Labor issues in Suzhou the role of the Labor Union Rep

I’m extremely happy today to come across a blog I should have been watching all along. Again, h/t to China Challenges, I have come accross Bill Dodson’s blog “This is China!“. Bill is extremely knowledgeable, experienced consultant who, like me, lives in Suzhou. Unlike me, he actually knows how to write with proper English.

(Actually, I know Bill, I just…you know…never got around to his blog. Hi Bill!)

Bill posted today on a topic I have been following: current developments in China’s labor force. His post has two links to Financial Times articles about labor issues, but with focus in Suzhou compared to the situation in Guangdong. ¹ The article has the usual obvious points about technology enabling workers to organize (Wow…they can use text messages!). It also too-briefly mentions some more complicated issues without giving proper background, which would probably be to much information for FT’s readers. For example, some of the strikes and protests were caused local government policy drafts regarding refunds pension payments to workers leaving Suzhou (and this issue probably also includes refunds of payments into the local Suzhou version of “401K” plans and housing down-payment allowances).

The articles are about labor situation in Suzhou. Some of the differences between Suzhou and Guangdong are:

• Suzhou is a high-end manufacturing zone, and this really changes everything
• Factories are smaller in Suzhou (the articles don’t talk about it, but I think this is a big difference… smaller factories are easier to control, usually will have more responsive management teams, and don’t require a Nazi security force)
• Suzhou hires a lot of locals as workers and management teams, instead of importing labor from far away
• Suzhou workforce generally is paid more per-hour than Dongguan / Guangdong workers, BUT, Suzhou workers are much less likely to get overtime work.  And Suzhou workers are some of the few workers in all of China that don’t hunger to have over-time

One interesting point…most of the labor unrest in Suzhou is in Japanese and Taiwanese companies.  Go figure.

Another interesting point brought up in the FT articles was…

But workers interviewed in the Suzhou New District Industrial Area on Thursday said that although they had heard of the strikes in southern China, they thought it would be more difficult to strike in Suzhou because many workers are not represented by unions.

and…

Neither do they trust the government trade union officials mediating the dispute. Low union credibility is contributing to unstable industrial relations, labour analysts say, adding that more disputes are inevitable.

I was in the Suzhou Toastmasters² meeting the other day and I heard a speech about Labor Union leaders. The speakers was an upper-middle manager of a Suzhou high tech company. The speech was about how the Labor Union of Foxconn – and Labor Union representatives in general – are working for Foxconn and not for the workers as they should be. This is a symptom of corruption in China. I evaluated his speech…which was a very good, organized speech. Only problem with his speech was that its political…and politics are one of the four taboos of Toastmaster meetings (the other three are sex, religion, and “topics of bad taste”… in other words all the fun stuff to talk about). After the meeting, I talked with another Toastmasters member – an HR Manager – who attended the meeting. We agreed that we did not agree with the content of the speech, although his speech probably represented the views of many people in Suzhou. The HR Manager told me that he tried to find a Labor Union representative for his company (its required for any company with more than 50), but no one signed up to take the job. The HR Manager was looking forward to having a Labor representative, because he felt that a good one can help the company with EHS and labor relations issues. His GM was flustered… “if no one wants the position…don’t push to get it filled!” The next day at my customer’s site, I volunteered to sit in and help them with their own “speech club” meeting. Coincidentally, a very intelligent young woman (who is a supervisor – level employee) gave a speech on the same topic, with similar content.

Now, I will base my following observations based on experience and not claim that this is anything more than ancedotal.

It seems to me that many supervisors, managers, and white-collar employees who I have talked to in Suzhou feel that the Labor Unions are just an arm of the CCP used to control industry, and don’t protect workers rights. And indeed, many companies in Suzhou don’t even have labor unions.

On the other hand, I have had many conversations with workers and Labor Union reps in 5 multinational company factories in Suzhou. In each one of these brand-name companies, the Labor Union rep provided valuable services for the workers, including monitoring of EHS, and serving in an “ombudsman” role in labor disputes. The main complaint of the workers toward the Trade Union was that the Union rep’s salary was essentially paid from the workers salary. However, 4 of these companies were JVs, with the Labor rep coming from the Chinese SOE partner side.

I honestly believe that Labor Unions in China can work well with employers to control labor disputes, protect the employer’s operations, as well as protect worker rights and safety. But this requires a company’s management be willing to manage properly, supported by good HR practices. Evidently, this is more common in Suzhou than in Dongguan.