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A Six-day Strike in Shanghai Caused by a $110 Pay Cut – Collective Action by Sanitation Workers in China’s ‘New Era’ of Stability Maintenance
Wang Jiangsong, April 13, 2018
In late March in the Changning district of Shanghai, 3,000 sanitation workers went on strike. Before long, the air was filled with a foul odour as garbage quickly began piling up in the streets. Trash collection is a public service, and the consequence of a strike is not limited to the walls of a factory compound like most industrial actions. In this case, hundreds of thousands of residents, including students, public servants, intellectuals, white collar workers, and entrepreneurs all had their lives disrupted. When they understood the reason for the strike, however, they were sympathetic and supportive of the workers, and took it upon themselves to post pictures and comments on social media (here, here, here). Police were quickly dispatched to the scene; photo and video show clashes between police and workers. After six days, the strike ended. This sudden rights defense incident, taking place in the far more repressive atmosphere that has come to characterize the advent of China’s ‘New Era,’ surprised many observers.
The Origins of the Strike
Shanghai’s sanitation workers are paid the city’s minimum wage of 2,300 yuan (about $366) per month; if they want to earn more, workers have to do overtime. In the past the work schedule was seven days a week, though at the end of last year this was changed to six days. This means that if they want to earn, say, 4,000 yuan a month, they’d need to do a few hours overtime every day, and then pick up another shift on the weekend. After paying into the social security fund, based on an income of 4,000 yuan, they would be left with take home pay of around 3,000 yuan.
Starting April 1, the Shanghai municipal government raised the minimum pay from 2,300 yuan per month of last year to 2,420 yuan, an increase of 120 yuan. On this basis, the overtime of sanitation workers would be 500-600 yuan, making the increase in pay in total around 700.
In March, however, the three companies that control waste management in Changning District decided to scrap the meal subsidies, as well as the early morning and graveyard shift allowances, which came to about 700 yuan per worker. This was, obviously, a significant portion of monthly income for the workers, so they went to the companies and demanded an explanation.
The companies responded that scrapping the morning and late night allowances and meal subsidies didn’t bring the workers’ official income down, and thus the companies didn’t harm the workers. The workers refused to accept this senseless explanation: the waste management companies are paid by government appropriations; if the state has raised the minimum wage of workers, it means the state wants to increase the workers’ income. The companies’ maneuvering meant that they themselves swallowed up the increase in income meant for workers, with the result that there was no change in the workers take home earnings. It was this abuse and insult that led the workers to strike in protest.
For years, whenever a strike took place anywhere in China, the local government immediately went into a high state of vigilance, treated the strike as a ‘mass incident,’ and initiated ‘stability maintenance’ measures. Police are brought in to take control and shut down the demonstration, and there are clashes between police and residents. In this case, the workers’ appeal was met with no reasonable explanation, and the conflict between labor and capital turned into a conflict between labor and the government. This chain of events is seen regularly on the streets of China.
A Macro View of Strikes
Some have asked: China these days is in an era of hyper stability maintenance, and whenever the government identifies buds of unrest they quickly crush them — yet this was a strike involving sanitation workers, in Shanghai of all places, and it went on for six days, so how did this happen?
In fact, there is nothing miraculous about this. Strikes of this scale have been taking place for years, and we could probably enumerate at least a few hundred since 2010.
Examined from a macro perspective, with the depth and penetration of industrialization and the market economy in China today, the conflict between labor and capital has become a structural contradiction, and the most important economic contradiction in the country. China is still not a market economy: it lacks regulations, rule of law, fairness, as well as protections for human rights or the rights and benefits of workers. For these reasons, conflicts between labor and capital are not only widely seen, but they’re also intense and fierce. Sanitation workers have gone on strike before, in the Panyu district of Guangzhou, as well as in the Yuelu district of Changsha, Hunan, among other places. Strikes by workers in other industries — including traffic management and other public industries, as well as manufacturing, construction, and services — have become the most common collective expression of conflict between labor and capital. This sort of conflict has seen spiraling growth in recent years.
Workers are not permitted to have their own, independent union in China. Where there are unions, they’re inevitably a department of the government and exist in name only, not actually playing the role of representing the interests of workers, bargaining on their behalf for better conditions and pay and protecting their rights with the law. This is why when conflict actually breaks out, workers surge forth, immediately going on strike to establish their bargaining position. This method of negotiation, widely adopted by worker groups in recent years, has come to be called “strike first, talk later” (先罢后谈) — a way of forcing the owners of capital to the negotiating table. The standard pattern in countries with market economies, of course, is “talk first, strike later,” because only if negotiations break down do workers feel the need to resort to their ultimate threat and gambit.
The most immediate explanation for why this explosive strike of sanitation workers took place in Shanghai is because there was no collective bargaining or mediating mechanism between capital and labor, in which they could effectively discuss and resolve the outstanding issues.
By the sixth day of the strike, when Changning district workers went back to their jobs, it was, in the first place, because police began arresting people, and the workers didn’t have a close-knit organization and leadership, so were not prepared to resist those kind of body blows; and secondly because the company backed off slightly, changing their policy to only deduct 260 yuan from the shift allowances, rather than the original plan to deduct 560 yuan.
Over the years the pattern around China has been that after workers unite and strike, and receive the support of public opinion, local government and firms make some temporary concessions. But then they begin to carry out harsh retribution against the most active rights defenders among the workers; they claim that they were taking orders from hostile foreign forces, and in some cases even frame up charges and get them sent to prison. This, however, doesn’t frighten workers, who are fighting for their own survival and that of their families. This is different from, for instance, the struggle for freedom of speech. Stripping workers of their income and benefits is a direct threat to their lives — but no one dies because they can’t speak the truth.
Late 2015 there was a crackdown against labor rights NGOs in Guangzhou, and of a sudden everyone seemed to be in a panic and besieged. Some made the calculation that the crackdown on these labor rights groups would bring an end to collective protest by workers. This reckoning was mistaken.
Both before and after the collective action by Shanghai sanitation workers, there were a number of large-scale actions by thousands of workers in Guangdong, and they achieved even better results than in Shanghai. The strike by sanitation workers in Changning was ad hoc, an emergency response — there was little solidarity or organization between workers. Though many people took part, it was essentially a mob event. The strike at the Panyu Shimen Hand Bag Co. (广州市番禺世门手袋有限公司) in early March was different. Around 1,000 people in the factory area went on strike, essentially taking it over. The workers were highly organized and prepared to strike a knock-out blow to management, and in the end were able to satisfy their demands for the social security payments and housing subsidies held in arrears to be paid off. Once the employer paid social security funds for the workers, the latter, especially the older among them would have a retirement payout, and it’s a much better position than if they’d been kicked out on their backsides back to the countryside, as would have happened otherwise.
Another noteworthy case involves Shenzhen SEG Co Ltd. The company wanted to move, and it would have to compensate workers. The law stipulates that if the company wants to sever the relationship with workers for its own reasons, not having to do with the employees themselves, then it must provide financial compensation to workers so affected. Usually, firms won’t inform workers that they’re going to move factories; instead, they quietly transfer their purchase orders and gradually move their machinery and equipment to the new factory district hundreds of miles away. The orders of the old factory decrease, workers only get minimal pay, and when workers’ lives are so stretched that they can barely make ends meet, they’re forced to look for jobs elsewhere. As this process takes place, after 18 months or so, what was a factory of thousands of workers has turned into just a few hundred. By the time management announces that they’re relocating production, there are only a few hundred parties they owe compensation to.
In the case of Shenzhen SEG, however, workers saw what was going on very early in the piece, and seized the initiative to strike first. They nominated, via direct election, 4 low- and mid-level management representatives and 7 worker representatives to form a ‘factory asset protection squad’ (守护资产的护厂队), and also formed another squad to act as bodyguards for the asset protection squad. Worker representatives submitted 10 demands to management, sought negotiations, and livestreamed the bargaining process. The compensation standard they submitted was “3N+5,” meaning that each year of seniority equalled three months of salary, with five months salary in addition. According to the Labor Contract Law (《劳动合同法》), legally rescinding a labor agreement requires compensation of one month of salary for each year of seniority, while illegally cancelling a labor agreement requires compensation of one month of salary for each year of seniority, and then an additional month’s salary as ‘notification payment.’ But these are the lowest stipulated compensation standards; the law doesn’t establish an upper limit. The demands made by Shenzhen SEG workers far exceeded the minimums requirement by law.
Changning district sanitation workers and Shenzhen SEG workers both went on strike on March 26; both strikes also concluded on March 31. In the end, however, the sanitation workers still ended up with a deduction of 260 yuan in their wages, while Shenzhen SEG workers managed to get a 1.5N + 1 payment for the factory’s relocation, as well as 10,000 yuan as an award for agreeing to that contract. This significant difference in outcome is a direct result of the different degrees of organization between the two groups of workers.
Resolving Labor Conflicts by Granting Workers Three Rights
Whether in state-owned enterprises or private companies, problems arise between labor and management — the only difference is that in the case of the former, it’s a conflict between state capital and labor, and in the latter it’s between private capital and labor. The history of Western countries over hundreds of years has shown that preserving three rights of workers is an effective means of resolving such disputes — but regrettably, China has yet to establish this sort of mechanism.
To the contrary, in China, the moment the government sees that workers are taking action, it calls it a ‘political incident’, or claims that it’s due to the incitement of hostile foreign forces. In the Changning, Shimen, and Shenzhen SEG incidents, there was no so-called foreign interference whatsoever. Why? with the Foreign NGO Management Law and the crackdown on labor NGOs in recent years, ‘foreign forces’ can’t get involved anymore. Yet, just because there is no help from labor rights groups, it doesn’t mean that workers themselves are unable to organize. Workers can learn, and from 2010 to 2015 with the wave of the labor rights movement, with the spread of internet access and spread of information, workers quickly grasped three basic points:
- Firstly, that they need to elect worker representatives. In southern China, this is known as a ‘worker representative system.’ This has legal grounds: according to the civil law, a group of individuals can elect representatives to negotiate on their behalf with management, government, the courts, and arbitration bodies — and this is known in the law as an entrusted agent relationship; further, it is grounded in the Labor Law, where in workplaces without unions, workers can elect representatives to engage in collective bargaining. Of course, there is ambiguity in the Labor Law in cases where there is a union but it does nothing; in such cases, can workers elect their own representatives? The law hasn’t made a clear determination on the matter.
- Secondly, they need to dispatch those representatives to negotiate on their behalf with the owners of capital, as a form of collective bargaining.
- Thirdly, that after the workers have elected representatives and invited management to negotiate, yet management has refused to respond, they need to exercise their right to strike, to force the owners of capital to the bargaining table.
These are the three rights of labor in the international context. Many workers in the south of China are now clear on these concepts, and are able to put them into practice. Given this, if the government continues to use an abnormal, crude form of ‘stability maintenance’ thinking, claiming that these workers are being used by hostile foreign forces, or even leveling the claim that independent labor organizations are competing with the Communist Party and its official unions for the ‘laboring classes,’ setting up a ‘second union,’ then they will be pushing workers into the opposition. For the government, this is politically unwise.
Why won’t the authorities allow these representatives, elected by workers themselves, to take part in the government-controlled unions? Hasn’t Xi Jinping criticized these unions and other similar organizations for bureaucratization, organizational involution, aristocratization, and general frivolity and misbehavior? How can these four negative tendencies be arrested? The only path forward is a constructive one: they should integrate the existing worker’s representatives and make them union cadres.
The state should have two primary functions: Firstly, to establish itself as a neutral party between labor and capital, and be an objective and fair umpire. The government should side neither with capital nor labor. Both forces are the fundamental constituents of productivity, and both are necessary. The state should mediate between them, not tilt the scales. As one worker once said, “we don’t need the government to come stand on our side — we simply need the government to remain neutral.” Secondly, the state should establish laws that govern the interactions between labor and capital, including administrative and judicial services that maintain the peace between the two sides. This would include a mechanism for reasoned negotiation and bargaining, in order to facilitate the two parties to resolve their problems.
Now, the situation in China is that the government comes out and forcibly shuts things down when labor and capital act unreasonably and clash to the point of harming the interests of the entire society.
Dr. Wang Jiangsong (王江松) is scholar of labor issues in China.