Sunday, January 22, 2012

A Happy Chinese New Year?

The organisers of this year's London Olympics said they were investigating claims that cuddly toy versions of the Games mascots are being made by poorly paid workers in a Chinese factory.
Golden Bear, based in Telford, central England, has a licence to produce Olympic products based on Wenlock and Mandeville, the official mascots of the Olympics and Paralympics. Allegations are that workers making the mascots were working for more than 11 hours a day for as little as 26 pence (40 US cents) an hour .

In China, unions are outlawed and workers who use the officially advertised mechanisms for redressing exploitation can be blacklisted as troublemakers.

The Trotskyist website ChinaWorker reports that the first week of 2012 witnessed a fresh wave of strikes across at least six provinces – Sichuan, Hebei, Jiangsu, Liaoning, Guangdong and Guangxi. China’s ‘sweatshop revolt’ is continuing and deepening as bosses’ try to force through wage cuts or relocate factories to cheaper production centres at home and abroad. This could also explain the increasing trend to introduce new technology. An upsurge of workers who are replaced by robots is now a hot topic in the Pearl River Delta region, with Foxconn being one of the most prominent examples. Foxconn has been heavily hit by labor issues over the past few years. To improve productivity and product quality it has declared it will introduce 1 million robots over the next three years to replace many of its workers - that it equals the number of operational robots worldwide.

Once the cost of labor exceeds the cost of deploying robots, it is clear what a company will have as its workforce. Robots can work 24 hours a day, need no incentives to stay or payments to social security, but instead provide better output for routine work with higher efficiency and accuracy. Although the upfront investment is significant, established Chinese companies can afford it.Taking the molding industry as an example, the average salary of a worker is 1,500-1,800 yuan ($230-280; 180-220 euros) a month. Adding the cost for food and accommodation, the total cost for a worker is at least 2,000 yuan a month. As a robot can only execute certain tasks, 20 percent of the work remains to be done by a human worker. With the price for robots ranging between 20,000 and 30,000 yuan, the investment can be usually recovered within one to two years. The prices for robots have fallen as a result of technological improvements and the beginning of mass production. Robots have an average life span of 12-15 years, so the economics for a decision in favor of machines can be compelling.

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