An inevitable consequence of a country‘s economic development is that its workforce comes to expect more. More schooling, better jobs, more money. That’s what happened in the United States and Japan in the last century, and now it‘s happening in China, which has seen a series of labor strikes at Honda Motor Co. factories and a spate of suicides at the electronic components plants belonging to Foxconn Technology Group. Younger, better-educated factory workers with aspirations to join China’s urban middle class want higher wages and more humane working conditions. Honda‘s problems may or may not be over now that a third walkout at one of its parts factories has ended, but more strikes are to be expected in the country’s vast manufacturing sector as workers continue pressing for change.

Labor unrest presents a dilemma for the communist government, which has vowed to address a growing gap between rich and poor but fears rising wages will threaten the foreign investment that has created jobs and served as the engine of economic growth. The ruling party preaches social harmony and wants to be seen as responsive to its people. Moreover, higher wages stimulate internal demand for the cars, electronics and other goods that are made in China, and help reduce dependence on exports — a government goal since orders fell dramatically with the collapse of the international economy. Yet officials fear that pay hikes will undercut China‘s competitive advantage, prompting companies to move their production to lower-paying countries such as Vietnam

The official All China Federation of Trade Unions has been complaining that workers are losing ground in the new economy, with labor’s share of gross domestic product having peaked at 56.5 percent in 1983 and fallen to 36.7 percent by 2005. The federation has been passive, however, sitting on the sidelines of the recent labor actions as workers in the plants have organized walkouts and negotiated their own pay raises directly with management.

It is unclear whether the government actively supports the strikes, but it hasn‘t suppressed them, and the tightly controlled Chinese press is doggedly reporting on the unrest. A reporter for the English-language China Daily even worked undercover at the Taiwanese-owned Foxconn, assembler of iPods and iPhones, among other things, where 10 workers committed suicide and three more tried before the company nearly doubled wages for many to about $300 a month. In a column this month, he described “a machinery that relies on people like us sacrificing our health for a rise in economic numbers” and a production line “that reduces its staff to an absolute decimal point.”

So far, the strikes have been resolved relatively peacefully, and it is our hope that the Chinese government will continue to allow workers to exercise their fundamental rights to protest and strike. International corporations, meanwhile, should reexamine the working conditions and wages of their employees, who only seem to be asking for a fair share of China’s ample economic pie. Corporations may see added costs to paying higher wages, but they also stand to benefit from the growing buying power of Chinese consumers.



Los Angeles Times, June 16