Quartz: The company that made your iPhone is reluctantly bringing democracy to Chinese labor

China Labour Bulletin is quoted in the following article. Copyright remains with the original publisher.

By Lily Kuo

23 September 2014

In late June, a 25-year-old assembly line worker at Foxconn Technology Group’s largest factory, in Shenzhen, noticed a post on the Weixin account of the Foxconn Trade Union promoting upcoming elections for union representatives. The worker, who asked only to be identified by the surname Wang, had been reading about the law and workers’ rights over the past year and thought that if he won, he could help negotiate for things like higher wages, more time off, and longer bathroom breaks.

He signed up at the union office, prepared a speech, and waited for a phone call that never came. The election was over by the end of August. Wang didn’t run; he didn’t even vote.

“I asked this department and that department what was going on with the election, but no one knew. There was no form of participation. I didn’t participate at all,” Wang, a bookish high school graduate from central China, told Quartz in September. “In the end, they did not complete this democratic election at all.”

In “Foxconn City”—another name for the 850-acre (344-hectare) campus of factories, dormitories, grocery stores, banks, and cafes, with its own radio and television stations and fire brigade—China’s growing, and in many ways struggling, labor movement is on full display. Here, where over 200,000 factory workers build electronics like iPhones, iPads, Kindles, Microsoft Xbox consoles and other devices, the company is openly encouraging people to participate in trade unions and junior employees to stand for election. It’s an approach that more factories in China are taking to keep an increasingly scarce, highly valuable manufacturing workforce happy.

But dig a little deeper, and the “workers’ rights” movement at Foxconn starts to look more like a facade. Quartz spoke to factory workers, labor organizers, and researchers about how Foxconn’s management and the Chinese government are trying to make workers happier. Foxconn declined to be interviewed for this article. Here is what we found.

The workers are gaining leverage

Chinese workers, no longer content to just send what little money they make back to their poorer hometowns, want for themselves are demanding higher wages, pensions they are owed, and protesting factory closures.

Right now, they have more leverage to make demands. A labor shortage, rising awareness of workers’ rights and ways to protest, as well as pressure on local governments to alleviate a country-wide economic slowdown, have given workers possibly the most power they have had since the Chinese communist party swept into power 65 years ago on the back of a revolution that promised to make life better for China’s farmers and workers.

“Unlike the earlier generation of migrant workers who struggled just to survive, this newer generation wants to earn enough to buy smart phones, computers, and a nice apartment and give their children opportunities they did not have. They have a strong sense of self-worth and they demand respect,” Katie Quan, a labor specialist at the University of California at Berkeley, wrote last year.

As a result, wildcat strikes (those not organized by a union) have surged in China over the past few years, hitting multinational firms from Foxconn to IBM, Honda, Cooper Tire and Rubber, Walmart, and Microsoft. Most recently, thousands of truck drivers in the eastern city of Ningbo went on strike, disrupting the world’s sixth busiest port. The first four months of this year saw at least 202 wildcat strikes, an increase of 31% from the same period last year, according to the Hong Kong-based non-profit China Labour Bulletin (CLB). Most of these strikes are in the manufacturing sector.

Chinese workers stage these strikes strike so often because they have few other ways to negotiate with their employers. Although collective bargaining has been legal since the 1990s, all unions are under the country’s state-controlled All-China Federation of Trade Unions (ACFTU)—the world’s largest trade union group in terms of members, 239 million (link in Chinese). Usually stacked with employees hand-picked by management, these ACFTU unions’ main remit is to keep business going as usual, negotiating with factory owners and plant managers and often ignoring workers.

“The union in China is fundamentally different from unions in the West… The union has made it clear that its goal is to work with employers, not promote confrontation,” a Walmart official explained after Walmart, famously opposed to working with unions, agreed to allow organized labor groups at its Chinese operations in 2006. In 2010, a local union in Nanhai, in the southern Guangdong province, sent vans of “strikebreakers” who scuffled with employees on a 17-day strike at a Honda supplier.

That approach is slowly changing, at least in some places. As wildcat strikes have increased in number, they’ve also become more sophisticated and contagious. They can spread quickly from factory to regional industry, thanks to chatrooms, blogging, and text messages. This spring, protests caught on across a string of factories making Nike, Puma and other sports shoes in Dongguan, a manufacturing hub in Guangdong. Involving some 40,000 workers and lasting for weeks, this was China’s largest strike since the country’s economic reforms and opening in the late 1970s and 1980s. Public sympathy and media attention have also made the authorities less quick to haul away workers.

As a result, local officials, companies like Foxconn, and even the ACFTU are looking for ways to negotiate with workers before strikes begin. Which was why Wang’s union decided to hold open elections.

Things are changing in Foxconn City…

Foxconn, the Taiwanese electronics manufacturer also known as Hon Hai Precision Industries, with more than a million workers in China, has become the face of the country’s sweatshop conditions after spate of suicides at its factories in 2010 first drew global attention to it. A report in 2012 by the Fair Labor Association (FLA), a global nonprofit, found that employees were being made to work an average of over 60 hours a week (the legal maximum was 49) for as little as 1,800 yuan (about $300) a month, in what critics describe as a prison-like environment, where everything from bathroom breaks to who can visit dormitories is strictly monitored.

Though a follow-up report last year by the FLA found conditions had improved, there are still problems. In August of this year, a 27-year-old man was killed (link in Chinese) during an argument with another worker, one of the plant’s safety inspectors. In July, a 22-year-old man who worked at Foxconn’s plant in Shenzhen jumped from his seventh-floor housing complex, one of over 18 suicides at Foxconn plants over the last two years.

In attempt to stem the tide of criticism, Foxconn has promised to start giving its employees more say in the company’s union, established in 2007. Last year, the company said it would add more junior employees to the union and better inform workers about elections and the union in general. (Though Chinese law gives workers the right to elect trade union leaders, factories only have started to follow it over the past few years.) The FLA said that between January and May of last year, Foxconn increased the percentage of worker representatives in main union committees from none to 39% at its Guanlun factory, also in Shenzhen, and to 41% from 10% at Longhua. As many as 70% of elected employee representatives were frontline workers, the company told Quartz last year.

…but change is slower than it seems

With the help of the FLA, the company also said it would begin training workers on how to vote (paywall). But according to workers and local labor-rights researchers, there’s not quite as much progress as the company claims.

A 25-year old woman who works in the factory’s production line and goes by the name Zhen is on her day off, chatting with friends at a community center next door to Foxconn. Zhen, who started working at Foxconn at the age of 17 to help send her younger brother to school, says workers still don’t have much of a voice, and the union is little help. “The union doesn’t do much more than organize sports games and matchmaking events,” she told Quartz.

Like Wang, Zhen doesn’t have much faith in Foxconn’s promises about elections. “I didn’t vote, and I don’t know anyone that did.” Four other workers told Quartz the same, as did a local labor researcher who regularly speaks with Foxconn workers in Shenzhen and worked for a month undercover in Foxconn’s factory there in 2011—the year Foxconn’s last union elections were held.

These are more than just anecdotes. According to a study (link in Chinese) last year of 685 workers at three Foxconn factories in Shenzhen and Wuhan by researchers from a consortium of Chinese and Hong Kong universities, only 45% of workers at the Longhua factory knew that as union members they would have the right to vote as well as stand as candidates for the union. The vast majority had never even heard of union elections, much less voted in one:

A blogger who claimed to be a Foxconn worker wrote on Sina (link in Chinese) in July, “The result can only be that most workers won’t know about it. We’ve been deceived. The trade union election is ultimately a mere formality.” One of the workers interviewed by the Chinese and Hong Kong researchers last year said he believed the elections were more for the sake of Foxconn’s “marketing image.” According to a report (link in Chinese) in the government-run Securities Journal last year, a Foxconn factory in Zhengzhou elected union team leaders by asking workers to stand next to a voting box while holding blank pieces of paper for a photo.

Union elections are spreading through China…

What’s happening at Foxconn is happening across the country, with varied results. After the string of protests this spring by workers at shoe factories across Dongguan, ACFTU’s trade union in Dongguan agreed to allow workers to elect representatives to the union. In July, the Guangdong Federation of Trade Unions said it would make democratic trade-union elections (link in Chinese) the norm across the province within five years. Factories in northwestern provinces like Liaoning and Hubei, where labor activism has traditionally been weaker, have started to allow more direct elections too.

Elected union representatives have in some cases been able to negotiate better working conditions. One leader at a factory in Guangzhou told Quan last year that he negotiated an 18% wage increase and a month’s worth of salary in bonuses, and workers threatened to boycott the factory cafeteria if it raised the price of lunch. The union also forced the factory to use newer commuter buses. Earlier this year, a cashier elected to head the trade union of a small, underperforming Walmart store in central China organized a blockade and a lawsuit against Walmart over its closure, one of the first times a branch of the ACFTU had gone up against a company.

In Guangzhou, more than 10 companies in the city’s special development zone have been holding elections for union leaders since 2010 as part of a pilot program launched after the strikes at Honda’s factory in Guangdong. According to Yang Tao, a researcher at Sun Yat Sen University, the candidates campaign for votes on platforms promising things like more time off, better cafeteria food, or car roofs in the parking lots. These elected union leaders have been better at negotiating for higher wages than their non-elected counterparts: the average salary of workers at these factories is around 4,000 yuan, well above the average for Guangdong province of around 2,000 yuan, according to Yang.

…but the unions are not yet that powerful

Even genuine elections, however, don’t always lead to change. At Foxconn, an elected “small group leader”—a low-level union representative—is principally responsible, according to the Foxconn Trade Union’s ad, for organizing “activities to care about each other” and visit workers who have fallen sick.

Despite the Communist party’s roots in workers’ rights—the ACFTU was a platform for the party’s outreach in the early days of the China’s communist revolution—some officials and businesses have been loathe to set up truly independent unions. “The party has a deep fear of independent worker organizations which would challenge its [rule],” Mingwei Liu, a professor at Rutger’s School of Management and Labor Relations, told Quartz.

After the 2010 strikes at Honda’s factory in Guangdong, provincial officials considered allowing collective bargaining and the election of employee negotiation teams at any factory in the province, if one-fifth of employees demanded it. But the proposal died because of opposition from businesses. Local officials have recently revived it, but are already meeting resistance from business groups in Hong Kong (pdf) that work in Guangdong.

And part of the resistance to embracing real elections and power for the unions comes from workers themselves. A woman from Shaanxi province who works with Zhen at Foxconn says that older workers, who earn higher wages, don’t want to rock the boat. Zhen adds that new workers don’t have any knowledge of things like worker activism, and that high turnover means it’s hard for them to care about improving conditions at Foxconn.

All the same, change is definitely afoot

Although the elections may have patchy results, other things are happening too. NGOs are doing more to raise awareness—distributing pamphlets to workers on their contractual rights, or teaching them about examples of labor activism in other parts of the world. And local and national-level officials recognize the need to smooth over China’s industrial relations, with some calling for a greater role of labor unions.

He Gaochao, another professor at Sun Yat-Sen University in Guangzhou, told Quartz, “Some of the key leadership recognizes this is a better way to deal with the situation, otherwise what else do you do? Send the army to suppress them?” He studied 12 auto parts factories in Guangdong province last year and found that workers at factories with elected trade unions who engaged in collective bargaining were less likely to strike, and when strikes did occur they tended to last for just half a day, according to a draft of his study.

“Change is definite. The question is time,” Zhang Zhiru, a labor rights activist who was detained after helping striking workers in Dongguan, told Quartz.

Life in Foxconn City has gotten better in some ways and worse in others, workers say. Though the typical shift is still long, from 8am to 8pm, or 8pm to 8am for the night shift, workers now have a 10-minute break every two hours, as well as a two-hour break for lunch. On the other hand, Wang says, their salaries have not increased much and the work has gotten more intense: Quotas that used to be done by two or three, sometimes as much as four or five workers, are now meant to be completed by one person.

At the community center, Zhen and other workers are selling keychains and jewelry they’ve made and baking peanut butter cookies. She makes around 2,000 yuan, but has to pay at least 600 yuan to the company for housing and food. Still, Zhen, who has been learning more about workers’ rights and following news about strikes and protests by workers around China, is encouraged. “Awareness of worker rights is growing slowly. Slowly, things will change.”

Additional reporting by Ailin Tang.

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