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Waking Dragon

“Follow the money?” Or the lack of money…?

Awhile ago, I wrote about the Chinese solution to bad working conditions: suicide.

Today, CNN has two related stories, one of which has a California connection. Foxconn, the world’s largest electronics contract manufacturer (which has been highly responsive to suicides at one of its production facilities, including large pay increases), is shifting some of Apple’s production “from Shenzhen to north and central China, amid a greater willingness from the US company to work with factories away from its long-time Chinese hub.”

The move should protect Apple’s supply lines from labor unrest and strikes. The move will also provide Apple with lower-paid workers, after recent SHARP salary increases in Shenzhen (oh… in response to suicides).

CNN states:

“Executives close to the annual negotiations between the two companies over next year’s orders said Foxconn’s demands to pass on some higher labour costs had not been met favourably by Apple.

‘But Apple is more ready now to use some of the new locations,’ one executive said.

Foxconn and Apple declined to comment.”

I’ll bet! :-)

Analysts estimate that, of Foxconn’s 800,000 workers in China, more than 100,000 are working on Apple products.

The related article describes labor unrest, mass protests, strikes, and acts of violence by workers in China, including a May 17 strike by 1,800 workers in a factory in southern Guangdong, which supplies parts for Honda Motors. The workers demanded better pay. After two weeks, they got it!

Victories by workers have been contagious and have spread to other cities and factories.

CNN states:

“Since China introduced market reforms in 1978, economic growth has averaged more than 9 percent every year and per capita income has more than quadrupled.”

(Note added July 11, 2010: TV news last night mentioned the irony that “communist” China is now one of the most successful “capitalist” countries in the world!)

“Prospering the most are the booming coastal provinces, where shiny skyscrapers boast malls teeming with well-heeled shoppers. But in the rural interior, tens of millions of Chinese still live in poverty. Beneath the glowing statistics, China’s leap to prosperity has left millions of its citizens behind.”

In an interesting case of cultural parallelism, the Chinese migrant workers reflect a bit of the “baby boomer” and “Gen X” phenomenon. Although we baby boomers have not lived through poverty and hardship, many of us HAVE spent way too much of our lives at work, often underpaid, out of work-life balance, and under extreme stress. Gen X’ers try not to make those mistakes.

A Canadian political science professor described the Chinese situation for CNN:

“Their parents have lived through hardship and poverty, but the younger generation has seen nothing but economic growth and they feel they should benefit from the economic progress,” says Wenran Jiang, political science professor at University of Alberta in Edmonton, Canada. “They will not put up with poor working conditions, work-related stress and low wages.”

China has an officially sanctioned “labor union,” but it looks like workers have “seen through” its pretenses:

“One institution that is in place to help smooth labor disputes is the All-China Federation of Trade Unions (AFTU), an officially sanctioned labor union. Chinese leaders have called on official labor unions to do a better job of representing workers. But striking workers at the Honda plant in southern Guangdong said they distrusted the official unions as pro-management, not pro-workers.”

So, as American business looks for underpaid workers worldwide for its offshored jobs, where will it look NEXT? After Russian President Dmitry Medvedev’s visit to Silicon Valley, my bet is that some high tech work will be offshored to low-paid Russians, but that could be complicated by a recent roundup (“tip of the iceberg”) of alleged Russian spies. (Note added July 11, 2010: Wow! Please notice how quickly the “spy swap” cleared up THAT problem [ignoring the rest of “the iceberg”]. It would be a shame to let politics stand in the way of “making a few bucks!” :-) ) Forbes asks, “Is Vietnam The Next China?” (For some strange reason, they capitalized the article “the.” :-) ) We shall all have to sit in increasing poverty and watch where the jobs go next…. :-)

Who knows? Maybe someday, after I am long dead, the economic levels of all of the current low-paid workers in the world will have been raised, and jobs with “American” companies will return to the unemployed of the United States. :-)

Naw! :-)

-Bill at

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