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20160516_142613 - CopyAs business people evaluating potential suppliers and manufacturing locations in China, you and I will be shown the “Five Star Factory”.  You will see “Five Star” ratings throughout China on places such as restaurants and public toilets.  This rating tells you it is the best.  Five Star Factories will have proper safety and working conditions, meet cleanliness targets, have friendly workers, good dormitories and eating facilities.  What we won’t be shown are the “shadow factories.” 

Shadow factories are secondary manufacturing facilities, perhaps nearby the main factory.  They are closed to visitors and often unregistered, so there are no official records of their existence.  Here, people might work 16-18 hour days, 6-7 days a week.  Often, workers are paid less per hour, violate safety and work conditions regulations, avoid taxes and produce goods that are sub-standard.   Most experts say that about 70% of all legal factories in China also have shadow factories.  The thing is though; very often migrant workers are looking for places where they can earn more money by working more hours. 

While the world may view 16 hours of work per day as a human rights issue, Chinese workers may view it as an opportunity.  You must understand that migrant workers come to the manufacturing areas in Southern China for a few years to earn enough money to send home to their families or to return to their country homes, marry and live a more comfortable life.  Even though there are strict labor laws to protect workers in China’s factories, these laws are readily ignored.  In China, work is a kind of religion and many workers seek as much of it as they can find.  It is also important to note that Chinese workers save on average, 42% of their income.  So while the wages for factory work average $.56/hour, the savings rate is still unbelievably high.

Personally, I do believe we should be concerned about Human Rights violations around the world, but in the manufacturing areas of China, we need to understand the complete picture before forming opinions.  And 16 hours per day?  Just ask any Silicon Valley worker with email, a laptop, a Blackberry and cell phone how many hours they work.

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