Ryan Pyle Blog: Honda Workers Strike, and the NYT

Hello.

A few days back there was a workers strike at a Honda car manufacturing plant in southern China. This occurred in late May. Of course thousands of news stories rushed to cover the news, and there was much mis-represented of what was really happening on the ground.

Enter Keith Bradsher and David Barboza. If you don't know who they are, all you need to know is that they are two of the best. Keith and David, both whom I've worked with and have a lot of respect for, are Business correspondents for the New York Times. And they co-wrote an article towards the end of May that I believe cut through and delivered the hard facts about what was happening at the Honda plant in southern China; a story that delivered news and facts that went well beyond that of the other publications.

A few points to keep in mind:

1) Yes, there is a workers union in China. It is considered to be an arm of the Communist Party and is mainly in charge of watching over workers not bargaining with companies for better working conditions. There are no explicit rules about striking.

2) It's true. Nothing in China is allowed to happen without the blessing of The Party. This strike may have first occurred on whim, but it continued because people high up in the food chain thought it was a decent move. Reasons why might include: that it is time for China's manufacturing migrants to earn more income and become part of the consumer economy; that it is time for China's manufacturing class to obtain better working conditions and better workers rights; that China needs to maintain awareness that the gap is growing between the rich and poor; the recent suicides at Foxconn might end up driving home the point that migrant workers in the manufacturing industry are vulnerable and need further employment protection through government regulation; and lastly that Honda is a Japanese company. Had this strike occurred at a GM or VW Joint Venture you can bet it would have been shut down in a matter of moments. There is a still a lot of personal, and government driven, anti-Japanese feelings throughout China.

3) The most interesting point is that this was allowed to carry on for several days. Meaning that there was debate amongst the top leaders about how to address the situation. We are seeing this more often in China; where the leadership is forced to make quick decisions about situations occurring (riots in Tibet / Xinjiang, or workers strikes) and the government goes very quiet, and local officials go in to hiding until they get their directions from higher up the food chain. One of the common mis-conceptions is that the Communist Party is a homogeneous one party entity where people all agree on the same basic plan for country development; well, that couldn't be further from the truth. The "Party" is a mix-mash of people with a mix-mash of ideas and ideals. A friend of mine who has a lot of government dealings told me that for every person in the government leadership who wants China to develop in to a modern economic global powerhouse, there is another person who wants to drive China back in to the Communist dark ages of the 1960s. While I don't know if that's exactly true, it does pose an interesting argument and can be used as a basis for understanding some of the "ying and yang" policy moves that the Chinese leadership continues to pull out of their hat.

The story by Keith and David is below. The link to the original story online is just below. Enjoy the read.

LINK to Original STORY.
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May 28, 2010
Strike in China Highlights Gap in Workers’ Pay

By KEITH BRADSHER and DAVID BARBOZA

FOSHAN, China — After years of being pushed to work 12-hour days, six days a week on monotonous low-wage assembly line tasks, China’s workers are starting to push back.

A strike at an enormous Honda transmission factory here in southeastern China has suddenly and unexpectedly turned into a symbol of this nation’s struggle with income inequality, rising inflation and soaring property prices that have put home ownership beyond the reach of all but the most affluent.

And perhaps most remarkably, Chinese authorities let the strike happen — up to a point.

In the kind of scene that more often plays out at strikes in America than at labor actions in China, print and television reporters from state-controlled media across the country have started covering the walkout here, even waiting outside the nearly deserted front gate on Thursday and Friday in hope of any news. All the Chinese reporters disappeared on Saturday morning, however, as the government, apparently nervous, suddenly imposed without explanation a blanket ban on domestic media coverage of the strike.

A worker at a factory dormitory said on Saturday afternoon that the strike continued, and police were nowhere in sight at the factory or the dormitory. The authorities have been leery of letting the media report on labor disputes, fearing that it could encourage workers elsewhere to rebel. The new permissiveness, however temporary, coincides with growing sentiment among some officials and economists that Chinese workers deserve higher wages for their role in the country’s global export machine.

And without higher incomes, hundreds of millions of Chinese will be unable to play their part in the domestic consumer spending boom on which this nation hopes to base its next round of economic growth.

“This is all because there is a major political debate going on about how to deal with the nation’s growing income gap, and the need to do something about wages,” said Andreas Lauffs, a lawyer at Baker & McKenzie who specializes in Chinese labor issues.

If wages do rise, that could bring higher prices for Western consumers for goods as diverse as toys at Wal-Mart and iPads from Apple.

The Chinese media may also have found it a little easier, politically, to cover this strike because Honda is a Japanese company, and anti-Japanese sentiment still simmers in China as a legacy of World War II. Certainly, the strike is hitting Honda hard, as the resulting shortage of transmissions and other engine parts has forced the company to halt production at all four of its assembly plants in China.

Honda has an annual capacity of 650,000 cars and minivans in China, like Jazz subcompacts for export to Europe and Accord sedans for the Chinese market. Because Honda’s prices in China are similar to what it charges in the United States, the cars tend to be far out of reach financially for most of the workers who make them.

A Honda spokeswoman declined to discuss specific issues in the strike negotiations.

The intense media coverage may evoke historical memories of the 1980 shipyard strike in Gdansk, Poland, that gave rise to the Solidarity movement and paved the way for the fall of Communism in Eastern Europe. But the reality here is much different.

Instead of tens of thousands of grizzled and angry shipyard workers, the Honda strike involves about 1,900 mostly cheerful young people. And the employees interviewed say their goal is more money, not a larger political agenda.

“If they give us 800 renminbi a month, we’ll go back to work right away,” said one young man, describing a pay increase that would add about $117 a month to an average pay that is now around $150 monthly. He said he had read on the Internet of considerably higher wages at other factories in China and expected Honda to match them with an immediate pay increase.

Many workers at other factories in southeastern China already earn $300 a month, but they do so only through considerable overtime. And even that higher income is not enough to embark on the middle-class dream in China of owning a small apartment and subcompact car. Officially, though, the government is discouraging heavy reliance on overtime, and workers here said that Honda was not assigning much.

The strikers said that Honda mainly hired recent graduates of high schools or vocational schools. And so, most are in their late teens or early 20s, representing a new generation of employees, many of whom had not been born when the Chinese authorities suppressed protests by students and workers in Tiananmen Square in 1989 — a watershed event whose 21st anniversary falls next Friday.

The profile of striking workers seems to run more along the lines of slightly bookish would-be engineers — perhaps without the grades or money to attend college — rather than political activists. Besides their low wages, the workers seem focused on issues like the factory’s air-conditioning not being cool enough, and the unfairness of having to rise from their dormitories as early as 5:30 for a 7 a.m. shift.

Workers said that in addition to their pay, they also received free lodging in rooms that slept four to six in bunk beds. They also get free lunches, subsidized breakfasts for the equivalent of 30 cents and dinners for about $1.50.

The striking employees said that some senior workers, known as team leaders, had allied themselves with management. But they insisted that the rank-and-file workers were solidly in favor of walkout — a claim impossible to verify.

Although China is run by the Communist Party and has state-controlled unions, the unions are largely charged with overseeing workers, not bargaining for higher wages or pressing for improved labor conditions. And they are not allowed to strike, although China’s laws do not have explicit prohibitions against doing so.

Workers at the Honda factory dormitory said that the official union at the factory was not representing them but was serving as an intermediary between them and management. Li Jianming, the national spokesman for the All China Federation of Trade Unions, declined to comment.

The workers here have been on strike since May 21, with no resolution in sight. But the strike did not come to broader notice until Thursday and Friday as Japanese media began reporting the shutdown of Honda assembly plants, and as Chinese media and Internet sites were allowed to report extensively on those activities.

The unusually permissive approach of the authorities toward media coverage of the strike follows a decision to tolerate extensive coverage this month of suicides by workers at the Taiwanese-owned Foxconn factory complex in nearby Shenzhen that supplies Apple and Hewlett-Packard.

The official China Daily newspaper ran a lead editorial on Friday that cited the Honda strike as evidence that government inaction on wages might be fueling tensions between workers and employers. The editorial criticized the Ministry of Human Resources and Social Security for not moving faster to draft a promised amendment to current wage regulations because of what the newspaper described as opposition from employers.

Zheng Qiao, the associate director of the department of employment relations at the China Institute of Industrial Relations in Beijing, said the strike was a significant development in China’s labor relations history and that “such a large-scale, organized strike will force China’s labor union system to change, to adapt to the market economy.”

Keith Bradsher reported from Foshan, China, and David Barboza from Shanghai. Bao Beibei contributed research.
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Ryan Pyle
Photographer
ryan@ryanpyle.com
Website: www.ryanpyle.com
Archive: http://archive.ryanpyle.com
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Ryan Pyle Blog: The Economist

Hello.

Why does the Economist hate photographers so much?

I mean, they don't really hate photographers. The Economist is a big picture buyer and their magazine is getting thicker and thicker each year. My reason for my opening statement is that they don't credit any photography; and recently they used one of my images from a computer factory in Shenzhen, and there was no credit in the magazine and only a "Corbis" credit online. See below.

Now, I think I understand why they don't credit writers for their magazine; and it's because they are all staffers and they don't want to draw away from the brand of the Economist and let any individual writers become larger than the actual magazine. And that is fair enough assuming people are compensated enough for giving up that opportunity.

But freelance photographers, and writers as well, rely so much on proper captioning as a form of marketing or advertising. I've had a lot of re-sales over the years from people who viewed an image in a newspaper or magazine and picked out my name in the caption, then googled me and found my website or archive.

So why does the Economist do that? Anyone have any inside information? While it might get on my nerves personally, you can't really fault the Economist and their methods or business plan. Their magazine is booming, in both terms of subscriptions and advertising, while the rest of the industry is falling in to a dark hole. I've been a subscriber for five or six years and I couldn't image living without my weekly edition; if for nothing else it gives me a lot of blog about.

Economist Picture:
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Back to the circuit board
Oct 22nd 2009 | SAN FRANCISCO
From The Economist print edition



Tech firms are doing so well that boosters say they will spur a broader economic recovery. That is unlikely.

THIS year’s Web 2.0 Summit, an annual technology conference in San Francisco, featured a reception at a swanky hotel dubbed “Web After Dark”. The event was packed with euphoric entrepreneurs toasting their grand plans. Conference veterans noted the contrast with the previous year’s summit, which many attendees spent drowning their sorrows as the world economy sank into chaos.

There is plenty of other evidence that the darkness that has hung over the information-technology industry for many months is lifting. Three of the sector’s heavyweights—IBM, Intel and Google—recently reported surprisingly robust profits. Even Yahoo!, a struggling internet portal, did less badly than expected. On October 19th Apple stunned even the most bullish investors by posting its best quarterly results ever: revenues came in at $9.9 billion, 24% higher than the same period a year earlier. Venture-capital investments in America are growing again. And Windows 7, the new operating system Microsoft launched on October 22nd, is expected to pep up demand for personal computers and related gear. The OECD believes a recovery has been under way for some time, particularly in Asia.

All this is more than welcome. But the wave of good news has also helped to buoy the industry’s infamous self-regard. Some even predict that IT will pull the economy out of the mire, with investment in technology giving a swift boost to productivity and job creation. As Edward Yardeni, an economist known for his optimism, has put it: “This will be a technology-led recovery.”

Just how much of a boost IT can provide is a subject of some contention. Both Forrester and Gartner, the industry’s leading research firms, predict that the downturn will bottom out in the current quarter and that growth will resume next year. Yet the two firms differ on the severity of the recession in IT and, more importantly, the speed at which the industry will pull out of its slump. Forrester sees a V-shaped future, whereas Gartner envisages more of an L, with revenues remaining below last year’s level until 2012 at the earliest.

There are good reasons to be conservative. For a start, talk of rapid growth in percentage terms disguises low absolute numbers, thanks to the depth of the recent contraction. If venture-capital investments in America were up by an impressive 17% in the third quarter, according to the National Venture Capital Association, this was mainly because they had dropped to an historic low. The volatile dollar muddles the picture as well. For almost a year, the currency’s increasing strength weighed heavily on the results of American IT firms by devaluing foreign revenues. Now its increasing weakness makes their numbers look far healthier.

In addition, excellent results at Apple, Google and even Intel reflect increased demand from consumers. Apple has benefited from the boom in smart-phones, Google from users clicking on more advertisements and Intel from the popularity of “netbooks” (small laptops), many of which contain its chips. But companies still account for by far the biggest chunk of technology spending. IBM, which offers the entire range of corporate IT services, from powerful computers to consulting services, is therefore a much better proxy for the overall health of the IT industry. Although its profits were better than expected, its revenues fell by nearly 7% in the third quarter compared with the same period last year.



Moreover, it is likelier that the economy, supported by low interest rates and stimulus programmes, is reviving IT, rather than the other way around—a function of IT’s increasing pervasiveness. It now accounts for over half of American firms’ investment in equipment (see chart). In the countries of the OECD, the organisation’s secretariat estimates, it accounts for more than 8% of value-added and nearly 6% of employment. Sacha Wunsch-Vincent, an economist at the OECD, says, “For most OECD countries, the prospects are of a very fragile and weak recovery, for the overall economy and thus for IT.”

Even if corporate investment in IT does bounce back faster than expected, it could be some time before the effects feed through to the broader economy. In a new book, “Wired for Innovation: How Information Technology Is Reshaping The Economy”, Erik Brynjolfsson of the Massachusetts Institute of Technology and Adam Saunders of the Wharton School point out that it usually takes five to seven years for IT investments to produce substantial returns because it typically takes that long for companies to make the organisational changes needed to capitalise on the new technology. What is more, Mr Brynjolfsson points out, the recession has encouraged companies to focus their IT investments on boosting the productivity of shrunken workforces, which may mean that unemployment remains stubbornly high for some time to come.

So the parties in San Francisco seem premature. Yet the recession has also accelerated trends that could make for a bigger celebration later. It has speeded up the adoption of promising new technologies, such as cloud and mobile computing. Without the crisis, consumers might not have rushed to buy cheap netbooks or even smart-phones. Needing to cut investment, companies looked more closely at software delivered as a service over the internet. One firm that has grown consistently this year is Salesforce.com, the largest provider of such offerings.

These trends have also been fuelled by the shift of the industry’s centre of gravity to emerging markets, where consumers have less money to spend on technology and companies are more likely to outsource their IT (see article). Countries such as China and India have seen IT spending increase by up to 30% annually in recent years and account for much of the industry’s recent growth. Between 2003 and 2008, developing countries’ share of spending on IT grew from 15% to 24%, according to the OECD. Developing countries also make more than half of the world’s electronics. China alone churns out more than a quarter, compared with just 3% in 1995, according to Reed Electronics, another market-research firm.

As for rich countries, the crisis has prompted governments to speed up IT investments which might otherwise not have become a priority for years, says the OECD’s Mr Wunsch-Vincent. The stimulus packages of most countries in the OECD include large sums for smart power grids, digitisation of health records and the deployment of broadband networks. All this, he says, should boost productivity and employment in time, provided the politicians have spent wisely—a big if.

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Ryan Pyle
Photographer
ryan@ryanpyle.com
Website: www.ryanpyle.com
Archive: http://archive.ryanpyle.com
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Ryan Pyle Blog: Work Conditions Getting Worse

Hello.

Much fuss was made last year when China unveiled a series of labor laws that seemed to better protect the average worker. Now an URBAN debate continues to rage on whether the labors laws just protect the unproductive or whether they are really useful, and timely.

But what about the migrant workers? Are they protected under the labor law and have their lives improved? Well, the labor law, see article, seemed to be focused in the right places but no one was expecting a financial crisis - which led to a demand crisis - which led to a Chinese export crisis - which led to a Dongguan crisis - which led to most employers throwing the new labor law out the window. What a series of chain reactions!

LINK: New York Times: Despite Law, Job Conditions Worsen in China

David Barboza for the New York Times writes an interesting feature on the plight of one family, in one factory and how that relates to the industry at large. I photographed the portrait of the family in question under very tense conditions just a few steps away from the factory where their son had been killed.

Having spent so much time in China, I've seen my fair share of factory floors and I had been under the impression that things were improving. Over the years working conditions have improved, even if wages and living conditions haven't. But workers still work too many hours, too much overtime and in poorly lit conditions - which leds to exhaustion and avoidable accidents, sometimes fatal.

My intention for this blog is to raise awareness that the financial crisis is causing cut backs not just in the US and Europe but also on the factory floors of southern China; and those cutbacks have led to more dangerous working conditions the for the most exposed portion of China's population - it's migrant workers. Please do read the article, it's a good one; I am very glad I was able to be a part of it.

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Ryan Pyle
Photographer
ryan@ryanpyle.com
Website: www.ryanpyle.com
Archive: http://archive.ryanpyle.com
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