China’s Workers Find Their Voice
In 2010, China’s workers found their voice. Emboldened by the country’s new labor law, encouraged by China’s continued economic progress, and frustrated that they are not sharing enough in the wealth being created, workers have found new ways to demonstrate their dissatisfaction.
Ten workers at Foxconn’s giant factory in Shenzhen expressed their discontent in the most desperate way possible—they committed suicide. In my 15 years in China, I’ve never seen anything like this. Foxconn’s response was to throw money at the problem. The company doubled the wages of its workers.
Other workers simply went on strike. Managers at Honda, Toyota, Carlsberg and a Brother sewing machine plant, among others, have all had to deal with striking workers in recent weeks The result—higher wages, which in the case of Honda, amounted to a double digit increase of 24 percent.
Even without resorting to strikes, workers at Yum! Brands units in China managed to get wage increases. After a six-month negotiation, KFC signed its first collective contract on the Chinese mainland last week with its employees in Shenyang, the capital of Liaoning province. According to the contract, more than 2,000 workers at the 66 KFC and Pizza Hut outlets, under Yum! Brands in Shenyang, will get a minimum monthly wage of 900 yuan ($132), up from 700 yuan ($103) .
Finally, at least nine Chinese provinces and cities will raise minimum wages, beginning July 1, by as much as a third after Premier Wen Jiabao called for measures to head off growing worker unrest. Beijing is increasing the lowest monthly salary employers may pay to 960 yuan ($142), up from 800 yuan ($118). Henan, the nation’s most populous province with almost 100 million residents, is raising its minimum wage by 33 percent to 600 yuan ($88), the local government said on its Web site.
What does all this mean? The editors at the wall Street Journal were wondering the same thing and asked me to write an op-ed on the subject. My editorial, Managing Rising Wages in China, appeared in Monday’s edition of the paper.