Business | Analysis

China’s low glass ceiling threatens growth

Last week’s riot at Foxconn belies the myth that better pay and benefits are enough to appease Chinese workers

  • Bloomberg
  • Published: 14:12 October 7, 2012
  • Gulf News

Beijing: How can it be that a company clever enough to satisfy Apple’s famously stringent requirements can’t figure out how to keep its workers from killing themselves and hurting one another?

Last week’s riot at a Foxconn Technology Group factory in northern China belies the myth that better pay and benefits are enough to mollify Chinese workers. Foxconn, which is Apple’s leading supplier, already pays above-market rates and has been raising wages.

A sea change is rippling through many Chinese factories. A workforce once dominated by women is now increasingly male. China’s one-child policy chips away daily at its competitive advantage in manufacturing for export, first by choking the supply of labour of both sexes, then by restricting the flow of women into factory jobs. The result is a more restive male workforce, frustrated by crude management and a thick, low glass ceiling.

When I first started visiting Chinese clothing and electronics factories almost a decade ago, there were often more women than men on the assembly line. The tide of migrant labour pouring in from the countryside was so strong that Chinese factory managers could be picky. Like the industrial bosses of 18th-century England, they chose women for their docility, their dexterity and their attention to detail.

Today, many plants have no choice but to hire more men than women. China’s gender ratio - 107 boys born for every 100 girls in 1980 — has widened to 118 boys born for every 100 girls as of 2010.

Male malaise

Sex-selective abortion is creating kindergartens of boys and villages of bachelors. In some areas, according to Dudley Poston, a sociologist at Texas A&M University, 160 boys are born for every 100 girls. (The natural gender balance at birth is 105 boys for every 100 girls.)

Chinese parents, wealthier today than a decade ago and wiser about the risks of sending a teenage girl alone across the country to work, are less inclined to steer their children into factory jobs. I have met young Chinese women in countryside towns — where a decade ago most girls would have done at least one turn in a coastal factory — who say that “our generation doesn’t work in factories”.

Nor are their parents as impressed by a prospective husband for their daughter if he works in what many see as a dead-end factory job. Professor Poston estimates that 40 million Chinese men may never find a wife. Less-educated, lower-income men struggle the most.

I have interviewed young male Chinese factory workers who feel “shackled” to their work, trapped between their dream of a good marriage and their jobs, where nepotism, not diligence or talent, determines who becomes a foreman and who stays on the line.

As cloistered in their factory dormitories as they may seem from abroad, Chinese workers are wired to the wider world. China’s manic economic growth and the opportunities it throws off to the wealthy and well-connected are not lost on them.

Many Chinese workers I have met describe “personal development” — starting a business, learning a trade — as a goal. Yet few, if any, factories try to help them achieve that. The truculence of the global supply chain is partly to blame, wooing workers with high wages ahead of product launches and expecting them to accept big pay cuts or long holidays when production schedules ease.

Chinese factory managers are also part of the problem. Too many treat staff as expendable, favour friends and neighbours from home, and fail to offer workers a path for advancement.

Creating opportunities

China’s male malaise has only just begun. Although the gender imbalance appears to be easing, it is too late to arrest China’s ballooning demographic debt. China’s working-age population is peaking just as its elderly population begins to soar. The lower birth rates of Hong Kong, Taiwan, Japan and Singapore show that even if China cancelled the one-child policy today, economic development will persuade mainland Chinese to keep their families small. Rising living and education costs have led couples in these areas to postpone marriage and to have fewer children.

In a country where the public-pension system covers less than 10 per cent of rural workers, according to a recent report by the Asian Development Bank, the economic and psychological burden on each young Chinese worker will only get heavier.

Companies buying from or running plants in China must start seeing their local employees more like their staff in developed countries. They should overhaul promotion practices by training foremen to communicate more sensitively and assess employees according to objective criteria. Foremen and other managers must be evaluated on their ability to nurture and retain assembly-line talent.

Factories must find ways to attract and keep female employees, by promoting more women to managerial roles, offering more generous maternity leave, and giving bonuses to managers who persuade women to stay longer.

They should consider paying promising workers — especially those on the assembly line — to go back to school. The best way to help China’s young workers to be happier in their factory jobs may be to show them how to leave. The prospect of advancement and real skills that scholarships like this would offer would help Chinese workers (and parents) to see a factory job as part of a career.

Training new hires

Three decades into Japan’s economic boom, big manufacturers such as Toyota Motor Corp were spending months training new hires. Singapore, realising its skills shortage, made vocational training a national priority. Japan and Singapore’s investments in their labour forces helped raise incomes and lift their economies into the higher rungs of the global supply chain.

In China, companies and the government aren’t doing enough to help lower-income workers develop on the assembly line or get promoted. Until officials in Beijing and companies such as Foxconn understand this, Chinese workers are only going to get more frustrated, threatening the nation’s economic development and the social stability on which its new leaders will depend.

Gulf News
Retail Gold Rate
Business Editor's choice

More from Popular in Economy

Quick Access

  1. Markets

  2. Economy

  3. Property

  4. Aviation

Business Top Stories

  1. Dubai’s hotel boom has designer labels

  2. Up for sale: Dh4,045m for a Gherkin

  3. Full steam ahead for the Gulf’s rail network

  4. Barclays net falls as investment income sags

  5. Russians’ alarm grows over Putin tactics