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Wang told us that his start-up investment was "less than 20,000 yuan" and that his guests were all construction workers, mostly from Henan. The hostel’s adverts – mainly via word of mouth and also by sticking name cards to public telephones – offered not only accommodation but employment services which were chiefly conducted on Wang’s mobile phone or via his contacts across the construction industry. Hostels such as this one also form part of the networks and ports of call of labour subcontractors.

Mr. Liu is a scaffold worker from Guangxi province who moved to off-farm work due to the poor land quality in his village. He was recruited by his boss, also from Guangxi, while staying with bridge builders in a hostel similar to Mr Wang’s in Shenzhen. Liu said that his boss was previously an electrician employed by a Guangzhou-based state owned company building materials company specialising in bridge building equipment. His boss had built up a network of “reliable” bridge workers over the years and eventually struck out on his own. When interviewed Liu said his boss had over 100 workers scattered over four sites in the province.

Liu’s boss did not offer contracts and pay was on a project basis. Subs of up to 50 per cent of the total hours worked were available to cover urgent needs such as children’s education and medical costs for illness. No training was deemed necessary although Liu said his boss tried to retain workers in order to build up a sense of team spirit and reliability. There was no insurance provided although Liu expressed confidence that his boss would “see him right” should there be an accident.  The bridge workers lived, ate and occasionally got drunk together during a job and the subcontractor often attempted to ameliorate the exhaustion of an especially long working week by turning up on site with food and drink. Working hours were eight to nine hours a day normally and up to 12 hours a day during a “good week”. Most builders work between 26 and 28 days per month weather allowing. Liu earned 50 yuan for a nine hour day and more with overtime. He said this was the going rate for unskilled construction workers – in Guangdong cities – working at height and our research bears this out. He said experienced skilled workers could earn considerably more. The aforementioned AMRC research provides a detailed breakdown of day rate and piece rate construction wages that range from 25 yuan for ordinary labouring to 50 yuan per day for working at height. What is noticeable about the construction industry wage structure in the case of this southern Chinese city is the complexity and differentials of the wage rates. For example, bricklayers are paid per brick laid and workers making shuttering for cement pouring are paid 10 yuan per square metre. By way of comparison, illegal and legal migrant construction workers from the UK and Turkey working in West Germany in the early 1980s were paid one of two flat rates depending whether the worker was skilled or unskilled. The serious differentials were on the basis of race. Brits were paid many times more than Turks. 

Wage Arrears

The late or non-payment of wages is the most serious manifestation of the wage issue. Mainland media have reported construction worker wages being paid in illegal “currencies” such as food coupons in restaurants. Other reports have charted illegal deductions made from workers wages called building quality deductions (gongcheng zheliang) and deductions aimed at preventing workers from moving to another site (gong qi di jin). Combined, these two deductions can knock 10 per cent off the total wage. Along with wage arrears, the collective protests that these practices cause have given rise to serious concern from the authorities. They are generally referred to in the media as social incidents and as far as the construction industry is concerned they mostly take place around Spring Festival. This is because most building workers are paid a living subsidy – usually 10 per cent of the agreed wage – until the completion of the project or Spring Festival comes around in January or February of the Gregorian calendar.

The lack of independent trade unions capable of effectively monitoring the industry is not the main reason for wage arrears. Unions are part of the solution. The power of capital in general and the influence – direct or otherwise – of the forces of globalisation in particular are the cause. The All China Federation of Trade Unions (ACFTU) is the only trade union allowed to operate in China and it is legally and constitutionally bound to working under the leadership of the Chinese Communist Party (CCP). Given the latter’s enthusiasm for market forces, it is not surprising to find that the ACFTU, while highly critical of the process that leads to wages arrears as well as the construction companies involved, apportions the lion’s share of the blame not on market forces as such but on the current imperfect market forces operating in China. The implication being that once these are perfected, the problem of wage arrears – which in Spring 2005 stood at approximately US$12 million – will diminish. The following will take a quick look at some the causes underlying wage arrears.

Firstly, there is a dramatic imbalance in supply and demand in the construction industry. There are a great number of construction companies chasing a limited number of construction projects and the market is therefore skewed entirely in the developers’ (jianshe danwei) favour. As a result, payments to the construction companies are often delayed as there is little to stop the developers from either overstretching their own finances or simply refusing to pay on time as part of their business practices. We have already made mention of the policy of the new management companies that will include overall project finances as part of their monitoring mandate, but these companies will be contracted by the developers themselves. The Beijing Times reported in February 2006 that the central government has ordered that the construction companies be paid on time for public infrastructure projects but there appears little guidance available for enforcement. Some construction companies agree to delayed payments as part of their bids to win government-backed projects! The practice of delaying payment is even more serious in the residential property sector and one survey in Zhejiang found that it accounted for 41 per cent of delayed payments in 2003. Undercapitalised construction companies are often forced into a practice known in Chinese as dianzi which is basically to elicit a form of unsupervised credit in order to secure a project. The source of this credit can be from a construction company’s own subcontractors – especially labour subcontractors who don’t get paid until completion – building materials suppliers and bank loans. This practice is obviously highly unstable and of course, it is the construction workers who suffer when it collapses.

Secondly, the labour supply market remains open to considerable abuse. As already discussed employment channels are very often casual, informal and on a day hire basis. Clearly, workers caught up in this chain are very difficult to organise. The official trade union for construction workers is the Chinese Seafarers and Construction Trade Union (CSCTU) and this body has recently embarked on a number of campaigns to recruit migrant construction workers. It has also organised bilateral talks with major state-owned construction companies. But it has made virtually no impact on the growing private sector and has concentrated its efforts mainly on research and law drafting, effectively playing the dog’s tail to both government policy aimed at tackling the problem and workers’ own more direct initiatives. These have included organising press conferences, threats of suicide in which workers draw lots and the ‘loser’ climbs up a crane or suitably high building to threaten suicide until a compromise is reached. This tactic meets with varying degrees of success and if the workers can succeed in persuading a local government department to get involved pressure will be brought on the relevant party or parties. However, should the police decide to make arrests then the individual who takes the action pays the price usually with a spell in detention. More direct collective protests such as strikes, road blocks and picketing finished sites are highly effective but very risky for the organisers.

Thirdly is criminal or corrupt behaviour. The industry is not short on scams, organised crime and gang bosses. Zhou Ziyong is a former construction worker who worked his way up to a position of site supervisor. In 2004 he recruited 700 workers to build a mall in Beijing. The contractor disappeared with the wages and left Zhou owing 758,000 yuan to 397 workers. Mr. Zhou took his story to the press and said he did not dare go home for Spring Festival as he would face unspecified pressure from the relatives and friends of those he recruited.

The MoC City Construction Committees and the Ministry of Labour and Social Security have put great store in the various tools of labour relations to attempt to improve the labour market. Contract templates for the industry have been drafted and issued; the official CSCTU has been urged to increase efforts to sign up migrant workers and increase pressure and persuasion on employers; targets to eliminate gang bosses from the hiring process by the end of 2005 were set by the Beijing Construction Committee. These will dilute the problem – especially in boom times – but not solve it. The negative impact of market forces can only be really tackled by strong unions willing to challenge at least some aspects of capitalist ideology and remove labour to the edges of its influence. Migrant construction workers are only likely to become active in trade unions that prove capable of pursuing immediate collective class interests as well as legal rights. Top down recruiting campaigns will meet membership quotas from above but have a negligible impact on China’s hundreds and thousands of construction sites. 

Conclusion

China’s construction industry is likely to remain a key industrial component of the country’s overall development. ‘Decent Work’ is an ILO sponsored framework for overall development and states that government policies should have at their core “opportunities for productive, remunerative, and safe work; the provision of social security; respect for workers’ rights; and the promotion of social dialogue”. This paper hopefully demonstrates that while construction does indeed create millions of job opportunities which have been central to China’s relative success in poverty reduction, the industry at present falls well short of meeting the remaining components of the Decent Work framework. Migrant workers make up the backbone of the industry and yet they work in an atmosphere of institutionalised discrimination that finds its clearest expression in the hukou system of residential restrictions. In short hukou dictates that migrant workers cannot live where they work unless they are in work. If they are out of work, they have to leave. This is hardly a level playing field for the social dialogue that Decent Work demands. Nor is the construction industry safe with over 1,324 reported fatalities in 2004 and many more going unreported. At a 2002 conference in Shanghai on Decent Work in China, the Director of the International Labour Institute of the MOLSS, Mr. Liu Yanbin, proposed that in the context of a transitional country, employment opportunities must: safeguard the creation of employment opportunities; ensure a minimum income; and protect workers’ basic rights and interests. In this light, the construction industry is an ideal area in which the government can fashion policy into addressing all of these aims while avoiding any radical policy departures which it claims to avoid in the name of building a “harmonious society”. These include legal reform in: residential discrimination (hukou); the right to strike; implementation of existing labour law; the identification and closing of legal loopholes that facilitate wage arrears and corruption along the supply chain; restriction on and monitoring of the bidding and tendering process for construction projects; access to legal redress for workers; and access to compensation for industrial injury. As we stated at the outset, none of these recommendations will be truly effective without independent trade unions.

References

Ministry of Works, China and S. Sharma, The Construction Sector in Asian Economies. 

China Labour Statistical Yearbook 2004

China Labour Social Security Yearbook 2004

China Foreign Investment Report 2003

China Work Safety Yearbook 2002

Bluebook of Zhejiang 2005

China in the World Economy (OECD, Emerging Economics Transition series)

Media reports from mainland China and Hong Kong SAR.

Ministry of Construction website: http://www.cin.gov.cn/

Chang Dae-oup, Globalising Asian Construction Industry and Workers: Transnational Corporations and Workers for Asia Monitor Resource Centre (work in progress)

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