China, rising wages and worker militancy

chinaBy Deirdre Griswold

July 21, 2015

Workers’ wages in the United States have been stagnant since the 1970s in terms of purchasing power. It is common knowledge that it now takes several wage earners in most working-class families just to meet basic expenses. Meanwhile, low-wage workers are on the move, fighting hard for a higher minimum wage and union representation.

Wages in many countries in Europe are also in the doldrums. And the worldwide capitalist economic crisis that started in 2008 has devastated the economies of countries caught in strangling imperialist debt, from Greece to much of Africa, Asia and Latin America.

But there is one bright spot for workers’ wages — although you would hardly know it if you rely on the commercial media for your information.

It is China.

Steady wage increases

According to all accounts, factory wages in China, which of course started at a much lower level than wages in advanced capitalist countries, have more than tripled in the last decade. Some say urban blue-collar wages have gone up five times in that period. This is not what is happening in other developing countries.

In addition, inflation in China is low — the present annual rate is 1.4 percent, making those fatter paychecks very real.

Here are some Western sources from this year:

The Economist, March 4: “Since 2001, hourly manufacturing wages in China have risen by an average of 12 percent a year.”

Imagine if workers here had been getting a 12 percent raise every year for the past 15 years! Even with a union contract, wage increases in the U.S. have barely kept pace with inflation.

The Technology section of the New York Times, April 24: “Waves of migrant workers from the countryside filled China’s factories for the last three decades and helped make the nation the world’s largest manufacturer. But many companies now find themselves struggling to hire enough workers. And for the scarce workers they do find, pay has more than quintupled in the last decade, to more than $500 a month in coastal provinces.”

These reports are directed at U.S. investors, cautioning them that if they want to do business exploiting workers in China, it’s going to cost them more than in the past.

Chinese wages have not zigzagged — they have risen at a very steady pace even as the labor force has increased, especially with people coming from the countryside. Going along with this has been the planned growth of big cities, with new housing, transportation, schools, etc.

Class struggle alive and well

There are two things to consider in these remarkable changes. One is the struggle of the Chinese workers for a better life, and the other is the response of the Chinese government, led by the Communist Party.

The class struggle by the workers against the bosses, many of them foreign corporations, is alive and well in China. Worker actions have grown tremendously.

Nothing deserves the label of U.S. government propaganda more than Voice of America. But here’s what VOA had to say recently about strikes in China:

“The China Labor Bulletin — which tracks disputes — found that there were nearly 1,400 strikes in 2014, and the number of protests has risen even higher in the first two months of 2015.

“’We record strikes and collective work protests as and when they happen, and over the last couple of months we’ve been recording 200 incidents a month, on average,’ explained Jeffrey Crothall, a researcher with the China Labor Bulletin’s Hong Kong office.

“The group recorded 569 protests in the fourth quarter of last year — three times more strikes than during the same period in 2013. The figure also indicates a sharp increase from 2011, when there were only 185 documented labor protests during the entire year. …

“The majority of protesters are demanding higher wages, back pay and greater benefits and pensions. …

“In 1995 China enacted a labor law which granted all workers the right to a wage, rest periods, no excessive overtime and the right to carry out group negotiations. Rapid economic growth in the years since has lifted millions out of poverty, but as the economy cools wages could stagnate and unemployment could rise, and many could start blaming the government.

“Authorities in Beijing, hoping to push local authorities to address the situation, last month issued a notice to local governments to make improving labor relations an ‘urgent task.’ The directive said officials will work to ensure employees are paid on time and in full, launch programs to provide better labor protections for rural migrant workers, and call on employers to improve workplace safety.” (Voice of America, April 9)

To put this in perspective, the Bureau of Labor Statistics in the United States keeps a record of large strikes involving more than 1,000 workers. Last year there were 11 such strikes in the United States, with a total of only 34,000 workers. There used to be hundreds of such large strikes every year, reaching as many as 424 in 1974 and involving 1.8 million workers. But the numbers started to decline in the 1980s.

Executive killed, state took workers’ side

The VOA also noted: “Although many of those participating in the labor protests have been detained, few have been criminally prosecuted.”

To understand the phrase “few have been criminally prosecuted,” here’s one of the most extreme examples: In 2009, an incident occurred involving steelworkers at the Tonghua Iron & Steel Works in Jilin Province in northern China. After a mass meeting addressed by the executive of the steel company that was going to take over their plant, the workers rebelled and beat him to death.

“Chen Guojun, the steel executive who was beaten to death, had threatened 3,000 Tonghua steelworkers with layoffs, which he had said could take place within three days. He also had signaled that larger jobs cuts were likely at the struggling steel mill.” (New York Times, July 26, 2009)

What did the Chinese government do about this? “The provincial government of Jilin ordered Jianlong Group of China to abandon a buyout of state-owned Tonghua Iron & Steel Group after workers protesting job losses killed a manager, state-run Beijing News said Monday. The instruction, announced via Jilin’s television network last night, also ordered Beijing-based Jianlong to never again take part in any reorganization plan of Tonghua, Bloomberg News reported.” (New York Times, July 27, 2009)

That was it. The privatization was halted. No arrests, no prosecutions. Isn’t that the kind of power that workers should have everywhere?

Growth of the working class

At the time of the triumph of the Revolution in 1949, China was an impoverished and war-torn country of 542 million. The vast majority were half-starved peasants, recently liberated from the landlords, who had treated them as little better than slaves.

Today it is a rapidly developing country of 1.3 billion. But it was only in 2012 that China’s urban population for the first time exceeded those living in the countryside. Today the urban share of the working population is above 60 percent.

The rapidly growing working class has many grievances and is not passive. The workers are militant, organized and demanding what they know to be their right: a stable life with decent pay and working conditions.

Since the turn to the right within the leadership of the Communist Party of China in the late 1970s, led by Deng Xiaoping, China has opened up to capitalist ownership. But the recent stock market crash there, which cost many Chinese their savings, showed that illusions about instant riches under capitalism can come up against the basic irrationality of the capitalist system.

The outcome of the crash, just like the big gains being made by the workers, shows something else, too. The state in China does not act the way capitalist states do in the rest of the world. To call China a capitalist country is wrong.

In order to modernize, the CPC has allowed many features of capitalism to exist there, and the capitalists have done despicable things like not paying workers, subjecting them to long hours and unsafe working conditions, etc. The growth of millionaires and even billionaires has fueled corruption of government officials and antagonized the workers.

But alongside the capitalist-owned businesses is an increasingly powerful and modern state-owned infrastructure, through which long-term socialist planning is carried out.

The government was able to stabilize the financial markets in the most recent crash — something capitalist governments cannot do without taking it out of the hides of the masses. How many capitalist countries could survive a drop in the stock market of more than a third without resorting to draconian measures?

Even more important, the state controls the planned development of the country in both economic and social terms.

Organizations struggling for an international agreement on carbon dioxide emissions to counteract global warming were enthusiastic when, at the end of June, China made public its detailed plan for economic development over the next several decades. While still allowing for China’s growth, it laid out exactly how the country will move away from fossil fuels as well as, for example, reforesting vast areas to sequester carbon now in the atmosphere.

No capitalist country has presented any such commitment to the future. How can they, when the corporations and banks are in vicious competition with each other to control and use all the levers of government to enhance their own profits, above everything else?