Tuesday, March 20, 2012

The Chinese Factory

One of the interesting things that appeared early in the new year was this report from the New York Times on the reasons Apple makes its products in China. (Some further background: this long report on working conditions in the factories of Apple's suppliers, and this follow-up report).

The NYT article and some discussions of it have concluded that making things in China is not about worker wages, but about workforce flexibility, readiness and 'appropriate' skill levels:

“[Foxconn] could hire 3,000 people overnight,” said Jennifer Rigoni, who was Apple’s worldwide supply demand manager until 2010, but declined to discuss specifics of her work. “What U.S. plant can find 3,000 people overnight and convince them to live in dorms?” 

This is disingenuous. The reason you can have an army of workers practically on site ready to leap out of bed at midnight and start making i-Pads is because they'll put up with it for what they get paid. In the end, this comes back to cost.  There are actually plenty of Americans prepared to live in barracks and jump to attention when needed. However, I'm guessing that Apple or other companies wouldn't be prepared to offer the same pay, benefits and pensions that one receives in the military.

It's also worth deconstructing the ahistorical statement that "if it weren't for the factory jobs, they'd all be unemployed and even poorer" This [long] piece by John Bellamy Foster and Robert W McChesney on  global stagnation and China argues that the "floating population" which does the majority of the most menial and hazardous work in Chinese factories was created by a complex process of proletarianisation during the post-Mao reform period, including the disestablishment of state-owned enterprises and (sometimes illegal) land privatization. The authors argue that this has created a reserve army of labour and enabled superexplotation. They cite figures showing rapidly increasing inequality in China and a steep drop in consumption, and particularly wages, as a share of GDP.

Then, just to complicate matters, you can read this news item on an announced wage rise by Foxconn and evolving labour market dynamics in China, with people now apparently more reluctant to migrate to the coast, forcing factories to relocate to the interior; and the Chinese administration desperate to increase the GDP share of consumption to counteract depressed export markets.

Could it be that the theorised capitalist development pathway of modernisation, labour absorbtion, and Kuznet's U-shaped curves is actually happening in China?  Will the contradictions of capitalist production necessitate a Fordist solution? It's worth noting that the Foxconn factory workers' reported new wage of $400 per month is about 50 percent more than the minimum wage in Peru, which for many workers in the formal economy is the standard wage. Will China become a middle class country even more rapidly than its southeast Asian neighbours? Will low-wage manufacturing eventually move to non-oil producing African countries, repeating the cycle?

Of course, no one knows. But one thing is for sure: in earlier cycles of capitalist development, improvement n wages, working conditions and labour rights didn't just happen automatically: they had to be fought for in distinct political struggles. So, it's always relevant to do what is possible to support these struggles, even if it is just putting consumer pressure on companies like Apple.

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