Low wage workers fuel world economy

LOTUS MOUNTAIN, China – The shiny blue and maroon fabric that worker No. 0391 guides into a Chinese factory sewing machine could be on your back this winter.

The worker, Lu Huikun, makes ski jackets, including this U.S. Ski Team model, for Colorado-based Spyder Active Sports. The jackets cost up to $529 in Denver-area stores.

Lu is paid 31 cents an hour if she keeps a brisk pace at the rattling machine.

A 36-year-old mother of two, she considers herself lucky. Bulldozers making room for factories scraped away her family’s rice field 12 years ago. Lu’s job sewing sportswear for Spyder, Adidas, Champion and other companies helps sustain her family.

“May you all be champions,” she says to those who would buy her jackets this fall.

But Lu’s eyes are tired from overtime shifts. Her thin legs tremble as she pedals her bicycle down People’s Road. More overtime lies ahead.

Lu’s daughter is gradually going blind. She needs special glasses that cost $250 – five months’ wages. When Lu reaches home, crosses a brick courtyard and bends to pump water, the 9-year-old clings to her leg, frightened by a world growing cloudier each day.

Behind many of your possessions – and goods you may buy in the holiday shopping blitz that began Friday – are desperate laborers like Lu in low-wage countries worldwide.

They are the invisible backbone of today’s world economy. But their presence increasingly raises policy questions in corporate boardrooms, spawns riots at trade summits from Seattle to Prague, ruffles consciences of some shoppers in malls.

This report will show you how these workers – in most cases the only people to touch your possessions before you – count on your purchases to survive. Still, they lack many things Americans take for granted.

And in the corporate drive for flexibility and low-wage efficiency, some are treated in ways Americans won’t tolerate at home.

A Denver Post examination of the system traced the origins of products into China, where U.S. firms farm out production of everything from ski coats to computers. Many companies try to shield this information from the public.

Once, such products might have been labeled “Made In USA.”

But today if you buy one of those trendy collapsible scooters, odds are it was made in China. Same with many skateboards, snowshoes, inline skates. The fireworks you shoot on the Fourth of July? Made in China. Your child’s school backpack or the one you wear hiking? Stitched and inspected in China.

The Post gained access to eight factories and interviewed dozens of workers and managers. Compulsory overtime here is the norm. Uniformed guards patrol gated factory compounds, where up to eight workers reside in dormitory rooms. Workers are paid based on quotas that punish any lapse. Wages in China vary, but 30 cents an hour is common; factories producing for Americans typically pay roughly minimum wage. Sometimes workers can’t leave factory compounds. Police on motorcycles cruise industrial zone streets looking for factory workers who cause trouble.

China’s central government requires 40-hour weeks, limits overtime to no more than three hours a day or 36 a month, and bans workers under 16.

Yet with tens of millions fleeing rural areas to seek work, factory managers say the labor law is seldom enforced. Workers often don’t receive extra pay for overtime and can’t refuse to stay late, said Kent Guo, a U.S. Foreign Commercial Service officer posted in Guangzhou.

“The employers say, “If you don’t want to work overtime, I’ll fire you.’ Or they find another reason to fire you.”

Compound-restricted workers proudly build “gliding boards’

Inside the Circle Skater Corp. factory – about two hours north of Hong Kong near Dongguan – 1,500 workers run by Taiwanese managers produce many things sold in America.

It’s a typical factory, a gated cluster of three-story buildings. The workers are migrants who live at the compound where, as at many factories, room and board is provided. Normally they’re allowed out three times a week, factory manager Circle Yan said. A team of 30 ex-soldiers in blue-and-white uniforms patrols 24 hours a day, registering who comes and goes.

The factory supplies sporting goods including skateboards, beginner snowboards bearing Bugs Bunny and the Time Warner logo, plastic snowshoes and inline skates, elbow and kneepads. One of the hottest products made here for U.S. consumers, Yan said, is a silvery collapsible scooter. The Chinese call these “gliding boards.”

Factory sales of all products top $23.6 million a year. You can find stuff made here in Wal-Mart, J.C. Penney, and Toys ‘R” Us among others, Yan said.

Soon after receiving an order, he mobilizes assembly lines that roar, hum and shake as workers rivet, glue, hoist and haul. Workers seldom speak in the process.

Boxed products roll out of workshops on conveyor belts leading into shipping containers mounted atop trucks. The trucks travel new concrete highways to Hong Kong for shipping to the United States. The journey from Chinese factory to Colorado store can take as few as 14 days.

Workers earn an average of 20 cents an hour, Yan said. That’s based on a quota tied to how much and how well they produce. The official work week is eight hours a day for six days – more days than China’s law allows. About 12 hours of overtime is typical, he said – again, more than permitted.

The workers are restricted in leaving the compound, Yan said, because he needs them close to respond quickly to orders from the United States.

“We are very busy. Most of the time they work.”

The restriction breeds bitterness.

“Here there’s a lack of freedom,” said 19-year-old Huang Changbin, a migrant villager diligently assembling scooters.

“We can’t go out when we want. I want to go out and play.”

Huang and his crew of 60 workers assemble 2,000 scooters in 12 hours, a foreman said proudly. Each scooter retails for about $75 in the United States. That’s about $150,000 worth of scooters for U.S. retailers. The workers combined, at 20 cents an hour each, earn about $144 for their part – one one-thousandth of the market value of their products.

Like many here, Huang migrated from a village in western China after completing junior high school. “There was nothing to do,” he said. He paid $25 for a third-class train ticket, a huge burden for his subsistence-farming family, and rode for 36 hours to Dongguan.

This Pearl River Delta region in South China – where Lu Huikun works too – draws millions of migrants into what may be the world’s biggest industrial zone. From Lotus Mountain, a 1,000-foot-high knoll in the middle of it, gray-black factories splay out spewing noise and smoke into a thick acid haze.

Here, Huang can earn up to $50 a month. “My family will save it for when I return,” he said. “I wanted to see the world, what’s going on here.”

He shares a room with seven others. Homesick and confined to the compound, he devotes off hours to writing letters to his parents and 16-year-old sister Changyan.

His advice to his sister: “Stay at home. Study. Read more books.”

But he’ll gut this out.

He’s worked as much as 70 hours in one week. He wants more, maybe a better job sewing. “I can get more money.”

He characterized his life as “not very good, not very bad.”

There was one high point.

He got to try out one of the “gliding boards” he assembles. He smiled as he described zipping across a factory floor on the scooter. Supervisors waived company rules for that test ride.

Back assembling handlebars, Huang takes consolation imagining he is an instructor for young riders in America showing them how to set up the scooter, watching them glide down a street.

“I know American little friends will enjoy playing with this,” Huang said, looking up from the factory line. “Let them play happily.”

U.S. companies try to respond to labor concerns with codes

Few U.S. corporations that sell things made in China allow scrutiny. Many won’t even identify who makes their products.

Wal-Mart spokesman Tom Williams declined repeated Denver Post requests to visit any Wal-Mart supplier factory, saying locations of factories are a closely held secret because “everybody watches everybody else and where they buy.”

Target spokeswoman Susan Eich said “we don’t have any such list” of supplier factories in China.

Kmart, too, counts on China. Chinese suppliers of electronics, bicycles and other products are required “to notify us of who their subcontractors are,” said Dale Apley, Kmart’s public policy director. But he wouldn’t give details or allow a visit.

Colorado-based corporations such as bicycle maker Schwinn, ski clothing company Obermeyer, and Crazy Scrubs – colorful medical wear – take a similar approach.

Meantime, public concern is growing about globalization hurting human rights. Street riots that shut down Seattle during World Trade Organization meetings last year were motivated in part by a sense of injustice in factories abroad.

“We get dozens of letters every month. A lot are form letters: “We want you to stop exploiting children,'” said Tim Lyons, spokesman for J.C. Penney, which sells products made in China at 1,100 stories across 50 states. The ideological anti-corporate tenor of some critics is such, Lyons lamented, that “you can’t win.”

Many corporations have responded. Target, Kmart, Wal-Mart and J.C. Penney officials say their suppliers must agree to obey local labor laws, pay prevailing wages, and ban child or forced labor.

Some companies such as Nike and Levi Strauss established elaborate codes of conduct that are posted on factory walls. Some firms hire auditors to review supply-chain conditions, sometimes visiting factories unannounced and conducting off-site interviews with workers.

In Colorado, Spyder this fall began negotiating a code of conduct with 24 suppliers in Asia. Chris Okazaki, formerly with Nike, is helping lead Spyder’s effort.

Fireworks industry an example of raw capitalism of China

Still, shoppers eyeing foreign-made products generally can’t tell from packaging the conditions in which those products were made.

And tracing products to specific factories “is probably one of the toughest things you could ever try to do,” said John Colledge, the U.S. Customs chief of forced-labor investigations. “We need substantive information to tie the product back to the factory. That’s what the consumer is going to need too.”

A 1930 U.S. law prohibits import of products made with forced labor. U.S. investigators say access in China in particular is so restricted that they’ve resorted to offering money over the Internet for tips.

And even inside factories in China, the source of a product isn’t always obvious.

Just as U.S. companies farm out production to factories in China, many big factories in China farm out work to smaller and smaller factories down to informal village-level “cottage” labor.

U.S. fireworks companies such as Rocky Mountain Fireworks in Denver rely on factories in China. Rising labor costs and safety regulations forced closure of factories at home, said Bill Stonebraker, president of Rocky Mountain Fireworks.

And demand is growing. U.S. consumers bought $625 million worth of fireworks in 1999, a figure that increased by about $25 million a year through the decade, according to Julie Heckman, director of the American Pyrotechnics Association.

One of the emerging new suppliers handling orders from Stonebraker and others is Brothers Pyrotechnics, based in Beihai, in a rural area near Vietnam along China’s southern coast.

Much of China’s fireworks industry is struggling after a series of explosions at factories. Most recently, an explosion July 1 at a plant in Guangzhou killed 40 workers, and central government officials shut down factories nationwide.

But by mid-September, Brothers was up and running. U.S. industry safety inspectors stationed in Beihai give the company high marks.

In charge is Garry Wang, 38, the son of a fisherman turned into flamboyant entrepreneur. Relying on a network of 20 rural Chinese factories, he sells $20 million worth of fireworks a year to Stonebraker and others.

Wang lives in a mansion with marble floors in Beihai. Recently at midnight, he strolled outside across his manicured grounds, fountains burbling, to practice golf.

Gardeners teed up balls and Wang swung away. A day later, he sat beneath a full moon by his swimming pool with two old friends, after a feast and footrubs, and addressed the matter of U.S. sensitivity about working conditions in China. The capitalism emerging here is raw, he said, like in the United States last century, with huge rich-poor gaps and also huge opportunity.

“Comparatively speaking, I think the United States is more important to China than China is to the United States,” he said. “Imagine what would happen if Americans stopped buying all these products. So many Chinese people would lose their jobs.”

Indeed, workers at Wang’s supplier factories said they were grateful for their jobs.

But some doubt they’ll ever get ahead.

“I know people enjoy these,” said Mou Qijuan, 30, piecing together a golden cardboard “Mighty Dragon” firework in a room at one factory with a dozen other women. The Mighty Dragons, which when lit roll around spitting sparks, sell for $3 or so at U.S. fireworks stands. Silently she and her co-workers folded, twisted and glued labels on hundreds of small fireworks every hour. Mou said she earns 15 cents an hour if she works at top speed.

Life for Mou is “just work, nothing exciting.”

She does a lot better than the cottage-worker villagers who make cardboard tubes for fireworks outside factories. They earn the least of all.

As Mou and her colleagues worked, she allowed that “sometimes my back hurts.” She added: “No rest.” Still, any overtime work was welcome. “If I am paid more,” she said emphatically.

The problem, she said, is that she isn’t paid enough.

Now that her son Lu Tiehua is 6, she said, she pays $12.50 a month – half her earnings – for child care so she can work. Not to mention money for food, and medicine when he falls sick.

“How can you save?” Mou asked indignantly.

As she spoke, Zheng Daji, 41, the factory manager, looked on. He’s run this compound with 2,200 workers since 1985.

Zheng acknowledged the plight of his workers. “If we don’t have orders for more fireworks, we have to ask people to leave,” he said.

He often hears complaints, usually about money. ” “Can you pay more?'” He always says no, fearing others would make demands too. He said he’s worried about growing unrest. “I’m afraid it will happen.”

But Brothers assistant business manager Judy Zhu, who accompanied Zheng as an overseer of his factory, hastily downplayed this. Jobs are too scarce, there are too many workers, she told Zheng. “I don’t think it will happen.”

Back in Colorado, Stonebraker at Rocky Mountain Fireworks said conditions that look harsh to Americans must be seen in the different context of China. He suggested U.S. consumers, not human rights groups, should guide how the United States handles standards in the global economy.

“It’s what you are going to pay for that product that governs what the manufacturer has to do,” Stonebraker said.

And for Chinese people “their recreation is work, more than in the United States. We don’t know what work is anymore. These people are happy in their way of doing things. We need to leave them alone. They do well by themselves. And they are advancing themselves at a pace they can stand.”

Villagers chase dreams with assembly-line jobs

Many villages offer Chinese workers little opportunity beyond subsistence farming.

In western China’s impoverished Yellow River Basin, landowner Hou Jianguo, 46, found growing crops in the dry clay soil of Gansu Province too hard. The family barely survived, eating almost all that they grew.

So in 1997, Jianguo decided to move his family. He, his wife and 19-year-old daughter rode a train for three days and two nights to China’s eastern coast south of Shanghai.

He found work burning holes into nylon pullstraps for Colorado-based Samsonite at a factory the company owns in Ningbo.

He calls his $112-a-month wages “very good.” He lives apart from his wife and daughter. His daughter works and lives at a garment factory nearby. His wife lives with a relative in town taking care of children while the relative works.

Jianguo’s family will endure the separation, he said on the Samsonite assembly line, because eventually they’ll attain their dream: returning to Gansu and opening a small tailoring shop.

“I’ll work until I’m old,” he said looking down at a stack of nylon pullstraps he’ll prepare for “Worldproof” suitcases. “Then I’ll return to my hometown.”

Similarly, Yiana Zhenghai, 24, left her village near Ningbo when she had a son in hopes that he might live more like American children. Her mother watches the boy each day while Yiana works in a backpack factory.

Workers there recently were stitching up wallets for Esprit and “America’s No. 1” backpacks for Jansport. Manager Sunshine Gui walked across the factory floor picking up odds and ends from the floor. Workers at sewing machines eyed her nervously as she passed.

At the end of the line, Yiana inspected every stitch. She and the others amaze manager Gui with how intensely they work for piecework wages. During lunch break many continue to work, she said, to earn a little more money.

“Of course I will spend the money I earn on my son,” Yiana said.

Despite the economic lure, the factory system also traps workers such as 22-year-old Zhang Youyan.

Now tending a juice shop near Dongguan, she made clothing for export since age 14. The juice job is easier but a dead end.

“People like me,” she said, “we just live one day at a time. We don’t think about the future. … It’s not that I don’t dream. I do dream. I just don’t have the opportunity to make it.”

Consumer group aspires to “fair labor’ labels

While the laborers churn out consumer goods, a growing debate about corporate responsibility is taking a new twist. Beyond street protests, a fledgling movement aspires to give U.S. consumers information about how products are made in hopes they’ll discriminate carefully. Leaders of the effort contend workers bear disproportionate burdens and that Americans would respond if they knew.

“If you believe that you are your brother’s keeper, you have some obligation to the people who are the least advantaged in the world,” said Sam Brown, director of the Fair Labor Association in Washington, D.C. “If your prosperity is built on the backs of people who are being exploited, then you have an obligation.”

Brown said retail discount giants in particular are perpetuating a shameful global “race to the bottom.” Within two years, he said, companies that adhere to humanitarian standards will be able to put “fair labor” labels on their products and gain a competitive boost.

But manager Yan at the scooter factory figures codes of conduct and labeling won’t amount to much. It’s window-dressing for image-conscious companies, he said, sitting in the office where he receives orders.

U.S. executives “only care about good products,” Yan said.

“They don’t care about human rights. They are businesses.”

Worker sadly, proudly toils to earn glasses for daughter

Lu Huikun and her colleagues at the sportswear factory doubted Americans who buy their products think about factory workers.

Even if Americans did care, they “can’t do much to help me,” Liang Qianzhen said, finishing some Adidas trousers. “There are too many people in this country.”

The best hope is that Americans consume as much as they can while workers here toil as fast as they can, Lu said. “I just want more work from you so I can make more money.”

She’s given up travel plans she and her husband, a delivery motorcycle driver, once shared. Now, instead of imagining a family vacation in Beijing, she thinks of her daughter’s future, and worries about her impending blindness.

Her daughter is bright and talks of becoming a doctor or teacher. “Mommy and Daddy save money,” the girl says.

Doctors insist there’s no cure. “Sometimes my daughter feels bad that she can’t see clearly,” Lu said. “When that happens, I tell her: “Don’t think too much about this problem. You were born with it.'”

So Lu toils and saves for special glasses. Tears streaked her face as she spoke. She sees no end to her struggles for her child.

And making things for Americans probably won’t meet her needs. She sat silently at her machine for a moment. But rather than dwell on consumers far away, she resumed sewing.

“I’ll try,” she said proudly, “as hard as I can.”