Foxconn Comes Under Pressure over Wages as Shenzhen Urban Village Rents Rise

Foxconn Comes Under Pressure over Wages as Shenzhen Urban Village Rents Rise
Photo Credit: Reuters / TPG
What you need to know

The gentrification of Shenzhen is forcing migrant workers out of their homes.

Listen
powered by Cyberon

Foxconn Technology Group workers in Shenzhen are struggling to pay the rent as the city’s industrial suburbs are gradually transformed into middle-class residential districts.

Foxconn’s production-line workers earn nearly 4,000 yuan (US$583) a month on average but one-third of that goes on rent and if housing costs continue to rise, workers say, they will be forced to leave.

In June this year, a group of Foxconn workers posted an open letter online asking the company for a reasonable wage increase to cover higher rents, the payment of housing fund contributions based on their actual take-home pay rather than their basic salary, and for the construction of more dormitory rooms in order to guarantee an affordable living space for all employees.

Production line workers at Foxconn are nearly all migrant workers who are systematically excluded from public housing in Shenzhen and can only afford to live in the densely packed urban villages that surround the factory complex. Even though Foxconn is located 15 km away from downtown Shenzhen, workers are already being squeezed out by new commercial and residential developments.

Last year, for example, one of China’s best-known real estate developers, Vanke, announced its Millennial Village Project to renovate one of the most popular urban villages right next to Foxconn and the Huawei campus, a move workers say could lead to the rent being doubled or tripled in the next few years.

It is estimated that there are currently around 10 million migrant workers crammed into Shenzhen’s more than one thousand urban villages, which take up just 8 percent of Shenzhen’s total land area. The apartment buildings in these densely populated clusters were hastily constructed using the cheapest materials in the 1990s and 2000s and many are already in a state of disrepair. The rents for these miniscule apartments on the other hand are rising all the time.

It is the same story in many other major cities. In Shanghai’s Baoshan district, for example, migrant workers can rent a tiny room with a shared kitchen and bathroom for between 500 yuan and 1,000 yuan per month depending on the length of the rental period. The cost of an apartment with a private kitchen and bathroom however is a few thousand yuan a month.

The Workers Daily reported on July 12 that only 12 percent of the 700,000 migrant workers living in the northeastern city of Shenyang owned their own home. Most migrant workers lived in private rented accommodation or in dormitories provided by the factory or construction site. A survey of workers renting or living in dormitories revealed that 84 percent complained about their terrible living conditions.

Across China, urban planning and local government housing policies have consistently neglected migrant workers’ housing needs. Housing policies in many major cities are aimed at attracting so-called high-value migrants rather than providing affordable housing for low-income families. Hukou restrictions and stringent application criteria mean that only a tiny proportion of migrant workers can even apply for government housing.

When the Guangzhou municipal government, for example, launched its plan last year to “allow tenants to enjoy the same [education and social welfare] rights as homeowners”, it attracted a lot of attention from migrant workers but they were soon disappointed when it became clear that the scheme only applied to tenants with a Guangzhou hukou.

Following the public backlash over the forced evictions of the so-called “low-end population” from Beijing last winter, local governments in Guangzhou and Shenzhen have taken a softer approach to urban renewal. Rather than forcing residents out, these local governments are asking real estate developers and landlords to resolve the issue.

In one Vanke development project near Foxconn, residents there were quietly asked to leave within one month. The workers had no legal protection and had no bargaining power with the landlords who could increase the rent whenever they felt like it. When landlords team up with big companies like Vanke, tenants are always left out in the cold and can do nothing except pack up their belongings and look for alternative accommodation.

After the publication of the Foxconn workers’ open letter in June, the company trade union promised to help workers by enhancing communication with the local government, community and real estate developers. While it is encouraging that the union recognizes that workers do have limited access to affordable and decent housing, it should be doing much more to ensure that the basic wages paid at Foxconn at the very least cover employees’ housing costs and provide them with a decent living.

Read Next: Wage Cuts Drive China's Online Food Delivery Workers to Strike

The News Lens has been authorized to repost this article. The piece was first published by China Labour Bulletin and can be found here.
TNL Editor: David Green (@DavidPeterGreen)