The end of China’s labour regime?

A reflection on the challenges to China’s labour regime – published on the Progress in Political Economy blog:

A key ingredient of China’s Post-Mao economic “miracle” is a labour regime entrenched in the export-oriented consumer manufacturing sector and premised on despotic exploitation, institutional discrimination and political exclusion of labour.

Are we seeing the end of this labour regime?

Not “Women’s Day”

One of five feminist activists – detained last year for organizing public campaigns and remaining stuck in a legal limbo – took to the social media to emphasise that the “women’s day” is in fact the International Working Women’s Day. Despite the harassment – and thanks to activists and advocates like her – China’s first Anti-Domestic Violence Law was passed last year and is coming into force this month in a country where 25% of married women experience domestic violence. In spite of the progress, the challenge is monumental. China’s working class women are not only severely exploited and dominated – young rural migrants considered docile and passive by management – during the country’s export-led industrialisation, but continue to be subject to gender-based discrimination – with more than 70% of urban female employees reporting hiring and promotion discrimination in a government report, and harassment – with 70% of female factory workers surveyed having experienced sexually harassment. Undeniably bearing the brunt of China’s industrialisation, women workers are frequently at the forefront of strikes as organisers and leaders – inspiring but not surprising as women have historically played a key role in the labour movement.

Finance Minister: lower wage and more flexibility

On the Labour Contract Law, China’s Finance Minister was explicit in his criticism during this year’s People’s National Congress. On wages: “In recent years the increase in workers’ income has been faster than the increase in productivity. This is not sustainable.” Clearly in the Minister’s mind is the rising labor costs in manufacturing and capital flight. Also criticised is “labour market inflexibility“: “The current Labour Contract Law is based on fixed working hours, so it is difficult for companies that need flexible workers.” This is said in reference to China’s planned shift from the manufacturing to the service industry as the key driver of growth. The service industry is to be built on highly casualised labor – as if it is not already so. But watering down clauses on contract length and severance pay will go a long way for businesses to increase their use of casual workers without fearing financial consequence. Interesting timing also, as Chinese companies are legally obliged from March 2016 to limit the use of agency workers under 10% of the labour force. The speculation that companies will simply turn these workers into “outsourcing” without actually reducing casualisation turns out to be well-founded; and some workers are already protesting.

How many labour protests in 2015?

With no publicly available official data, here is what we know. China Labour Bulletin’s excellent Strike Map, the most widely cited source in news, logged 2,774 incidents for 2015, double the number of the previous year. Wickedonna, arguably the best informal source of protest of all kinds, recorded 10,425 cases of labour protests and demonstrations for 2015 – the largest category of protest, followed by those of property owners (6,625) and peasants (3,011). In addition, for reasons not specified, it separately counted protests by teachers, taxi drivers, public transport drivers and hospital employees – which accounted for another 800 labour protests. In a state media article in late 2015, the Minister of Human Resources and Social Security cited 11,007 incidents related to unpaid wages – still the single most frequent cause of labour dispute – just in the first nine months of 2015, a 34% jump from a year ago. Overall, we are looking at possibly up to 15,000 labour protests in 2015 (as possibly thousands more likely go unreported).

Reversing the Labour Contract Law?

Never properly enforced, China’s Labour Contract Law of 2008 nevertheless provides a favorable legal framework for workers – a nuisance in the eyes of the corporate sector from the beginning – but this is about to change. Labour market inflexibility and high labour costs are cited as key problems resulting from the eight-year law, according to the China’s Finance Minister. The Minister’s comment seem to aim specifically at watering down social insurance, severance pay and restriction on casualisation. This goes against the tide of more legal protection of workers over the last decade. The Guangdong government is more direct – it insists on reducing businesses’ burden by freezing minimum wage adjustment for the next two years.

China’s labour movement stalled?

Not feeling any sense of pessimism for the still nascent workers’ movement in China is impossible. The faltering manufacturing sector has been shutting down factories and laying off workers. The state sector is looking to cut down its bloated coal and steel enterprises with a potential loss of more than a million jobs. Some of the more vocal workers’ groups, which combine legal aid with a degree of labour organising, have been harassed and criminalised. Workers are resisting. The most symbolically powerful protest is by miners at who is formerly known as  Anyuan, the birthplace of labour organising for the then tiny communist party activists in the 1920s. But materials gains made in the last twenty years are likely to be eroded, and activist organisational network in disarray. Will the labour movement be able to regroup to confront the assault?