As Wal-Mart Swallows China's Economy, Workers Fight Back

Imaginechina via AP Images

On any given day, go to the Shenzhen Wal-Mart in the city's Yuanling neighborhood, and you may find a stocky man in his early fifties in front of its doors, draped in a banner that reads, in Chinese characters, “Support the just demands of workers.”

Ask him why he's there, and he will tell you that he used to work at the Wal-Mart, that he was unjustly fired for organizing other workers and protesting deteriorating work conditions, and that he's fighting to get his job back.

“A lot of people said I should just leave. But my skin is really thick, and I didn’t want to leave the company. I still had faith that things could and would change,” Wang said. “I asked myself, how should I protect my rights? How can this unfair situation be made right?” The answer he found, he said, was organizing along with his fellow workers and now, continuing to stage his weekly protests.

While he usually protests alone, Wang Shishu's is one of a growing number of Wal-Mart workers in China who are fighting for their rights. In the past year alone, distribution-center workers have gone on strike to protest cuts in benefits, several cases of retaliation against employee activists have received significant media attention, and labor NGOs that previously focused on factory workers are beginning to get involved.

It’s tempting to see Wang’s story as part of a global fight against the world’s largest retailer, one that ranges from Wal-Mart workers in the United States organizing and gaining attention last year for their nationwide walk-out on Black Friday, to the Global Day of Action last December that involved workers in ten countries, to the outcry over the fire at a Wal-Mart supplier’s factory in Bangladesh. But Wal-Mart workers in China face unique obstacles, not least of which is the role of the official state-sponsored union. While China's Wal-Mart workers—unlike their counterparts in the United States—are officially unionized and members of the All-China Federation of Trade Unions (ACFTU), lack of support and action from the ACFTU has led workers like Wang to take matters into their own hands.

Born in Jiangxi, a province just north of Guangdong that is one of the poorest in the country, Wang came to Shenzhen in 1989, almost a decade after the city was designated as a Special Economic Zone. The influx of both foreign and domestic investment transformed what had been a small fishing village into a bustling metropolis that is now known as the manufacturing capital of the world.

A former People's Liberation Army soldier, he had two small children to put through school, as well as a wife with a chronic illness. Without a high school diploma, and as an older worker, his prospects were dim. For Wang, getting a job at the Shenzhen Wal-Mart was seen as a stroke of good fortune. “At the time, I trusted Wal-Mart,” he said. “After I started working there, I felt lucky, and really treasured the job.”

It wasn't just the 1,500 yuan a month that he received as a full-time worker (which included a 400 yuan housing subsidy) that he appreciated. He also appreciated the company's values, known as Wal-Mart “wenhua,” or culture, which is heavily promoted in China and reinforced by blue plaques bearing several of Sam Walton's aphorisms that can be found dotting the walls of all the stores.

Wal-Mart respected workers as individuals, he said, parroting back to me one of the three tenets of the “Wal-Mart Culture” as listed on their China website: respect for the individual, service to the customer, and the pursuit of excellence. “In my previous jobs at private companies in China, this wasn't the case,” Wang said. “But at Wal-Mart, I felt like a person, treated with basic fairness. As long as you worked hard, you received approval and encouragement.” And, equally as important, regular pay increases.

But when conditions started deteriorating several years ago, he and other workers began to protest, leading, he believes, to his firing last June.

Wang Shishu’s story is not unique—he is one of the hundreds of millions of migrant workers that have shaped modern China by their labor. And more and more, they are shaping the future of China with their militant labor strikes and direct actions. In the past two months alone, labor strikes have popped off with street cleaners in Guangzhou, high school teachers around the country, Foxconn workers in Jiangxi, and migrant construction workers in Beijing.

 

Wal-Mart opened its first retail store in China in 1996, in Shenzhen. Today, Wal-Mart has almost 400 stores in 147 cities throughout the country, from several locations in the capital city of Beijing to Supercenters and Sam's Clubs in fourth-tier cities in remote provinces. According to its website, the company had more than 87,000 employees as of 2010. While China sales account for only 2 percent of Wal-Mart's global revenue, company executives believe China is key to its future growth, especially as revenue from the retail sales market in China is expected to reach $5 trillion by 2016, fueled by a growing middle class and government policies that are promoting domestic consumption to drive the economy.

As Wal-Mart expands in China, activists and academics have found that along with “Wal-Mart culture,” the company has also imported abuses familiar to those who follow Wal-Mart in the United States: low wages, worker intimidation, gender-based discrimination,  unpaid overtime, replacing full-time workers with part-timers (who have lower hourly wages and don't receive any benefits), firing workers who complain or organize, and most recently, eliminating benefits such as the meager housing subsidy the company formerly provided.

These labor violations occur despite of the 2006 unionization under the All-China Federation of Trade Unions. With more than 200 million members, ACFTU is the largest trade union in the world, and the only union that can legally operate in China. In 2005, ACFTU declared they would unionize 60 percent of foreign enterprises by the following year, and chose Wal-Mart as the poster child for the unionization drive. According to labor scholar Anita Chan from Sydney’s University of Technology, Wal-Mart was targeted partly because of its reputation as a notorious union buster. Unionizing Chinese Wal-Marts would be a major feather in the ACFTU's cap.

Despite its reputation as a business-friendly union—an official organ of the Communist Party, it has been criticized for being more invested in GDP growth than in protecting workers—the ACFTU soon found that Wal-Mart was unwilling to negotiate, afraid perhaps of the dangerous precedent that allowing workers to unionize in China would set worldwide. The union was forced to organize workers from the ground up. After the ACFTU clandestinely set up several union branches in the space of two weeks, Wal-Mart realized it needed to negotiate. In August 2006, Wal-Mart and the ACFTU signed an agreement establishing unions at all its stores in China.

When we learned that there were bottom-up organizing efforts going on at several stores, we were encouraged, said Ellen David Friedman, a long-time union activist who is now teaching at Sun Yat Sen University in Guangzhou. “There was a very interesting period in which some of these worker leaders actually contended with management. This kind of grassroots militancy won great support from the workers.”

These hopes proved to be too optimistic. The ACFTU soon abandoned any pursuit of union democracy—colluding with management at one store, for example, to appoint a store manager as the union head after the elected chair had to step down. “At that point,” Friedman said, “our previous guarded optimism also evaporated.”

 

The father of Wal-Mart worker organizing in China is a young man now in his thirties named Gao Haitao, a former Wal-Mart worker at a store in Nanchang, in Jiangxi province. Affectionately called Chairman Gao by workers who followed his blog on Sina Weibo (a microblogging site), Gao engaged in a very public battle with both the union and with Wal-Mart management for years.

His story illustrates the difficulties of workplace organizing in China. In 2006, before Wal-Mart formally allowed its workers to join the ACFTU, the Nanchang store unionized as part of the ACFTU’s initial organizing drive. Other workers voted Gao in as the store's first union chair. He quickly began using his platform to protect workers rights, successfully calling for a worker who was fired for eating free samples on the storefloor to be reinstated and traveling all the way to Beijing to meet with trade union officials in the capital to air workers' complaints.

Other workers wrote admiringly of him online, leaving comments like, “Under [Gao’s] leadership, the union isn’t just window dressing,” and “If only our trade union chair was half as good as Chairman Gao.” Workers in other cities even began contacting him for advice and assistance. But in 2008, after his efforts to force Wal-Mart to come up with a better collective-bargaining agreement were railroaded by both management and the union, he resigned in protest.

In a surprising twist, Gao currently works for the ACFTU’s regional office in Guangdong Province, working on individual workers-rights cases. When asked why he now works for the very union that railroaded his efforts at protecting workers rights, he explained that there is a lot of reform that needs to happen to protect the rights of workers, from stricter enforcement of existing labor law to implementing a better system for regular wage increases. “My hope is that we can address workers’ problems through systemic change,” Gao said. While he didn’t address the role of the union, it is clear that Gao believes reforms are needed.

His personal opinion is that workers who want to organize at Wal-Mart are facing an uphill battle. Part of the problem, he believes, is that current labor laws are too weak to protect and empower workers.

“Wal-Mart as a company is very careful,” Gao said. “Right now, the industry standards are inadequate. If Wal-Mart doesn’t technically break the law, it’s hard for the workers to do anything.”

Labor scholar Anita Chan agrees, adding that many frustrated workers, rather than fight for better conditions, simply choose the exit option. “Wal-Mart only pays minimum wage, and it doesn't have overtime,” she explained. “When the wage is minimum wage and there is no overtime, it’s not possible to live on what you're making. So a lot of workers just leave for something better.”

Some workers, however, are taking initiative. In addition to Wang Shishu, a young woman named Li Wan recently successfully sued Wal-Mart for wrongful termination, believing the company had fired her for attending a training on collective bargaining. Last July, more than 40 workers at the Wal-Mart distribution center in Shenzhen went on strike.

Beyond just Wal-Mart, other observers of the labor movement in China point to the tens of thousands of “mass incidents”—strikes and protests—that occur every year as evidence that worker discontent is leading to growing tensions. And, they say, workers are winning.

While the vast majority of these actions are factory strikes led by young workers, many are increasingly labor disputes in the service industry—the sector that employs the largest number of workers in China, despite Foxconn’s domination in our popular perception of the country.

But while wages in factories have gone up, the income of service sector workers has stagnated and, after adjusting for inflation, has even declined. There is a national and provincial minimum wage that is supposedly enough to cover living expenses, it hasn't kept pace with the rising cost of living in China

Established organizations like Students and Scholars Against Corporate Misbehavior (SACOM), a Hong Kong-based NGO that advocates for expanded workers’ rights and the formation of independent labor unions, are now getting involved in the fight against Wal-Mart.

“Workers in the service sector are also the working class whose livelihood is deteriorating,” said SACOM's Yiyi Cheng. SACOM is planning to release a report on working conditions in Wal-Mart's Shenzhen stores in the upcoming months.

The decline in working conditions was the catalyst for Wang and his fellow Wal-Mart associates. Wang rattled off a laundry list of workers complaints: management harassing older workers in hopes they would quit, stagnant wages, unpaid overtime, and, the latest move, taking the housing subsidy and adding it to workers' base pay, a move that would make it seem like they were raising wages in response to workers' complaints but in actuality, would be gutting a key social service.

Increasingly, his fellow associates looked to Wang to be the go-between and resolve these worker disputes. Additionally, in 2011, he and other Shenzhen Wal-Mart workers were invited by an activist lawyer Duan Yi to attend a training on collective bargaining in Hong Kong, which further sharpened his determination to fight back.

All of this made local union officials and store management increasingly concerned, and they began a campaign of harassment and intimidation that included late night phone calls containing veiled threats and installing a video camera to monitor his activities in the employee breakroom.

The situation escalated in July of last year as workers decided to protest the lack of pay increases and the gutting of their housing subsidy. As the de facto leader, Wang organized several meetings and circulated a petition that almost 100 workers signed.

That month, at the same time that Wang was organizing workers at his store, more than 40 workers at the Wal-Mart distribution center in Shenzhen went on strike over similar pay issues. Believing Wang to be involved in that action (he claims he did not know they were planning on striking), management fired him at the end of July.

He is currently in arbitration, and says that he wants to get his job back not only to support himself and his family, but to continue his fight for workers rights. “If workers aren’t satisfied anymore and we face obstacles, this is a problem we as a society need to fix. If we don’t fix this problem, then everything else we do is meaningless,” Wang said. “I want to take what I've learned and share it with my fellow coworkers, to have more people learn about how to protect our rights. Having more people and more power is the only way we can influence things.”

 

Wal-Mart's future in China is no longer quite so bright. Labor disputes will continue to erupt as workers become increasingly dissatisfied. In China, recent scandals from being caught selling meat from diseased pigs to price fixing to charges of bribery have undermined Wal-Mart's reputation among the rising middle class as a safe and reputable retailer. And recently, there have been reports that the company plans on closing 100 of its underperforming China stores, even as Wal-Mart officials continue to state publicly that they still plan on expanding in the country, albeit more slowly than originally planned.

Wang says he still respects the values of the company, but he asks, “The company’s policy of respecting people is very clear, but this so-called respect, how are they embodying it? What does it even mean?” And he has a clear message and warning for Wal-Mart: “What you're doing, you’re playing with fire.”

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