Five o’clock in the morning and the young woman’s eyelids are drooping. All night she has been removing spots of dust from Amazon smartspeakers with a toothbrush. Time seems to crawl. Now she is overwhelmed with exhaustion.
She works on, more and more slowly, until she can do no more. She looks around the workshop. Other workers have rested their heads on the bench. She slumps forward and falls asleep.
Let’s call the young woman Alexa. Alexa, what are you doing here?
For an answer, we must fast forward a couple of months to last Monday. It is an overcast morning in the city of Hengyang, in the southern Chinese province of Hunan. More than seven million people live in this city, the second-largest in the province. It is known locally as the Wild Goose City, for the birds that used to stop off on their southerly migration, but many people even within China would struggle to find it on a map.
The morning is warm but overcast, with a light haze that could be fog or pollution. The road to the Foxconn factory in Baishazhou Industrial Park is wide and lined with well-cared-for plants. There’s a steady stream of cars, motorbikes and buses heading towards the factory, which sits back from the road behind a large gate. Blue-uniformed security staff keep watch on those coming in and the street outside.
Dozens of workers are arriving, casually dressed in jeans and T-shirts. Most are young and there is a good mixture of women and men. Ahead of them lies a 60-hour week, eight regular hours for five days, plus two more of overtime each day and another 10 on Saturday. They will be expected to hit tough targets and must ask permission to use the toilets. The overtime – up to 80 hours a month – is far in excess of the 36 hours stipulated in Chinese labour laws, but companies can and do seek exemptions and workers want the overtime, to boost their basic pay.
These are the people who are making the smart speakers and tablets that Amazon hopes to make a fixture in millions more homes around the world this year: the Echo and Echo Dot – which both spring to life when the user addresses them as Alexa – and the Kindles.
It is a year since Amazon sealed a deal with the giant Foxconn company to ramp up its hardware production in Hengyang, with the Chinese firm reportedly adding 30 new production lines and creating 15,000 jobs.
Foxconn is China’s largest single private employer, and in March it reported a 4.2% increase in profits, with net income rising to £1.84bn in the last three quarters of 2017. Profits for the first quarter of this year were £605m and its CEO, Terry Gou, has a fortune reported to be about £5.3bn. But it is said to be keen to diversify to reduce its reliance on Apple and it is investing heavily in the Hengyang plant to meet the demand from Amazon.
The Foxconn factory in Hengyang relies on the tried and tested formula of low wages and long hours. But here there is another element: the extensive use of agency workers who don’t have the security of a regular job.
These employees – known as dispatch workers in China – are hired in from labour companies as an off-the-shelf workforce. They are generally slightly better-paid than permanent members of staff, but they get no sick pay or holiday pay and can be laid off without any pay at all during quiet months when production drops off. In some ways they resemble the Amazon products they are making: wanted one day and discarded the next.
But the increasing reliance on a disposable workforce by companies has alarmed the Chinese government, and in 2014 it changed its labour laws to limit dispatch workers to just 10% of a company’s staff – and then only to cover temporary work. Companies were expected to fill most positions with regular staff on employment contracts.
The wage slips pinned to the walls of the Foxconn factory in Hengyang suggest that the message may be taking some time to get through: they show that about 40% of the workforce in the Hengyang plant are bought in from agencies. These are the workers on whom Amazon CEO Jeff Bezos is relying to further entrench his position as the world’s richest man.
Bezos is worth an estimated £102bn, a fortune he acquired against a backdrop of global reports of misery for Amazon’s warehouse workers, exhausted by the demands made on them in return for the most basic of wages. Unions and labour rights groups have protested about low pay and harsh working conditions, and three delivery firms used by Amazon are facing a legal challenge from the GMB union, demanding that gig economy delivery drivers receive sick pay and holiday pay.
Last month it was revealed that ambulances had been called 600 times to Amazon’s UK warehouses over the past three years. There have been repeated calls for Amazon to improve the lot of its workers.
But Bezos doesn’t see the need. Collecting an award for “outstanding personalities who are particularly innovative, and who generate and change markets, influence culture and at the same time face up to their responsibility to society” a couple of months ago, he was questioned about the controversies surrounding the way he made his money.
“When you’re criticised,” he said, “first look in the mirror and decide: are your critics right? If they are right, change. Don’t resist.”
But Bezos’s mirror apparently showed him that his critics were wrong. “I’m very proud of our working conditions and very proud of the wages we pay,” he told the audience gathered to fete him.
And now he and Gou have brought that same formula to Hengyang. But what draws two of the world’s richest men to set up in a city far from the big manufacturing hubs of Shenzhen, Shanghai, Tianjin and Guangzhou, with their easy access to shipping and huge industrial bases?
For an answer, it helps to know that Alexa is working for 14.5 yuan an hour (£1.69). That’s £1 less than the £2.69 national average for a factory worker in China. Foxconn could not pay her so little in Shenzhen, where the legal minimum wage is 19.5 yuan an hour, or in Shanghai, where it is 20 yuan.
Some days Alexa gets to work overtime. But when she opens her wage slip at the end of the month she will be disappointed, because she and her fellow dispatch workers are paid only the same 14.5 yuan rate that they get for the main shift, instead of the time-and-a-half stipulated by Chinese labour law and Amazon’s own supplier code of conduct.
Foxconn promises agency workers a minimum of 3,700 yuan a month (£431.64), but pay slips and workers’ own accounts suggest real wages rarely get close to that figure. Most earn between 2,000 and 3,000 yuan, with permanent staff earning between 2,000 and 2,500 yuan. In 2017, the average wage for a worker in Hengyang was 4,647 yuan a month.
Pay rates have rocketed in China in recent years, but Hunan remains one of the provinces with the lowest wages, and the minimum in Hengyang – 1,280 yuan a month – is barely half that in Shenzhen, where Foxconn’s Apple factory is based.
That Shenzhen factory has been the subject of years of criticism for its treatment of staff manufacturing iPhones and other Apple devices – with 14 suicides in 2010 prompting the installation of netting around the factory dormitories to catch workers jumping from the roofs.
Now rewind again, back to March. It is early evening and Alexa is getting off the bus and entering the factory for the night shift. She has secured a job as a dispatch worker through the Qizhong labour company – one of six supplying the factory – and has joined the production line making Amazon’s mini smart speaker, the Echo Dot.
Alexa looks much like the other young women around her, but she has a secret. Alexa has been sent in undercover by the US-based labour rights investigator China Labor Watch to find out what is going on behind the security gate. It is the first time anyone has investigated Amazon’s production lines, and CLW has teamed up with the Observer (and the Sunday Mirror) to publish the findings. Its own report – Amazon Profits from Secretly Oppressing its Supplier’s Workers – is published online today.
— source theguardian.com by Gethin Chamberlain in Hengyang, China