A Victory at Foxconn

February 22nd, 2012  |  Published in Political Economy, Work  |  1 Comment

A recent article in the New York Times reports an encouraging victory for the workers at Foxconn, the gigantic Chinese manufacturer that makes products for Apple and many other companies:

The announcement by Foxconn, which said that it would raise salaries as much as 25 percent, to about $400 a month, came after an outcry over working conditions at its factories. In recent weeks, labor rights groups have staged coordinated protests in various countries after reports that some of Apple’s Chinese suppliers operate harsh, abusive and dangerous facilities. To stem criticism, Apple hired a nonprofit labor group to inspect the plants it uses.

It seems that this move came in response to the efforts of the workers themselves—including the martyrs who committed suicide in protest against Foxconn’s labor practices—and increased awareness among consumers. Mike Daisey’s report for This American Life, in particular, deserves credit for raising consciousness. This victory, if it holds up, is an encouraging example of how trans-national labor solidarity can work.

In a follow-up, however, the Times carefully avoids the class struggle at the heart of this story: as Ned Resnikoff observes, the story goes through remarkable linguistic contortions to avoid ascribing agency to the Foxconn workers themselves. We are told that for higher wages to be sustained, companies “must convince consumers in America and elsewhere that improving factories to benefit workers is worth the higher prices of goods.” The fate of Chinese workers is thus placed in the hands of corporate marketers and beneficent consumers rather than, say, the workers themselves.

Mobilizing consumers has its place in a labor organizing campaign, but I’m dubious that the altruism of atomized consumers on its own is a durable basis for increasing wages. The market is simply too good at obscuring the true relations of production, except when rare instances like this one break into the open; ethical consumerism can easily be subverted by companies that sell a false sense of moral purity by marketing themselves as virtuous capitalists. A better model for the role of consumers in labor struggles are things like the California Grape Boycott, which was initiated and led by the United Farm Workers.

There are a couple of other interesting things about the Foxconn story, which actually ties together a lot of my preoccupations. One thing to note is that in this case, the struggle over time was at least as important as the fight over money. In addition to higher wages, Foxconn is pledging to reduce overtime—the punishing 14-hour days and 7-day weeks have been reported as a major factor behind the wave of suicides. Given how much of 19th Century labor history in the West was devoted to the fight over the working day, it’s not surprising that the same struggle is being recapitulated in China.

The other thing that jumped out at me is the last paragraph of the Times story, which is tacked on almost like an afterthought:

And worried that the old model is dying, Foxconn has announced plans to invest in millions of robots and automate aspects of production.

Just last week, I wrote a post where I described the relationship between worker bargaining power and technical change as follows:

Suppose, for example, that employers had to pay much higher wages for work outside of standard hours, for irregular schedules, and for last-minute re-schedulings. In the short run, this would increase the income of some workers, which is good. It would also make employers more reluctant to use employees in this manner, unless it made them enough money to pay the higher wages. But in the long run, it would create stronger incentives for employers to simply use fewer workers, perhaps by replacing their labor with machines. This might sound like a dystopian scenario in itself—we win higher wages, and the end result is that we just get replaced with robots! But the alternatives are, in my view, even worse.

If Foxconn follows through on its wage and hour concessions, and on pledge to automate, it will fulfill this dynamic perfectly.

Moreover, this case demonstrates that the disappearance of human labor in manufacturing is not just a rich-country phenomenon, and the data suggests that Foxconn is not anomalous. Recently, Felix Salmon came up with data showing that the absolute number of manufacturing jobs is declining, not just in the United States and other rich countries, but even in China. Some of this may be a result of production shifting to even lower-wage countries, but it also lends support to my longstanding contention that the most important story behind deindustrialization is technological change rather than outsourcing. If even China isn’t growing manufacturing employment, this suggests that the global economy is going through a gradual transition from an industrial to a post-industrial economy, much as rich countries made the transition from being predominantly agricultural to a stage where farming only makes up a tiny percentage of jobs and GDP. Going back to a manufacturing dominated workforce doesn’t seem much more plausible—or, when you think about it, much more desirable—than reverting to a situation in which most people worked on farms.

That’s not to say manufacturing doesn’t matter. Jared Bernstein had a good post the other day that describes the ways that a strong manufacturing sector benefits a national economy. But direct job creation is only a minor component of the case for manufacturing, and the declining employment in the sector means that a revival of manufacturing is unlikely to play a large role in reducing the unemployment rate. Matt Yglesias gets to the central issue here:

But even in China, job growth is coming primarily from the service sector. It’s not a nation of factory workers and it likely never will be. But China has been de-ruralizing very rapidly. And it turns out that one way to characterize the “good old days” of rapid income growth in the United States is as not a move to factories but off of farms.

To Yglesias, this implies that growth in the service sector is the key issue for global economies in the future. But to take this a step further, one way to characterize what is happening in the United States today is not a move to the service sector but out of manufacturing. And it’s true that, if you want the aggregate amount of employment to grow in step with the growth of the population, you are committed to creating a whole lot of service jobs. But as I have argued before, this implies a strong normative judgment about the socially-optimal level of commodification.

As Ursula Huws has pointed out, the creation of service sector jobs often entails “a socialisation of the kinds of work which are also carried out unpaid in the home or neighbourhood”, things like “health care, child care, social work, cleaning, catering and a range of personal services like hairdressing.” Insofar as people experience these tasks as unpleasant drudgery, it is desirable to reduce the need for them to performed unpaid—particularly since unpaid work is done disproportionately by women. But just as in manufacturing, there are more and less labor intensive ways of replacing domestic labor. As Cat Valente observes in her fascinating post on gender-biased technological change in Japan, innovations that reduce the need for household labor can be at least as significant as iPhones or assembly-line robots. This is the alternative to the system in which one privileged group of workers hires another group of workers for the domestic tasks they no longer have time or inclination to perform.

To what extent do we deal with de-industrialization by turning more and more of human activity into paid work, and to what extent do we try to decrease the total amount of wage labor by reducing the work week and allowing people to spend more time out of the labor force? That is one of the key questions facing us in the 21st century, as the jobs that currently form the basis of our economy begin to disappear.


  1. Dave Lewit says:

    February 20th, 2014 at 3:34 pm (#)

    You are talking about a needed analysis and transformation of the current neoliberal system and its Chinese partner system. I like your broad and multifaceted considerations, and your energy. Sounds like you might be a visionary. So exactly how might we bring about a democratic and ecologically sound world economic system at this stage of technological development? What kinds of sociopolitical activism would be involved?

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