Wall Street Journal: China’s Migrant Workers Struggle for Pensions

China Labour Bulletin is quoted in the following article. Copyright remains with the original publisher.

By MARK MAGNIER
Dec. 26, 2014

SHENZHEN, China—In a gritty industrial park here, 59-year-old Zhou Shoufang is leading hundreds of co-workers in a fight for pension benefits at a toy factory.

Mr. Zhou is part of China’s first generation of migrant workers, people who left their farms decades ago to work on assembly lines in coastal cities and who are now nearing retirement age.

Such workers have until recently focused on securing higher wages. But with an aging workforce, a frayed social-safety net and a tightening labor market, calls for benefits such as pensions and health-care and unemployment insurance have grown louder.

In what workers call a turning point, Yue Yuen Industrial Holdings, one of the world’s largest makers of shoes, including for such companies as Timberland and Nike , agreed in April after a two-week strike to boost cost-of-living allowances and increase pension benefits.

That sparked further worker actions, labor groups say, and more concessions on benefits. Shenzhen-based BPS China, previously known as Power One Asia-Pacific Electronics, agreed in June to boost social-security coverage and overtime wages after a 12-day strike, and Foshan Craft Factory in September expanded its benefits package, according to the labor groups. The companies didn’t respond to requests for comment.

“Yue Yuen’s success has made a big difference,” said Ji Jiansheng, a 42-year-old worker at sports-equipment maker China Qilitian Golf Articles (Shenzhen) Co., where he said negotiations over benefits are continuing.

At the Shenzhen Guanlan Baode Toy Factory, Mr. Zhou and his campaign have had limited success.

Workers won some concessions after a one-day strike in August 2013, but Mr. Zhou says their demands for payments dating back to 2001 toward pensions haven’t been met. Mr. Zhou and workers at other factories say in many cases they’re simply trying to get companies to pay what they are supposed to under current labor laws.

Mr. Zhou started working at the company in 1994, and in the early days he says he would cry thinking about the family he had left behind in Guangxi province, where he had worked as a farmer. He started out making 600 yuan a month in base pay, which increased over the years to 2,160 yuan (about $350) currently, or around 3,400 yuan with overtime.

He used to enjoy karaoke singing in his free time, but now his voice is scratchy as the result of surgery for a benign tumor in 2006. The operation cost 30,000 yuan, which he had to pay himself; the company only started paying for medical insurance in 2007, he said.

Thumbing through tattered papers in his workers’ dormitory, where a large poster of Chairman Mao decorates a wall, he said the pension money he feels his employer owes him, around 10,000 yuan, would mean the difference between a decent retirement and aging in poverty. Migrant workers usually send much of their pay back to their families, leaving them with little.

He plans to move back to Guangxi to join his wife next year, but he’s worried about the future as he has no source of expected income.

“Millions of people in China are in the same situation,” he said. “Older migrant workers are most vulnerable. We can’t work longer, and have very little savings.”

Cao Zhanping, a 40-year-old worker at Qilitian Golf, agrees. “Society should take care of people who work hard,” he said, eating a plate of dumplings with co-workers. “Is it really asking too much to work when you’re young and get benefits when you’re old?”

A spokesman for Qilitian Golf’s parent, O-TA Precision Industry Co., said the company pays all benefits in keeping with Shenzhen law but that outside labor activists create trouble. “We’re doing our best to create a harmonious company and society,” he said.

Migrant workers with a pension accounted for less than one-sixth of China’s working population in 2013, according to official statistics, while less than one-tenth had unemployment insurance.

China’s Communist Party has tended in recent decades to side with companies and limit labor rights to maintain political stability and economic growth. All collective bargaining falls under the All-China Federation of Trade Unions, a massive state bureaucracy that critics say cares more about preserving order than helping workers.

But the ground is shifting in favor of workers, labor experts say.

Recent laws require companies to sign employment contracts and pay social benefits. And since 2011, China’s working-age population has declined. That is forcing companies to offer better conditions. Wages for migrant workers have increased at double-digit rates since 2010, reaching 2,609 yuan a month last year.

That has helped embolden workers, labor experts say. China Labour Bulletin, a Hong Kong-based civic group that tracks strikes and labor protests in Chinese media, recorded 1,206 incidents this year through November, compared with 592 in 2013 and 337 in 2012. The group doesn’t categorize disputes by their causes.

The Chinese government doesn’t release labor-protest statistics.

According to activist group China Labor Watch, in 227 of 299 reported strikes from April—when Yue Yuen settled—to mid-November, back coverage claims were among workers’ complaints. The activist group didn’t have comparable figures for 2013.

“Workers are claiming more pay and benefits because increasingly they can vote with their feet,” said Zhang Zhiru, founder of activist group Spring Wind, which has advised Baode and other worker groups on labor law and tactics.

Higher wage-and-benefits packages help workers spend more, which in turn supports Beijing’s broader goals for an economy that relies more on domestic consumption than on exports.

However, while older workers increasingly value pension and health benefits, many younger workers prefer immediate cash, sparking tensions.

In August, some 5,000 workers at Guangdong’s Kalex Co., a circuit-board maker, went on strike, clashing with police and overturning motorcycles, after the company started deducting social-security payments, according to local media reports.

“We’re trying to convince young workers they need to fight for pensions, but retirement is far away for them,” said Mr. Cao, the golf-equipment worker.

Wang Jiangsong, a professor at the China Institute of Industrial Relations, said local officials often balk at enforcing benefits rules, or they side with companies out of fear that factories will relocate.

When workers prevail in benefits disputes, such as at Yue Yuen, it tends to be more a result of adverse publicity, political pressure or both than a respect for the law, said Jonathan Isaacs, an attorney with the Baker & McKenzie law firm, who advises companies on labor issues.

Interconnected workers are also increasingly aware of their rights. In the Yue Yuen case, much of the anger built on WeChat , a popular mobile chat service.

Mr. Zhang, the labor activist, said companies frequently argue that they can’t address worker’s benefits demands until ongoing revisions to the legal system are completed. “Companies exaggerate how often government policy changes to discourage workers from contributing,” he said.

As he spoke to a reporter in a deserted restaurant, two dark-clad men appeared and started photographing him. Mr. Zhang said he has changed offices several times after what he claimed was pressure from the police on his landlord over his organizing activities.

Amy Chan, representative with Perfekta Enterprises Ltd., Baode’s parent company, said all Baode workers receive their entitled benefits as legally required. “We are fair and law abiding, she said. ”Workers are an important asset of any company."

—--Liyan Qi contributed to this article.

Write to Mark Magnier at mark.magnier@wsj.com

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