Abuses in Tech Industry in China Exposed

The Information Age once promised a new industrial revolution, in which ugly smokestacks and Third World sweatshops would be overwritten by antiseptic roboticized assembly lines, ceaselessly pumping out state-of-the art electronics.

But the promise of modernity didn't stop a few young factory workers from throwing themselves off of ledges last year. Working-class misery, it seems, has just gotten rebranded.

A new report by China Labor Watch (CLW) peers inside Sweatshop 2.0, describing conditions at 10 factories where investigators found widespread patterns of abuse. Violations of both international labor standards and China's domestic laws appear to be common, suggesting that government authorities are either unwilling or unable to curb the market forces they've unleashed. Meanwhile, at the global post-industrial vanguard, companies often follow the same path as their Dickensian antecedents, constantly gunning for faster, larger-scale and cheaper production processes.

But if the tech sector's expansion has taken on a life of its own, CLW indicts the very top of the corporate supply chain, rather than the factories that directly manage Chinese workers:

The multinational companies that contract production to these Chinese factories claim that the factories bear the sole responsibility for these abuses. However, in this report, CLW posits that many of these abuses are firmly entrenched in the global supply chain system. ... the only way factories are able to offer a competitive advantage is to lower the manufacturing costs, which often translates directly into lowering labor costs.

This burden is eventually passed down to workers, who are forced to work long hours at a high intensity. When these external pressures become too great, and workers suffer from accidents or tragedies such as suicides occur, blame is often directed at factories, while international companies at most publish a press release, and vow to implement reform.

The names involved include Dell, Salcomp, IBM, Ericsson, Philips, Microsoft, Apple, HP, and Nokia. The production is generally managed by partner firms like Taiwan-based Foxconn, which was scandalized by worker suicides last year. Other links in the chain involve the manpower agencies that recruit and supply workers and the avaricious local officials who encourage exploitative practices. After everyone takes their cut, just a few dollars of each $600 i-gadget reaches the pocket of a young migrant laborer in Shenzhen.

Many of the violations involved cheating workers by simply underpaying them in creative ways. Deductions for food and board, utilities and social insurance may reduce a typical monthly wage of US $138 to less than $80, which, according to CLW, leave workers "with no other option but to work excessive overtime."

"Excessive" may be an understatement. Though Chinese law restricts overtime to 36 hours per month, a worker might clock 160 hours to make ends meet. The researchers found that the workday was structured to squeeze employees to work extremely long shifts, sometimes through breaks.

Reflecting global trends toward maximizing workforce vulnerability, age and gender discrimination were common. One factory, Tyco, "only seeks to hire female workers."

Unfair contracts prevent many workers from seeking justice, and managers can route their contracts through a separate firm to make it easier to fire workers without liability.

CLW concludes that the combination of oppressive conditions, employer impunity, nonexistent oversight, and general economic desperation traps young workers in a system "in which official resignation is nearly impossible and forcing workers to 'voluntarily' resign, thereby forfeiting a significant amount of their final wages."

CLW notes that current oversight systems are primarily designed to make companies look good. Auditing organizations that are commissioned to monitor working conditions provide legitimacy but have little real power to hold corporations accountable. Moreover, workers have few mechanisms to raise grievances without putting themselves at risk. The report recommends the simple measure of establishing a hotline for workers who want to report violations.

Finally, advocates say consumers should be informed about how and by whom their products are made. Publicizing the sourcing of each product would prevent suppliers and multinationals from punting the responsibility for labor abuses between each other.

Li Qiang, head of China Labor Watch, stated in the report:

the profit maximization model of the global supply chain within the electronics industry directly conflicts with the fundamental principles of [Corporate Social Responsibility]. A true socially responsible company must fulfill its legal and ethical obligations to all shareholders and stakeholders, including employees. It must truly safeguard labor rights and improve the treatment of labor.

But even with managerial reforms, codes of corporate ethics, and consumer pressure, conditions won't fundamentally improve without a broadening of workplace democracy. That's a tall order for a one-party state, but the Honda strikes did end in considerable concessions. Plus, if there's one area where China is willing to reform, it is in the industrial bastions where quelling unrest is necessary to keep profits up.

The Make IT Fair campaign, a consumer-oriented initiative that has targeted multinationals like Apple, recently issued guidelines for worker training programs that seek to engage workers in promoting safety and awareness of labor laws. Using a participatory education model, the campaign suggests, "worker training programmes should be rights-based and explicitly focused on empowerment."

Yet the big gap in the production chain is the lack of truly independent unions in China. While there has been a heartening groundswell of spontaneous protest activity at some factories, particularly Honda, advocacy in the tech sector has been led by outside watchdogs. An indigenous labor movement could harness Chinese workers' growing frustration and aspirations for justice in an increasingly unequal society.

The tech industry shows that modernity run amok can create more problems than it solves. But if any good can come out of China's global capitalist experiment, it's the sense of possibility among workers that beyond the factory gates lies a bigger world, where lives can change with a click of a button--and individuals can take their destinies into their own hands.