Strike highlights bosses’ social security ‘tricks’
Print Edition
THOUSANDS of workers were on strike for a third day yesterday at a factory in southern China that makes shoes for Nike and adidas.
Their action has exposed tensions over employer contributions to China’s social security scheme and pressures on manufacturers to keep up with rising labor costs.
The strike at Yue Yuen Industrial (Holdings) factory, a footwear maker in Dongguan City, Guangdong Province, entered its third day in protest at unpaid social insurance payments, with thousands of workers gathering in the factory compound.
About 600 workers first took to the streets on April 5, blocking roads and demanding that social insurance and housing funds be fully paid.
Remain unsolved
After failed negotiations with management, more workers joined what became a massive strike on Monday and Tuesday.
As talks between workers and management took place and the local government intervened, the number of people on strike subsided and the crowd dispersed yesterday morning after talks with management.
A senior company executive, surnamed He, said the company had offered cash to encourage staff to return to work.
Yet the disputes over social benefits remain unsolved, ringing alarms for many other manufacturers in the economically booming southern Pearl River Delta region.
The workers claimed that the factory management had been tricking them by paying inadequate sums of money into the social insurance scheme each month. Additionally, a majority had received no housing funds, though they were supposed to be paid by the company.
A human resources executive said only about 1,000 workers of the plant’s 45,000 staff have been paid housing funds.
Although all workers are covered by the social insurance program, the sum paid by the company is lower than required by law, the executive said.
He said the workers’ social insurance was paid based on the local average salary standard instead of their actual monthly income, which is much higher.
He Gaochao, a public affairs professor at Sun Yat-sen University, said it is a common phenomenon for many manufacturers, at least in the Pearl River Delta region, to pay as little in social security funds for their workers as possible.
But with new awareness on the part of workers to safeguard their rights, manufacturers’ practices are now causing tensions, He Gaochao said.
Xiao Shengfang, a lawyer with Guangdong-based Sino-Win Law Firm, said the strike also exposed the crunch faced by manufacturers as they battle the rising cost of labor.
As of April 1, at least seven provinces and municipalities, including Beijing, Shanghai and Tianjin, had lifted the minimum wage standard.
A recent survey by Standard Chartered Bank among 375 manufacturers in the Pearl River Delta region showed that wages are expected to rise 9.2 percent this year, compared with an 8.4 percent rise in 2013.
Some thirteen percent of surveyed manufacturers said they intended to move out of China to countries such as Cambodia, Thailand and Vietnam, where costs can be 20 percent lower.
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