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The era of cheap labor in China is coming to a close

As China has risen to become an economic and engineering powerhouse, the days of Western nations using Chinese peasants for cheap, disposable labor appear to be coming to a close.  The struggles of Taiwanese conglomerate Hon Hai Precision Industry Comp. Ltd. (TPE:2317) and its Chinese manufacturing subsidiary Foxconn -- and the woes they've caused the likes of Apple, Inc. (AAPL) and Sony Corp. (TYO:6758) (or some would argue the woes Apple, et al. have caused them) -- are well documented.

Now Microsoft Corp.'s (MSFTsoon-to-be-rebranded/renamed Nokia Devices unit has become the latest to experience these issues.  Workers accuse Microsoft of trying to force them to sign a new contract with worse terms after it took over Nokia Oyj.'s (HEX:NOK1V) phone unit.  Microsoft allegedly tried to fire some of the employees after they complained and refused to work until better terms were offered.  

But the firing attempts quickly backfired after virtually the entire workforce united in solidarity, going on strike.  This week picketers displayed signs, including one that read "If you want to change the marriage, you have to first offer compensation," according to Reuters.

China protest
Guards stand watch during a protest at Nokia's factory this week. [Image Source: Reuters]

An employee whose surname is Wang told Reuters, "They have no grounds for firing us.  We've already chosen this road to walk on, so we'll stick with it."

Nokia spokesperson Doug Dawson admitted that Nokia and Microsot terminated 59 employees who refused to work out of a workforce of approximately 5,000, but denied reports of mass firings.  He expressed hope that an agreement with the workers would be reached, stating, "[We met with workers this week] to explain the situation and dispel the many rumors and false statements."

Workers, though, said that statement was a lie, telling Reuters, "The company didn't send any representative to negotiate with us; the labour union isn't doing anything either."

The Nokia factory is located in southern China's Guangdong, a popular manufacturing location.  Nokia's factory is located in the city of Dongguan.  The city of Shenzhen -- where Apple's products are produced -- is just an hour away.

Source: Reuters





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