Factory Stories: Will you make payments to a pension insurance fund?

by Wang Xiaolin (Factory Stories #4, July 2012)


“On the news they said that the retirement age will be will be raised, for men to 65, and for women to 60!” Ah-Qin burst out to her colleague, Ah-Ling, as soon as she entered the office.

“You haven’t made any payments to a pension insurance fund yet, so why care?” Ah-Ling replied without lifting her head. While idle, factory workers like to “turn to family affairs, national affairs, general affairs, any kind of affairs,” and since the issue of raising the retirement age stirred a lot of hubbub in the media and caused a lot of bad blood over the issue online, Ah-Ling also grew more interested. The Ministry of Human Resources and Social Security stated that “in order to timely implement policies for a flexible raise of the pension age, investigation and research work will begin in the second half of this year. At the same time, forums will be held in order to gather ideas on every aspect of this matter,” adding that “a flexible raise of the pension age is the general tendency, and now merely a matter of time.”1 As it seems, the retirement age will be raised sooner or later but because of concerns over “social stability” the ministry will not give it’s final approval just yet. After all, there are too many voices opposing the reform.

There is no doubt that people hate the idea of retiring at an older age, but for many workers the immediate question is whether to make payments to a pension insurance fund at all. Right after entering the factory most of Ah-Ling’s coworkers immediately signed a “voluntarily waiver on making payments to a pension insurance fund,” so apparently there are still many workers unwilling to make such payments. Why is that?

First of all, many workers haven’t really thought about relying on the pension insurance system in their old age. In the past, many people were rather indifferent towards making payments to a pension insurance fund. Anyway, they could get that part of the money from their individual account when they returned to their homes; but according to the new regulations simply withdrawing that money is not possible anymore. Having to hand over their hard earned money and still not being provided for in the city when getting old is just outrageous! Although the policy is getting more “accomplished” by the day, low-income workers still have all sorts of concerns. Older workers feel a bit more relaxed with cash in their hands. Often they have elders and children to take care of, and a wage of two or three thousand is more often than not just enough to make ends meet and that certainly doesn’t include any “spare money” to spend on social insurance! Not to mention the young workers. Since “the youth don’t know the taste of worries” and often spend their wage on clothing, amusement, and dinners parties, their money runs out before the end of the month. For them retirement seems something far, far away.

Workers in their 30s seem to be the ones most concerned about social insurance. For the most part, these people have been working for over 10 years. They have gotten used to stable factory jobs. So for them the question of retirement in the city has become an issue. Most importantly, social insurance is directly linked to children’s education.

As a matter of fact, as soon as Ah-Qin heard this, she too started thinking about social insurance. She started working when she was 13; she washed dishes in a restaurant, worked as a beer girl, went into the factory, spent a whole month’s wage on learning computer skills, and then started working in the office. She worked for over ten years and never bought any social insurance. Now she takes all sorts of pains in order for her son to be accepted at a public primary school in Shenzhen. She was told that one of the preconditions for getting into a public school is that one of the parents has paid social insurance in Shenzhen for more than a year, so now she’s begun pondering on that problem.

Secondly, across all social insurance the biggest proportion of money goes to pension insurance, so pension insurance takes a considerable part of the wage. Factory wages are generally low, although they seem to increase every year, and despite the fact that in the last few years they seem to be increasing a bit faster, from two to three hundred in the nineties; to two to three thousand today. They don’t really keep up with the rapid inflation. At the same time bosses, in order deal with “rising labor costs”, cut all sorts of bonuses and benefits, so that wages on the whole are suppressed to the bear minimum. It is as Ah-Qin says, in the past many factories provided for food and accommodation and offered bonuses for full work attendance and generally paid more for night shifts. Factories today don’t offer this anymore. Even if you work 12 hours a day for 26 days a month you still get about three thousand Yuan and have to deduct rent, utilities, and food. So what this really means is that you are left with nothing in the end. Faced with a deduction of more then one hundred Yuan every month, while not knowing whether they will actually receive a pension in the future, people are usually not willing to pay.

Thirdly, when quite often people change factories or even believe they will be able to escape factory work altogether, they tend to feel that making payments to a pension insurance fund is a waste of money. Factory wages are low, doing repetitive work every day is hard to bear, and whenever you’re a little careless you’ll get “a kick in the ass” by the manager or boss, so many workers don’t want to stay long term at the same factory. They might even move to another province looking for a “better” factory. And if the [accumulated contribution to the] pension insurance fund is not transferred (actually that transfer means a lot of trouble), the money was spent for nothing. There are also some workers who dream of earning a little sum in the factory in order to start their own businesses afterwards. Ah-Qin mentioned, on more than one occasion, that quite a few relatives back home have opened small “marts”, making tens of thousands of Yuan per year, and that she too will “hopefully go back ‘next year’ and open a store”. Many of these “next years” have already crept by, but Ah-Qin, without knowing why, is still working. Like Ah-Qin, Ah-Ling also knows many workmates who solemnly pledge that they will go home: whether they will work as small business owners or as farmers, they are all determined not to return to the factory. But shortly after New Year’s they turn up again. For these Ah-Qins, whether opening a store or changing one’s profession, simply getting away from the factory carries some sort of hope. They can’t reconcile with their worker status, since “work will not set you free”! Being a worker implies a life of toil and poverty. The notion of working all their life simply feels like a nightmare to them. Since they can’t stay in one workplace on a long term stable contract and don’t know what will happen from one day to the next, there’s really no reason why making payments to a pension insurance fund would seem indispensable.

Nevertheless workers will eventually get old, and not everyone will get the opportunity to start a successful business and spend their days free of toil and poverty. If inflation is taken into account, workers’ wages actually haven’t risen much in the last couple of years. The burden that young people have to carry has grown heavier and heavier: they can’t afford an apartment in the city, and even building a house in their home town isn’t as easy anymore; school fees for children are increasing; more and more aspects of life require money. The popular saying from the past, “raise children to be secure in old age” is losing its certainty.

But is it, at the end of the day, really worth making payments to a pension insurance fund? This is a puzzling question indeed.


1 See: http://www.nbd.com.cn/articles/2012-06-12/660490 (Retrieved on April 1, 2017)

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