Representatives of major brands, the Chinese Government, and the Fair Labor Association (FLA) gathered in Beijing on January 8 to discuss a new book examining wage trends at the global level. The book, Fair Wages – Strengthening Corporate Social Responsibility, sheds light on wage inequalities and unfairness facing workers around the world. It was authored by Dr. Daniel Vaughan-Whitehead, professor of corporate social responsibility at Sciences Po in Paris, who is responsible for wage practices at the International Labour Organization (ILO).
The book launch was chaired by Mr. Zhang Junfeng, Deputy Director of the Institute of International Labor and Social Security in Beijing, and brought in the perspectives of brands, suppliers, and Chinese trade unions. H&M, an FLA Participating Company, and Chengfeng, an FLA Participating Supplier, spoke about the need to support fair wages. Participants called for transparency from factories and buyers on wage expectations and costs, support from the local government, and the need to set long-term objectives in wage policies. Auret van Heerden, President and CEO of the FLA, opened the event by introducing three key concepts: responsibility, sustainability and fair wages for a fair society. These ideas were echoed throughout the day as participants discussed the way forward toward more equitable wages in factories in China.
Professor Daniel Vaughan-Whitehead highlighted some key issues, which sparked an engaging discussion between the speakers and the audience:
- The reasons behind, and the trend of, growing wage disparity, with the gap between the rich and the poor becoming only more polarized in most economies.
- The growing debate around the legal minimum wage – what does it mean as compared to living wage, and what is the appropriate level for minimum wage?
- Pay systems, and the benefits of mixed payment systems rather than the typical piece-rate system employed in most factories worldwide.
- Insufficient overtime payment and lack of transparency in reporting hours worked.
FLA’s research, assessments and surveys over the past two years confirm that excessive working hours have a negative impact on workers, often resulting in physical and psychological stress for workers and increased worker turnover. FLA surveys in China found that an estimated 50 percent of workers in the garment industry and 80 percent in electronics manufacturing work more than 60 hours per week, and an estimated 80 percent regularly work more than 7 days in a row. Even more alarming is the fact that 20 percent sometimes work more than 24 consecutive days without a day of rest.
One argument some have used in defense of excessive working hours is that Chinese factory workers want to work more hours. This argument, however, does not paint the full picture: 45 percent of 1,766 recently-surveyed workers say that their salary would not be sufficient if they did not work more than 60 hours per week. In fact, 40 percent said their salaries were not sufficient to cover basic needs, such as education, health care and housing. In addition, 50 percent of workers reported that excessive working hours make them feel isolated and more prone to sickness. Many said that they did not get to spend enough time with their families. Only 20 percent of workers felt satisfied with their job.
Data obtained by FLA shows that those who spend an excessive number of hours at work are eight times more likely to be unhappy with their job than those with regular hours. In addition, they are six times more likely to show signs of poor mental health. In short: long working hours create risks to workers’ wellbeing and undermine factories’ retention efforts and long-term productivity. Because of the harmful impact that long hours have on workers, the FLA Workplace Code of Conduct, which is based on international labor standards, states that “the regular work week shall not exceed 48 hours…Employers shall allow workers at least 24 consecutive hours of rest in every seven-day period…[and] the sum of regular and overtime hours in a week shall not exceed 60 hours.”
On September 20, FLA Shanghai hosted a networking event and brief workshop for suppliers and brands operating in or sourcing from factories in China. Session facilitators asked participants to consider how to improve relations at hypothetical “Factory A,” which has high working hours. Read the rest of this entry »
Understanding workers’ perception of the factories they work in is essential for management seeking to recruit and retain talented and qualified employees. The Fair Labor Association’s SCOPE Workers’ Surveys are standardized, quantitative questionnaires which are completed anonymously by a randomly-selected, representative sample of workers. SCOPE surveys measure the effectiveness and impact of factories’ social compliance efforts in areas such as hours of work; hiring; communication; and grievance and complaint systems. Recently, FLA launched a new SCOPE survey to measure job satisfaction.
The new SCOPE Job Satisfaction Survey gathers workers’ opinions on factors influencing job satisfaction, such as:
- working hours
- wages and benefits
- health and safety
- working environment and the atmosphere within the factory
- supervisors’ and management’s attitude and communication
- professional development and advancement opportunities
- perception of work performance
- physical impact of working at the factory
The survey also measures the workers’ loyalty to the factory; their short- and long-term priorities; and their plans to leave or stay with the factory. In addition, the survey indicates which factors are most likely to improve hiring practices, retention and productivity. It may also help identify risk areas in workforce stability. Read the rest of this entry »
On May 31, dozens of company, supplier and NGO representatives joined FLA staff for an informal gathering at the FLA Shanghai office to discuss trends, best practices and lessons learned in capacity building for social compliance. Labor advocates and industry leaders are increasingly realizing that it is important to look beyond monitoring to develop resources that positively and sustainably affect compliance. Capacity building at the factory level – activities that strengthen the knowledge, abilities, skills and behavior of individuals – is essential for sustainable compliance. Capacity building encompasses more than training, and can include:
- Human resource development: the process of equipping individuals with the understanding, skills and access to information, knowledge and training that enables them to perform effectively.
- Organizational development: the elaboration of management structures, processes and procedures, not only within organizations but also the management of relationships between the different organizations and sectors (public, private and community).
- Institutional and legal framework development: making legal and regulatory changes to enable organizations, institutions and agencies at all levels and in all sectors to enhance their capacities.
China has been through 30 years of unbridled growth based on its low-cost labor market structure. During this period, the state’s priority was employment creation. The laws and regulations issued were intended to support the low value-added processing industries that were flourishing at the time, but they were poorly enforced and created an unstable labor supply.
By the end of the 1990’s, Chinese policy makers realized that their economic future did not lie in these low value-added industries and that jobs alone would not ensure the social stability they sought. The strategic objectives of industrial restructuring and social cohesion necessitated the development of longer term, more stable employment relationships – hence the need for labor contracts.
China’s Labor Contract Law (LCL) therefore had two objectives – the need to protect workers and to upgrade industry – and both contribute to the overriding objective in Chinese policy at present, namely to maintain social stability or harmonious society as it is officially described. Read the rest of this entry »