The Mechanisms Underpinning Low Wages and Excessive Overtime in Chinese Export Factories
Author: Anita Chan and Kaxton Siu
The codes of conduct of Western brand-name corporations normally require supplier factories in the Global South to comply with the local country's minimum legal wage; the codes also often stipulate a maximum sixty-hour work week. But the problems of illegally low wages and overtime violations in supplier factories remain unresolved. This article uses survey data collected in a city in South China on workers' wages and work hours to show how legal minimum wage rates, which normally are expressed in developing countries as a monthly wage, obfuscate the level of wages paid to workers. This will be demonstrated by comparing two different payment systems: time rates (which predominate in the toy industry) and piece rates (which predominate in garment manufacturing). The differences in the compensation rates and work hours resulting from the two systems lead the authors to contend that countries in the Global South and the implementers of corporate codes should calculate minimum wages in terms of hourly earnings in order to make wage payments more transparent and help reduce exploitative practices.