Chinese Workers Demand Higher Pay

Workers at a Honda parts factory in China went on strike and have won promises of higher pay. The concession hasn't satisfied all of the workers. Migrant workers at several foreign owned factories have made similar demands. The Chinese Government, which tended to side with management in previous labor disputes, seems to be giving workers more leeway in labor disputes.

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RENEE MONTAGNE, host:

Now to labor unrest in China. Chinese workers are on strike at the Japanese auto company Honda. And they've shut down an auto plant and four factories. Honda responded by offering a 24 percent raise. This is just the latest labor problem to hit southern China. NPR's Louisa Lim joins us from Shanghai to tell us more.

Good morning.

LOUISA LIM: Morning, Renee.

MONTAGNE: Where does the strike stand as of this morning?

LIM: Well, Honda's now saying that most of the 2,000 striking workers will accept this pay rise, which actually would bring their salary to $280 a month, which is more than double the minimum wage in that part of China.

But the workers were originally asking for more than a 50 percent increase. And about 100 workers are still holding out for more. Their argument is that they're being paid 50 times less than Japanese employees for the same job, so they deserve more.

MONTAGNE: And how much leverage do these workers have? I mean, how much impact has this strike had on Honda?

LIM: Well, these workers have already been on strike for more than two weeks. They work at an auto parts factory, but after a week on strike they've actually - they actually managed to shut down Honda's four car plants in China. That's a loss to Honda of about 3,000 vehicles a day. So it is costing Honda very dearly. And the company says all its factories will remain closed at least through Thursday.

And this strike highlights some of the vulnerabilities of the supply chain. Honda didn't have a second supplier of auto parts in China. It obviously wasn't expecting strikes in China, since unauthorized labor organizing is actually illegal in China.

MONTAGNE: You know, though, how much significance can be attached to the fact that this strike was allowed to go ahead and even to be reported on by official media?

LIM: Well, it does appear to be part of a trend. Authorities do appear to be allowing sporadic peaceful protests. And in this case the strike was, even as you say, given coverage in the state-run media. But many wonder whether this could be linked to the fact that the company involved was Japanese, not a Chinese company.

Yesterday, local media, however, reported that there was some violence, there were some clashes between strikers and members of an official government-authorized union who in theory are supposed to represent workers but were actually trying to get them back to work. And today we've seen fewer reports in the official media. So this may signal that authorities are beginning to lose patience with this strike after two weeks.

MONTAGNE: And, Louisa, this strike at Honda comes after a spate of workers' suicides at a Taiwanese-owned electronics factory, also in south China, which led to a 20 percent wage hike. Is there a connection between the two?

LIM: Yes. Well, I mean, I suppose both cases are bringing the spotlight onto working conditions in China's factories. And they seem to indicate that China's low-wage workers are being pushed to their very limits. And in the case of the electronics factory you talked about - Foxconn - maybe even beyond their limits. At that factory they've had 10 suicides in the past few months. And a number of different factors are behind blamed - long working hours, lots of overtime, and an almost military discipline on the production lines, which some said were making workers depressed.

So some people are now wondering whether the era of cheap Chinese labor could be coming to an end. And, indeed, if you look at the demographics, factory workers in China are gaining leverage. Maybe because of the one child policy, in the past decade the number of workers in that labor pool - 20 to 39-year-olds - has fallen by 22 percent. So that in many ways does increase their bargaining power.

MONTAGNE: Thank you very much. That's NPR's Louisa Lim speaking to us from Shanghai.

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