Factory Stories: Let’s talk about the ‘labor shortage’

by Da Wei Yi Pai (Factory Stories #2, March 2012)

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After Chinese New Year, the media again started to hype the old topic of ‘labor shortages.’ Whatever they say, the story is still the same as a few years ago: First, the bosses are dissatisfied with the situation, they say that the rising costs have made business difficult and that they want a better deal from the government. Second, they say the workers have changed and do not want to work hard anymore. How much of that is actually true?

Before the ‘labor shortage,’ in the 1990s, we had the phenomenon of high and long-term unemployment. At that time, domestic state-owned enterprises (SOEs) were privatized, many went bankrupt and were closed down. More than a few people committed suicide after that, and at the same time a large part of the rural labor force rushed to the industrial zones in the coastal regions to look for a way out. However, regions like the Pearl River delta (PRD) could not absorb that many migrant workers. Even if they found jobs they had to cope with serious problems: low wages, extreme overtime, wage arrears, work accidents, personal humiliation… in any case, it was not an easy life. That was the time when the bosses were in a strong position and could pick and choose the workers they wanted.

In the past ten years, China experienced an extraordinary economic boom. The coastal regions became the factory of the world. Shenzhen alone received five to six million industrial workers, and countless new factories were opened here. We should not forget to mention that nowadays it is not so hard for people in the countryside to have children. Because of the decreasing labor force, plus the fast industrial development and the demand for labor, finding work, especially in low paid positions with little social security (less then 2000 yuan), has become a lot easier and has also produced all the talk about a labor shortage. However, if we take a closer look we can see that “labor shortage” involves many actual problems that are demoralizing people. Women workers around twenty are indeed in great demand, and to frequently change jobs is no big deal for them. The boyfriends of women workers do not have the same strength. This year, after Chinese New Year, many male workers came back a few days late. Even those considered skilled had difficulties getting a job in the big factories in Shenzhen and were forced to start and stay in some lousy small factory. Not to mention the older female workers. Their main destinations are those shitty illegal factories. In short, besides the fact that many migrant workers barely earn enough to make a living, the ‘labor shortage’ absolutely does not mean rising wages and an improvement of working conditions for them. A great majority of workers cannot be picky at all.

So what is their aim when bosses, and the media they control, day-in and day-out whine about the ‘labor shortage’? Those creatures of bosses are good at making a profit from anything, at finding ways to extract even more money. The hype around the ‘labor shortage’ has already become a pretense used by both small and big bosses to oppress workers. In other words, many factories are not really short of workers but still post recruitment offers every day and even do everything to attract workers. By making a fuss about ‘labor shortage’ they, actually, do attract more workers and increase their ability to make a selection.

To put it bluntly, the ‘labor shortage’ assault means that factories without major concerns regarding wages and conditions, those which do not seem that bad, are overflowing with workers. However, in fact, they only appear to be not that bad. Let’s take that famous electronics company where, since 2010, workers have continuously jumped off factory buildings as an example. This year after Chinese New Year, it declared that it would “proactively raise the basic wage” to 1,800 yuan, creating some excitement that lasted for a while. What did really happen? 300 yuan were deducted from the wage for food and accommodation (two years earlier it was for free) and the basic wage workers received was the same as what the Shenzhen minimum wage regulations stipulate. Besides, on the one hand that industrial company where workers jumped off factory buildings “strictly controlled overtime,” euphemistically calling it “allowing workers to get a good rest,” while on the other hand it increased labor intensity, so that workers would earn less while having to work harder. In addition, that company made use of the fact that there are many workers and different departments. Regarding the issue of the wage increase, it brazenly used a double standard. Many positions with a basic wage above the minimum wage did not get any increase. On the internet, workers posted this information: Some skilled employees got a 7 RMB increase, some 10 RMB, but others got no increase at all. As a result, considering the monthly deductions for social insurance, food, and accommodation, plenty of employees only get 2,000 RMB. However, the bosses got the result they wished for: hiring workers after the Chinese New Year went smoothly, and although the basic wage of many new employees increased, after a range of deductions the total wage basically had not changed; this was done in the midst of all the noise about an “open wound”, the need to move factories inland, the seeking for preferential treatment everywhere and all the ruckus raised to obtain it.

In short, the bosses largely took advantage of the fact that the public had accepted the existence of a ‘labor shortage’: small bosses often used the opportunity to lower the wages, presenting a rather high “composite wage” tag while in reality forcing workers to do more overtime than the labor law allows. You don’t accept it? Then the boss comes up with the sentence: “Currently, we don’t make any money by keeping the factory open, it is just for guaranteeing you employment…” Somewhat bigger bosses consider more maneuvers and tricks like inland relocation, mergers, the collaboration with the state to reduce taxes, etc.
What does ‘labor shortage’ mean for the workers? Obviously, they dare to hope for substantial wage increases and an improvement of working conditions, as a ‘labor shortage’ implies that there are relatively abundant employment opportunities for Chinese workers. While workers’ do not care much about their own rights and options, they are very much interested in a relatively relaxed employment environment. When workers feel out forms of struggle they are unlikely to go as far as to [risking] not having anything to eat. Seen from that angle, if the industrial boom continues workers from the Pearl River Delta will more or less learn about their own power, develop self-confidence and accumulate some first-hand experience in class resistance.

‘Labor shortage’ itself cannot improve workers’ labor and life, but it can give workers more courage to fight. That is one reason why we have seen a constant series of all kinds of strikes in the past ten years.