Realizing Their Rights- Growth of Chinese Worker Power

Lately, we’ve been inundated with news about factories all around China and their striking workers. I have found three sources from three different countries. These are The New York Times from the US, The Financial Times from the UK, and The Globe and Mail from Canada.  Excerpted below are portions of articles that are compelling–

For almost two decades very rapid economic growth has been possible partly because of the mass migration of young people from rural areas to the towns driving urbanization and industrialization. But this spring of youth escaping rural drudgery is drying up. The Honda strikers, like the Foxconn suicides, are mostly in their 20s. There is an instinctive realization among them that there is a diminishing number of youths to follow their migrant footsteps. – “China’s Dwindling Resource,” Phillip Bowring

Unlike the first wave of migrants who came to the cities in the 1980s and 1990s, the current batch has more options and higher aspirations. Many are not content to save money for a few years before returning home. They want to settle in the booming cities. That means they need higher wages. If they can’t get them, there are opportunities at home. –Change is finally afoot for China’s workers,” David Pilling

“Workers’ bargaining power is rising as the labour market tightens,” Patrick Lawrence of research firm GaveKal- Dragonomics wrote in a recent report to clients highlighting inflationary pressures in the Chinese economy. The wage increases “remind us that labour tensions are set to become a much bigger issue over the next few years as workers fight for larger paycheques and improved working conditions,” Mr. Lawrence added. –China’s low-cost workers have richer days ahead,” Andy Hoffman

This is a great step forward (not to be confused with a leap) for the Chinese worker. They are not satisfied with what they got before—the workers now want more. With fewer workers in the labor pool, the workers are in a better position to bargain for better working conditions and higher wages. The outlook seems fair enough where workers in China can hope for higher pay and better rights.

To Hem or to Haw – Is Ethical Labeling Necessary?

In “Fair Trade Goods from Danger Zones: Is the Label Necessary?” Leon Kaye refers specifically to olive growers in conflict-ridden Palestine as a group who would benefit greatly from the foreign purchase of their goods.  As it turns out, there are SA8000 certified olive farms in Palestine; and Zaytoun, a community interest company, was the first in the olive oil industry to receive the Fairtrade Foundation mark.  However, small farmers in other conflict areas may not be able to afford to be certified, or just may not know about the benefits.

“These goods may not always sport a trendy feel-good “fair trade” label, but their purchase allows the Diaspora to help their homeland financially.” – Kaye

Now I’m not saying that everyone should go out and switch from Italian olive oil to Palestinian olive oil, but I am saying that consumers should take their time when shopping at the supermarket and pay attention to information like the product’s country of origin.  Labels and certifications are helpful in steering consumers in the right direction, but if people are well-informed about what is going on in the world, their own knowledge should be sufficient to purchase a good based on its country of origin.

When I go to the supermarket from now on, I plan to buy at least some of my food from places that, to the best of my knowledge, will benefit the most.  Perhaps I will choose to buy apples grown in upstate New York, or dried fruit from Uganda, or even olive oil made in Palestine.  Either way, I can make a difference by being a more conscious-consumer.

As Kaye put it: Is “hemming and hawing” over whether or not goods from troubled, conflicted countries have the fair trade label really worth the angst?  I guess that’s up to each one of us to decide for ourselves.

A Need for Clear Ethical Labeling

In Toby Webb’s blog about ethical labeling, he highlights the challenge for consumers to purchase the right products because of unclear labeling–

“The findings are that people find the labels confusing, but overwhelmingly want to do the right thing when it comes to ethical product buying”.

The existence of consumer demand for ethical products, supported by Harvard professor Michael Hiscox’s research, should give incentive to companies to be responsible and to clearly display their ethical certification.

Despite the fact that demand for ethical products exists, some responsible companies have existed for a number of years, but have experienced, until recently, little recognition. There is therefore a need for an easily understood and credible diffusion of information to distinguish the companies that respect their workers and the environment from those that do not.

Professor Hiscox’s ethical labeling research: http://www.people.fas.harvard.edu/~hiscox/papers.html

Verifying CSR – GRI’s Survey on Corporate Reporting

Verification and transparency have become key buzz words in the CSR world. Many CSR programs have been challenged by the question of how to verify and show transparency in respect of the standards or ethical code that the corporation is attempting to implement. Reporting initiatives have emerged as practical tools for verification and transparency. The Global Reporting Initiative has become a leader in reporting due to its framework and guidelines for sustainability reporting.

This past May, the Global Reporting Initiative held the Global Conference on Sustainability and Transparency in Amsterdam. World leaders and practitioners of sustainability gathered to focus on how to push the GRI’s framework and guidelines forward and make it a more transparent and beneficial tool.  During the conference, a survey was conducted addressing questions of purpose, trustworthiness, effectiveness and transparency of corporate reporting.  The conclusions of the survey showed that the purpose of reporting was to account for sustainable practices, as opposed to “improving internal processes”.

While reporting has become a means of guaranteeing transparency, another layer of verification has also appeared. Accreditation has emerged as another supportive tool for certification of labor and environmental standards, as well as codes of conduct. Standards, including SA8000 use accreditation organizations such as SAAS for oversight and certification practices.  Accredited certifications could also be applied to reporting as an oversight mechanism to communicate that what is being reported is accurate and in compliance with reporting guidelines and framework. This would help to verify the reporting systems and add more pressure for accuracy. By establishing verification systems using accreditation and reporting, CSR programs can be pushed into ensuring compliance.

GRI Survey- http://www.amsterdamgriconference.org/index.php?id=39&item=35

Chinese Foxconn and Foxconnic China

Scandals spread faster than advertisements. Lying on the lower end of the value chain, Foxconn could not have otherwise caught so much attention from the international media. But despite highly concentrated media accusations against Foxconn, the rate of suicide within the company, 20-30 per million workers, is still lower than the national average of 140 per million people. Comparing internationally, the suicide rate of Japan during its economic takeoff was around 250 per million and that of South Korea 260 per million.

This is not so much intended to excuse Foxconn from its scandal, but to draw attention to its broader background and implication. Workers’ salaries and working conditions are undoubtedly one important side of the story, but it is also necessary to reckon with the other side, that is, the need for an apparatus to ease workers’ adaptation to the lifestyle as workers of the manufacturing sector.

The manufacturing and assembly sector is often the least profitable, most polluting and most exploitative part of the value chain, and is increasingly outsourced to emerging economies. Standardized manufacturing makes precision the chief concern of management. The Toyota Model, one of the most successful models of management of high-quality manufacturing, consists of the breaking down of the production line into infinitely small steps each performed by ultra-specialized workers. In other words, the unbearably repetitive nature of Foxconn workers stems not so much from Foxconn’s mistreatment of its employees, but from the nature of high-quality manufacturing management.

The nature of the job may be particularly shocking to Chinese workers. Besides being an industrial worker, each Chinese worker is also an owner and manager of a plot of land in the countryside. Traditionally working as mini-familial entrepreneurs taking charge of all of purchasing, production and marketing, the switch to repetitive manufacturing tasks, though materially beneficial, is in no sense a realization of their full potential. Furthermore, most export factories hire an either predominantly male or predominantly female workforce according to the nature of the job, making it difficult for workers to bring their families near the working site. The living cost in urban areas is too high for low wage immigrant workers to support their families. Coupled with an acute lack of public investment or inter-provincial governmental coordination, making cheap and quality education, social security and health service unaffordable or unavailable to immigrant workers and their family members, a typical worker in the export sector leaves his or her parents, children and spouse back in the countryside. Isolated from their traditional social network, immigrant workers can hardly find a channel to vent or relieve their pressure.

Here the significance of freedom of association comes in. Formal and informal workers’ organizations, which may range from unions and guilds to mahjong friends, are intended not only to struggle for workers’ rights but also to help them establish a new social network to replace the traditional one. To transform the workplace from one where workers do not know each other to one where they are friends of each other has to be in the agenda of union leaders. Ultimately, China has to do away with the strange phenomenon of “immigrant workers,” both through more equitable cross-regional economic development and through public investment in the more developed provinces to fully integrate workers and their families into the community they work in. In the short run, nevertheless, workers’ associations may have to shoulder the responsibility.

Relevant links:

NYT: After Suicides, Scrutiny of China’s Grim Factories

BBC news: Foxconn suicides: ‘Workers feel quite lonely’