In early November 2008, primary and middle school teachers in rural Chongqing, frustrated at local governments’ failure to pay them the wages they were legally entitled to, staged a series of strikes and go-slows across the region. In response, local government officials did something that just a few years earlier would have been unthinkable: They agreed to meet the teachers’ representatives in face to face talks to resolve the dispute.
The Chongqing officials were not alone. In 2007 and 2008, government officials all over China were forced to the negotiating table, not only in disputes with their own employees but increasingly in private sector disputes as well. China’s workers, squeezed by rising prices and unemployment, angered by management abuses, and emboldened by the passage of the Labour Contract Law and their own improved ability to organise, staged strikes and protests across the country demanding government intervention. And, more often than not, they were successful. Striking taxi drivers forced local governments in dozens of cities to curtail the excessive fees charged by cab companies, and in China’s manufacturing heartland, Dongguan, tens of thousands of laid off factory workers secured payments for wages in arrears after staging demonstrations in front of the city government building.
In nearly all these incidents, however, there was one organisation conspicuous by its absence. The All-China Federation of Trade Unions (ACFTU), the sole legally mandated trade union, is now seen by the majority of China’s workers as irrelevant to their needs, and as such they increasingly take matters into their own hands. In the Chongqing teachers strike, for example, all of the more than 20 directly elected teachers’ representatives in talks with government officials from Qijiang county were members of the teachers’ union, yet not a single union official attended the meeting. Asked why the union had not been involved, one representative explained that the teachers “don’t believe in their own organization! The union is rather weak… It performs almost no function.”
Unemployment jumped noticeably during 2007-08. Even the notoriously myopic official unemployment rate, which only includes urban residents of working age who have registered as unemployed, increased from 4.0 percent at the end 2007 to 4.3 percent at the end of 2008, or to about ten million workers. In the first half of 2008, large numbers of small and medium-scale enterprises, hit by higher raw material and transport costs and an appreciating currency, started to scale back production and lay off staff, mostly rural migrant workers not included in the official unemployment statistics. And the trend was greatly intensified in the latter half of the year as demand for exports collapsed. Tens of thousands of manufacturers dependent on cheap labour, lax enforcement of labour and environmental standards and an undervalued currency went out of business, leaving millions without work. In February 2009, Chen Xiwen, director of the office of the Central Leading Group on Rural Work, revealed the results of an extensive survey of 15 migrant worker-exporting provinces, which estimated that 15.3 percent or 20 million of China’s 130 million migrant workers had lost their jobs in the previous year. Despite the Chinese government’s four trillion yuan economic stimulus package, many experts see further pressure on jobs in 2009 as a result of the economic slowdown, the fall in exports, rising real wages, tighter monetary policy and other factors
As the cost of living rose across China, many local governments increased the minimum wage, sometimes on a yearly basis rather than once every two years as recommended by the central government. In Shenzhen, which was particularly hard hit by inflation, the minimum wage increased from 690 yuan in 2005 to 810 yuan in 2006, and 850 yuan in 2007. By 2008, it had reached 1,000 yuan. The global financial crisis however put the brakes on this trend. On 17 November 2008, the Ministry of Human Resources and Social Security issued a circular which called for the suspension of all minimum wage increases until the economic situation improved.
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