The state of labour relations in China, 2019

14 Jan 2020 Ferado

At the end of 2019, there was a huge public outcry in China over reports that Li Hongyuan, a former employee of Chinese tech giant Huawei, had been detained for eight months by the authorities in Shenzhen apparently at the behest of Huawei after he asked his former employer for severance pay and a yearly bonus.

For many middle-class professionals in China, the case confirmed a growing sense of unease and the realisation that, in the eyes of their employer, they were nothing more than a resource to be exploited and then discarded. What happened to Li Hongyuan, it seemed, could just as easily happen to them.

Tens of thousands of well-paid professionals in the tech industry lost their jobs last year as intense competition for market dominance combined with a slowing economy in China led to the collapse of hundreds of tech start-ups, including several so-called unicorns. Many employees, such as those at US tech company Oracle in Beijing, had to take prolonged collective action in order to get decent severance pay before being laid off.

Those employees who still had a job rebelled against the excessively long work hours (9.am to 9.pm, 6 days a week) demanded by their employer and openly rejected the corporate “wolf culture,” first developed by Huawei, that stressed loyalty and dedication to the company above all else. A survey of white-collar workers published towards the end of the year confirmed that younger workers felt little sense of loyalty to their employer (most left within three years). The vast majority of respondents said respect and fair treatment should be the most important component of any corporate culture, while only a small minority said they were still willing to accept “wolf culture” in the workplace.

Dissatisfaction among younger workers at the current state of labour relations was further heightened in April last year with the revelation that China’s main state-backed pension fund could be completely depleted in 2035, just when those born in the 1980s were hoping to retire.

It could be that 2019 marks a fundamental shift in the values of white-collar workers in China. Many younger workers are no longer willing to work long hours nor accept the kind of hardships their parents endured in order to chase illusory dreams of a better life; instead they focus on decent pay for decent work and a healthy work-life balance.

For most blue-collar workers, however, there were more basic concerns last year like just getting paid.

Of the 1,386 collective worker protests recorded on China Labour Bulletin’s Strike Map last year, 1,159 (about 84 percent) concerned demands for payment of wages in arrears. And once again, it was the construction industry, which accounted for 43 percent of all protests, where the problems were the most severe. Despite repeated government promises to solve the problem of wage arrears for construction workers, a staggering 99 percent of all incidents recorded last year were related to the non-payment of wages. There are still deeply ingrained and systemic problems in the construction industry that have become even more apparent as the economy slows and credit becomes more difficult to obtain. CLB’s 2019 report on the construction industry argues that the only way out of this quagmire is to create a new system of sectoral trade unions that can ensure decent pay and working conditions for construction workers through collective bargaining with industry representatives.

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