Reportback from China —

The world's biggest sweatshop

By DON McINTOSH, Associate Editor

Jeff Hermanson is an ambassador of the American labor movement to China’s workers. At the AFL-CIO Solidarity Center, his title is “senior adviser for union strengthening.” He’s a China specialist who speaks Mandarin Chinese and got his masters’ degree studying Chinese labor history. Three times in 12 months, Hermanson has visited China to offer assistance to workers’ rights advocates.

His work is one side of the U.S. union movement’s China policy.

Elizabeth Drake’s work is the other. Drake, senior international policy analyst in the AFL-CIO’s Public Policy Department, has worked to get the U.S. to impose punitive tariffs on China because of its human rights violations.

Though it may seem contradictory, AFL-CIO officials say the two approaches are consistent — working to restrict trade with China as long as China’s workers are unfree, and helping China’s workers win their freedom. They say it’s not the numbers or the poverty of China’s workers that threatens America’s workers: it’s their lack of freedom. Lack of freedom prevents China’s workers from winning improvements in their own standards and claiming their share of China’s rising productivity, Hermanson and Drake say.

Worldwide, the old union idea of “solidarity” is as relevant as ever. Solidarity means “their struggle is our struggle,” and that takes on added meaning in a globalized economy. China’s unfree workers may be the biggest factor driving down wages worldwide. Even in other poor countries — in Asia, Africa and Latin America — competition with China puts downward pressure on wages. Thus, solidarity isn’t charity; it’s collective self-interest.

China’s population of 1.3 billion (one-fifth the world total) is more than four times that of the United States. And China’s workforce, estimated at 760 million in 2003, compares with a U.S. workforce of 147 million. Half of China’s workforce is employed in agriculture. China’s educated workers — engineers and computer scientists — will be competing with the rest of the world in years to come. But in recent years, China’s biggest impact globally has been manufacturing. China’s export-oriented manufacturing sector, concentrated in its coastal provinces, is the worlds’ biggest sweatshop, employing as many as 150 million “migrant” workers from rural villages.

Their lack of freedom is pervasive. To begin with, their movements are restricted. Workers’ official residence is the place they were born. To work in the city, workers from the villages must get a temporary residency permit, and while there, they are not entitled to government benefits like health care. Unless they marry a city resident, China’s migrant workers tend to return to their home villages. Most are young women who work in the city for five or 10 years, and then return to the village to start a family.

Migrant factory workers commonly toil 12 hours a day, seven days a week, with just one day off a month, and earn the equivalent of $50 to $150 a month. Because they’ve left their homes to work in the factories, their employers provide meals and housing. Hermanson visited these dormitories, where workers sleep eight or 16 to a room.

And Chinese factories are dangerous places to work. When Hermanson met with a group of injured workers in the Pearl River delta, he saw faces scarred, arms missing hands. Workers told him of a toy factory that had 15 machines. One was kept idle, only used in rush orders, because it was so dangerous. Workers called that machine “The Amputator.” Workers complained, but management refused to repair or replace it. Almost every time it was used, a worker lost a body part. “Amputation is so common in this area that there are hospitals that do nothing but handle amputations,” Hermanson said.

Such conditions could take a while to improve because workers don’t have the freedom of association or the right to assembly, or the right to form independent unions. Those restrictions make it hard for them to use the rights they do have under Chinese law.

Under Chinese law, workers have rights, including the right to collective bargaining. According to the law, workers can elect representatives in their workplace, a factory committee that negotiates with the employer on what’s called a collective contract, which must be ratified by workers and then taken to the labor bureau to be registered. That’s what the law says. But Hermanson said he’s not aware of a single case where that law is in use.

How could they use it? The law doesn’t permit workers to freely assemble. And the government has imprisoned people who have tried to form independent unions, which the law forbids. Instead, there’s one big union in China, the All China Federation of Trade Unions (ACFTU).

The AFL-CIO does not regard the ACFTU as a legitimate trade union organization. Neither do Chinese workers, Hermanson said.

Hermanson said in the 1920s, though it was led by communists, the ACFTU was a real trade union, organizing foreign-owned factories to win gains for workers. But after the Communists came to power in 1949, they outlawed other unions, and the ACFTU took on the character of a mass organization designed to improve worker morale and productivity, and serve the interests of the Communist Party. Whether or not ACFTU served workers’ needs when China was communist, it’s ill-suited to serve them in the new China.

China is still nominally communist, in that the Chinese Communist Party and its structures dominate the country politically. But Hermanson said communism as an ideal was discredited during the Cultural Revolution period of the 1960s, and is no longer an end goal within the Communist Party. The most recent congress of the Chinese Communist Party actually modified party rules to allow “capitalists” to become members of the Communist Party.

“Today, the Chinese Communist Party is nothing more than a machine for dominating a capitalist society,” Hermanson said.

Since 1978, China has been moving away from state-owned enterprises and toward private ownership. Private enterprise is seen as a more efficient way to achieve development. But it is economic change from above, devised and imposed by an elite in the Communist Party. The official term is “Socialism with Chinese characteristics.” Hermanson calls it market socialism. Corruption has flourished, and incomes have polarized. Whereas 30 years ago, everything was owned by the state, today, the majority of economic output is now produced by private enterprise.

Today, state-owned enterprises (and joint ventures between them and foreign companies) are where you will find the ACFTU, though it operates more as a sort of humane human resources department, helping workers access benefits, and resolving workplace disputes. Private enterprises in China — where most of the manufacturing for export is taking place — don’t see any reason to allow unions. And in any case, workers don’t really want the one union they’re allowed to have, because they don’t see the ACFTU as their organization.

So unionizing is the exception in China, Hermanson said.

The rule is spontaneous mass protest in reaction to management abuses.

The most common abuse that leads to protests is failure to pay wages on time or correctly. According to one survey, nearly three-fourths of migrant workers have experienced wage defaults. If workers are not paid, Hermanson said, they’ll brood a day or two, then engage in a work stoppage — go out into the street, block the factory, do a snake dance, occupy their factory, or just stay in their dormitories and refuse to go to work.

Despite a climate of repression, China has seen an explosion of protest by workers in the last few years. Last year there were 74,000 officially noted mass protest actions by workers, up from 10,000 a year 10 years ago.

Workers who walk out of the factory often take their dispute to the government, sending delegations to Beijing or to regional authorities. Unlike the 1989 protests at Tianenmen Square, which were seen as a direct challenge to authority of the state, these protests are challenges to local leaders.

“People believe that by going up to higher authorities, they can overcome the corruption of local officials or local employers,” Hermanson said.

Hermanson says these petitions do sometimes have success, because portions of China’s ruling elite have been campaigning to implement the rule of law and eliminate corruption.

In some cases where their demands for redress are not met, workers smash factory windows, or destroy the bosses’ car. That’s when people go to jail, Hermanson said, commonly for terms of three to six years. If police can find out who led the spontaneous uprising, they target them. A criminal conviction also means a worker’s permit to live in the city is revoked, so they lose their ability to work in other factories.

Hermanson said there’s a crackdown under way right now on workers’ rights groups in China, especially those that are accepting funding from the West. Consequently, he can’t say publicly who he’s meeting with while in China, for their own protection.

“The AFL-CIO is seen by the Chinese government as an enemy of China,” Hermanson said. “They’re judging us by our campaign to restrict trade with China.”

Trade Restrictions Lifted, Over Labor’s Objections

Today, in U.S. policy, trade is more important than foreign policy, and more important than human rights.

At one time, U.S. law put China in a category of nations that had a kind of probationary trade status, owing to the Jackson-Vanik Amendment to the Trade Act of 1974.

Jackson-Vanik (named for Washington Senator Henry “Scoop” Jackson and Ohio Representative Charles Vanik) prevented the United States from granting “most-favored nation” status (basically the standard tariff treatment given to friendly nations) with communist countries that restricted citizens from emigrating — unless the president granted an annual waiver.

The waiver was always granted, but at least it meant Congress held hearings every year, in which Chinese human rights got public attention. And every year, China would hasten to make improvements, even if cosmetic. They knew they were under the microscope, Drake recalls, and every year they released political prisoners prior to the hearings. “These were small gestures, but not totally meaningless,” Drake said.

But in 1994, the World Trade Organization (WTO) was created. The agreement that created it said that no member nation could discriminate against another member nation in trade. Every nation in the WTO had to treat every other nation equally, without conditions. Any country which violated this rule could face substantial punitive tariffs from other countries. China wasn’t yet a member of the WTO, but the WTO formula set a new tone.

In line with his “free trade” position, President Bill Clinton announced that year that trade would no longer be linked to human rights. In effect, U.S. corporations would be “free” to trade with countries where the workers were not free.

In 1998, Congress changed the terminology from “most favored nation” to “normal trade relations.”

By 2000, though it remained an authoritarian one-party state with ongoing human rights abuses, China had substantially transformed to a market economy, and it sought to join the WTO. So in 2000, at Clinton’s request, Congress voted to end its annual review of China, granting “permanent normal trade relations” with China by exempting it from the Jackson-Vanik amendment.

Thus was trade defanged as a tool of foreign policy to discourage human rights abuses.

Drake said the AFL-CIO had wanted to strengthen the annual review, not get rid of it. But it lost the fight in Congress.

Now, China, like the United States, is a member of the WTO. The WTO doesn’t allow member countries to withdraw trade benefits based on violations of workers’ rights. But the Trade Act of 1974, a U.S. law, still stands. Last year, hoping to restrict trade with China, the AFL-CIO pushed a trade case under that law. The Bush Administration quickly dismissed the case.

The AFL-CIO wants the U.S. government to restrict trade with China as long as its workers are unfree, but it is not asking American workers to boycott Chinese goods. It only does that in cases where the oppressed workers themselves are calling for a boycott, like South Africa in the 1980s and Burma today. However, Drake says, it’s difficult to know what China’s workers want because the repression they face prevents them from having organizations.

That makes visits by labor officials like Hermanson all the more important.

Hermanson said Chinese workers have a message for Americans: “We’re not your enemies. We’re your allies, and we’re being abused by the same people who are abusing you.”

“Allowing corporations to run the economy is what’s damaging American AND Chinese workers’ living standards,” Hermanson said. “There would be an equalization if workers were allowed to organize, and if workers could move.”

Hermanson said he found an incredible hunger among Chinese workers for information about American workers and their working conditions, and about unions. Hermanson said Chinese workers have heard Americans are rich, but they’re not surprised when he tells them American workers are also oppressed and abused.

Chinese workers are oppressed and abused to a much greater degree today, and yet Hermanson said he sees signs that things may be changing.

In just the last year or two, China experienced something never before seen: a labor shortage — of as much as two million workers in several coastal provinces. The shortage is the result of rapidly increased demand for China’s manufactures, and a workforce that has begun to shrink for the first time as a result of several decades of strict family planning. Plus, the dire rural conditions which spawned the diaspora to the coastal cities have improved in recent years, thanks to changes made by government officials nervous about growing instability. Taxes on farm inputs were lowered and prices of farm goods were raised. That has led some migrant workers to return to their villages. And there are signs that the tightened labor market is starting to raise China’s factory wages — to as high as $150 a month in some areas. Those are still some of the lowest wages in the world, but it represents a doubling of the wages previously paid.

Hermanson thinks China’s rapid development will eventually benefit all Chinese. “The question is ‘How quickly will it turn from an abusive sweatshop model to a self-sustaining consumer model?’ “

Hermanson likes to talk to Chinese workers about their own history. During a patriotic strike in Hong Kong in the 1920s, Chinese workers were shot down by British soldiers. Migrant workers were shot and hung and beaten for striking, and yet they succeeded in building a powerful movement of 2.5 million members in two years. That movement became the Chinese revolution. Could it happen again?

Despite all the oppression he’s seen, Hermanson says he’s hopeful.

“Those disputes we’re seeing are going to turn into a movement, and the Chinese government and employers will have to make some kind of concessions, just as our government and employers had to in the early 20th century.”

© Oregon Labor Press Publishing Co. Inc.