Agreeing on the Wage: The Contestation and Negotiation of Wage Levels in Chinese Factories

This paper aims at exploring how wage levels are contested and negotiated in Chinese factories. Recognising the social and political dimensions of wage apart from an economic one, I intend to further challenge the notion of economic supremacy in wage determination in China. Without strong worker organisation and formal collective bargaining mechanisms in most Chinese workplaces, wage at the factory level tends to be determined more contingently than in the Western context. Practically speaking, since collective struggles of workers on wage increase recur alongside calls from enterprises about rising labour costs, addressing wage demands of Chinese workers will help evaluate the future of China as a manufacturing hub, which has adopted a low-cost strategy for years.

I argue that wage rates are legitimatised and challenged by workers under the influence of labour process in a factory. The labour process reflects the extent of managerial control, which lays the groundwork for the conditions for contesting the wage system, such as the degree of atomisation or solidarity of workers, comparability of wage rates, as well as the arena to articulate wage demands. These conditions affect workers’ understanding of the current wage system, motivation and action in making wage demands, and eventually wage adjustment.

Preliminary findings of a qualitative multiple case study will thus be presented. 4 Chinese factories in the electronics and automobile industries are studied. Data for this paper is mainly collected from interviews with HR managers, workers and labour NGO organisers in respective regions. They are complemented by document review and non-participant observation on the shop floor and in wage-related meetings in the factories.