Social security funds a source of labor unrest in China

Protesters at the Yue Yuen factory in Dongguan, April 18. (Photo/China Times)

The ongoing strike at Taiwanese shoemaker Yue Yuen's factory in Dongguan in southern China's Guangdong province highlights the inconsistency of the enforcement of social security funds in China, reports our Chinese-language sister paper China Times.
Around 2,000 workers from another of the shoemaker's factories in Jiangxi province have joined their 30,000 counterparts in Dongguan to protest against Yue Yuen for failing to pay their social security and housing funds in full. The protest began on April 14 and has now entered its second week after the strikers did not get a satisfactory answer from their employer.
Operated by the Taiwan-based Pou Chen Group, the Yue Yuen factory in Dongguan's Gaobu township is one of the biggest shoe factories in China and produces footwear for more than 30 top brands including Nike, Adidas and Reebok. The factory currently employs more than 60,000 workers.
Employers in China are required to set asides 30% to 50% of their employees' wages for social security payments. However, increasing wage levels in the country have made the fund a heavy burden on businesses. In the past, the government did not make the fund mandatory in order to attract companies. However, as local workers have become more aware of their rights and as some provinces have allowed migrant workers to bring their funds back to their hometown, the fund has become a cause of a good deal of worker dissatisfaction.
A Taiwanese bakery business in Shanghai has incorporated the fund into workers' salaries at the request of many workers from other provinces. The company has since asked all its workers to do the same. The measure helps the company to recruit workers since its salaries appear to be higher.
The requirements for the funds, in fact, vary significantly according to the local authorities. Municipal governments in Suzhou and Dongguan where many Taiwanese businesses are located have not required them to pay the fund in full. Some local governments require social insurance payments to include retirement funds, health care, occupational injury, unemployment, housing or even childbirth insurance but some may only have to pay a few of these.
Taiwanese businesses in China in general have abided by the requirements but many local small and medium companies or even major firms have not. Some have completely ignored the requirement while some have listed most of their staff as dispatch workers to save costs.
The practice has been common in China but workers would generally not report violations if their bosses were Chinese nationals, China Times said. The attitude is different where Taiwan- or foreign-funded companies are concerned, however, as the employees consider these businesses should be more law-abiding than local firms. (http://www.wantchinatimes.com)