People’s Daily tries and fails to understand problem of wage arrears in China

After two tragic deaths in the last two months that were directly related to the failure of employers to pay construction workers’ wages on time, the People’s Daily, mouthpiece of the Chinese Communist Party, has demanded that employers respect the rights of their employees and respect the law.

While it is encouraging that the People’s Daily has published an ostensibly pro-worker commentary, the article unfortunately glosses over the long-standing and deep-rooted defects in the construction industry that are the fundamental cause of the wage arrears problem.

The People’s Daily blamed a few bad bosses for squandering money on themselves and then refusing to pay their workers the wages they are entitled to. While there may be some bosses who fit that description, many of the labour contractors in the construction industry are as much victims as they are villains.

The labour contractors who hire say 40 or 50 workers for a particular project are completely dependent on the company that hired them for payment; that company is in turn dependent on the main project contractor, which is dependent on the developer, which is dependent on the banks and on sales from other projects to get money. When sales and bank credit dries up, as they did in 2014, there is an inevitable chain reaction which leaves those at the bottom, the workers and the labour contractors, out of pocket.

For many labour contractors, the pressure of demands from the workers combined with the intransigence of the companies up the development ladder can prove too much. China Labour Bulletin Director Han Dongfang, last week talked to the sister of a labour contractor who worked on a rural power network project in the remote Liangshan district of Sichuan. After trying and failing to get the money he was owed by the power company to pay his workers, the contractor committed suicide. Han’s interview with his sister is currently being broadcast in instalments on Radio Free Asia.

This a far from being an isolated incident, indeed, CCTV’s China 24 recently interviewed another labour contractor, Yang Minghong, in Henan who is facing exactly the same problem. Despite winning a court case, Yang has not been paid the 3.2 million yuan he is owed for two years and he is getting increasingly desperate.

"If I can get my construction payment, I will immediately pay my workers. But without that, I can do nothing," Yang told China 24.

Workers on a government sponsored construction project go on strike in protest at non-payment of their wages

The People’s Daily argued that local governments should better supervise construction projects to ensure that workers do get paid. Of course they should, but it is those same local governments whose reckless development of land without sound financial backing that has created many of the problems in the first place.

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