. Retail price: $99.99.]

Conditions at Pou Yuen Factory Number V
Producing Timberland Shoes

  • There are 3,600 workers at Pou Yuen Factory V, 80 percent of whom are young women, averaging 23 years of age. However, over 1,000 workers at the factory are just 16, 17 or 18 years old. Seventy percent of the workers are migrants from rural areas who are housed in company dorms.

As is standard in China's export assembly industry, the women workers are generally from 16 to 25 years of age, at which point they are fired. The companies feel that once the women reach 26 they are "used up" and "exhausted" from the 12-to-14-hour shifts, seven days a week, and they may get pregnant. The companies do not want to pay maternity leave.

  • The workers estimate that they produce more than 250,000 pairs of Timberland shoes each month. (Timberland shoes made in China retail at Macy's in New York for between $89.00 and $125.)

Timberland's logo is posted on the wall outside the Pou Yuen Factory #V (Timberland shoes are also being produced at Factory # 3.) Pou Yuen is a giant Taiwanese-owned shoe conglomerate, one of the largest footwear manufacturers in the world, with factories in China, Vietnam, Indonesia and Taiwan. There are more than 100,000 mostly young women workers assembling shoes for Pou Yuen in factories across China.

The Zhongshan City Branch of the Pou Yuen conglomerate in Southern China employs 37,000 workers in at least six factories contained on a "campus" which also includes worker dormitories.

Besides the two factories producing Timberland shoes, other Pou Yuen factories assemble sneakers for New Balance, Reebok, Nike and Clark.

  • During the peak season (roughly June-October) the women report working up to 14 hours a day, seven days a week.

Hours:

The regular daily shift during the peak season is:

  • 7:30 a.m. to 11:30 a.m.
    (11:30 a.m. to 1:00 p.m., lunch break)
  • 1 p.m. to 5:30 p.m.
    (5:30 to 6:00 p.m., supper break)
  • 6 p.m. to 9 p.m. - 10 p.m.
    (occasionally there are forced 16½-hour shifts till midnight)

With 1½ hours off for lunch and a half hour for supper, the workers are at the factory 98 hours a week, while being paid for only 80 ½ hours. They work 11 ½ to 12 ½ hours a day, seven days a week.

[Picture: Timberland sneakers made in China. Retail price: $89.99.]

Typically, a woman making Timberland shoes at the Pou Yuen Factory V will be allowed just one or two days off a month.

During the slow season, the women will work 55 to 60 hours a week, 10 hours a day, Monday through Saturday and receive Sunday off.

[Picture: Timberland shoe label: Made in China]

Forced Overtime Without Pay

All overtime work is mandatory. Failure to work overtime is punished with stiff fines, amounting to a full week's wages.For example, the second time a worker misses the required overtime, she will be fined $10.84 and also lose her attendance bonus for theentire month, which amounts to $6.02. The $16.86 she loses in fines is more than she earns working a full 70-hour workweek. The third time a worker misses overtime, she is immediately fined.

Cheated on Overtime Pay

Every worker reported of being shortchanged on the number of overtime hours actually worked.Pou Yuen management simply under reports the hours. Most workers at Pou Kuen are paid on a piece rate basis, but there are over 500 workers who are paid by the hour. Pou Yuen management arbitrarily sets their daily production quota so high that the workers cannot possibly reach the goal in eight hours. The whole production line must then remain at work, unpaid, for an additional three to four hours each day until the quota is met.

Those working on a piece rate receive no overtime premium for the long extra hours.No matter how many hours a week they work, they are always paid the same standard piece rate.

[Picture: Maystar Footwear factory]

[Picture: Maystar Footwear factory where Timberland shoes are produced.]

Low Wages

The average wage in the factory appears to be 22 to 23 cents per hour.For example, for working approximately 70 hours a week, most women earned 580 rmb, or $69.88 a month, or $16.13 a week, which would then equal 22 or 23 cents an hour. (There are 8.3 rmb to $1.00 U.S.)

For working 70 hours a week, workers earn:

  • 22 - 23 cents an hour
  • $2.30 a day (for a 10-hour day)
  • $16.13 a week (for a 7-day, 70-hour workweek)
  • $69.88 a month
  • $838.55 a year

In March 2000, seven women at Pou Yuen reported that most of the workers assembling Timberland shoes were then earning 400 to 500 rmb per month, working approximately 55 hours per week. This would put their earnings at between $11.12 and $13.90 a week, or 20 to 25 cents an hour. The lowest wage we saw was 16 cents an hour, $11.12, for working a 69-hour week.

Timberland's Profits up 27.2!

In 1999 Timberland's net profit was up 27.2 percent over the year before, amounting to $75.2 million profit on $917 million in total sales. Last year Timberland manufactured just 20 percent of its footwear (in two factories in the Dominican Republic and Puerto Rico) while outsourcing 56 percent of its shoe production to contractors in China and Taiwan. To handle its large production in China, Timberland has opened an office in the southern city of Zhu Hai. None of Timberland's employees are unionized.In 1999, Sidney Swartz, Chairman of Timberland, paid himself $1,759,356 in total compensation, or about $7,330 a day. In 1999 his son was paid $1,579,423, /or about $6,580 a day; not including millions of dollars in 1999 stock options!  

The highest take-home wage for production workers appeared to be 38 cents an hour. At any given time there are up to 280 "trainees" employed at the factory. They earn as little as 12 cents an hour, earning just $6.67 for a 55-hour workweek.

Harsh Factory Conditions

Temperatures of 100-plus degrees Fahrenheit

Besides complaining about the excessively high production goals, the extremely long, forced overtime hours, the exhaustion of working seven days a week and the low wages, the women also reported that during the hot season temperatures in the factory would regularly exceed 100 degrees.

Especially in the technical section, the factory air is thick with dust, and in the adhesive area there is a strong smell of chemicals. Workers handle toxic glues and other solvents without gloves.There is inadequate ventilation in the plant, and noise levels around certain machinery equals that of a New York City express train racing through a station.

The workers were very upset that they had no idea how their wages were calculated and that they varied so much from month to month. The workers have no idea how the various piece rates are set, or what exactly is being deducted from their wages. They are left completely in the dark.

Threatened and Told to Lie to the U.S. Auditors

When U.S. auditors representing Timberland arrive, the visits are announced in advance. Beforehand, the workers are threatened never to criticize factory conditions, and are trained to lie to the auditors. Factory managers follow the auditors around the factory to monitor and intervene in any interviews with the workers. The workers report being very afraid when the monitors arrive.

Living Conditions: 12 to a Room

Seventy percent, or 2,520 of the Timberland workers are housed in two nearby eight-story dormitories, where they are crowded in, 12 people to a small 13 by 20 foot room. There are 32 rooms per floor. More than two dozen workers share one bathroom.

Both the factory and the dorms are under surveillance 24 hours a day by private company security guards.

There is No Independent Union at the Pou Yuen Factory

This is typical of privately owned factories in China. Of course any attempt to form an independent union at the factory would be immediately crushed through firings and arrests. Anyone the Chinese government considered a ringleader in such an organizing effort would be imprisoned without trial for 5 to 8 years, under administrative detention, in a hard labor camp. There are no labor rights in China.

 
Timberland's Code of Conduct

Even Timberland's weak code of conduct, which allows 14 and 15-year olds to work 12 hour shifts, regularly putting in 60-hour work weeks, while being paid straight time for long overtime hours, is being routinely violated in China. Nor does Timberland's Code of Conduct include respect for the rights of women (who are regularly 80% of the workforce), payment of at least subsistence wages, public disclosure of factory names and locations, or independent verification of factory conditions by local respected independent non-governmental, religious, human and women's rights organizations.

None of the Pou Yuen workers our researchers spoke with had ever seen or even heard of the Timberland Code of Conduct. Not that it would matter very much, since China's own labor laws as well as internationally recognized labor rights standards are routinely and systematically violated at the Pou Yuen factories with complete impunity. That is the real root of the problem. 

 

Timberland's Guiding Principles for Choosing Business Partners 

We are committed to doing business only with partners...

Who choose their employees based on their ability to do the job, not on individual characteristics. [VIOLATED]

FACT: Eighty percent of the workers in the Pou Yuen plant are young women 16 to 25 years of age.At 25 they are fired because they are "used up" and "exhausted" from the 12-to-14-hour shifts, seven days a week, and for fear they may get pregnant, since the company does not want to pay maternity benefits. (Article 62 of China's labor code states: "After childbirth female workers shall be entitled to no less than ninety days of maternity leave with pay."

Who recognize the right for employees to freely associate and bargain collectively … [VIOLATED]

FACT: There is no real union at the Pou Yuen factory, and any attempt to organize an independent union there would be met with firings, beatings, arrests and imprisonment without trial for 5-to-8 years in a hard labor camp. Pou Yuen management has formed a company-controlled "union" to organize recreational activities. There are no labor rights in China.

This environment must be free of harassment, abuse, retribution for grievances … [VIOLATED]

FACT: Workers are threatened by Pou Yuen management not to criticize or openly discuss factory conditions with Timberland's auditors, and are coached to lie. The workers are very frightened when the company's auditors tour the factory.

We will not do business with partners whose employees presence is anything other than voluntary. This specifically prohibits… any forms of forced labor... [VIOLATED]

FACT: All overtime work at Pou Yuen is mandatory. During the peak season workers are at the factory 98 hours a week, while being paid for 80½ hours. Failure to work overtime is punished with the loss of one week's wages. On the third such occasion, the worker is fired. The poverty level wages also drive the women to work overtime.

In addition to compensating for regular work hours, partners must provide compensation to employees for overtime hours at a premium rate … [VIOLATED]

FACT: Because of the excessively high production quotas set by Pou Yuen management, hourly workers are regularly forced to work 3 to 4 overtime hours each day without pay. Nor do piece rate workers receive an overtime premium, despite working 80 hours a week. In fact, most workers report being shortchanged of overtime hours actually worked, which do not appear on their pay stubs.

We will seek partners who do not apply conditional employment practices, such as training wages, pre-employment fees and deposits… [VIOLATED]

FACT: At the Pou Yuen factory there are over 275 "trainees" being paid as little as 12 cents an hour, or $6.67 for a 55-hour work week. Most workers pay approximately $50 to a private local labor service to get a job at Pou Yuen.

We will seek partners whose employees' regular work schedule … is not more than 48 hours per six-day period. Our partners must ensure that employees hours do not regularly exceed 60 hours in a given week, 12 hours in a given day, or more than 6 consecutive days without a day off… [VIOLATED]

FACT: As has been noted, during the busy peak season at the Pou Yuen factory, employees assembling Timberland are forced to work up to 14 hours a day – from 7:30 a.m. to 10:30 p.m. – seven days a week. During this season, they are regularly at the factory 98 hours a week. Timberland workers get one or two Sundays off per month.

We will seek business partners who provide their employees with a safe and healthy work environment … [VIOLATED]

FACT:The temperature in the Pou Yuen factory regularly exceeds 100 degrees Fahrenheit during the hot season. Workers handle toxic glues without gloves. In sections of the factory the air is thick with dust and in other areas the noise levels are deafening.

We seek partners who provide residential environments that are safe and healthy… [VIOLATED]

FACT: Workers sewing Timberland shoes at Pou Yuen are housed 12 to a room measuring less than 13 by 20 feet. More than two dozen workers share one bathroom. 


 
Do the American people have a voice concerning the conditions under which the products we purchase are made in China?
YOU BET WE DO!
We purchase 36% of China's total exports worldwide!
We have the right to demand respect for human and worker rights and fair wages.
Did you know ?
  • China accounts for 60% of all the shoes imported to the U.S., with a retail value of over $16.9 billion.
  • China accounts for 95% of all the stuffed toys imported to the U.S., with a retail value of over $3 billion.
  • China accounts for 57% of all the line telephones imported to the U.S., with a retail value of over $2.4 billion.
  • China accounts for 27% of all the wooden furniture imported into the U.S., with a retail value of $1.3 billion.

[Picture: Workers make Keds at the Kunshan Sun Hwa factory in China.]


Wal-Mart Dungeon in China

Qin Shi Handbag Factory
Sanxiang Town
Zhongshan City
Guangdong Province, China

Summary: Wal-Mart/Qin Shi Factory

  • 14-hour shifts, 7 days a week, 30 days a month.
  • Average take-home pay of 3 cents an hour, $3.10 for a 98-hour workweek.
  • One worker earned 36 cents for an entire month’s work.
  • 46 percent of the workers earned nothing at all and were actually in debt to the company.
  • Housed 16 to a room and fed two dismal meals a day.
  • Physical and verbal abuse.
  • Held as indentured servants, identification documents confiscated, allowed to leave the factory just 1½ hours a day.
  • 800 workers fired for fighting for their basic rights.
  • Wal-Mart audits a total farce.

[Picture: Wal-Mart Supercenter in Shenzhen]

Workers held in indentured servitude making Kathie Lee handbags at Qin Shi factory.

There are 1000 workers at the factory; 90% of them young men 16 to 23 years of age; almost all migrants are from rural areas.

Wal-Mart started producing Kathie Lee handbags at the Qin Shi factory in September, 1999.  The workers passed us a Qin Shi/Wal-Mart invoice form dated September 2, 1999 which calls for the production of 5,400 Kathie Lee handbags (style #62657 70575) to be delivered no later than October 20, 1999.

Before that Qin Shi produced handbags for Payless carrying the Predictions label.  (In 1999, Payless was the eighth largest importer by weight of goods entering the United States.  Wal-Mart was, of course, the first. In the latest six-month period available—October 1999 to March 2000-a search of U.S. Customs Department shipping records made available in the PIERS database, show that 53 percent of Wal-Mart’s total imports worldwide come from China.)

The daily work shift at the Qin Shi Factory is 12 to 14 hours, seven days a week, 30 days a month.  At the end of the day the workers return “home” to a cramped dorm room sharing metal bunk beds with 16 other people.  At most, workers are allowed outside of the factory for just one and one half hours a day.  Otherwise they are locked in.

Working up to 98 hours a week, it is not easy to find the time to go out.  But the workers have another fear as well.  Before entering the Qin Shi factory, management confiscates the identification documents of each worker.  When someone goes outside, the company also takes away their factory I.D. tag, leaving them with no identification at all.  If you are stopped by the local security police you could be detained and deported back to your rural province as an illegal migrant.

When you need to use the bathroom the company again confiscates your factory I.D. and monitors the time you spend.  If you are away from your workstation for more than eight minutes you will receive a severe fine.

All new employees are illegally charged a deposit of 80 rmb ($9.64 U.S.) for a three year work contract, along with another 32 rmb ($3.86) for the first 10 days living expenses, which includes two dismal meals a day.

Further deductions from the workers’ wages are made for the temporary residency and work permits the workers need, which the factory management intentionally delays applying for for several months.  This also leaves the workers trapped and afraid to leave the factory grounds, since without these legal permits they can be deported at any minute.

Qin Shi management also illegally withholds the workers first month’s wages, so it is only at the end of the second month that the workers receive, or may receive, their first pay.  Because of all of the deductions and fines, many workers earn nothing at all after two months work, and instead, are actually in debt to the company.

Fines for violating any of the strict company rules are severe, a practice made even worse by the fact that armed company security guards can keep 30 percent of any fines they levy against the workers.

The workers making Wal-Mart Kathie Lee handbags report being subjected to body searches, as well as physical and verbal abuse by security guards and quality control supervisors.

The workers are charged 560 rmb ($67.47 U.S.) for dorm and living expenses, which is an enormous amount given that the highest take home wage our researchers found in the factory was just 10 cents an hour.  There were others who earned just 36 cents for more than a month’s work, earning just 8/100th of a cent an hour.  Many workers earned nothing at all and owed money to the company.

Seventy percent of the workers said they lacked money for even the most basic expenses, and were forced, for example, to go without even bread and tea for breakfast. Lacking money and with constraints on their freedom of movement the Qin Shi workers making Kathie Lee handbags were being held in conditions resembling indentured servitude.

In a vicious trap, they did not even have enough money to travel to look for other work. 

The Qin Shi factory has such a notorious reputation for cruelty and exploitation that the workers admit they are ashamed to tell anyone where they actually work – to endure such conditions must mean that you are very, very poor and down on your luck.

Wal-Mart carried out an inspection/audit at Qin Shi in early November 1999 and the factory passed with flying colors.  The audit was obviously a farce – as will become clear later – and one can only conclude that Wal-Mart simply does not know and does not care what its contractors are doing.

Eventually the workers at Qin Shi could stand no more abuse, and fought back.  Eight hundred workers were fired in December, but they did at least win some of their back wages.

Wal-Mart Bags Made Under Slave-like Conditions in China

A Wal-Mart Production order was carried out of the Qin Shi Handbag Factory by the workers.  The production order was signed on September 2, 1999 by Yu Lin Chen and Su Chun Wong.

The Qin Shi Handbag Factory was to produce 5,400 Kathie Lee handbags, style #62557 70575 with a delivery date of October 20, 1999.  The invoice notes that Wal-Mart will accept no late deliveries.

Kathie Lee Handbags
#62657 70575
Made in China
All Man Made Materials
Dept. 31
KL 6021E
$8.96  

[Picture: Kathie Lee purse made in China]

[Picture: Label: "A portion of the proceeds from the sale of this item will be donated to various children's charities."]

 

Working for Wal-Mart in China…For Nothing

10 cents an hour is the highest wages

Nearly half the workers surveyed (46%) actually owed the company money after a month’s work!

The pay records below were drawn from a sample of 24 workers from the Qin Shi Handbag Factory in Zhongshan, China, where they sew Kathie Lee handbags for Wal-Mart.  The workers are paid according to a piece rate. They work 12 to 14 hours a day.  The paycheck they received on October 31, 1999 covered the 31-day period from August 20 to September 27.  The names of the workers are being withheld to protect their security.  Since Qin Shi factory management fines the workers $2.49 for failure to return their pay records, the workers had to take advantage of their one-hour supper break to sneak out and xerox their pay stubs.

19 Workers Surveyed from the Sewing Department:  

Worker 

Hourly Wage
(cents) 

Daily Wage
(12-14 hr workday) 

No. Days Worked 

Net Pay
(after deductions for dorm, food, fines) 

Number of Pieces Sewn each day 

Average piece rate pay per unit 

Total Gross Pay
(before deductions) 

9-10

$1.20 

37 

$44.22 

1,010 

2/10 of 1 cent 

$60.12 

8-9 

$1.09 

34 

$36.99 

413 

4/10 of 1 cent 

$52.89 

6-7 

$0.86

38 

$32.77 

1,073 

1/10 of 1 cent 

$48.67 

6-7 

$0.86 

37 

$31.69 

760.22 

2/10 of 1 cent 

$47.59 

6-7 

$0.83 

37 

$30.60 

673.30

2/10 of 1 cent 

$46.51 

6-7 

$0.81 

37 

$30 

622 

2/10 of 1 cent 

$45.90 

0.8-0.9 

$0.11 

27 

$2.89 

361 

4/10 of 1 cent 

$40.00 

4-5 

$0.61 

35 

$21.20 

331 

3/10 of 1 cent 

$37.11 

$0.00 

35 

(owed $1.81) 

684

2/10 of 1 cent

$35.30 

3-4 

$0.44 

40

$17.71 

393 

2/10 of 1 cent 

$33.61 

3-4 

$0.43 

37 

$16.63 

434 

2/10 of 1 cent 

$32.41 

$0.00 

35 

(owed $7.11) 

398.4 

2/10 of 1 cent 

$27.71 

$0.00 

32 

(owed $20.72) 

401 

2/10 of 1 cent 

$22.53 

$0.00 

23 

(owed $18.92) 

691.83 

1/10 of 1 cent 

$18.19 

$0.00 

31 

(owed $19.16) 

474 

1/10 of 1 cent 

$17.95 

$0.00 

19 

(owed $23.61) 

515 

1/10 of 1 cent 

$13.49 

$0.00 

17 

(owed $26.39) 

309.5 

2/10 of 1 cent 

$10.72 

$0.00 

(owed $33.49) 

324 

1/10 of 1 cent 

$  3.61 

$0.00 

10 

(owed $34.46) 

186 

1/10 of 1 cent 

$  2.65 

 

Five workers surveyed from the gluing department:

Worker 

Hourly Wage
(cents) 

Daily Wage
(12-14 hr workday) 

No. Days Worked  

Net Pay
(after deductions for dorm, food, fines)  

Number of Pieces Sewn each day  

Average piece rate pay per unit  

Total Gross Pay
(before deductions) 

T

7-9 

$1.03 

37 

$38.19 

740.11 

2/10 of 1 cent 

 $54.10

U

$0.15

32 

$4.91 

541

2/10 of 1 cent 

 $42.05

V

$0.65 

35 

$22.77 

480.34 

2/10 of 1 cent 

$38.67 

W

$0.00 

27 

(owed $11.20) 

340 

3/10 of 1 cent 

$25.90 

X

$0.00

24 

(owed $20.84) 

446 

15/100 of 1 cent 

$16.27 

Note:  The monthly payday is on an irregular schedule, varying according to production volume and delivery date.  Deductions are withheld from the workers’ wages for living/dorm expenses, food, job placement fee, temporary residency permit and various fines (e.g.-for not returning ones pay record).  The exchange rate is 8.3 rmb to $1.00 U.S.

 

Hours: 12 to 14 Hours a Day, 7 Days a Week, 30 Days a Month

The “regular” daily work shift is:

  • 7:00 a.m. to 12 noon
    (noon  to 1:30 p.m. lunch break)
  • 1:30 to 5:30 p.m.
    (5:30 p.m. to 6:30 p.m. supper break)
  • 6:30 to 9:30, 10:30 or 11:30 p.m.

The workers are at the Qin Shi factory up to 115½ hours per week, from 7:00 a.m. to 11:30 p.m., or 16 1/2 hours a day, seven days a week.  This was the schedule in September, which is their busy season, when they were making the Wal-Mart handbags.

But they were paid for only 14 hours a day, and 98 hours a week.

Working seven days a week and 30 days a month, essentially the workers would receive one day off every other month.

All overtime work is mandatory.  The 98-hour workweek at Qin Shi exceeds the legal limit on total overtime by 200 percent.  (China’s labor law states that overtime cannot exceed 36 hours a month, or 9 hours a week over the regular 40-hour, 5-day workweek).

Despite these excessively long hours, the workers receive no overtime premium, earning always the same standard piece rate.

Wages:  Average wage - 3 cents an hour!  Highest wage 10 cents an hour, 46% of the workers earn nothing at all and in fact owe the company money.

All the workers at Qin Shi are paid according to a piece rate system, which varies given the type of operation required.   Piece rates per unit completed ranged from 1/10th of a cent to 4/10ths of a cent, with the average being just a little over 2/10ths of a cent.  So, for example, if a worker sewed 100 pieces for the Kathie Lee handbags, he or she would earn 24 cents.

In September and October, when the factory was producing Wal-Mart, the range of the workers wages varied wildly, but no one came even remotely close to making the already below-subsistence legal minimum wage of about 31 cents an hour, on which no one can possibly survive.

The highest take-home wage we found in the factory was just 10 cents an hour, or $1.20 a day -- $44.22 for 37 days of work.

The average wage in a sample of 24 workers amounted to only 3 cents an hour.  However, of that sample 46 percent of the workers earned nothing at all after more than a month’s work, and in fact owed the company money due to all the deductions for company dorm and food expenses, fines and other illegal withholdings.

One worker earned 36 cents for the entire month of August, which would amount to 8 cents a week, or 8/100ths of a cent an hour.

The Kathie Lee handbag the workers make at the Qin Shi Factory retails at Wal-Mart for $8.76, which by American standards is quite cheap.  However from the perspective of the average worker in the factory, earning just 3 cents an hour, the Kathie Lee handbag is very expensive indeed.  At 3 cents an hour, he would have to work 299 hours to purchase such a handbag for his girlfriend.

Average Wage at Qin Shi

  • 3 cents an hour
  • 44 cents a day (for a 14-hour workday)
  • $3.10 a week (for a 7-day, 98 hour work week)
  • $13.43 a month
  • $161.16 a year

Highest Wage at Qin Shi

  • 10 cents an hour
  • $1.40 a day (for a 14-hour workday)
  • $9.80 a week (for a 7-day, 98-hour work week)
  • $42.47 month
  • $509.60 a year

Legal Minimum Wage in Zhongshan City
(Which is already below subsistence levels)

  • 31 cents an hour
  • $1.79 a day (for an 8-hour workday)
  • $12.51 a week (for a 5 day, 40 hour work week)
  • $54.22 a month
  • $650.60 a year

Because of the pitiful and illegally low wages at the Qin Shi factory the workers were forced to go without even the most basic necessities.  Seventy percent of the workers reported lacking the money for even a tiny breakfast.  Kept in the position of indentured servants, the workers had no money or savings even to leave the factory to look for other work.

[Picture: Footwear factory in China. China accounts for 60% of all the shoes imported to the U.S., with a retail value of $16.9 billion a year.]

The Wal-Mart Audit: A True Farce

After having begun production at the Qin Shi factory in September, Wal-Mart sent an inspection team to visit the factory in early November to conduct an audit.

The visit was announced in advance and Qin Shi management was well prepared.  Before Wal-Mart arrived, management split the factory in two.  Those still working on the first and second floors of the building remained Qin Shi employees, while those working on the third and fourth floors would now be working for a separate front company called the Yecheng Leather Parts Factory. This factory was illegal and unregistered, and in fact the 800 workers there still continued to do the same work producing the Kathie Lee handbags.  The Yecheng Leather Parts Factory was simply a front company set up to fool or appease Wal-Mart.  On the third and fourth floors conditions remained wretched with excessively long overtime hours till 11 p.m. and criminally low wages, since the workers had to strain to also finish uncompleted production quotas from the first two floors, which were now turned into a “model” factory of sorts.

Meanwhile, in November, the 200 workers left on the first and second floors started to receive 350 rmb ($12.17 U.S.) a month in back wages, to make up for the below-minimum wages they had been earning since September when the Wal-Mart work began.  Also, from November onward these workers were to be paid the legal minimum wage $12.51 a week, even if the company continued to cheat and fudge on the amount of overtime actually worked.

The first and second floors were cleaned, and fancy high quality toilet paper was installed in the bathrooms.  Wal-Mart’s Code of Conduct went up on the wall. Even Wal-Mart’s human rights hotline numbers were posted: 1-800-WM-ETHIC for the U.S. and 1-800-963-8442 for outside the U.S.

Any serious auditor would realize rather quickly that those 200 workers alone could not be producing the amount of goods Wal-Mart ordered, and might even have walked up the flight of stairs to see the other 800 workers doing the vast majority of the work.

But Wal-Mart’s audits are a farce, and one can only conclude that Wal-Mart does not care, and really does not know what its contractors are doing.  Wal-Mart then covers this farce by threatening to pull out of any factory violating Wal-Mart’s Code of Conduct --that is, in the unlikely event that they are actually exposed by a handful of tiny NGOs searching for the estimated 1,000 hidden contractors Wal-Mart uses in China alone.  Of course, Wal-Mart refuses to publicly disclose to the American people even the names and locations of the factories they use in China.  They claim this information is a trade secret.

The Workers Fight Back and 800 are Fired. But They Win a Significant Victory.

On November 28, Qin Shi management posted an announcement stating that the 800 workers on the third and forth floors would, as of December 10, have to start purchasing food coupons in order to eat in the factory canteen.  But the workers were already penniless and miserably underpaid, and lacked even the money to purchase the food coupons.  It was another way of saying that many of the workers would now have to starve.

That was the last straw. A group of workers went on the offensive publicly denouncing the exploitive conditions at the Qin Shi factory including:

  • The use of child labor
  • Body searches
  • Confiscating worker identification documents
  • Fines
  • Below-minimum, starvation wages
  • Excessively long overtime hours, working until 11:00 p.m., seven days a week
  • Physical and verbal abuse
  • Recruitment fees and other illegal deductions
  • The total repression of all human and worker rights, even the right to complain or raise a grievance, which were immediately met with firings

In mid-December, Qin Shi management shut down the third and fourth floors, firing all 800 workers.

But the workers refused to leave until they received their back wages and the deposits which they were owed – and they won!

This might not seem like much of a victory, unless one understands the climate of total suppression of all worker rights in China.

A Worker Tries to Call Wal-Mart’s Hotline

A worker at the Qin Shi factory tried to call Wal-Mart’s human rights complaint phone number: AT&T Direct 1-800-963-8442 (outside the U.S.).  The worker could not get through.

Later a letter was sent to Wal-Mart headquarters on Bentonville, Arkansas.  It is not known if that got through.  At any rate, there has been no response from Wal-Mart.

As of our last contact with the workers in mid-January 2000, Wal-Mart production continued at the Qin Shi factory.

[Picture: Factory dorm space]



Working for Wal-Mart in China:
Earning 36 cents a month, 8 cents a week or, 1/10th of a cent per hour

Another example of wages at the Qin Shi Factory, where they sew Kathie Lee handbags for Wal-Mart, is outlined below.   At Qin Shi, the regular shift is 12 to 14 hours a day, seven days a week, with one day off per month.

1.) Mr. X, Shandong Province:  Started working in the trimming section of the factory in March 1999, earning just 65 cents an hour (5.4 rmb) in August and around $6.02 (50 rmb) in September.  This would put Mr. X’s average wage for these two months at 77 cents a week—8/10ths of a cent per hour.

2.) Mr. Y, Guangxi Province:  Started working in the factory on April 30, 1999 and by October 29, after working 5 months and 29 days—had earned a total of $19.52 (162 rmb).  This amounts to 75 cents for a full 91-hour workweek, or 8/10ths of one cent per hour.

3.) Mr. A, Guangxi Province:  Started working in the factory May 4, 1999, and after nearly six months of work, on October 30, was paid a total of $42.17 (350 rmb).  This would come to $1.62 a week—2 cents an hour. 

4.) Mr. B, Guizhou Province:  Was able to earn just $39.76 (330 rmb) in five months of work, and received his first pay only after completing three months of work.  His pay averaged $1.84 a week—2 cents an hour.

5.) Mr. C, Henan Province:  Started working on July 22, 1999, receiving his August wages on September 30, earning $30.24 (251 rmb).  This was the highest wage in the group, coming to $6.98 a week—8 cents an hour.  However, the following month, he received only partial payment.

6.) Mr. D, Henan Province:  Started working on June 18, 1999 and received just 36 cents for the full month of August.  This amounts to earnings of 8 cents a week, or 1/10th of a cent (.09 cents) an hour.  The following month, Mr. D did much better, earning $14.46 (120 rmb) for September.  His 4-cent-an-hour wages, $3.34 for the week—ranked him among the top 30 percent of wage earners in his production team of 80 people.

7.) Mr. E, Henan Province:  Started working on June 7, 1999, but by the end of October had earned nothing at all, and in fact owed the factory $12.05 (100 rmb).  After 19 weeks of work, Mr. E had actually lost money.

8.) Mr. F, Henan Province:  Started working on June 14, 1999 and received $24.14 (200.4 rmb) for July, ranking him 10th in earnings among his 100-member production section.  For August, Mr. F received $12.05 (100 rmb) which still ranked him in the top 14 percent of his team.  For the two months, Mr. F’s average weekly wage was $4.18—5 cents an hour. 

 


 

Wal-Mart Discloses Factory Locations To Government in China
Why does Wal-Mart refuse to provide this same information to the American People?

The National Labor Committee recently purchased a Disney garment in a Wal-Mart Supercenter in Shenzhen in the south of China.  A hangtag on the garment identified the specific name and location of the factory in China where the Disney child’s sweatshirt was made.

The question is:  If Wal-Mart and Disney will provide the authoritarian government in China with the names and addresses of the factories in China where they are making their goods, then why do they continue to refuse to release this very same information to the American people? 

In China, under the Law of Consumers Rights (Chapters 2 and 3), consumers have the right to know the origin of the products they purchase, including supplier information.  Of course, like all laws in China, implementation can be weak and spotty.  Still, the principle exists and in some cases Wal-Mart and Disney respect the law and make available their suppliers’ names and locations.

Why is it that Wal-Mart can trust the Chinese government, but it will not trust the American people? 

From the hangtag on the Disney garment we learn that it was sewn at the Midway Daily Products Factory, located in Dongguan City, Guanghou, Guangdong Province, China. 

Not that Wal-Mart or Disney would have much to brag about regarding conditions at the Midway factory.  During the busy season, workers will be at the factory up to 14 hours a day, seven days a week, from seven a.m. to 10 p.m. earning just 33 cents an hour.  Ten workers share a single dorm room.  Any attempt to form an independent union will be crushed.  If a worker is absent for three days, he or she is fired.  Arriving at work 15 minutes late is punished with a fine amounting to more than a full day’s wages. 

During the slow season, when workers are in a 50-hour weekly schedule, they earn $16,68.  Overtime is rewarded with an extra 10-cent-an-hour premium.

See: “Mulan’s Sisters/Working for Disney is No Fairy Tale” by Hong Kong Christian Industrial Committee and CAFOD, Hong Kong, April 1999.

 


 

Labor Law in China

Wal-Mart, Nike, Huffy, Timberland, New Balance and many other U.S. companies routinely violate China's labor laws.  It must also be noted that the government of China does nothing to implement its own labor laws.

[Picture: Workers making Keds sneakers]

CHINA'S LABOR CODE

An 8-hour workday, 5 days a week, a 40 hour work week

Article 36: The state shall practice a working hour system under which laborers shall work no more than eight hours a day and no more than 40 hours a week on average (as of May 1, 1997)

Prohibiting Excessively High Daily Production Quotas

Article 37: In the case of laborers working on the basis of piecework, the employing unit shall rationally fix quotas of work and standards on piecework remunerating in accordance with the working hour system stipulated in article 34 of this law.

No Forced Overtime/Overtime Strictly Limited to Nine Hours a Week/ Legal Work Week Capped at 49 hours.

Article 41: The employing unit may extend working hours due to the requirements of its production or business after consultation with the trade union and laborers, but the extended working hours for a day shall generally not exceed one hour; and such extended hours shall not exceed three hours a day and only under the condition that the health of the laborer is guaranteed.  However, the total extension in a month shall not exceed thirty-six hours. 

This means that overtime work should never exceed three hours a day, making the longest legal shift permitted 11 hours.  It is illegal to work more than 9 overtime hours a week.  That caps the longest legal workweek allowed at 49 hours.

All Overtime Work Must Be Paid at a Premium

Article 44:  The employment unit shall, according to the following standards, pay laborers remunerations higher than those for normal working hours under any of the following circumstances:

  1. to pay no less than 150 percent of the normal wages if the extension of working hours is arranged;
  2. to pay no less than 200 percent of the normal wages if the extended hours are arranged on days of rest and no deferred rest can be taken;
  3. to pay no less than 300 percent of the normal wage if the extended hours are arranged on statutory holidays.

After one year, all workers are entitled to paid annual vacations

Article 45:  Laborers who have kept working for one year and more shall be entitled to an annual vacation with pay.

Detaining Workers Wages, Fines or Mandatory Deposits is Illegal

Article 50:  Wages shall be paid monthly to laborers themselves in the form of currency.  The wages paid to laborers shall not be deducted or delayed without justification. 

Companies Must Join and Pay into Social Security

Article 72:  The employing unit and laborers must participate in social insurance and pay social insurance premiums in accordance with the law.

No Discrimination Against Women

Article 12:  Laborers shall not be discriminated against in employment, regardless of their ethnic community, race, sex, or religious belief.

The Right To Organize Independent Unions

Article 7:  Laborers shall have the right to participate in and organize trade unions in accordance with the law.

Every Worker Has the Right to a Written Work Contract

Article 16-19:  A labor contract is the agreement reached between a laborer and an employing unit for the establishment of the labor relationship and the definition of the rights, interests and obligations of each party.  A labor contract shall be concluded in written form and contain the following clauses [including]:  wages, working conditions, type of work.

Safe and Healthy Working Conditions

Article 52:  The employing unit must establish and perfect the system for occupational safety and health, educate laborers on occupational safety and health, prevent accidents in the process of work, and reduce occupational hazards.

Protecting Juvenile Workers

Article 58:  The State shall provide female and juvenile workers with special protection. [For example, 16 and 17- year-olds cannot work more than eight hours a day or at night.]

[Picture: Workers making KEds at Kunshan Sun Hwa factory.]

 


 

Huffy Bikes Made in China
Sold at Kmart, Sears, Wal-Mart

Huffy bikes are being made at Baoan Bicycle Factory I

Zhen Bei Road
Sha Jiang Town
Bu Gang, Shenzhen
China

Summary: Huffy Bikes/Baoan Factory: 

  • Forced 13½ to 15-hour shifts, from 7:00 a.m. to 11:00 p.m. seven days a week
  • Workers are at the factory 93 hours a week
  • Wages are between 254 and 414 an hour--$16.68 for a 66-hour work week
  • Failure to work overtime is punished with a fine of two-days' wages;  no overtime premium is paid
  • Strong chemical odors in the painting department, excessively high temperatures in the welding section
  • No health insurance or social security pension
  • Strict factory rules and harsh management;  no talking during working hours
  • 12 workers housed in each dark, stark dorm room
  • Two meals a day;  poor quality food
  • If workers complain or attempt to raise a grievance about the harsh working conditions, excessively long forced overtime hours or low wages, they are immediately fired.  In late 1999, all the workers in the delivery section who went on strike were fired.

(There is a factory, a storehouse and nearby dorms.  The Baoan facilities are owned by the Taiwanese Zhenzhen Nan Guan Corporation.  Nearby, there is a second smaller Baoan Bicycle Factory #2, with 200 workers.  The Baoan factories assemble bicycles from parts supplied from local materials factories or from the Fuda Corporation of Taiwan.)

[Picture: Huffy bike made in China]

Baoan Bicycle Factory #1

The major production in the factory is for Huffy Bicycles (other lesser brand names include Germini and Tec).  The bikes are exported to the U.S., Canada and Europe.

There are 700 to 800 workers, mostly men, but there are 200 women employees ranging in age from 21 to 24 years old, who are mostly employed in the packing section.  As is typical in the export assembly industry, most workers leave after they reach 25 years of age, since they are worn out from the grueling overtime hours.

The vast majority of the workers are migrants from rural provinces such as Hanin (over 1000 miles from Shenzhen), Jiangxi, Hunan and Xianxi.

The factory is broken down into several sections:  preparing and assembling parts, the tire section, welding, final assembly and packing.

Hours:  Forced Overtime; 13½ to 15-hour Shifts; Seven Days a Week

The "regular" daily work shift is:    

  • 8:00 a.m. to 12 noon
    (12:00 noon to 1:30 p.m. lunch break)
  • 1:30 p.m. to 5:30 p.m.
    (5:30 p.m. to 6:30 p.m. supper break) 
  • 6:30 p.m. to 9:30 or 11:30 p.m.

Workers report that they are forced to work overtime nearly every day, including Sunday work.  On average, the workers may receive every other Sunday off.  During particularly large rush orders, some workers said they had to work through to 3:30 in the morning, which means they would be at the factory for a shift of 19½ hours.

During the "regular" shift, the workers would be at the factory 13½ to 15 hours a day, six and seven days a week, while being paid for 11 to 12 ½ hours.  On average, they would be at the factory over 93 hours a week, while being paid for just 76 hours.

Refusal to work mandatory overtime hours is illegally punished by a fine of 50 rmb-U.S. $6.02, which amounts to more than two days' wages.

Wages:  25 to 41 Cents an Hour; $16.68 for a 66-hour Workweek

Workers in the assembly and packing section are paid according to a piece rate.  They earn between 25 and 34 cents an hour.

A worker putting in a 66-hour workweek would earn $16.68-25 cents an hour.  Other workers working 81 hours a week earned $27.80, or 34 cents an hour.

In the painting and welding departments, the workers are paid by the hour and earn approximately 41 cents an hour.  For example, someone working a seven-day, 81-hour week would earn $33.36, or 41 cents an hour.  This would include a $7.23 U.S. bonus each month for those working in the welding section due to the extremely high temperatures.

Low Wage:   

High Wage: 

- 25 cents an hour 

- 41 cents an hour 

- $2.78 a day (for an 11-hour shift)   

- $4.77 a day (for an 11 ½-hour shift) 

- $16.68 for a 6-day, 66-hour week 

- $33.36 for a 7-day, 81-hour week 

- $72.28 a month   

- $144.56 a month 

- $867.36 per year     

- $1,734.72 per year 

No overtime premium is paid to the hourly workers, while those on piece rate only receive an overtime bonus if they reach their production goal.

Working Conditions:  Harsh Treatment; No Rights

Workers complain about the extremely long mandatory overtime hours and the lack of even one regular day off each week.  They say they "hardly can rest" and at the end of even the standard overtime shift they return to their cramped dorm rooms "exhausted."  Many workers have to handle heavy weights all day long, while others are on their feet constantly for 11 to 12 ½ hours a day.  Asked if they would like to take mechanical skills or other learning classes at night, the workers responded saying that because of all the overtime hours, they "haven't the time or the energy at night to attend classes, even if they existed."

Illegally, the workers are not provided written work contracts describing factory hours, working conditions and wages, including overtime rates.

There is a strong chemical odor in the spray painting section, and the temperature in the welding area is excessively high.

[Picture: Huffy bike made in China]

Workers also complain about strict factory rules and harsh management style.  For example, talking during working hours is strictly prohibited.  Cutting into a line is punished with a fine of up to $1.20-nearly five hours wages.

The workers said these wages were too low.  One worker in the packing section explained that he earned 600 rmb per month, $72.29, and was unable to save or send any money home.  Despite all the overtime hours he worked, he was just able to survive, never getting ahead.

At the Baoan Bicycle Factory there is no medical insurance or social security pension.  The workers have nothing, not even a primitive factory clinic.  If they are sick, they need to go to the local hospital in town.  But the workers said it was then very difficult to get permission to be absent from work.

No worker had ever heard of any so-called U.S. Corporate Code of Conduct, and they had no idea what it might be.

The first month's wages are illegally withheld as a deposit, so the workers only receive their first pay during the second month.

The amount of 180 rmb--$21.67, more than a month's wages-is deducted to pay for the worker's temporary residency permit.  Another 10 rmb ($1.23 U.S.) is deducted from each worker for their factory ID cards.

No Rights:  Fired for Raising a Grievance

As is standard in China, no independent union is allowed at the Baoan Bicycle plant.  Any public dissent or raising of a grievance is met with firings.

Toward the end of 1999, delivery workers at the Baoan factory went on a wildcat strike to protest the harsh factory treatment, excessively heavy workloads and long overtime hours and the low wages.  All the strikers were fired.  Dissent is not permitted.

Living Conditions:  12 to a Dark, Crowded Dorm Room

Twelve workers are crowded into each dorm room, which the workers described as stark and dark.  There are no entertainment facilities other than a single TV in the common area.  The workers explained that the only "entertainment" available to them was to hang around nearby snack and grocery stores.

The Baoan workers are charged 45 rmb per month ($5.42) for food--two meals a day, which is deducted from their wages along with a small dorm fee of $1.81 U.S.  The workers report that the quality of the food is very poor.

Huffy Wages in China are Less than 2 Percent of What They Paid in the U.S.
1,800 U.S. Workers Lose Their Jobs

In the last 17 months, 1,800 Huffy Bicycle workers have lost their jobs as Huffy shut down its last three remaining U.S. plants to outsource its production its production to China, Mexico and Taiwan.  The plants closed were in Celina, Ohio;  Farmington, Missouri, and southern Mississippi. 

The 850 Huffy workers fired in July 1998 from the Celina, Ohio plant were members of the United Steelworkers of America (USWA), who earned $17 an hour--$11 in wages and $6 in benefits.  Their last job was to cover an American flag sticker that was on bikes made in China with a new sticker representing the globe.  The average wage of the workers in China currently making Huffy bicycles is 33 cents an hour, less than two percent of what the USWA members made.

The Huffy Bicycle Company (which owns the Huffy, Royce Union Bikes and American Sports Design brands as well as producing private brands for other companies) controls 80 percent of the U.S. bicycle market.  In 1998, the Huffy Corporation had sales of $584 million and a gross profit of $97.5 million. Huffy Corporation CEO, Don R. Garber, paid himself $771.091 in 1999.

Many of the fired Huffy workers are now working two, or even three, minimum wage jobs to try to make ends meet and not fall behind in mortgage and car payments, school and other expenses for their children. 

 

Unlike Canada and the entire European Community, the United States is the only industrialized country in the world, with the possible exception of Australia, that makes no attempt to regulate bike imports. Due to human rights concerns and anti-dumping regulations, Huffy bikes made in China are not sold in Canada or Europe.

 


 

Trying to Live on 25 Cents an Hour.

The U.S. Companies Say the Workers Do Just Fine.

But can you really live on the 25 cent an hour wages that the U.S. contractors pay in China—which come to $15 for a 6-day workweek or $65 a month?

The cost of living in China is, of course, just a fraction of what it is in the U.S., and U.S. companies like Wal-Mart and Nike assure the American people that they pay fair and adequate wages in China, which, they add, are very competitive given the low cost of living there.

But Nike, Wal-Mart and the other U.S. companies are wrong, and they are deliberately misleading the U.S. people. In China, it costs $12.05 a month to provide milk for a six-month-old infant.So how can anyone survive on just $65 a month in wages?The cost for one child's milk amounts to 19 percent of the month's wages.

We gathered information on the cost of living for a lower middle class family in Shenzhen City in southern China—where many of the assembly factories exporting goods to the U.S. are located.

Monthly Expenses in Shenzhen:

Rent for a 3-bedroom Apartment
(400-500 square feet) 

1100 rmb 

$132.53 

Utilities (water and electricity) 

400 rmb  

$48.19 

Phone service
(a wireless phone costs $36.14-$48.19/month) 

100 rmb 

$12.05 

Food for 3 people
(husband, wife, six-month old child) 

600 rmb 

$72.29 

Monthly Cost of raising a 6-month old child
(including milk for 100 rmb/month--$12.05
and diapers for 20 rmb--$2.41 per day) 

500-700 rmb 

$60.21 - $84.34 

Cooking oil 

50 rmb 

$6.02 

Fuel for cooking 

60 rmb 

$7.23 

Subtotal:  

 

$350.59/month 

(Note: Many people choose to eat out, since it is cheaper than preparing food at home. For example, to prepare lunch at home for three people can cost 25 to 35 rmb--$3.01 to $4.22, or about $1.20 each. A quick, cheap lunch of noodles can be purchased from a vendor for 5 to 10 rmb, as little as 60 cents.)

[Picture: Workers' dorms in Shengzhen. 9-12 people share one room sleeping in bunk beds.]

If you add up even just these common expenses, it already amounts to $350.59, which is more than five times the wage of a typical factory worker who is producing goods for the U.S. companies.

  • What about bus fare, which costs 3 rmb, or 36 cents for a typical half-hour trip? Round trip bus fare five days a week would cost 120 rmb, or $14.46 U.S.
  • A visit to the doctor costs between 60 and 80 rmb, or $7.23 to $9.64
  • Men's new shoes cost 200 rmb, $24.10 U.S.
  • The simplest man's t-shirt costs 20 to 30 rmb, or $2.41 to $3.61.
  • A cheap, plain two-piece woman's outfit costs 100 to 150 rmb, or $12.05 to $18.07 U.S.
  • Going out for a traditional dim sum holiday meal at a Chinese restaurant would cost 30 to 40 rmb per person, or $3.61 to $4.82.

Food is cheap at the local market

Rice 

10 cents per pound 

Vegetables

14 cents per pound

Meat

33-55 cents per pound

Fish

22-44 cents per pound

A whole chicken

$2.41

Workers locked in factories in China producing goods for the largest and most profitable U.S. multinational companies are barely able to eke out an existence, living hand to mouth and surviving only because they are crowded into tiny dorm rooms with 12 other people and eating three dismal company meals a day.Dorm accommodations and food expenses are deducted from a worker's gross wage.To share a bunk bed in a crowded dorm room costs about 305 rmb per month, or $36.75 U.S.Meal coupons cost 3 to 9 rmb per day, or between 36 cents and $1.08.For the month, this would average $22.00 U.S.

A factory worker's wages are merely wages of survival and the job leads to a dead end, without advancement or rights.  

[Picture: Workers use the iron bars to dry their clothes.]

 

Visiting the Company Dorm

In Shenzhen City, just as there are rows of factory buildings, so too are there row after row of company dormitories, which are drab concrete buildings seven or eight stories high.  With heavy iron grates or bars covering the windows, the dorms resemble prisons. 

[Picture: Factory dorm]

The workers use the grates to hang up their clothing to dry.

We went into one of the dorms.  The building super assumed that we were working for a North American company and were looking for dorm space to house our workers, so we received the grand tour.

[Picture: Factory dorm]

It was explained that in a 10-by-20-foot room, it would be easy for us to fit 9 to 12 people.  He showed us plenty of such rooms, demonstrating how they had arranged the two-level bunk beds lined up against every inch of wall space, leaving a narrow corridor down the center of the room.  The bunk beds had hard wooden surfaces covered with paper thin straw mats.  Some workers had been able to secure thin mattresses, while others slept on folded up blankets.

The few possessions the workers owned were hung up inside their tiny bunk space-for example, two shirts hanging from a nail, with some pictures torn from magazines taped on the wall.

The workers hung blankets or sheets or strips of torn plastic over the outside part of their bunks in order to provide a little privacy.

The walls were cinderblock, the floors concrete and the one fluorescent light was affixed to the ceiling.  The rooms were damp and drab.

One of the workers with whom we spoke worked in a plastics factory, 16 hours a day he said, from 8:00 a.m. to midnight.  He received two Sundays off each month.  For working over 90 hours a week, he earned $27.87.  

[Picture: Worker dormitory. Workers hang sheets for privacy.]

 

483,000 U.S. Manufacturing Jobs Lost

In a single year, 1999, we lost 256,000 well paying manufacturing jobs in the United States.  And in just the last two years, 1998 and 1999, we lost 483,000 manufacturing jobs.  At the beginning of 1998, there were 18,838,000 U.S. workers employed in manufacturing.  By the end of 1999, there were just 18,355,000 left.

The single greatest factor contributing to the growing income disparity between the rich from the poor in the U.S., is the loss of well paying, largely union, manufacturing jobs.

For example, General Motors used to be the largest employer in the U.S., with wages of $26 an hour and $20 an hour in benefits.  Today, Wal-Mart is the largest private sector employer in the U.S. with 885,000 employees, nearly half of whom qualify for federal assistance under the Food Stamp program.        

Citation:  Bureau of Labor Statistics 3/10/00

[Picture: Want ad: "Urgently Wanted: Assembly Workers--many female, assembly of handbags, related experience preferred, will consider good quality workers if not experienced.]

The Race to The Bottom -- $9.32 an hour versus 25 cents an hour

One shoe company in China, Pou Yuen, employs over 100,000 workers to assemble Nike, Timberland, Reebok, and New Balance sneakers and shoes for export to the U.S.

Meanwhile…In the United States there are only 24,800 footwear workers left in the entire country from coast to coast.  This means that just one Taiwanese-owned shoe conglomerate with multiple factories in China employs almost four times as many footwear workers as are left in the entire U.S.

Between 1990 and 1999, 37,900 footwear workers lost their jobs in the U.S.  Employment in the shoe industry was slashed by 60 percent, falling from 62,700 jobs in 1990 to 24,800 today.

The average footwear worker in the U.S. earns $9.32 an hour, while in China workers making Nike, Reebok, Timberland and New Balance are paid approximately 25 cents an hour.  So, footwear workers in China are paid just 3 percent of what U.S. workers earn.

Citation:  Bureau of Labor Statistics 2/07/00

Today, Wal-Mart is the largest private sector employer in the U.S. with 885,000 employees, nearly half of whom qualify for federal assistance under the Food Stamp program. 

[Picture: With heavy iron grates or bars covering the windows, the dorms resemble prisons.]


Alpine Car Stereos 

Alpine stereos are produced at: 

Qingdoa Daesung Electronic Corp. Ltd.
Xia Wang Bu Licang Qu Qingdao City
Shandong Province, China

Top of the line Alpine car stereos, some costing up to $1,300 each, are made in China by young women who are paid 31 cents an hour and sit hunched over, staring into microscopes 9½ hours a day, six days a week, soldering the fine pieces of the stereo.  Above the women is an electronic scoreboard which monitors their progress in meeting their production quota of 720 stereos a day.

Not just apparel and sneakers. There are high tech sweatshops. 

The Daesung Electronic Corporation moved to the city of Qingdao from South Korea in 1991, becoming just one of 3,000 South Korean investments currently in the city of Qingdao, most of them export assembly factories.  There are also 1,000 U.S. investments in Qingdao, which has 55 industrial parks within its city limits.  Every month 300 ships leave Qingdao's port, carrying a total of $3.8 billion of cargo every year.

[Picture: Alpine radio]

There are 700 production workers at the Daesung factory, almost all of them young women from the surrounding area.  They are joined by 100 managers and research staff who are from South Korea.

Daesung produces high tech electronic components such as motors, amplifiers, mobile pagers, beepers and car stereos.  Most of their work is for the auto industry.

When we visited the factory in July 1999, they were making Alpine car stereos which were exported to the U.S. through the port of Los Angeles.  Their destination was the Big Three and other automakers and suppliers.

According to factory management, there is a 9½ hour daily shift, from 8:00 a.m. to 5:30 p.m., six days a week, with an hour off for lunch.  We could not independently confirm this with the workers, but if management was accurate, the workers would be in the factory 57 hours a week, while being paid for 51 hours.

Management said that the base, or starting, wage was 360 rmb--$43.31 a month.  This would come to 20 to 22 cents an hour, depending upon whether they worked a 45 or 51-hour workweek.

The average wage, the company said, was 500 rmb per month, $60.24 U.S.

Average wage: (According to the company)           
  • 27 to 31 cents an hour
  • $2.31 a day (8.5 hours)
  • $13.90 a week (for a 6-day, 45-51 hour workweek)
  • $60.24 a month
  • $722.89 a year

Daesung factory managers said that the fully loaded wage for a skilled worker-including all mandated social security benefits, transportation stipends, bonuses, etc.-came to $100 U.S. a month, $23.08 a week.  We were unable to verify any of these wage figures with the workers.

The Daesung factory declared a profit of $400,000 in 1998, which was sent back to the parent company, which continues to operate two factories in South Korea.

A Walk Though the Factory:

Daesung Electonics is a high tech manufacturing company built with an initial investment of seven million dollars.  The factory was clean, air conditioned and full of the latest computerized equipment.  The young women workers were dressed in long white uniforms with matching white caps.

[Picture: Alpine car stereos being made for 31 cents an hour.]

They sat concentrating, bent over, staring into microscopes as they soldered the fine pieces of the Alpine car stereos, which moved along a U-shaped assembly line.  No one looked up;  no one talked;  no one smiled.  They worked very fast, and one could not help but think how exhausted these women must feel at the end of their shift after having stared into a microscope all day.  Above the women, an electronic scoreboard posted their daily production quota of 720 Alpine car stereos, and monitored the workers' progress, comparing how many stereos they had completed up to that minute with how many they should have made in order to reach their quota by the end of the day.

The Daesung Electronics Corporation Came to China to Escape Unions

Unlike their North American counterparts, the South Korean factory managers were very direct and pulled no punches as to why they had relocated to China.  Daesung senior managers told us they moved to China to escape the labor movement and the high wages in South Korea, where the minimum wage is $1.60 an hour and the average manufacturing wage about $2.49 an hour.

[Picture: Alpine radio box]

Daesung management spoke very glowingly of the All China Trade Union-ACTU-that is the official government-run union.  The said to us:  "You have to understand, the ACTU does not bargain for rights or wages.  This union is nothing like the unions in South Korea, or in the U.S.  The ACTU represents both management and labor, and really acts as a channel of communication so we know what the workers are thinking."

In fact, the government-controlled All China Trade Union, functions as one giant company or yellow union, which actively collaborates with and provides cover for the authoritarian regime's total denial of internationally recognized worker rights in China.  It is another burden the workers have to deal with, another nail in the trap.

Daesung management was full of the same complaints we heard in numerous other assembly factories: that in China, there were no clear laws; that regulations and standards varied from one local government office to another; that there was no way to know how the local bureaucrats would implement these shifting regulations, so in many cases you had to rely upon bribes, which made it essential to make friends with local government authorities and the police.

They complained that port charges in China-the ports are owned and operated by the government-are just as expensive as in South Korea.  Further, their Social Security payments for workers' health, unemployment and pension benefits were becoming too high, and many investors were trying to avoid these expenses.

Asked if there was a middle class in China and a possible market for their products, they responded "No, none, and there never will be under this government."

Still, despite all the problems, they said that Korean companies are racing to get into China before things change.  So it must be a good deal for them after all.

An Uninspiring Meeting with ACTU 

The National Labor Committee met with officials from the All China Trade Union (ACTU) branch in Shanghai.

It was not a very inspiring meeting, as they explained to us that ACTU's mission was "to relieve tensions between management and workers," and to "cooperate with management to develop their enterprises."  The ACTU representatives explained that "both managers and workers are part of the union," and were full of praise for the U.S. manufacturing companies moving to China.  Asked about the millions of layoffs from the state-owned enterprises, they responded, "it cannot be any other way."  It was dropped at that.

The All China Trade Union, which is sanctioned and run by the Chinese government, is the only "union" allowed to operate in China.  It functions as a company "yellow" union.

 


New Balance in China

Freetrend Factory
Shenzhen
Guangdong Province, China

We know of five factories in Southern China where New Balance sneakers are currently being produced. What follows is a report on four of those factories.

Freetrend is a Taiwanese-owned company operating a six-plant compound in Shenzhen, with two additional factories currently under construction. Its major production is for New Balance. According to several warehouse workers, it is common for Freetrend to also subcontract work to the Lizhan Footwear Factory, which is another major New Balance supplier. Materials for the New Balance sports shoes come from Taiwan.

There are more than 10,000 workers in these six factories, and as is typical in the assembly industry, the vast majority are young women aged 18 to 25 who have migrated to Shenzhen from more agrarian provinces.At 25 years of age the workers are fired.Though there is no written rule, the workers know that the company will not tolerate pregnancies.One woman, an assistant, was illegally fired one week before the researchers arrived because she was pregnant.

Summary — New Balance Made at Freetrend
  • Workers at the factory 14 to 15½ hours a day, from 7:30 a.m. to 9:30 p.m., six days a week.
  • 18 cents an hour base wage.Average wage is 25 cents an hour, or $2.25 for a 10 hour day.
  • 12 cents premium for working overtime hours.
  • No freedom of movement.Workers need prior permission to leave the factory during their lunch break. Factory and dorms are locked down at 9:00 p.m. every night, after which no one can enter or leave. Workers need permission to use the toilet and the time away from their workstation is monitored.
  • Treated like children, workers must memorize factory quality control regulations.Failure to recite them from memorywill be punished with having to write out the regulations 100 times.
  • Harsh rules and management.Section chiefs are very strict and scream at the women, who are frequently brought to tears. One woman stated: “When you are in the workplace you are scolded for just laughing or standing up.” There is constant pressure to produce.
  • Workers are fined for taking sick days.
  • Illegal deductions.To get a job at Freetrend, workers must pay a 50 rmb deposit and then the first month wages are withheld by the company.
  • 12 workers share one small dorm room.
  • No independent union will be permitted, nor are workers allowed to raise grievances.
Hours: At the Factory 14 to 15½ hours a Day, Six Days a Week, From 7:30 a.m. to 9:30 p.m. or 11:00 p.m.

The standard shift four days a week is from 7:30 a.m. to 9:30 p.m. However in June, some women reported working until 11:00 p.m.

The standard shift: (Monday, Tuesday, Thursday and Friday)

  • 7:30 a.m. – 11:30 a.m.
    (11:30 a.m. – 1:30 p.m., lunch break)
  • 1:30 – 6:10 p.m.
    (6:10 p.m. – 7:30 p.m., supper break)
  • 7:30 p.m. – 9:30 p.m.

So the workers are at the factory 14 hours a day while being paid for only 10 hours and 40 minutes.When they work until 11:00 p.m. they are at the factory 15½ hours a day.

On Wednesdays and Saturdays the shift is shorter, from 7:30 to 6:10 p.m., so the workers are at the factory for 10 hours and 40 minutes.

  • 7:30 a.m. – 11:30 a.m.
    (11:30 a.m. – 1:30 p.m., lunch break)
  • 1:30 – 6:10 p.m.

The workers are typically at the factory six days a week for a total of 77 hours and 40 minutes, while being paid for just 60 hours of work.

In the molding section there is also a second grueling night shift stretching 12 hours from 7:30 p.m. to 7:30 a.m., with just one half hour break from 1:30 a.m. to 2:00 a.m.These workers are at the factory 72 hours a week while being paid for only 69 hours.

Wages: 18 Cents an Hour Base Wage; Average Wage is 25 to 30 cents an Hour, or $2.55 to $3.01 for a 10 Hour Day.

The base wage at Freetrend is 18 cents an hour. However with all overtime hours, incentives and bonuses added most workers make more, averaging between 25 and 30 cents an hour.

In the stitching, cutting and hand work sections, the workers are paid according to a piece rate system. The workers said they earned between 500 rmb and 600 rmb each month, or between $60.24 and $72.29 U.S. This would mean their hourly wage ranges from 23 cents to 28 cents.

Average Piece Rate Wage (including all overtime hours, bonuses and production incentives):

  • 25 cents an hour
  • $2.55 a day (for a 10 hour day)
  • $15.29 a week (for a 60 hour, 6 day work week)
  • $66.27 a month
  • $795.18 a year

In the molding, quality control and warehouse sections the workers are paid hourly wages which range from 28 to 32 cents an hour, or from $16.68 to $19.46 a week.

Average Hourly Wage

  • 30 cents an hour
  • $3.01 a day (for a 10 hour day)
  • $8.07 a week (for a 60 hour, 6 day work week)
  • $78.31 a month
  • $939.76 a year

Overtime hours are paid at a rate of up to 36 cents an hour. Also, workers who meet their daily production goal will receive a 72 cent bonus each day.

Working Conditions at Freetrend / New Balance

No freedom of movement. Factories and dorms locked down at 9:00 p.m. every night. Fines for sick days. Section chiefs scream at the women to work faster. 12 workers to a single dorm room. No independent union allowed.

Illegal Deposits, Wages Withheld

To prevent or discourage new employees from seeking better conditions and wages elsewhere, Freetrend charges each worker a 50 rmb deposit ($6.02) upon entering the factory and then illegally withhold their first month’s wages (about $66 U.S.) neither of which will be returned if the worker leaves the factory before their first year is out. The workers only receive their first pay at the end of the second month.

No Freedom of Movement

Workers are not permitted to leave the factory compound to walk outside during their lunch break without prior permission from factory managers. Then every night at 9:00 p.m., the factories and dorms are locked down, after which no one is allowed to enter or leave.

[Picture: New factory construction at Freetrend. In China, construction workers are paid 18 cnets an hour and work 12-hour shifts, seven days a week.]

Treated Like Children. Harsh Factory Rules and Treatment. Fined for Sick Days.

Workers must memorize their supervisors and managers’ names and the factory’s regulations regarding quality control. Failure to be able to recite the regulations in full, upon demand, will be punished by having the worker write out each regulation 100 times.

There are strict factory rules at Freetrend backed up by a system of demerits and fines. Workers who forget to wear their factory I.D. cards, are out of proper uniform, or fail to sign the registry each morning will be fined. Workers are fined 2 rmb for taking a sick day. Workers who lose their I.D. card will be fined 100 rmb, or nearly five day’s wages.

To use the bathroom, a worker must first gain the permission of their line supervisor and receive an “off-duty permit”, without which they cannot leave their work station. The length of their bathroom visit is monitored.

The workers say there is a lot pressure on them to work faster, to meet production goals, and that the sections leaders are very strict, screaming at and scolding the young women, leaving many of them in tears.

One worker commented that there were more regulations in the factory then there had been in junior high school: “When you are in the workplace, you are scolded for just laughing or standing up.”

Heavy Dust Powder in the Air

Workers in the stitching section complain about a heavy dust-like powder which fills the air they must breath. Despite the lack of proper ventilation they are not provided safety masks.

No Social Security, Health Insurance or Pension Plan

Illegally, Freetrend has not joined and inscribed the workers into any social security health or pension plan, to which both the company and the workers would have to contribute. As China privatizes its health and pension system, the Freetrend workers are left with no long range protections whatsoever.

There is a factory clinic at Freetrend, but the workers must pay for all medicine.

No Paid Vacation

After a year’s service, the law entitles each worker to a paid annual vacation. Freetrend permits only unpaid leaves.

12 Workers to a Dorm Room

Workers are housed 12 people to a small dorm room. There is one toilet on each floor. The workers are charged 70 rmb ($8.43) every month for lodging and food.

[Picture: Leaving the dorms for work]

Spending $3.00 a Week On Yourself

One young woman explained that she attempts to send $48 U.S. a month home to her family in Hunan, but to do so she can only spend about $3.00 U.S. a week on herself. So, for example, on her day off, rather than go into town which would cost money, she instead stays in the industrial zone and just takes a walk.

No Union at Freetrend

Most workers have no idea what a union is. They have no experience with independent organizing, since anyone attempting to form a real union would be immediately arrested and imprisoned for 5 to 8 years without a trial.

New Balance

Lizhan Footwear Factory
Dongguan City
Guangdong Province, China

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:
  • Workers at the factory 11 to 14 hours a day, six and seven days a week.
  • 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.

[Picture: Looking for work at the Lizhan factory]

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

The “regular” shift is from 7:30 a.m. to 6:30 p.m., six days a week, though in June of 1999 workers in the sole department reported working from 7:30 a.m. to 8:30 or 9:30 p.m. In these giant factories hours can vary from section to section, as do wages.

The “regular” shift would be:

  • (7:00 a.m. – 7:30 a.m., 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:

  • (7:00 a.m. – 7:30 a.m. 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.
    (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.

[Picture: Lizhan factory/ New Balance want ads]

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.

 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
2) Age 18-25
3) Healthy
Skilled ones will be preferred.
Please bring necessary documents to enroll and join the interviews!"
 

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.

The basic wage is 18 cents an hour.

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.

[Picture: Lizhan factory workers in uniforms cue up to enter the factory. There is an SA8000 banner on the factory, which reads, "Fully implement SA8000 Accountability Management System." ]

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.

Working Conditions: New Balance/Lizhan Footwear Factory

Illegal Deposits and Wage Deductions:

To get a job at the Lizhan Footwear factory making New Balance sneakers, workers are charged various deposits and wage deductions totaling a full five-weeks of wages.

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.)

[Picture: K-Swiss at Lizhan factory with SA8000 banner]

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

None of the workers at the Lizhan Footwear Factory were provided with a written work contract, which is legally required, and must clearly spell out wages, hours, and working conditions.

No Paid Vacations

Also illegally, the workers are not provided an annual paid holiday, but can only take an unpaid leave.

No Social Security Insurance

Once again, in violation of China’s labor law (Article 72: “The employing unit and laborers must participate in social insurance and pay social insurance premiums in accordance with the law.”), the workers at the Lizhan Factory were not inscribed in any social security health insurance or pension plan, which is mandatory for the company to participate in.

Denial of Freedom of Movement

During the one and a half hour lunch break, no one is permitted outside the factory compound without prior permission from their supervisors. Also the factory/dorm compound is locked down at 9:00 p.m. each night and no one is allowed in or out after that. Workers who cannot report back by 9:00 p.m. will be locked out for the night.

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

Twenty-eight workers are crowded into each dorm room, sleeping in triple level bunk beds, which are stacked up against the walls.

Workers Told to Lie to Inspectors

Lizhan management threatens and coaches the workers to lie about factory conditions and the hours they work should any New Balance auditors approach them. The workers are instructed to say they are working just eight hours a day, and not the 9½ to 12 hours they actually work.

[Picture: New Balance sneakers made in China.]

Fired For Raising a Grievance – Busting a Strike

In February 1999, frustration in the polishing section of the factory spilled over. The workers went on a spontaneous strike to protest piece rates so low that even after 10 hours of work, six and seven days a week, they earned almost nothing. The strike was immediately broken and the factory fired 30 of the most active workers who participated.There was a second strike in the molding section, which was also crushed.

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

The workers told the researchers: “Once your are employed as a worker you will always be a worker." There is no possibility to advance.It is very frustrating and the workers feel in a trap, going nowhere.

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

Representatives from the Council on Economic Priorities Accreditation Agency (CEPAA) SA 8000 monitoring program showed up at the Lizhan Factory and were introduced at a morning assembly.Afterwards the workers told our researchers that they had no idea what SA 8000 was. Some other workers said the SA 8000 people organized a few talks on Chinese labor laws, but no one paid much attention.

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

With an estimated 250 million redundant agricultural workers in China's rural provinces, many seek factory work in the south. 

 

New Balance

Pou Yuen Factory
Zhongshan
Guangdong Province
China

As was mentioned earlier, the Zhongshan Branch of the Pou Yuen Shoe conglomerate is made up of six or seven factories employing 37,000 workers. Nearby Pou Yuen factories I and II is located a separate unnumbered plant where New Balance sneakers are being produced. Pou Yuen factories I and II produce for Reebok.The Pou Yuen conglomerate promotes itself as the “model” factory in China.

There are approximately 4,000 workers, the vast majority of them single women between 18 and 26 years old, though there are some 15 year olds there, who are employed illegally.Almost all the workers are migrants from rural provinces.Export assembly factories in China rarely if ever hire anyone over 25 years of age. By the time the factory workers reach 25, they are worn out and exhausted from all the grueling overtime hours, and are replaced by younger women.

Summary: New Balance made at Pou Yen
  • At the factory 15 hours a day during the busy season, from 7:00 a.m. to 10:00 p.m., seven days a week
  • One or two days off a month
  • Low wage of 14 cents an hour; average wage of 19 cents
  • $11.12 for a 78-hour workweek
  • Compulsory exercise from 7:00 to 7:30 a.m.
  • 12 workers to a dorm room
  • Heavy chemical odor in the sole department; workers complain of skin rashes
  • No union
  • Never heard of New Balance Code of Conduct
  • The women report that “the work is hard and backbreaking” and that their lives are “meaningless”
  • Told how much the New Balance sneakers sell for in the US., the workers screamed, “It is unfair!”

[Picture: New Balance factory at Pou Yen.]

Hours: At the Factory from 7 a.m. to 10 p.m., Seven days a Week

The workday at the Pou Yuen plant starts at 7:00 a.m. with a half-hour of compulsory exercise.

The standard shift is:

  • (7:00 a.m. -7:30 a.m., compulsory exercise)
  • 7:30 a.m. - 11:30 a.m.
    (11:30 a.m. - 1:00 p.m., lunch break)
  • 1:00 p.m. - 5:30 p.m.
    (5:30 p.m. - 6:00 p.m., supper break)
  • 6:00 p.m. – 9 or 10:00 p.m.

The workers interviewed explained that overtime hours from 6:00 to 9:00 or 10:00 p.m. were very common, even a daily occurrence. The workers reported that they received one or two days off a month. No one ever receives more than four days off in a month, and that much only during slack periods.

So the workers are in the factory for up to 15 hours a day, seven days a week. Under this schedule they would be at the factory 105 hours a week.But on average, they are at the factory 14½ hours a day, while paid for 12 hours; 6½ days a week, totaling 94½ hours, while being paid for 78 of those hours.

However, hours and wages do vary from department to department in the same factory, which is huge, employing several thousand people.

Some workers in the sole section reported that they were working from 7:00 a.m. to 7:30 p.m. with 1½ hours off for lunch.So they were working 10½ hours a day, 6 or 7 days a week.

Cheating on Overtime Hours – Twisting the Law

Overtime work at Pou Yuen far exceeded what is legally allowed in China, where, by law, overtime is limited to 36 hours a month, or 9 overtime hours a week on top of the regular 40-hour workweek.

So the legal limit permissible is 49 hours of work per week, yet at the Pou Yuen factory, women are working 78 hours a week assembling New Balance sneakers. They are being forced to work 29 hours more each week than is legal, exceeding the limit by 60 percent.

The way Pou Yuen and New Balance can get around the law is by applying a flexible hourly system that is based upon a year rather than the week. During slack periods when there are few or no New Balance orders, many workers may be without work for an entire month. The workers can remain in the dorms and eat, but they are not paid. Those hours can then be worked at any time of year without being recorded as overtime, even if the worker is working 12½ hour shifts seven days a week.

The Ultimate Contingency Workforce

With the permission and collaboration of the local government, Pou Yuen and New Balance have come up with the ultimate contingency workforce, flexible enough to keep thousands of workers on hand, as if in storage at a minimal cost to the company and yet ready to respond at a moment’s notice when New Balance and the whims of the marketplace dictate, by working a 78 hour workweek. Better yet, these excessive hours do not even have to be recorded or paid as overtime.

Wages: 14 to 24 Cents an Hour; $11.12 to $16.68 for a 68 to 78 Hour Workweek

Hourly wage rates at Pou Yuen ranged from 14 to 24 cents an hour, the average wage being 19 cents an hour. Weekly wages ranged from $11.12 to $16.68 for a 68 to 78 hour workweek.

After deductions for living expenses, temporary residency and work permits, etc., the workers report they earn between 400 rmb and 500 rmb ($48.19 - $72.29 U.S.) per month on average.

Average New Balance / Pou Yuen Wage

  • 19 cents an hour
  • $2.12 a day (for an 11 hour shift)
  • $14.82 per week (7 days, 78 hours)
  • $64.22 per month
  • $770.64 per year

Almost everyone at Pou Yuen factory making New Balance sneakers is paid according to a piece rate system which none of the workers understand. They have no idea what the piece rate is per unit or how it is calculated at the end of the month. And then there are numerous deductions from their wages, including:

  • 135 rmb for food
  • 45 rmb for lodging
  • 15 rmb for medical other fees for hygiene, temporary residency, work permits, etc.

New Balance uses the piece rate system to drive the women to work harder, but since no one understands how their wages are calculated, the workers feel mistreated and cheated.Nonetheless, they have no choice but to work harder each month to see if they can earn a few extra pennies.

Not only do the workers not understand how their wages are calculated, but wage rates tend to vary and wildly fluctuate from month to month.

Working conditions
  • No worker was provided with a written work contract, which is legally required to specify hours, overtime, wages, holidays and factory conditions.
  • No worker was inscribed in a long-term Social Security health insurance or pension plan.(This is a major issue as China abandons its state-owned enterprises which guaranteed jobs for life that included health benefits and a pension. Now the workers are cut loose, on their own and with no safety net.)
  • Workers report a strong chemical odor in the sole section and say they are suffering skin rashes from the toxic chemicals. (However, recently this situation has slightly improved when Pou Yuen installed additional ventilators.) Workers in other sections of the factory complain they are constantly breathing in a heavy “leather dust” which is in the air.
  • No worker interviewed had ever heard of the New Balance Code of Conduct. But it is compulsory for the workers to memorize Pou Yuen’s strict factory rules and regulations.
  • Workers are housed 12 to a room, sharing bunk beds.
  • There is no independent union at Pou Yuen, and in fact, the workers had little idea about what a union is and does. Outside the factory, the company had put up a poster about the “family of trade union” at Pou Yuen. When asked about this, the women responded, “Oh, it seems to just organize some recreational activities.”
  • Along with other deductions from their wages, the workers also reported paying labor recruiting agencies in Henan and Shanxi from 350 to 700 rmb ($42.17 - $84.34) in order to get a job at the Pou Yuen factory.
  • The workers felt that the procedure to visit the factory clinic was too complicated and time consuming, especially when one was sick. You had to get a medical form from the line assistant, fill it out and return it to the assistant, who in turn took it to the section chief, who after reviewing it would return it to the line assistant.
  • Once in the factory clinic, there was no personal care. Nurses did distribute medications, but the patients had to get out of bed and walk over to the dorm canteen if they were to eat. One young woman, bed-ridden with appendicitis, had no one to care for her and went without food and water.

"Our Lives Are Meaningless"

Once at the factory, the young women who come here from rural areas full of hope are quickly disillusioned, as they find themselves working grueling overtime hours six and seven days a week.

The workers explained to the interviewers that “once you are in the production line working, your hands and eyes cannot stop for a minute.” You do the same operation over and over again, a thousand times a day, day in and day out, for more than 12 hours a day. One women said, “My whole life is only work, and it is meaningless. There are no promotions in the factory.”

All the workers agreed that their working life is “hard and backbreaking.” They were also angry that when they were lined up to be selected by Pou Yuen management to participate in a new training program, they felt that they were “slaves in a slave market, where the nicest looking women are the ones chosen.”

“It’s So Unfair!”

When several of the women were told what New Balance sneakers sell for in the United States, they responded: “It’s so unfair!We are so helpless!”

A Second Pou Yuen Plant Connected to New Balance – The Pou Yuen American Leather Factory

The Pou Yuen American Leather Factory is a newer, smaller facility across the street from the Pou Yuen Footwear Factory that is producing for New Balance.

At the time that the researchers visited this factory in June, there were 400 to 500 workers and the factory was just starting up. The workers were producing uppers for New Balance. But this factory may evolve into one of several Pou Yuen materials plants which supply components for further processing to several Pou Yuen factories producing not only for New Balance but also Timberland, Reebok and other brands.

The regular shift at the Pou Yuen American Leather Factory in June was from 7:00 a.m. to 5:30 p.m., six days a week, with 1½ hours off for lunch. Sometimes there was overtime work until 9:00 p.m. An overtime premium of 12 cents an hour was paid on top of the standard piece or hourly rate. Hourly employees said they could earn up to 22½ cents an hour. There were fines of 10 rmb if you reported late to work and 20 rmb if you lost your factory ID card.

The workers’ major complaint was the presence of “leather dust” so thick in the factory air that they could “barely stand it anymore.”No protective equipment was provided to the workers by the factory.

NEW BALANCE, MADE IN CHINA

Pou Yen factory: 19 cents an hour, 15-hour shifts, 7 days a week

  •  
    •  
      • Total production cost: $10.52
      • Retail Price: $84.99
      • Markup = 800%

 



Looking for Fubu and Deep E in China

U.S. companies face no scrutiny in China and can usually get away with whatever they say regarding working conditions at their contractors’ factories—for who is ever going to check?

In 1999, a small socially responsible U.S. shoe company based in Oregon, Deep E – which is a member of Co-op American – was telling the American people that the shoes it produced in China were made by workers whose rights were all respected, who were paid $3.13 to $4.70 U.S. an hour, and who worked 40 to 45 hours a week earning $148.70.

This sounded too good to be true. So the National Labor Committee tried to find the factory Deep E was using in Northern China, which was located somewhere outside the port city of Qingdao, about 400 miles south of Beijing.

The factory, called Tae-Kyung, was located in Jiaozhou City, which turned out to be about 1½ hour drive from Qingdao, only our professional driver could not find it since there was no street address. After stopping a dozen people for directions we finally found the factory located on a dirt road about one half mile off the dilapidated highway which ran through Xiao Ma Wan village.

[Picture: Fubu sneaker factory in China. Note the guard towers.]

The Tae-Kyung factory was not a pleasant looking place. In fact it resembled a prison, with a high stone wall, with four guard towers and a turret at each corner, surrounding a huge compound enclosing the factory, warehouse and dorms. Two thousand young women, 18 – 20 years old were locked inside the compound. There were four guards posted at the entrance, which was blocked by a sliding metal gate.

It was in a wide-open flat area with other factories nearby. The Tae-Kyung compound was encircled by a 25 foot wide dirt road. There was no way to approach or get near the factory without standing out conspicuously, especially as North Americans. The Chinese people are very friendly and local merchants and passersby soon gathered around us, very curious and wanting to try a few English words out on us.

But every time a small crowd gathered, security police would pull up on their small mopeds and the conversations had to end.Certainly nothing serious could be discussed – we had wanted to question people about conditions in the nearby factories – since we did not want to get anyone in trouble. It was only afterwards that we found out from another factory owner that it is common for the factories to pay $100 or so a month to the local police chief who will then have his people keep an especially close eye on your factory. And in fact, every hour or so two security police on their mopeds would speed around the road circling the Tae-Kyung factory. The place was isolated, well guarded and watched over.

When we arrived at the factory it was nearly 100 degrees Fahrenheit. It was lunchtime and the factory was blasting loud popular music as the women straggled over to the dorms to eat.

The next day we returned to the factory. Our driver, who, like all drivers, worked for the local government, was growing suspicious: why were we visiting factories rather than going to the tourist sites? So we had him drop us off at a small restaurant about a mile from the factory and after he left we walked the rest of the way. We wanted to get inside the factory to see the conditions. When we reached the gate, the guards let us in but held us at the guardhouse. After some time and several phone calls we were told we could go to the factory office. As we went up the step we were met by six or seven of the Korean managers, all carrying walkie-talkies and looking nervous, very agitated, angry and on guard.They showed us into an office showroom and left us alone for about five minutes, enough time for us to start getting a little concerned: were they making phone calls to the authorities to find out who we were? But it gave us time to inspect the Fubu sneakers they were currently making. As it turned out, Deep E had just pulled out of the factory, taking its production to Brazil.

Many of the factories have no street address and are difficult to find, even with a professional driver who perhaps doubles as an informer as they work for the local governments, and you begin to get a picture of how difficult it is to do independent research in China, and why it is the U.S. companies can say just about anything they want and get away with it. 

All the managers then returned with the factory’s General Directory Mr. Song Jung Ho, who smiled at us and said it would be inconvenient, or rather, impossible, for us to see the factory. We would have to have written permission beforehand from their headquarters in South Korea. We asked to enter again, inquiring what were they afraid of and that sort of thing, but they would not budge.

It was very clear that nothing like this had ever happened before, and that we were certainly the first people to show up unannounced and ask to inspect their factory.

The point is, when you realize that it is more than a 20 hour flight from New York to China, which is 13 time zones away; that the factories are walled in and guarded with the local security police also watching; that so many of the factories have no street address and are difficult to find, even with a professional driver who perhaps doubles as an informer as they work for the local governments, you begin to get a picture of how difficult it is to do independent research in China, and why it is the U.S. companies can say just about anything they want and get away with it.

Add to that the fact that every worker in China knows that she can be fired for even being seen discussing factory conditions, that any worker publicly raising a grievance is fired and anyone attempting to organize an independent union will be immediately imprisoned, you can understand how tight the trap is for the workers, who have no rights, not even the right to speak about their working conditions.

Regarding Deep E’s original calculations that the Tae-Kyung workers making their shoes were paid $3.13 an hour straight time and $4.30 an hour over time and were making $148.70 for a 45 hour workweek, they were slightly off. Actually they were off by about 1500 percent, since the workers were in reality earning just $9.73 a week.

 
Fubu and Deep E shoes Made in China

Tae-Kyung Factory
Xiao Ma Wan Village
Tiao-Dong Town
Jiaozhou City
Shandong Province, China

Tae-Kyung is a South Korean-owned footwear factory with 2062 production workers and 98 supervisors and management staff who are largely South Korean. The workers are almost exclusively young women, 18 to 20 years of age, one half of whom are migrants from distant provinces who are housed in factory dorms.  Currently the factory is producing sneakers for Fubu and up to recently they were also producing Deep E hemp shoes.

Conditions at Tae-Kyung / Fubu / Deep E

12 hour shifts from 7:30 a.m. to 7:30 p.m.; 6 days a week; 17 cents an hour base wage, or $9.73 a week; average wage 22 cents an hour; 12 workers to one drab dorm room; workers must sign-out to leave the factory compound.

[Picture: Fubu sneakers made in China. Retail price: $59.99.]

Hours: 7:30 a.m. to 7:30 p.m. or 8:00 p.m., Six days a week

The standard shift at the Tae-Kyung factory is from 7:30 a.m. to 5:30 p.m., with an hour break for lunch. However, the women we interviewed said they almost always worked a 12 hour shift and that they worked most Saturdays.

So their schedule would be:

  • 7:30 a.m. – 12:00 noon
    (12:00 noon – 1 p.m., lunch break)
  • 1:00 p.m. – 5:30 p.m.
    (5:30 p.m. – 6:00 p.m., supper break)
  • 6:00 p.m. – 7:30 p.m. or 8:00 p.m.

They would work this shift 6 days a week, which means they would be at the factory up to 75 hours a week, while being paid for 11 hours a day, or 66 hours a week. When we visited the factory in July it was not their busy season and they were not working on Sundays.

Even if the women were obligated to work just every other Saturday, then their average work week would be a little over 58 hours, or 10½ hours a day times 5½ days.

Wages: 17 cents an hour base wage; $9.73 a week; Average wage 22 cents an hour; Highest wage 34 cents an hour.

The base, or starting wage at the factory is 17 cents an hour, or $9.73 for a 58 hour week.

Base wage:

  • 17 cents an hour
  • $1.70 a day (for 10½ hour work day)
  • $9.73 a week (for 5½ day, 60 hour work week)
  • $42.17 a month
  • $506.02 a year

However, most workers at the factory earned more than the base rate, and their take home pay – including all incentives, bonuses and overtime premiums – averaged 450 rmb per month, or $54.22.This would put the average hourly wage at approximately 22 cents an hour.

Average take home wage: (including all bonuses, overtime premiums, and incentives)

  • 22 cents an hour
  • $2.31 a day (for 10½ hours of work)
  • $12.51 a week (for a 5½ day, 60 hour work week)
  • $54.22 a month
  • $650.60 a year

The highest wage we heard about at the factory was one woman who earned 700 rmb for the month, or $84.34 US, for working 57.5 hours a week.This would come to 34 cents an hour.

These wages were similar to those in other factories nearby where the Tae-Kyung workers had friends who were employed.In an electronics factory a few blocks away (the workers did not know what brand they were producing) they were being paid 700 rmb a month, $84.34, while working 12 hours a day, seven days a week. At a nearby wood furniture factory the workers were earning $54.22 a month.

Working conditions: 12 women to a small dorm room; workers need to sign out in order to gain permission to leave the factory.

Twelve women share one drab dorm room, sleeping on metal bunk beds. The women complained that there was no entertainment, not even a single common TV in any of the dorm buildings. It was very drab and boring.

To leave the factory the women had to sign out first in order to get permission.

There was no independent union at the factory and any attempt to organize one would be immediately crushed.



Where Keds are Made in China

Kunshan Sun Hwa Footwear Co. Ltd.
Kunshan City
Jiangsu Province, China
 
16-year-old girls assemble Keds sneakers applying the toxic glue with their bare hands, the only tool they are given is a toothbrush.

[Picture: Young workers using toxic glue to make Keds shoes]

The Sun Hua Footwear Company is a South Korean-owned factory located in Kunshan City, which is about 65 kilometers west of Shanghai. The factory is surrounded by a 15-foot high concrete wall topped with barbed wire; the heavy metal entrance gate is kept locked and is patrolled by armed security guards.

There are 1800 production workers locked in the factory, 90 percent of them young women 16 to 25 years of age. There are also 100 office workers, including 30 managers from South Korea.

One hundred percent of Sun Hwa’s production is for export. When we visited the factory in July 1999, they were producing Keds sneakers for Stride Rite. However, in the showroom we saw sneaker and tennis shoe models they had done for Guess, Gap, Tommy Hilfiger and Liz Claiborne. They also make rubber boots and ski boots.

Going Through the Factory your Eyes Stung from the Toxic Glue

There are anywhere from 40 to 90 parts in a sneaker and some of those pieces are glued together. In the Kunshan Sun Hwa factory, like most other footwear plants in China, they use toxic glues. On the floor next to some of the young workers in the adhesive section were shinyten-gallon tin cans of glue marked “XXX STRONG” on which, even if there were further precautionary warnings, the women obviously could not read them since they would be in English. The top of the cans were cut off and the girls dipped small bowls into the can to draw the glue out, which they then applied to the sneaker parts using their bare hands; the only tool they had been given was a toothbrush. The girls look 16 years old. When you went through the adhesive department where they worked your eyes stung from the strong chemical vapors. There was no special ventilation, nor were gloves or masks provided to the workers.

[Picture: Workers making Keds]

Every young worker was a specialist, doing the exact same operation over and over again, hour after hour, day after day. For example, we saw one young girl marking a pattern with a pencil on canvas pieces that would eventually make up the uppers of the sneakers, doing the same motion 600 times an hour. By the end of a numbing 10 hour shift she would have completed 6,000 such operations.

As we went through the factory no one looked up, none of the workers were talking to each other, and no one smiled. Everyone was bent over glued to their workstations concentrating to keep up with the flow of the production line.

The factory was clearly run with a strict military-style discipline. Workers were strongly encouraged to use the bathrooms during their lunch break from noon to 1:00 p.m. If they needed to use the toilet any other time of the day they would first have to get permission from their section chief.

At the end of the day, the workers had to queue up and leave in single file, as if they were in the military, or rather grammar school. The person sitting at the front of each production line had a cardboard sign with the production line’s number on it.When he or she was given the signal that it was alright to stand up, everyone else in the line also stood, queued up, and left single file, production line after production line.

At least half the workers lived in factory-owned dorms, which were said to be nearby. Everyone left on bicycles, which was all they could ever dream of affording.

[Picture: Young workers making Keds at Kunshan Sun Hwa]

The Sun Hwa managers said their factory provided very good jobs, at good wages, though on the other hand it seemed an apparent contradiction when they admitted most workers leave after just one and a half years. If the jobs were so good why was everyone leaving?

According to the company, the average production wage was 600 rmb per month, or $72.29 US, or about $16.68 a week. We could not verify this since we chose not to speak with any of the workers inside the factory, lest they should say the wrong thing and find themselves fired after we left. This 600 rmb figure would include all incentives and production bonuses. The management said they paid the incentives to the whole production line rather than to individuals which was no doubt used as a strategy to make sure workers would pressure each other to work faster so they would all get their small, but very needed bonus. It is not known whether the 600 rmb monthly figure is before or after the company’s deductions for food and dorm accommodations.

According to the company the average wage was:

  • 42 cents an hour
  • $3.34 a day (for an 8 hour day)
  • $16.60 a week (for a 5 day, 40 hour work week)
  • $72.29 a month
  • $867.47 a year

Company spokespeople said that the factory operated on a daily shift of 9 hours from 8:00 a.m. to 5:00 p.m., five days a week, and with an hour off for lunch. We could not independently confirm whether this was accurate or not, though it would certainly be the exception from standard factory hours across China if they were really working just the legal 40 hour work week.

Coming to China “For the Cheap Labor” and “No Unions”

The Kunshan Sun Hwa factory was opened in 1991.The company general manager said they came to China “for the cheap labor” and “to get away from the unions in South Korea”, where they no longer operate any factories. The fact that the minimum wage in South Korea is only $1.60 an hour says a lot about current wages in China.

We were told that it takes three to five years to get a factory up and running smoothly and at full capacity. Now they could turn around an order from the United States in just three months, from the date the order arrived to the delivery of the sneakers at a U.S. port. Most of their raw materials are imported from South Korea, and the rest come from other nearby Asian countries.Now they do $30 million of business a year.

[Picture: At the end of the day, workers must leave the Keds factory in a single line.]

If the Sun Hwa factory was following social security health and pension benefit laws in China – which few export assembly factories appear to be doing – then payment of these legal benefits would add 50 percent to their cost of labor. So if the workers were paid 600 rmb a month, their fully loaded wages including all direct and indirect costs would amount to 900 rmb per month or $1,301 a year. For all 1800 workers their total annual payroll would be $2.34 million.

This means that their total direct and indirect labor costs for all 1800 production workers would amount to less than 8 percent of their $30 million in annual revenues.

Sun Hwa’s management also said they expected the Chinese currency, the rmb, to be devaluated eventually as it was already trading in the local black market at 8.7 rmb to the $1.00 US, while the official rate was still 8.3 rmb to the $1.00 US. This represents nearly a 5 percent devaluation (0.048192).

Operating a Factory in China: It all Depends on Who You Know and What Bribes You Give

It’s called “Guanxi”, or literally, the relationship business. You cannot do business in China without developing personal contacts with the local bureaucrats who make, change and implement the law, often in an arbitrary manner. Sun Hwa management explained to us that whenever you need to get something done, then every time you must lobby the person in charge, whether in the tax office or the customs department, and pay a bribe. Business in China runs according to who you know and who you pay.

[Picture: Young workers making Keds at Kunshan Sun Hwa]

A case in point. The Kunshan Sun Hwa factory had too much work and, as it often does, it sourced some stitching work to a local company. When the first lots came back, the Sun Hwa quality control managers saw the work was horrible, so they pulled the rest of their materials from the subcontractor and ended the contract.Not long after that, $50,000 (U.S.) disappeared from Sun Hwa’s bank account. No explanation was ever given, but the local subcontractor had obviously contacted the local authorities and together they decided to punish the South Korean factory for breach of contract, even though quality control standards were clearly written into the contract.

Sun Hwa management responded not by going to court, but by paying the local mayor a little visit, who then and there, on the spot, reduced the fine by 66% and then returned $33,00 to the company. They did not say, but perhaps a little inducement was given to the mayor in appreciation for his fairness.

At any rate, in China the laws can be changed quickly and then implemented with little warning, and as there are no exact regulations to implement the laws, penalties can be handed out in an arbitrary manner by the local authorities. This is why you have to lobby people and pay bribes.

The Export Assembly Factories Want China in the WTO


Sun Hwa management explained that they want China in the World Trade Organization (WTO) to end the arbitrary ways the law is implemented.In other words, now that they had set up factories to access the “cheap labor” in China, they wanted their investments secured and protected within the solid, unchanging framework of the law.No one can blame them for that, but why do they attack the workers in China who are asking for the exact same thing, a level playing field, where worker rights are equally legally guaranteed and fairly implemented?If the companies can have copyrights, why should not workers’ rights also be protected?

One hundred percent of the women’s and children’s Keds/Stride-Rite sneakers we found in Macy’s in New York City were made in China.

[Picture: Production of Keds at Kunshan Sun Hwa factory]

[Picture: Bikes are the only means of transportation factory workers can afford]

 


Nike in China, and Proud of It

Nike Puts the Swoosh on Contractors' Factories

Sewon Factory
Jiaozhou City
Shandong Province, China

[Picture: Sewon Factory]

On the walls of the Sewon Factory in Jiaozhou City, you see the famous Nike Swoosh and “Just Do It" – right behind the locked metal entrance gate, the iron bars covering the windows and the spiked metal fence surrounding the factory.  There was a serious fire in the plant in 1995, and the factory was told to take the iron grates off the windows. But apparently Sewon's management did not feel it had to.

The base wage in the factory is 20 cents an hour, and people in the neighborhood said the women had to work 11 to 12-hour shifts, six days a week.  Nor would Sewon and Nike hire anyone over 25 years of age, figuring that by that time the workers were “used up" and “exhausted."

[Picture: Sewon factory. Nike contractor in northern China.]

Sewon is a South Korean-owned footwear manufacturer with two plants in Jiaozhou City, which since 1989 have produced exclusively for Nike.  The factory we visited had 1,500 workers, mostly young women 18 to 25 years of age.  The outside walls of the factory were covered with Nike's “Swoosh" and “Just Do It."  But with the heavy metal entrance gate locked and bars of the windows, it resembled more an army barracks than a factory.  Sewon's second factory was much larger, with 4,000 young workers.

There are three other factories in Jiaozhou City employing up to 15,000 workers who also work exclusively producing Nike sneakers.  So, in this one city in China, there are 20,500 young women sewing Nike sneakers.

All of Sewon's raw materials come from South Korea.  Frequently Sewon must subcontract its overflow work to other local factories.

Fleeing $2.49-an-hour wages and unions

Sewon's managers further explained that they left South Korea in 1989 and relocated to China to escape the high wages and unions in South Korea.  In South Korea in 1989, a footwear worker earned $600 U.S. a month, for six day, 55½-hour workweeks.  This came to $138.96 a week, $2.49 an hour.  Sewon's direct labor costs in China are less than 9 percent of what they were in South Korea.  Instead of paying $7,200 a year to its workers, Sewon can pay just $650.60 in China, which is an annual savings of $6,549.40 per worker.  With their 5,500 employees in Jiaozhou City alone, they are saving more than $36 million a year in direct labor costs, not to mention paying little or no taxes in China, and the absence of any independent unions.  One can understand why they fled South Korea.  This massive relocation of factories to China has had a disastrous impact on the South Korean labor movement, which represented 20 percent of the workforce in 1989, but less than 10 percent by 1999.

[Picture: Nike Air Max sneakers. Retail price: $135.]

Twenty to 26 cents an hour; 44 to 66-hour workweek

Sewon managers said they limited the workweek to 49 hours, working just every other Saturday, beyond the standard 8:00 a.m. to 5:30 p.m. shift five days a week.  This would put the workers at the factory 55 hours a week, while being paid for 49 hours.

However, people in the neighborhood, including local vendors, said that the factory was always working 11 to 12-hour shifts, six days a week.  If this were more accurate, then the shift would be from 8:00 a.m. to 7:00 or 8:00 p.m. six days a week.  This would put the workers at the factory 66 to 72 hours a week, while being paid for 60 to 66 hours.

The starting wage making Nike sneakers at the Sewon factory was 360 rmb, or $43.37 U.S. per month, which would amount to $10.01 a week-20 cents an hour, for a 49-hour workweek.

However, Nike and Sewon have a policy to increase wages 30 cents a week every third month, a raise of six tenths of a cent per hour.  This means that a skilled worker, after one year, would earn 450 rmb per month, or $54.22 U.S. to make Nike sneakers.

Sewon/Nike Wage after one year (fully loaded wage, including all incentives, overtime and bonuses)

  • 26 cents an hour
  • $2.31 a day (9-hour day)
  • $12.51 a week (for a 5½-day, 49-hour workweek)
  • 54.22 a month
  • $650.60 a year

When we visited the factory in July 1999, it was over 95 degrees, but the factory had no air conditioning.

People in the community said Sewon never hires anyone over 25 years of age, at which point the workers are fired.  The factories do this to keep their workforce young and energetic, knowing that by 25 years of age, the workers are worn out, used up and exhausted.  And besides, they may want to get pregnant and the companies do not want to have to pay maternity benefits.

There is no union at the Sewon factory and any attempt to organize one would be met with mass firings, arrest and imprisonment without trial.

Nike:  110,000 Workers in China

The best estimate is that Nike contracts with approximately 50 hidden factories in China, employing over 110,000 workers.  Forty percent of Nike's footwear is now made in China.  Nike also has 70,000 workers in Indonesia, who earn 19 to 21 cents an hour, and 45,000 workers in Vietnam, who earn 20 to 23 cents an hour. 

 

 


Nike Clothing Made in China

Hung Wah and Hung Yip Garment Factories
Liuhuzai Industrial Area
Xiajiao, Huizhou City
Guangdong Province, China

The following research on Nike production in China was carried out between November 1999 and April 2000, by the Hong Kong Christian Industrial Committee (CIC), an extremely important independent NGO human rights organization.

  • During the busy season, 15-hour shifts, from 7:30 a.m. to 10:30 p.m., seven days a week; sometimes working all night
  • One day off per month
  • Average wage:  22 cents an hour.  $18.07 for a 7-day, 83.5 hour workweek
  • 12 cent premium for overtime hours
  • 98% women
  • 12 to a dorm room
  • Never heard of Nike Code of Conduct
  • No union

Hung Wah and Hung Yip are Hong Kong-owned dual garment factories, employing 2000 to 2500 workers, 98 percent of whom are young women 16 to 32 years of age, who sew Nike and other brands, sportswear and children's clothing.  Most of the women are migrant workers from Sichuan and Hunan provinces.

[Picture: Nike Factory]

Peak season hours:  At the factory 15 hours a day seven days a week, from 7:30 a.m. to 10:30 p.m.

Monday - Saturday

  • 7:30 a.m. – 11:30 noon
    (11:30 noon – 1 p.m., lunch break)
  • 1:00 p.m. – 5:30 p.m.
    (5:30 p.m. – 6:30 p.m., supper break)
  • 6:30 p.m. – 10:30 p.m. or 8:00 p.m.

Sunday

  • 7:30 a.m. – 11:30 a.m.
    (11:30 a.m. – 1:00 p.m., lunch break)
  • 1:00 p.m. – 5:30 p.m.

The workers are at the factory 15 hours a day Monday through Saturday, while being paid for 12.5 hours.  On Sunday they work a 10-hour shift, while being paid for 8.5 hours.  This puts the women at the factory 100 hours a week, while being paid for 83.5 hours.

The women receive one day off per month, which is payday.  If very large orders come in, sometimes the women are forced to work right through the night.

Wages: 20 to 23 cents an hour; $16.68 to $19.46 for a seven day, 83.5 hour workweek; 12 cent bonus for overtime hours

During the peak season wages range from 600 to 700 rmb per month, or $72.29 US to $84.34 US, and $16.68 to $19.46 for the week.

The average peak season wage would be:  (This includes all overtime hours, bonuses, and overtime)

  • 22 cents an hour
  • $2.58 per day (for a shift of nearly 12 hours)
  • $18.06 a week (for a 7-day, 83.5 hour workweek
  • $78.31 month
  • $939.76 year

Overtime hours are paid at a premium of 12 cents an hour above the standard piece rate.

However, these wages are even lower than they appear since the workers must pay for their own food and are charged 35 rmb per month for their dorm space.  Twelve women share one small dorm room.  Usually the factories deduct these expenses from the worker's wages before they receive their pay.

Working Conditions:  12 workers to a Dorm Room; First Month's Wages illegally withheld; Fined 5½ hour wages for being 5 minutes late; Never heard of Nike's Code of Conduct; No Union.

Management illegally withholds the worker's first month wages, so they only receive their first pay at the end of the second month.  The workers are also charged a 25 rmb deposit for their factory I.D. card, and must pay 90 rmb ($10.84) for their temporary residency and work permits.

The workers have no social security, health, pension, or unemployment insurance, which by law the company is mandated to participate and pay into.

The women are fined 10 rmb, or 5½ hours' wages, for coming five minutes late to the factory.  A worker is fined 5 rmb for failure to wear their factory I.D. card.

No one had heard of any such thing as the Nike Code of Conduct.

The workers had no experience with independent unions, and of course, no union would be allowed at the Hung Wah and Hung Yip factories.

The workers biggest complaints were the lack of any leisure – working seven days a week – their being exhausted, and the very low wages.


Nike, Adidas and Jansport Backpacks Made in China

Keng Tau Handbag Company
Keng Tau Industrial Zone
Panyu Village
Guangdong Province, China

  • During peak season workers are at the factory 14 hours a day, seven days a week, from 8:00 a.m. to 10:00 p.m.; one day off per month; some women report working until 3:00 a.m.
  • Average wages range from 25 to 36 cents an hour, or $19.46 to $22.80 for a 7-day, 77 ½-hour workweek; some wages are as low as 8 cents to 11 cents an hour
  • No overtime premium is paid.
  • Failure to work overtime is punished with fines and a warning letter is posted in the factory.
  • Sixteen workers to a dorm room; two poor quality meals a day
  • Workers instructed not to punch their time cards for night or Sunday work.
  • No union.

The Keng Tau Handbag Company is owned by the Taiwanese firm Glorieux Industrial Ltd.  Keng Tau has three factories located in the Ken Tau Industrial Zone, two of which are functioning while the third factory is under renovation.  One Keng Tau factory was built in 1988 and employs 300 to 400 workers while the second, newer and larger plant was built in 1998 and employs approximately 700 to 800 workers.

[Picture: Adidas bag made in China. Retail price: $39.99.]

These factories produce bags, especially backpacks for Nike, Adidas and Jansport, which are exported to the United States and the United Kingdom.

The workers are mostly women between 18 and 30 years of age, migrant workers from Hunan, Hubei and Sichuan provinces who have come south looking for job opportunities.

Hours

During the peak season workers are at the factory 14 hours a day, seven days a week, from 8:00 a.m. to 10:00 p.m.  Some report working to midnight or even 3:00 a.m.  The workers receive one day off per month.

During peak season the schedule at the new factory is:

Monday through Friday and Sunday:

  • 8:00 a.m. – 12:00 noon
    (12:00 noon – 1:30 p.m. lunch break)
  • 1:30 p.m. – 6:00 p.m.
    (6:00 p.m. – 7:00 p.m. supper break)
  • 7:00 p.m. – 10:00 p.m.

Saturday:                 

  • 8:00 a.m. – 12:00 noon
    (12:00 noon – 1:30 p.m. lunch break)
  • 1:30 p.m. – 6:00 p.m.

So the workers are at the factory 94 hours a week, seven days a week, from 8:00 a.m. to 10:00 p.m. while being paid for 77½ hours.

However, at the older, smaller factory workers report working sometimes until 12:00 midnight or even until 3:00 a.m., which would mean that they could be at the factory for up to 19 hours a day.  If they worked to midnight each night they would be at the factory 106 hours a week, while being paid for 89.5 hours.

Workers receive one day off per month.

Failure to work overtime is punished with a fine of 9 rmb, the equivalent of 3 ½ hours' wages, and loss of the monthly attendance bonus of 40 rmb ($4.82 US), which the workers only receive if they are never late, never miss a day, and work all the extraordinarily long overtime hours.  The worker who misses overtime also receives a warning letter, which is publicly posted in the factory, and the workers name is announced over the loud speaker.

Workers are instructed not to punch their time cards for evening or Sunday work.  So any company records shown to Nike, Adidas or Jansport are fabrications, seriously underreporting the actual number of hours worked.

Workers receive no overtime premium.  No matter how many hours they work, they always receive the same standard piece rate or hourly wage.

Wages

In the new factory wages range from 25 to 36 cents an hour, $19.46 to $27.80 for a 7- day, 77 ½- hour workweek; wages as low as 9 cents an hour have been reported in the old factory, where wages range between 11 and 18 cents an hour.

Workers' wages in the new factory range from $19.46 to $27.80 for a seven day, 77 ½-hour workweek, or from 25 to 36 cents an hour.  These wages include all overtime hours, bonuses and production incentives.

Low Wage  

 High Wage

* 25 cents an hour  

* 36 cents an hour 

* $2.78 a day (for an 11 hour workday) 

* $3.97 a day (for an 11 hour workday) 

* $19.46 a week (for a 7 day, 77 ½-hour week) 

* $27.80 a week (7-day, 77 ½-hour week) 

* $84.34 a month 

* $120.48 a month 

* $1,012.05 a year 

* $1,445.78 a year

However, in the old factory, where the exact same work is done, workers report earning just $8.34 to $13.90 for the same 77 ½-hour, seven day workweek, or 11 cents to 18 cents an hour.  One woman reported working until midnight or 3:00 a.m. every night of the week – working 89 ½  hours – and receiving only $8.34 for the entire week, or just 9 cents an hour.

Average wage in the old factory: (Including all overtime hours, bonuses and production incentives)

  • 14 cents an hour
  • $1.59 a day (for an 11-hour day)
  • $11.12 a week (for a 7-day, 77 ½-hour workweek)
  • $48.19 a month
  • $578.31 a year

Workers are housed 16 to a room; given two poor quality meals a day

Ninety-eight rmb a month, or $11.81 U.S. (which for low wage workers comes to one week's wages) is deducted by the factory from the workers' wages each month in return for dorm accommodations and food.  Workers are housed 16 to a crowded room and fed two poor quality meals a day.  The workers must take care of and pay for their own breakfasts.

Illegal deductions

Upon entering the Keng Tau factories the workers are illegally charged a 60 rmb job deposit and their first month's wages are withheld by the company.  This is done to prevent the workers from looking for better or higher paying jobs, for if they leave before their first year is out, they forfeit both their wages and deposit.

Workers' Chief Grievance

Many of the workers interviewed complained about the long and exhausting forced overtime hours for such low wages.  Especially in the old factory, the turnover rate with workers leaving is quite high.

There is no union at the Keng Tau Handbag factories.

 


Nike, Adidas and Puma Caps Made in China

Tong Ji
Ja Da Qu
Zhuhai
Guangdong Province, China

Average workweek:  57 ½ hours.  Average pay:  27 cents an hour.

Tong Ji is a Taiwanese-owned cap factory employing 500 peasant workers, who range in age from 18 to 25 years old.  They produce Nike, Adidas and Puma caps for export to the United States, Canada and Europe.

In November 1999, the factory was operating on a schedule of 72 ½ hours weekly which means they were working 32 ½ hours overtime each week on top of the regular, legal 40-hour workweek.

However, by March of 2000, overtime had been cut back to 12 ½ to 22 ½ hours a week, with the workweek now ranging between 52 ½ and 62 ½ hours.

[Picture: Containers on their way to the U.S.]

Hours-Peak Season Schedule:
At the factory 12 hours a day, six days a week

Monday-Saturday:

  • 8:00 a.m. -- 11:30 a.m.
    (11:30 a.m. -- 1:30 p.m. lunch break)
  • 1:30 p.m. -- 8:00 p.m.

Workers would be at the factory 12 hours a day, six days-72 hours-a week, and are paid for 62 ½ hours.  The average workweek would be 57 ½ hours, a little less than 10 hours a day.

Wages at Tong Ji Range from $13.90 to $16.68 a week, from 22 to 32 cents an hour

All production wages are paid according to a piece rate system.  The average wage is 550 rmb.--$66.27 a month for a 57 ½-hour workweek.

Average Wage (including all overtime hours, production bonuses and incentives):

  • 27 cents an hour
  • $2.55 a day (for a 9 ½-hour day)
  • $15.29 a week (for a 6-day, 57 ½-hour workweek)
    $66.27 a month
    $795.18 a year

For serious production errors, a worker can be fired and fined 270 rmb ($32.53)-more than two-weeks' wages.  The factory withholds half of the workers' first month's wage.

 


[Picture: Truth in Labeling-Danziger]


Nike, Fila and Agron Caps Made in China

Wei Li Textile Ltd.Nike hat made in China retailing for $16
Number 2 Industrial Area
San Xiang, Chongzhan
Guangdong Province, China
 

Cap factory pays nearly twice the wage of other Nike contractors in China; Average Wage:  564 an hour; No forced overtime; But factory management runs a company union and hires only single young women, 16 to 25 years old.

Wei Li Textile, or the Supercap Factory, is a Taiwanese-owned company with three factories in Chongshan and Zhu Hai employing a total of 6,100 workers.

Wei Li Textile Factory Number 2 produces caps for Nike, Fila, Agron and other labels for export to the United States and Europe.  There are 3,000 workers in the factory, 80 to 90 percent of them young women, 16 to 25 years of age, who are migrants from the rural provinces of Henan, Sichuan, Anhui and Hunan. A recruitment advertisement posted outside of the Wei Li Textiles Factory #2 in March 2000 read:

Because of production needs, we are looking for experienced workers in the computerized stitching and sewing sections.

Requirements:
Gender:
           Female only
Age                17 – 21
Qualifications:  Junior secondary or above
Documents:     Identity card, education certificate, single certificate,
                      health card. No color blind or color disability is a must.
Application:     9:00 a.m. – 10:00 a.m. Monday, Wednesday and Friday

Nice working environment, comprehensive living facility, sufficient orders.  Wages are paid on piece rate.  More work done, more profit.  Welcome to join us! 

 

In November 1999, the computerized stitching section was working daily 12-hour shifts, with every other Sunday off.

The work schedule was:  

  • 8:00 a.m. – 12 noon
    (12 noon – 1:00 p.m. lunch)
  • 1:00 p.m. – 9:00 p.m.

During the peak season, the workers were at the factory 13 hours a day, while being paid for 12 hours.  They were working seven days a week, with every other Sunday off.  On average, they were at the factory 84 ½ hours a week, and were paid for 78 hours.

Working this schedule, the women could earn $27.80 a week-37 cents an hour.

However, by March of 2000, the Wei Li Textiles factory appeared to be working on a five-day, 8-hour a day, 40-hour Monday through Friday schedule.

All production workers are paid according to a piece rate system.  Wages range from $19.46 to $25.02 per week, averaging $22.24 per week, or 56 cents an hour.

Average wage:

  • 56 cents an hour
  • $4.45 a day (8 hour shift)
  • $22.24 a week (5-day, 40-hour workweek)
  • $96.39 per month
  • $1,156.63 per year

The workers are charged 135 rmb a month for dorm accommodations and food, which is deducted from their wages.  Eight workers share one room.  Strict factory regulations require that all dorm lights be shut off before 11 p.m.  Failure to do so will result in a fine.  The workers must pay 70 rmb for their temporary residency permits.

Many workers are not inscribed in Social Security health, pension and unemployment insurance, which leaves them with no safety net whatsoever.

Wei Li Textiles has established a “company union" at the factory, with management choosing the workers' representatives. 

 


RCA TVs Made in China along with Action TVs Sold at Circuit City and Wal-Mart

TV's Retail Price in the U.S. is Marked up 430 Percent!

For years, and now again with renewed vigor, U.S. companies have claimed that their mere presence in China would help open that society to American values. In effect, we are told that U.S. companies operating in China will also be on the front lines, acting as mini-universities of a sort, doing the heavy lifting in inculcating and spreading respect for human, women's and worker rights and democratic freedoms by their own example.

[Picture: Action Tag]

Shenzhen Action Electronics

Zhong Her Industrial Park
Baishizhou Nan Shan District
Shenzhen City
Guangdong Province, China

  • Mostly young women workers, 20 years of age.  However, some of the workers at the Action Electronics plant appear to be as young as 14.
  • Working seven days a week during the busy season, 7:30 a.m. to 9:00 p.m.-or even past midnight.
  • There is a special factory overtime premium of 36 cents an hour for work after midnight.
  • Base wage for assembly workers is 25 cents an hour.  Fully loaded wage is $18.91 for a 7-day, 65-hour workweek, or 29 cents an hour.  However, workers must pay for their own food which lowers their weekly earnings to just $15.57.
  • Ten to 12 people share each small, crowded dorm room.
  • 250 rmb is deducted from the workers' wages for their Temporary Residency Permits.
  • Workers are fined 10 hours pay for mistakes they make on the production line.
  • They are not given a legal work contract.
  • Illegally, they are not inscribed in Social Security health, unemployment and pension program.
  • Workers have never heard of any so-called U.S. Corporate Code of Conduct.
  • No union exists at the factory.  Independent unions are not permitted in China.

Action Electronics is owned by its Taiwanese parent corporation, Hwa Yih.  There are two Action Electronics factories in China, one in Shenzhen and the other in Shanghai.

[Picture: Action/Thomson 5" color TV with radio made in China, retailing for $149 at Circuit City]

The Shenzhen Action Electronics factory is located in the Zhong Her Industrial Park, which houses several medium to small sized electronics, rubber and plastics factories.  The Zhong Her Industrial Park is a joint venture of Taiwanese and Chinese capital.  China's investment is in the land, factories and overall management of the zone, while Taiwan's investment is in the actual manufacturing.

Action Electronics, which began operating in 1993, is the largest factory in the zone, housed in a six-story building that includes the production space, offices and storage.

Action Electronics produces 4-inch, 5-inch and 7-inch mini-TV sets, some including radios, or radios together with CD boomboxes, for RCA (Model RT-7945) which retails for $299.  Mini-TVs carrying Action's own label are sold at Circuit City and Wal-Mart.  The National Labor Committee purchased a 5-inch Action color TV at Circuit City for $149.  Action Electronics exports to the U.S. and to Japan.

RCA tv/stereo made in China
Action Electronics factory

25 cents an hour, 14 to 16-hour shifts, 7 days a week

Total production cost: $47.42
Retail price: $299

RCA's markup: 630% 

There are 500 workers in the factory, mostly young women, split into eight production lines.  The average age of the women is 20 years old, however some as young as 14 are employed there.  The women are migrant workers from Sichuan, Hunan, Hubei and Jiangxi provinces.  The factory actively recruits in the local high schools in these rural areas.

Hours

Working 7 days a week during the peak season, sometimes from 7:30 a.m. to 11:00 p.m. or midnight.

During the slack season, the women generally work a five-day, 45 to 47½-hour workweek.  In the peak season, the women must put in a seven-day workweek, working some days from 7:30 a.m. to 11:00 p.m. or midnight.  During particularly large rush orders there may be mandatory overtime hours required even beyond midnight, which is why the factory has established a special 3 rmb (36 cent) per hour premium for working past midnight.

Peak Season Hours:  Seven-day Workweek:

  • 7:30 to 11:30 a.m.
  • 11:30 a.m. to 12:50 p.m. (lunch break)
  • 12:50 to 5:10 p.m.
  • 5:10 to 6:00 p.m. (supper break)
  • 6:00 to 7:30, 9:00 p.m., 11:00 p.m. or 12 midnight (or later, depending on the size of the order and the shipping deadline.)

If they had to work until midnight, the workers would be at the factory 16½ hours a day.  On average, during the busy season, the women could be at the factory for up to 80½ hours a week, while being paid for 57½ to 65 hours.

Wages

Base wage in the assembly section is 25 cents an hour.  More skilled workers earn 32 cents.

The base wage in the assembly section is 360 rmb per month, $43.37, which comes to $10.01 a week-25 cents an hour for a regular 40-hour workweek.  However, most workers receive a 70 rmb bonus each month ($8.34 for the month, $2.11 a week) if they meet production goals, behave well and do not come late or miss days.

Overtime hours are paid at 30 cents, except when working past midnight, when the premium rate rises to 36 cents.

So during the peak season, if the factory was running on a seven-day, 65-hour week schedule, an assembly worker would earn $81.93 a month, or 29 cents an hour.

Assembly worker's wage:

360 rmb 

$43.37

base wage per month 

70 rmb

$8.43 

production/attendance monthly bonus

250 rmb 

$30.12

for 100 hours of overtime per month at 2.5 rmb per hour 

680 rmb

$81.93 

total per month 


Assembly workers' fully-loaded wage:

  • 29 cents an hour
  • $2.69 a day (for a 9 ¼-hour day)
  • $18.91 a week (for a 7-day, 65-hour workweek)
  • $81.93 a month
  • $983.13 a year


The more skilled workers who make the main body of the TV earn a higher base wage of 32 cents an hour, or $12.79 for a forty-hour workweek.  They also receive a higher attendance and production bonus of 120 rmb, which comes to $14.46 a month, or $3.61 a week.  They earn the same 30-cent an hour overtime premium.

Skilled Workers' fully-loaded wage:

  • 36 cents an hour
  • $3.37 a day (for a 9 ¼-hour day)
  • $23.08 a week (for a 7-day, 65-hour workweek)
  • $100 a month
  • $1,200 a year


However, it appears that the workers have to pay out of pocket for their food, for which the factory charges 120 rmb a month, $14.46 U.S.  This would lower the weekly take-home wage of an assembly worker to $15.30 for a 65-hour workweek, or 24 cents an hour.  A skilled worker's weekly take-home wage would drop to $19.47, or 30 cents an hour.

The workers report that the food they receive at the factory canteen is of poor quality.

Working Conditions-Making RCA and Action TVs

Crowded Dorms

Workers are housed 10 to 12 people to a small, cramped dorm room, with three double bunk beds along each side wall, with only a narrow corridor down the center of the room remaining open.  There is no space for the workers to store their few possessions. 

Strict Factory Rules and Fines

Production errors on the assembly line are punished with a fine of 20 rmb, amounting to the loss of 10 hours wages.  Also, the names of anyone making such production errors are publicized in the factory as a way to pressure and humiliate the young workers.

No Work Contract

The workers are not given written work contracts, which are legally required and which must spell out hours, pay, overtime premiums, days off and other working conditions and obligations.

Workers Not Inscribed in Social Security

Again, this is illegal.  The company by law must inscribe its workers into a Social Security health, unemployment and pension insurance program to which both the company and the workers must contribute.  Without social security coverage, the workers are left with no safety net whatsoever.  There is a very limited factory clinic, but the workers must pay out of their pocket to use it.

Deduction for Residency Permit

250 rmb, $30.12 U.S., is deducted from the workers' wages to pay for their temporary residency permits.

No Code,  No Union

No worker ever heard of any so-called U.S. Corporate Code of Conduct.  There is no union at the factory.  Independent unions are not tolerated in China.

Workers' Main Complaints

The workers were very upset about the low wages they made in the factory, which after all the deductions and paying for basic necessities left them with very little money despite the long hours they worked.  They also complained about the harsh treatment in the factory and in the industrial park, especially from the Chinese personnel managers.

Many of the young women workers said they would like to be able to study English or computer programming at night.  But they have no time to do so given the long overtime hours they must work.  Also, they said, they do not have much energy left when they finally return to their tiny dorm rooms after the day's work.

Tracing a TV Made in China to Circuit City in New York and Finding a 430 Percent Mark-up

Using U.S. Customs Department shipping documents made available in the Piers database, the National Labor Committee was able to trace an Action brand 5-inch mini color TV set (model CAN 5503) made in the Action Electronics Factory in Shenzhen City in southern China to a Circuit City store on 14th Street in New York City.

Two thousand one hundred Action 5-inch color TV sets, shipped from China on an Evergreen Line vessel arrived in Los Angeles on October 26, 1999, where they were declared to have an estimated customs value of $72,904.  Each TV had a customs value of $34.69, which represents the total materials and labor cost to make and ship the product.

The 5-inch Action color TV (Model CAN 5503/Made in China) which the NLC purchased in Circuit City cost $149, which represents a 430 percent mark-up over the total cost to make the TV, including Action Electronics' profit.

The big losers are the assembly workers in China, who are denied their rights and paid just 25 cents an hour to make these sets.

In the global sweatshop economy, the 430 percent mark-ups, a company's huge advertising budget, booming corporate profits, the CEO's enormous salary, all of it rides on a pyramid scheme in which those at the bottom, in the developing world, are stripped of their rights and toil for pennies an hour to funnel money up the pyramid to those at the top.

If the U.S. retailers were willing to give up just a tiny piece of their substantial mark-up, then it would be possible to pass it along to the workers in China, whose wages would then begin to climb to at-least-subsistence levels.


[Picture: China's president welcomes GM with a billboard: "Twenty-first century. Construct modernized plant. Make new century vehicles and develop new century people."]


Finding Spiegel in China

15-hour shifts, seven days a week

Spiegel's first quarter 2000 revenues were up 14 percent, to $714.9 million, with a net profit of $20.2 million.  Catalogue sales make up nearly half of Spiegel's total sales 

Shenzhen City
Guangdong Province, China

The southern China city of Shenzhen is teeming with assembly plants.  Row after row of nondescript concrete five-story buildings house small assembly factories on every floor.

While visiting Shenzhen in late January 2000, we decided to enter one of the buildings to see what the factories looked like inside.  When we reached the third floor, we found the doors wide open, and so we went in.

It was an apparel factory where young women were sewing two-piece women's outfits, a matching white jacket and skirt carrying the “Apart" label, which is owned by Spiegel and sold through their catalogs.

[Picture: Spiegel's "Apart" jacket.]

There was a large hand-written cardboard sign on the wall letting the women know that they would be working until 11:00 p.m. every night that month, seven days a week.  They started work at 8:00 a.m. and if they arrived a minute late, they would be fined two hours' wages.

A middle-aged man approached us.  He explained that he was the manufacturer; these were his clothes, but that this was not his factory.  He was only subcontracting some overflow production here.  His factory, which was much larger, was 60 or 70 kilometers away in Dongguan City.  He also was operating his plant at full capacity, from 8:00 a.m. to 11:00 p.m., seven days a week.

Thinking we were U.S. buyers, he was very anxious to speak.  He said that his total cost for each two-piece outfit was 200 rmb, or $24.10 U.S.-but that included everything: fabric, labor, shipping costs, even the cost of the quota.  He was manufacturing the clothing for a company in Hong Kong which had the Spiegel contract.

For his costs, some overhead and his profit, he tacked on another 100 rmb, or $12.05 U.S., bringing the total cost of the two-piece outfit to 300 rmb, or $36.14.  Presumably that is what he charged the company in Hong Kong.

Questioned about his labor costs, he said his fully-loaded labor cost, including all direct and indirect expenses such as social security benefits, came to 7 rmb, or 84 cents per piece for either the jacket or the skirt.  Given that this Spiegel blazer retails for $99 in the U.S., the fully-loaded labor cost to produce it in China amounts to just 8/10ths of one percent of the price.

When we told him his prices seemed a little steep, he got angry and told us to go further north into China if we wanted cheaper prices.  However, he soon warmed up again and invited us to visit his factory in Dongguan, which we could not do, since it lay outside the area permitted by our visas.

[Picture: Factory where Spiegel was being made.]

 


Labor Activists Imprisioned in China

Some of the 15 to 20-year sentences for attempting to peacefully defend internationally recognized workers rights.

(Partial list prepared by China Labour Bulletin.  Updated as of February 28, 2000.)

Name 

Place & reason for arrest 

Date of detention 

Date of trial/sentence 

Sentence 

Place of Detention 

Additional Information 

Guo Qiqing 

Jinment city, Hubei - disrupting public order 

Aug. 21, 1999 

 

 1 year

Shayang County, Hubei Province 

Guo Qiqing organized a sit-in to demand money owed to the workforce 

Guo Xinmin 

Gansu - subverting the political power of the state 

Jan. 11, 1999 

July 5, 1999 

2 years 

 

Guo set up a newsletter entitled "Workers' Monitor" and also organized workers into taking legal steps to secure unpaid wages from the Tianshui City Transport Company 

Guo Yunqiao 

Hunan - leader of Yueyang City Workers' Autonomous Federation 

June 9, 1989 

Sept. 1, 1989 revised on Sept. 1, 1991 

Death sentence later commuted to life imprisonment on a charge of "hooliganism" 

Hengyang prison (Hunan Provincial No.2) 

He reportedly led a protest march of 10,000 workers to the municipal government offices following the June 4th Tienemen Square massacre. 

He Chaohui 

Hunan - providing information 

Oct. 1998 

Aug. 24, 1999 

10 years for illegally providing itelligence to foreign organizations 

 

He was previously imprisoned for organizing workers' demonstrations and strikes in Chenzhou 

Hu Min 

Hunan - one of the founders of the Yueyang Workers' Autonomous Federation who organized demonstrations and strikes 

June 9, 1989 

 

15 years for "hooliganism" 

Hengyang Prison 

 

Hu Nianyou 

Hunan - Changsha Workers' Autonomous Federation 

June 1, 1989 

 

Minimum of 10 years for "looting" 

Longxi Prison (Hunan Provincial No.6) 

 

Hu Shigen aka Hu Shenglun 

Beijing - FLUC 

May 27, 1992 

July 4, 1994 

20 years for "counter-revolutionary" crimes 

Beijing No.2 Prison 

Seriously ill. Hu has swollen lymph nodes. Born in 1956, formerly an academic at the Beijing Foreign Language Institute. 

Huang Fan 

Hunan - Yueyuang Workers' Autonomous Federation 

June 9, 1989 

Sept. 1, 1989 

7-15 years (exact sentence unknown) for "hooliganism" 

Hengyang Prison 

 

Huang Lixin 

Hunan - Yueyuang Workers' Autonomous Federation 

June 9, 1989 

Sept. 1, 1989

7-15 years (exact sentence unknown) for "hooliganism" 

Hengyang Prison  

 

Kang Yuchun 

Beijing - FLUC 

May 27, 1992 

July 4, 1994 

17 years for "counter-revolutionary" crimes 

Yanqing Jail, Beijing 

Kang is seriously ill with heart problems and has been denied adequate medical treatment. Born in 1965, formerly a doctor in the Department of Psychiatry at Anding Hospital.  Reportedly ill-treated in prison. 

Li Bifeng 

Sichuan - sent reports to overseas human and workers' rights groups about workers' protests in Mianyang City in July 1997 

March 8, 1998 

April 6, 1998 

7 years for “fraud" 

Jiangyou City Detention Centre 

Born in 1964, formerly an officer at Mianyang city tax bureau, southern Sichuan.  Jailed for 5 years in 1989 for participating in the Democracy Movement. 

Li Qingxi 

Shanxi - putting up notices calling for independent unions & contacting overseas labor & democratic organizations 

Jan 16, 1998 

 

1 year Re-education Through Labor 

At his own home, in Shanxi Province 

Former health worker at a clinic attached to the Datong City Coal Mining Administration. 

Li Wangyang 

Hunan – Shaoyang WAF 

June 9, 1989 

 

13 years for “Counter-revolutionary propaganda and incitement"  

Longxi Prison  

Li was the leader of the Shaoyang Workers Autonomous Federation, and was reported in the official press as “founding a completely autonomous workers' organisaton". 

Liu Jingsheng 

Beijing – FLUC 

May 28, 1992 

July 4, 1994 


15 years for “counter-revolutionary crimes" 

Formerly imprisoned at Beijing No.2 prison but present whereabouts unknown 

Seriously ill. Liu has a history of gastric problems, has lost teeth and is suffering from hypertension. Born in 1955, formerly a worker at the Tongyi Chemical Plant. Also detained during the Democracy Wall Movement of the late 1970s. 

Liu Dingkui 

Sichuan - "disrupting social order" 

 

Jan. 20, 1999 

1 1/2 years re-education through labor 

 

Liu, a railroad worker, organized a 500-strong protest on Oct. 21, 1998 to demand unpaid salaries from the state-owned Peijiang Iron and Steel factory in Jiangyou city, Sichuan 

Mao Yuejin 

Hunan - Hunan WAF 

June 9, 1989 

Sept. 1, 1989 

15 years for "hooliganism" 

Hengyang Prison 

 

Pan Qiubao 

Hunan - Hunan WAF  

June 9, 1989  

Sept. 1, 1989 

7-15 years (exact sentence unknown) for "hooliganism" 

Hengyang Prison 

 

Tan Li 

Guangzhou - planning to hold a workers' rally and organizing an independent union: the China Labor Allliance 

Feb. 6, 1998 

 

 

 

Formerly a worker at teh Guangzhou Ocean Shipping Group 

Tu Guangwen 

Jiangxi - organizing a street protest by laid-off workers 

Feb. 9, 1998 

 

3 years re-education through labor "gathering a crowd to disrupt traffic" 

 

 

Wan Yuewang 

Hunan - one of the leaders of the Yueyang WAF 

June 9, 1989 

Sept. 1, 1989 

7-15 years (exact sentence unknown) for "hooliganism" 

Hengyang Prison  

Helped to organize a march in protest at the violent suppression of the 1998 Democracy Movement 

Wang Changhuai 

Hunan - Changsha City WAF 

1989 

 

13 years for "counter-revolutionary propaganda and incitement" 

Yuangjiang Prison 

 

Wang Fengshan 

Gansu - subverting state power 

Jan. 11, 1999 

July 5, 1999 

2 years 

 

Helped Guo Xinmin and Yue Tianxiang publish the newsletter, "China Workers' Monitor" 

Wang Guoqi 

Beijing - Free Labor Union of China 

June 24, 1992 

July 4, 1994 

11 years for “counter-revolutionary crimes"  

Beijing No.2 prison 

Reported by relatives as being seriously ill with scabies, his skin infected from being bitten by mites. Born in 1963 and unemployed at the time of his arrest. Family visits suspended in May 1997 for an unknown length of time as punishment for Wang's failure to memorize prison rules 

Wang Miaogen 

Shanghai - attempting a public protest during East Asian Games 

April 1, 1993 

 

3 years, then forcibly committed to a psychiatric hospital 

Shanghai An Kang Public Security Bureau Hospital 

Born in 1954, formerly a manual worker. Served 2.5 years' re-education through labor for involvement in Shanghai WAF during 1989. 

Wang Zhaobo 

Hunan - one of the leaders of the Yueyang Workers Autonomous Federation 

June 9, 1989 

Sept 1, 1989 

7-15 years (exact sentence unknown) 

Hengyang  Prison (Hunan Provincial No.2) 

Organized strikes and demonstrations 

Xu Wangpin 

Sichuan 

 

Dec. 1998 

3 years for “disturbing social order" 

 

A former factory worker, Xu had previously served 8 years in prison for trying to organize an independent trade union during the 1989 pro-democracy protests. 

Yan Jinhong 

Sichuan 

 

Jan. 20, 1999 

1½  years' Re-education Through Labor for “disrupting social order" 

 

Co-organizer of protest at Peijiang Iron and Steel factory in Jiangyou City - see Liu Dingkui 

Yang Qinheng 

Shanghai - reportedly for reading an open letter on Radio Free Asia on 27 January calling for the right to organize trade unions. 

Late Feb. 1998 

March 27, 1998 

3 years' Re-education Through Labor for “inciting social unrest" 

 

Aged 44, Yang completed 3 years' re-education through labor in 1996. Active in petition campaigns, Yang also called for the reassessment of the official verdict on the 1989 Democracy Movement and the release of political prisoners. 

Yao Guisheng 

Hunan - Changsha Workers Autonomous Federation - helping other WAF members to escape arrest 

June 4, 1989 

 

15 years for “robbery and assault"

Longxi Prison 

While helping others to escape, Yue got into an argument with a taxi driver over the fare. The authorities  used this as a pretext for the “robbery and assault" charge. 

Yuan Shuzhu 

Hunan - Yueyang Workers Autonomous Federation 

June 9, 1989 

Sept. 1, 1989 

7-15 years (exact unknown) for “hooliganism" 

Hengyang Prison 

 

Yue Tianxiang 

Gansu - subverting the political power of the state 


Jan. 11, 1999 

July, 5 1999 

10 years 

 

Yue set up the newsletter Chinese Workers' Monitor. Also organized legal action to force wage arrears payment to laid-off and employed workers from the Tianshui  Auto Transport Co. See Guo Xinmin. 

Zhang Jingsheng 

Hunan  -  helping to organize the Hunan Workers' Autonomous Federation 

 

 

13 years 

Hunan Yuanjing prison No. 1

Zhang was reportedly beaten by prison guards for leading a hunger strike in 1992. 

Zhang Shanguang 

Hunan - passing on “intelligence" to foreign organizations. He filed reports with  foreign radio stations about widespread labor and peasant unrest in his home county of Shupu. 

July 21, 1998 

Dec. 27, 1998 

10 years for supplying intelligence to [organizations] outside China"

 

Zhang's sentence is directly connected to his attempt to set up the Shupu County Association for the Rights of Laid-off  Workers. He is 45 and dangerously ill with tuberculosis. On August 6 1998, he was beaten by members of a police-appointed militia because he allegedly failed to respond to questions. 

Zhao Changqing 

Shaanxi - for trying to stand for election as a factory representative to the National People Congress. 

March 25, 1998 

Sept. 6, 1998 

3 years

 

Zhao, 28, was formerly a worker at the Shaanxi Hanzhong Nuclear Industry Factory 813.  His election manifesto criticized  the All China Federation of Trade Unions for failing to defend workers' interests. Spent 6 months in jail in 1989 for involvement in the pro-democracy movement.  

 


Rhetoric versus Reality

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.

[Picture]

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:

A quart of milk  

$0.82 

over 2 ½ hours wages 

A liter of orange juice  

$1.45  

five hours' wages 

A “Big Mac" with fries and a Coke 

$1.93 

6 ½ hours' wages 

A movie 

$1.81  

over 6 hours' wages 

A pair of Nike sneakers  

$81.93  

nearly 5 ½ weeks' wages 

Men's new shoes 

$24.10  

80 hours' wages 

One man's t-shirt   

$ 2.41  

7 hours' wages 

A cheap, plain woman's 2-piece outfit  

$12.05 

more than 40 hours' wages 


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:
Gender:            Female only
Age:                 17 – 21
Qualifications:   Junior secondary or above
Documents:       Identity card, education certificate, single certificate, health card. No color blind or color disability is a must.
Application:       9:00 a.m. – 10:00 a.m. Monday, Wednesday and Friday

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
                      2.) Age 18-25
                      3.) Healthy

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.

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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.

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