Linked Arms, idle machines. This scenario seems to have returned with more force this year to China, where the reduction in economic growth is already evident. Two strikes drew the attention of the media around the world, deserving subjects featured in Bloomberg and Financial Times websites at least.
Strike at Wal-Mart
The first, in the Wal-Mart store at Changde, which was closing its doors due to the restructuring plan of the company in the country. What caught the attention of the media in this case was the action of a union leader, belonging to the only legal labor federation in the country – the All-China Federation of Trade Unions (ACFTU) – and completely controlled by the Communist Party of China, the party that is still called a “Communist” one and that governs the country. Huang Xingguo, 42, was elected leader of the local chapter of the Federation by his fellows, a few years after an agreement with Wal-Mart allowed the legalization of union activity in the company.
The unusual of this event is that Huang organized the workers to try to prevent the closure of the store and the dismissal of 135 employees, an absolutely rare action among Chinese union leaders. The strikes there are always run by committees of workers elected in each mobilization, who are invariably dismissed, and in many cases sent to prison, for their role in the strike. Huang himself received the “visit” of representatives of the CPC’s Politics and Law Committee – the agency responsible for the country’s judicial system – to warn him that he could fight for the rights of his fellow workers only as long as he did so “legally” and that he could not “politicize” the issue. By illegal actions it’s included any street demonstrations outside the gates of the company, and any kind of resistance to “the authorities”. Nevertheless, Huang and 70 employees continue to meet daily in front of the Wal-Mart closed shop waiting for the verdict of a lawsuit against the multinational.
Yue Yuen Industrial strike
The other strike involved the largest sports shoes manufacturer in the world, Yue Yuen Industrial, owned by the Pou Chen Group, based in Taiwan, employing 200 thousand workers in China. The Yue Yuen supplies Adidas, Nike, Puma, Crocs, Timberland and many other sports brands. Adidas is the official supplier and prime sponsor of the FIFA World Cup in Brazil. In this case, the ACFTU “played in opposite team” and only acted to force workers to accept an agreement considered unsatisfactory for them. The strike had increased adhesion over the days, reaching 40,000 strikers. On the first day, April 14, the workers marched to the city of Dongguan – considered an illegal action – being repressed by the K9 police and riot troops, causing several injuries and arrests. Since then they continued to strike inside the factory gates.
Dissatisfaction spread like wildfire after a Yue Yuen retiree went to the bank to withdraw some of his benefits and found out that the amount available was too low. The company had been systematically underpaying workers’ mandatory social insurance benefits to offset some of the decline in its profit margin of 5.2 percent in 2013 from 9.5 percent four years earlier.
Other factors led to one of the biggest strikes in China in recent years. Low wages was one of them. The minimum wage for a worker on the production line is 1,130 yuan, not enough to cover the 1,469 yuan retail price for a pair of Nike running shoes.
Claims, according to the U.S. based NGO CLW (China Labor Watch) were:
1. Opening of accounts related to the payment of social insurance;
2. Provide social insurance and backpay to all according to law;
3. If the Yue Yuen does not provide social insurance backpay, workers should be allowed to end of their labor contracts and receive monetary compensation;
4. Free accommodation and meals to everyone who had these benefits stipulated in their contracts.
A few days later the ACFTU and various ministries went into action to end the strike. The Bureau of Social Insurance said the unpaid social insurance was actually due (which was not news to anyone) and Yue Yuen Industrial issued a statement, obviously in accordance with the ACFTU, stating that it would pay the overdue installments of social insurance, since that workers pay their part (!) and those who did not to return to work within 3 days from April 24, the company reserved the right to fire workers for absence from work.
Despite this, the facility number three, with 15,000 employees, continued on strike, as well as internal strikes in other plants, preventing an accurate assessment of the number of strikers. The strike ended with the acceptance, reluctantly, of the agreement, but lawsuits have been filed against the company, which was forced to shell out about US$ 31 million to pay social insurance and had an estimated US$ 58 million loss caused by strike action.
However, many other strikes occurred in the country. According to an unofficial survey of the organization CLB (China Labour Bulletin) based in Hong Kong, there was more than one strike per day from mid-2011 until the end of 2013. Certainly the official figures are much higher, but not provided by the government. But in 2014 this average rose to 2.2 strikes per day in the first four months. According to the organization, there was a 31% increase in strikes in the first quarter of 2014 compared to the same period last year.
Manufacturing industries account for 35% of the strikes in the first quarter of 2014, while the transport sector for 26%, mainly taxi drivers. The strikes in the public service have been increasing, with 15 strikes of teachers and 13 of health workers. Strikes in the health sector reflect a global problem – its precariousness and privatization. Their demands are the same; reduction of working hours, pay rise, end of chiefs harassment and increasing tendency to turn healthcare into a commodity.
According to a lawyer of foreign companies in China, Dan Harris, “this is not a blip, it’s going to continue and get worse.” And a company manager, showing what he thinks of the workers struggle, said: “The government has to do certain things [to manage conflicts and strikes] so we don’t fall back into the Stone Age.”
On the other hand, Lin Dong, a union activist, has another point of view. “There is a saying in my country,” he says, “The government doesn’t help the people fix their problems. They fix the people who point out the problems, instead.”
Some strikes that had more impact were: At IBM, when it announced a deal worth U.S. $ 2.3 billion in the sale of its subsidiary to Lenovo, its more than thousand employees went on strike in March demanding higher compensation than offered.
Also in March, one thousand workers at a Samsung supplier, Shanmukang in Dongguan went on strike against wage cuts and managed to reverse it, and achieved an increase in overtime rates and monthly subsidies.
Last year, a seven months strike at Cooper Tire & Rubber – an American tire company – prevented its sale to an Indian corporation. The strike cost was estimated in US$ 70 million and the company failed to receive $ 2.5 billion from the sale.
The migrants situation is the root of strikes
The state owned enterprises workers remain in the rearguard of the struggles in China, although some sectors of the public service are raising up. In the undisputed forefront are the migrants since 2007, when the strikes were concentrated in the province of Guangdong, southern China.
Since then, their economic situation had no significant change, but its firepower increased, mainly by the experience gained in these years and by social and demographic factors.
There are officially 269 million migrants in China, but due to the aging population and low birth rate, today there are 35 million less potential workers between 15 and 39 years than 5 years ago. This leads, beside the demand for more skilled workers, to labor shortage, encouraging workers to fight.
Their struggle achieved “double digits” increase in wages in recent years. Their average wage was 13.9% up in 2013 over the previous year. However, the prices of basic goods increased at a faster rate, canceling out any gains made. According to the National Bureau of Statistics, per capita living expenses increased by 21.7 percent in 2013. Housing increased by 27 percent and accounts for half the cost of total living expenses for migrant workers.
Statistics also show that the vast majority of migrants do not have any form of social insurance. In 2013, only 15.7% had social insurance, 17.6% had health insurance, 9.1% had unemployment insurance and only 6.6% of women had maternity insurance.
This shows, first, that the proclaimed advantages of capitalism controlled by an iron fist “communist” government capable of ensuring “social peace” to the exploitation of workers do not exist. What reigns in China is the most complete anarchy in production and the existence of the “law of the market” in labor relations. The big “advantage” for the capitalists is the existence of a dictatorship that represses any workers’ mobilization in the name of “stability”, ie, to keep themselves in power.
Secondly, it shows that capitalism in China is not able to resolve the situation of penury of the working class, especially the most exploited sector – the migrants – as the country’s economic growth is based on their exploitation. Only the independent organization of the working class, with the destruction of this bourgeois abscess within the working class – the All-China Federation of Trade Unions – and the construction of free trade unions independent from the government and employers will be able to lead a struggle for better living conditions.