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MCDONALD'S TOYS :
DO THEY MANUFACTURE FUN OR MORE EXPLOITATION?
A report on the working conditions of McDonald's toy production in mainland China
By Hong Kong Christian Industrial Committee
Introduction
McDonald's is a fast food Transnational Corporation (TNC) owning more than 160 fast food restaurants in Hong Kong. McDonald's has long been the target of attack, both in Hong Kong and abroad, for underpaying its worker. One of the most notorious ways to do so is offering lots of part-time jobs. A research conducted by a local workers union, the Hong Kong Confederation of Trade Union, revealed that the hourly rate of McDonalds’ part-time staff in HK is as low as HK$11. Earlier on, concerned parties and NGOs held protests outside McDonald's restaurants demanding that the company pay decent wages to its workers. However all these fair urges have fallen on the deaf ears of Uncle McDonald's.
The tremendous charm of Uncle McDonald's derives not only from the hamburgers it sells, but the marketing of various toy gifts from which huge profits are reaped. According to a store manager in HK, the sales revenue of the company soars to as much as two-fold when a new round of toy gifts is introduced to the market. While these toy gifts of Snoopy and Hello Kitty are sold at HKD$18 or above, their production costs can be as low as HK$1-2 exploiting the cheap and abundant labor supply in the mainland. Most of these toys are supplied by toy factories in the River Pearl Delta of Guangdong province where at least 100 thousand mainland workers are laboring day and night for the consumers and collectors of McDonald's toys all over the world. Researchers of the Hong Kong Christian Industrial Committee (HKCIC) conducted a research on the working and living conditions of one of these toy factories in July and August 2000. We find that workers cannot get a decent wage and their rights are seriously abused. The findings are compiled in a short report named “McDonald's Toys: Do they Manufacture Fun or More Exploitation?”
From July to August 2000, the HKCIC conducted a work place research in one of McDonald's toy supplier named Pleasure Tech Holdings in Sha Jing Town, Shenzhen. Our researchers visited the dormitory and interviewed more than 20 factory workers from the Shenzhen plant of the company. We find that as many as five plants are operating under Pleasure Tech Holdings. All of them are located in Sha Jing Town, Shenzhen.
The five plants are as follows : 1) City Toys (where the main body of the plastic toy is molded and colored; and the finished product is assembled). 2) Wei De Factory (its operation is similar as the former plant). 3) Jin De Factory (normally produces electronics toys). 4) Tian De factory (supplies accessories and small parts, both plastic and cotton, to be assembled in the first two plants). 5) Gao De Factory (manufactures woolen parts and toys). Plastic Snoopy toys and dinosaurs, which had caused a whirlwind in Hong Kong earlier on, were manufactured in these plants. The five plants are currently manufacturing Hello Kitty key rings.
Pleasure Tech Holdings 新城玩具有限公司
Sub-plants : Wei De Factory, Jin De Factory, Tian De factory, Gao De factory
Factory address : Wen Fung Industrial Park, Sha Jing Town, Baoan District, Shenzhen, Guangdong province.
廠址
深圳市寶安區沙井鎮萬豐工業園
Factory Description
Pleasure Tech Holdings is a Hong Kong investment. City Toys and Wei De factory have been operating for more than 10 years. A rough estimation of 10 thousand workers are employed of which 90% are women in their twenties. They come from various inland provinces like Queizhou, Sichuan, Yuannan, Hubei, etc. Pleasure Tech manufactures mainly plastic toys although woolen ones are also produced. The manufacturing process is broken down into molding, wool planting, spraying, assembly and packaging. Workers told us that fire facilities are present in the work place. But gathering from the observation of our researchers, many windows in the work place are barred.
Poverty wages
For City Toys and Wei De workers, the "normal" rate for working 8 hours a day is RMB12. Overtime work (for no matter how many hours, till whatever time before or after midnight depends on the production quota of the day) is compensated by another fixed amount RMB12. Workers told us they could not object to or refuse working overtime. The overtime compensation rate is the same on Saturdays and Sundays. In other words, workers in the two factories are paid at a fixed daily rate of RMB24 for an unlimited number of hours depending on the needs of production. The monthly wages for June and July of the workers we interviewed ranges around RMB700.
It is stated in the regulations of Guangdong province that the official minimum monthly wage (based on a "normal" weekly working hours of forty) for Sha Jing Town in Shenzhen is RMB419. Hence the official minimum hourly rate for Sha Jing should range from RMB2.1 to RMB2.6. According to the Chinese Labor Law, this minimum wage (of RMB419 in this case) does not include overtime compensation which should be 1.5 times, 2 times and 3 times the normal hourly rate under different circumstances. (1.5 times for overtime work on week days; 2 times for working on Saturdays and Sundays; and 3 times for working on national holidays) Pleasure Tech's practice of paying a fixed daily rate of RMB24 for an unlimited number of working hours blurs the distinction of "normal" working hours and overtime work thus confusing the calculation of overtime compensation rate. This obviously violates the Chinese Labor Law by underpaying workers.
# In violation of Article 44 of Chinese Labor Law on wages for overtime work; and working on public holiday.
# In violation of Article 48 of Chinese Labor Law on minimum wage.
Extremely long working hour
Our researchers find that it is common for workers of City Toys and Wei De to have no holiday for the whole month when production orders are huge. They "normally" work 15 hours a day from 7am to 10pm. During peak seasons, that can be extended to as long as 20 hours a day (from 7am to 2 or 3am the next day). Workers have to hit a fixed production quota everyday no matter how many hours it takes. The situation of failing to accomplish the quota of the day does not arise simply because workers would not be able to leave the work place unless the target is hit. To give an idea of the abuse, a worker's hourly pay rate can be as low as RMB1.2 after working 20 hours (RMB24/20hours) a day.
Moreover, workers are told that they do not have to punch the clock machine for overtime work nor do they have to do so on Saturdays and Sundays. In this way the clock punch records only the "normal" working hours of eight a day. The management told workers this was to "go round the monitoring of the Labor Bureau".
# In violation of Article 36 of Chinese Labor Law on working hours.
# In violation of Article 37 of Chinese Labor Law on piece-rate work.
# In violation of Article 38 of Chinese Labor Law guaranteeing at least one day off a week.
# In violation of Article 41 and 43 of Chinese Labor Law on overtime work.
Unlawful Penalties
Our researchers find that it is 'the" practice of all the five plants to deliver this month's wages only in the second month (eg. A worker can get his/her June wages only by the end of July). That means workers have one month's wages held up by the management. Our researchers also learned about cases of workers’ ID cards being taken and kept by the management for as long as three months. Workers told us that many fellow workers could not tolerate the factories' harsh working conditions and low wages and quitted. The above unlawful practices are taken up by the management to inhibit workers from leaving the factory. Workers have to give up a whole month's salary and their ID card if they quit.
According to the Chinese Labor Law, the management should not impose unreasonable penalties on workers. In Pleasure Tech one can find a set of penalties and rules. For instance RMB2 and RMB120 will be deducted respectively for being late and absent from work. Refusing to work overtime and taking leave without prior application costs another RMB120. Yet workers told us that it was almost impossible for the management to approve applications for taking leaves.
# Violation of Article 50 of Chinese Labor Law (Wage deduction)
# In violation of article 50 of Chinese Labor Law on unreasonable penalties and holding up of workers' wages.
# In violation of article 9 of Regulations Protecting the Labor Rights of Workers in Enterprises in Guangdong which states that enterprises should not keep workers' ID cards, temporary residence cards etc.
Eating at Pleasure Tech
Our visits to the factories in the beginning of July found that workers had to pay RMB120 (formerly RMB60) a month to the factories for the provision of two meals a day. We were told that when production pressure was high, workers could not leave the work place for lunch. They would eat at the work place as the management would arrange for meals to be brought up to them so that they could return to work immediately. A worker told us her experience of having to work continuously for two days starting from 8am to 6pm the next day. There was virtually no lunch time at all as food was brought to the work place. At that time, she worked and ate and went back to work again without stop. She could only take a nap of half to one hour at the work place when she could tolerate no more.
Dormitory
Workers can stay at the dormitories provided by the factories at their own expense. Dormitory fee was increased from RMB35 to RM60 two months ago. At the time of our visit to dormitory number 12, about 10-16 workers stayed in a room which housed 8 double-bunk beds. Ventilation in the room was poor. The two fans and the small window in the room did not help much and it was especially difficult for workers sleeping on the lower bunk. No shower was available in the dormitory and workers could take a "bath" with a bucket of water. Lighting was poor in the staircase which could be dangerous to workers. Nor was the provision of fire facilities satisfactory in the dormitory. Married couples had to stay outside as no couple room was provided.
Workers' strike crushed
The absence of a workers' union in this factory does not mean that workers in Pleasure Tech does not air their grievances. A couple of months ago workers in the spraying section went on strike when the factory cancelled their food subsidy. This wild-cat attempt was not successful and the management could easily respond by firing the organizers.
# In violation of Article 78 of the Chinese Labor Law on settlement of labor disputes.
Labor Contract and Workers' Insurance
According to the Chinese Labor Law, the employer should sign official contracts with his/her employees upon employment. It is also the responsibility of the employer to buy insurance for workers. Pleasure Tech complies to none of these.
# In violation of article 16 of the Chinese Labor Law on the signing of labor contract.
# In violation of article 72 of the Chinese Labor Law on enterprises contributing to Social Securities.
Using Child Labor
On 6 July 2000, a batch of 160 children, aged around 12-13, were arranged to work in Pleasure Tech. They are students from a high school (Gun-Zhi-Yi-Zhong) at Gao Zhou in Guangdong province. They told our researchers they were 15 years old. But when our researchers asked about their year of birth, the answers were 1987 and 1988. Most of these children are in junior high school while some are even in primary school. Their first task in the factory was to put colorful clothes on the plastic toys of Aladdin. And their first day experience in the factory was that of over-time work till 9pm. Our researchers saw them bringing along their homework for the summer vacation. Their dormitory beds were where they did their homework after taking dinner. At the time of our visit in July, these children stayed in dormitory number 12 where a lot of steel sticks were dumped outside. It was particularly dangerous when it rained and at night which was the case during our visit.
When our researchers visited the factory again end of July, the children were taken back to Gao Zhou. These children had worked in the factory plant for three days. According to other workers, these children were too young to take up factory work and they were not very useful in the actual production.
As told by both workers and stall owners near the factory, we learned that workers' mobility in Pleasure Tech was always very high due to harsh treatment. The management would resort to recruiting workers as young as 14 and 15 to ensure adequate labor supply. For convenient recruitment, our researchers were told that these under-aged workers were mostly from Gao Zhou, Guangdong, the same home province of the manager. It is an understood practice that as long as children as young as 14 and 15 could produce an ID card of 16 years of age (usually they borrowed ID cards from their elder brothers and sisters), no body would bother to check whether child labor was being used.
# In violation of article 15 of the Chinese Labor Law on working age.
Industrial Accident
Two workers in the molding section broke their fingers because of fatigue. They were taken to the hospital.
Case studies
"It was very hard for my parents, letting me work in this factory. I cried and cried. I want to see the outside world. And I have three brothers and sisters going to school! I want to earn money, to help my parents. This is my first day in the factory. It's no fun at all. Working is hard.
This toy is a present given to us by the factory. Should be the factory's product. Only the small ones in the factory could have it. It's 7pm now. We have to work over time tonight…..till 9pm…"
"I came from Gun-Zhi-Yi-Zhong (Gun-Zhi High School). I have not finished my high school to work here. I came here few days after the batch of 160 children. How could I work in the factory under-aged? Borrow others' ID card of course. It's common. I used my fellow sister's ID card. She's 17 years old.
Why did I come to work in the factory? My family is poor. My parents can't even raise us, three brothers and sisters. What are the toys we are making? Hello Kitty key rings. I pull the thread through. I work till midnight every night. It's very tiring. Have I ever cried for this? Tell me who in this factory hasn't cried?"
"The molding machine is very noisy and the ventilation is bad in my section. We do not have ear plugs nor masks. We are given cotton hats to hear for what reason I don't know. There must be something I don't what in the air that makes my skin allergic. See, there are red spots on my hands.
We have to work over time till 1 to 2am every night. It's very hard. But we have only 3-400 (RMB) a month. The most I have ever got was more than 500 (RMB); the least 200(RMB) or more."
"I trim the plastic toy after molding. We were making dinosaurs this April and June. We are now making Hello Kitty key rings. I remember going to a fire safety class on my first day. The employer gives us only a wood-plank bed. We have to buy everything else like pillows and blankets on our own. A female security will search us over everyday when we leave the plant. This is to make sure that we do not steal anything from the factory. Do we have any entertainment facility in the factory? None, except for the "educational" TV shows teaching you the doctrines of life. They are so boring that nobody wants to watch them.
I've been here for 4 months and the most I could get was around 500 (RMB), the least around 300 (RMB). Did I send money home? I can hardly eat and spend on anything with the little wages, how can I have spare money to send home? I didn't have a temporary residence card. We workers have to pay the whole sum of 350(RMB) to apply one. How can I afford it? There was one time when five of us were stopped by the gong-an (police) asking for our temporary residence cards. We could not produce any and were detained. Not long afterwards, our employer came and we were released after his paying 1250RMB to the gong-an. He must have some connection with the gong-an.
I was once hurt by the soldering sparkle. I did not go to see the doctor lest disrupting the production. The scar is still there on my arm. We can go to the doctor when we are sick. The expenses, I don't know how much, will be deducted from our salary. You can ask for sick leave but whether you can get it depends on the mood of the manager. In most cases, we cannot get it."
"The highest salary I've got was 670(RMB, after deducting food and lodging expenses). That money was the reward for my laboring without rest for 15-16 hours a day, 30 days a month and finish eating my meal within half an hour. I worked over time for a total of 80 hours in June and have only two days off. I guess I should have not less than 400(RMB, food and lodgings not deducted yet) by the end of July for my June salary, shouldn’t I? For the whole July, we worked over time every day till 12:15am or 1:15am and had not had one single holiday. For three days, we worked till 2:15am. I remember the earliest time we could leave the plant was 10:15pm.
Why didn’t I recommend my unemployed auntie to Pleasure Tech or Wei De Factory? My fellows there told me their working conditions and wages were even worse than us here in Jin De. I would rather have no work than worked in those two factories.”
Conclusion
Our research on the supplier factories in China shows that McDonald’s toys are manufactured in blunt violation of the Chinese Labor Law and brute exploitation of the Chinese workers. All these were practiced under open eyes to sustain the huge profits of the company. McDonald’s claims that their company has strict control over all of its products, food or non-food like toys and services. The reality of workers laboring for McDonald’s in China sternly shows that all these are just lip services. The truth is McDonald’s as a super-sized trans-national corporation evades its social responsibility to both the people and the society in which they have business and investment.
We strongly demand that McDonalds:
27 August 2000
Contact person: Monina WONG or Alice KWAN
Tel: 852-2366 5860
Fax: 852-2724 5098
Email: hkcic@hknet.com