Chinese workers lose more than jobs
By Ivan Franceschini

SHENZHEN - "Has your boss run away without paying your arrears? Have you been fired? Has your salary been cut? With the necessary knowledge and by protecting our rights, we can overcome this crisis." So runs a leaflet being distributed amongst the thousands of migrant workers in the Longgang district of Shenzhen, the district at Hong Kong's back door that has become an epicenter for the China's remarkable industrial growth over the past two decades or so.

There are more questions, followed by brief explanations: what to do if your salary is not timely paid; if the factory interrupts its activities or calls for a long vacation; if your employer decides to cut its workforce; if someone forces you to resign; if the factory is being tranferred.

The answers include long quotations from Chinese labor laws, explained to common workers in plain and clear language. At the end, a box highlights the phone number of the leaflet's creator - the Centre for Workers' Health and Safety, a civil society organization founded by Huang Qingnan, a former migrant worker who had his face disfigured by acid thrown by a jealous colleague back in 1999.

Millions of migrant workers who have helped make the Pearl River Delta province of Guangdong and its district of Shenzhen the world's factory are now trying hard to weather the collapse in exports and save their very shaky jobs.

"After the beginning of the financial storm, protecting workers' rights has become harder; now even doing our job is much more difficult," Yu Huimin, a collaborator of Huang Qingnan, said over a cup of tea. The collapse in world trade that has come in the wake of the global financial crisis has forced numerous factories to close. At many of those that have stayed in business, labor standards have worsened.

Li, a young migrant worker from Henan province, to the north, said: "Before, it was easy for me to find a job with a salary of 1,260 yuan [US$180] including free board and lodging; now at most they offer me a base salary of 800 yuan."

Last June, the electronic components factory where she worked for over six years went bankrupt, leaving hundreds unemployed. In a few days, Li was able to find a new position, but after six months her new workplace was closed and production was moved elsewhere. Li, in her mid-30s and and a mother of two young children, is full of vitality but is now facing a struggle to find work in a world where 30 means that you are already old.

"Laoban [the bosses] only wants girls younger than 25 and even if you have a high school diploma they don't want you. How can I compete with them?"

In the delta area, the vexing problem for many is that salaries have dramatically dropped. From 2006 to 2008, the average wage of Shenzhen's workers rose more than 30%, from 2,451 to 3,233 yuan per month. Wages are now being cut by up to 20% - a move that hurts workers while doing little to help the companies imposing the cuts, according to labor activists.

"Salaries count as a minimal part of the production costs of an enterprise," said Yu Huimin. "It's absolutely meaningless to harm workers' interests in order to protect the company, firstly because this is not so useful, and secondly because workers already have a difficult life and an increase of pressure on them is just another possible cause of [social] instability."

As many as 20 million migrant workers, about 15% of the total 130 million migrants to the coastal cities, could lose their jobs this year, according to official estimates - figures that some people claim vastly misrepresents what is happening.

Liu Kaiming, who heads the Institute of Contemporary Observation, a Shenzhen-based civil society organization, said: "This is just an estimate." According to Liu, about 20 millions workers in the manufacturing industries of the coastal areas returned home for the spring holiday.

"On top of this, we should add about 16 millions workers in the building industry and an unspecified number of workers in the services and in other industries, amounting to a total of somewhere between 36 and 40 million workers.

"Every one of them will come back to the cities looking for a job. I think that even though workers in the building industry won't have particular difficulty finding new jobs, thanks to big projects started by the government, it won't be the same for the workers in the manufacturing and services industries. The 20 million might well be just the people unable to find a new job."

Zhang Quanshou understands very well the impact of this economic crisis on Chinese migrant workers. His name-card states in red letters "National People's Congress Representative", a position that he obtained in 2008. Zhang arrived in Shenzhen from Henan as a common migrant worker in the 1990s, and made a living by finding jobs for his fellow villagers in cities like Shenzhen. In 2000, he founded a company mediating between migrant workers and factories; he takes a percentage of the earnings of every person he helps.

Zhang receives his guests guarded by large uniformed bodyguards in a luxurious office in a working class neighborhood of Pinghu town, north of Shenzhen. On one wall are dozens of plaques with prizes, honors and titles from government bodies; on the other walls are photos of him with the high-ranking officers. Before the crisis, about 12,000 workers were passing through his company annually - and he had aimed to to double that number this year. Then, last July, factories were no longer wanting "his" workers and in some cases sent back people already hired. Moreover, workers no longer beseiged his office. After the Spring Festival at the start of February, there were just 5,000 new arrivals, half the number of the previous year. Many migrants decided to stay at home waiting for news of whether their factories would still open after the holiday.

According to Zhang, employers in the area prefer to hire young women between the ages of 16 and 23, because they are more disciplined and hard-working than their male counterparts. Even then, because of the present uncertainty regarding future orders, he can now only sign labor contracts of no more than three months, compared with one year contracts agreed to previously. Wages, however, have remained substantially unchanged, he said.

Zhang is optimistic that the present dire straits will not last. "In late spring there will surely be new jobs, otherwise the whole world will go wrong", he said.

The financial crisis hit Chinese workers just when hopes of raising labor standards were at their peak. In 2008, three new laws on issues fundamental for workers, such as labor disputes and labor contracts, came into force. The financial crisis has cast a shadow on all those improvements.

Hua Haifeng, an activist of the Chunfeng Service Center for Labour Disputes, a civil society organization providing free legal advice to migrant workers in Shenzhen's Bao'an district, said the first months of 2008 saw a steep rise in the number of workers who, reassured by the new legislation, had decided to sue their employers. Since the end of last summer, there has been an abrupt shift in this trend.

The number of consultation requests to the Chunfeng Service Center peaked in April 2008 at 90 cases, dropping by October to only 14 seeking redress with free legal counsel or with improvised "civil representatives" (gongmin daili) who, without any qualifications, promises miracles for little money.

Beyond individual cases are many larger labor disputes. Early this year, one involved a DeCoro, a furniture company originally from Italy. The company, a leader in sofa manufacturing, started off more than a decade ago by paying above-average salaries. Recently a string of incidents and labor disputes have tainted the company reputation. According to Xu Shilong, a lawyer contacted by many DeCoro workers, 1,784 employees decided in March 2008 to secure legal counsel to claim overtime pay. After that, disputes surged as the company turned down a growing number of requests grounded on the new labor laws.

Since last January, the DeCoro disputes have attracted the attention of the Chinese media, whose reports state that because of a collapse of orders from the US the company has since October faced serious financial problems and 2,239 employees were left without pay in November and December. The Shenzhen government tried to mediate, the workers went on strike and, on January 15, chief executive Luca Ricci fled the country with all his foreign staff, leaving Chinese authorities to deal with the enraged workers.

"I would have never imagined it, nobody thought that our boss was such a person," said Chun, a 30-year-old worker who worked in DeCoro's administration department for eight years. "Many workers still think that he's going to come back - I have also dreamt that he'll come back very soon. Now Chun, her husband, also a former DeCoro employee, are at home without a job, with their two-year-old daughter. The local government, facing 2,000 enraged workers, paid part of the pay arrears, handing over almost 11 million yuan. "A case like this is very representative of what is going on these days", commented lawyer Xu Shilong.

The official concern over social instability is tangible. On February 17, the All-China Federation of Trade Unions, China's only official trade union, with over 200 million members, issued a warning. Its vice president, Sun Chunlan, said: "In the present situation it's necessary to be on guard against hostile forces inside and outside the country ready to take advantage of the difficulties experienced by some enterprises in order to infiltrate migrant workers and cause damages".

To forestall worker dissatisfaction building into large anti-government demonstrations, the government in Bejing is trying to extend more welfare benefits to migrant workers. In the past few months, the media have been carrying news of new benefits for unemployed migrant workers hastily passed by local governments, of new regulations that would form the basis for a national unified pension system, and of huge re-employment projects launched by the provincial governments - all against the backdrop of the forthcoming passage of China's first Social Security Law.

The aim is a swift reform to give migrant workers the possibility of sharing the benefits of China's fledgling welfare system. Even today, living in a great city in China without permanent local residence (hukou) is the root of many problems. People without local hukou are not entitled to state assistance. They have no free medical assistance, they have to pay higher school fees for their children, and in case of occupational problems they cannot receive benefits, and so on.

A clearer picture of the prospects facing Chun and other workers like her will emerge towards the end of this month, when Chinese companies look forward to receiving their next round of overseas orders. For now, in the cities and in the countryside, if factories and in the halls of power, it is a period of anxious waiting.