The sticking point in the battle to end the practice of employers defaulting on the payment of migrant workers' wages is the existence of the "private employment relationship" according to Dong Baohua, a labor expert from the East China University of Politics and Law.

Statistics from the All-China Federation of Trade Unions reveal that there are 94 million migrant rural laborers in China whose employers owe them up to 100 billion yuan (US$12.1 billion) in unpaid wages.

The problem is more complicated in the construction industry. It has now been disclosed that over 70 percent of payment defaults comes from construction enterprises. The State Statistical Administration has found that there is an unaccounted shortfall in construction projects throughout China of more than 336 billion yuan (US$40.6 billion).

'Bao gong tou'

In the building industry, inserted between the construction companies and workers from rural areas, there is often an individual contractor known as "bao gong tou" in Chinese who arranges for a group of migrant workers to work on a project.

"There is ambiguity about who hires the workers, the company or the contractor?" Dong said, drawing a triangle showing the three relationships. "Actually, the workers are working for the company, but they were hired by the sub-contractor."

Moreover, according to the professor, many of these individual contractors are not qualified to carry out the work and have never won approval from relevant governmental departments.

A common phenomenon leading to wage payment defaults is that these contractors may "evaporate" with a huge amount of money paid out by the company which should have been distributed to workers. Thus, when workers claimed wages from the company, it would say that it had already paid the money to the sub-contractor.

"Now, Shanghai has clearly stipulated that if such a thing happens, the company should be held responsible and has to pay the wages to the workers," he said.

"Accordingly, the wage default problem [in Shanghai] is not very serious. The qualification of the contractor is the key."

Dong stressed that individual employment relationships in the business field was a danger to the current social order.

Pay-up storm

The ongoing storm over the recovery of wages due to migrant workers is thought to be unprecedented in China.

It is widely believed that the decisive action now being taken by governments at all levels is due to the activities of Xiong Deming, a woman farmer. She was described as "bold" by her husband and it was she who told Premier Wen Jiabao that her husband - a construction worker - had not received wages totaling more than 2,240 yuan (US$270.90) which were due to him for work performed a year earlier.

That night, the husband, from southwest China's Chongqing Municipality, received his overdue wages.

And, in acknowledgment of her "boldness", Xiong was crowned as 2003's "Economic Person of the Year" by China Central Television Station (CCTV).

Actually, the problem has existed for a long time. It was referred to before last year's Spring Festival when the media carried reports of some migrant workers committing suicide when they failed to get the wages they were owed.

In China, since the reform and opening-up policy in 1978, large numbers of farmers have bidden farewell to their traditional agricultural way of life and flocked to the cities, chasing the elusive dream of finding a better existence.

Root causes

While people were blaming private contractors and saying they were "black- minded", it gradually emerged that government projects also accounted for a great proportion of the defaulted payment of wages. Many contractors were also forced to shun migrant workers because they were failing to be paid money by the government.

In Xiong's county, many people failed to get money from government projects.

A recent exposure by CCTV of wage defaults in a project in Hohhot, in north China's Inner Mongolia Autonomous Region, showed that the local government owed a total of more than 30 million yuan (US$3.6 million) to more than 1,000 migrant workers and several hundred individual contractors. The project with a total investment of more than 300 million yuan (US$36.3 million), was started in 2000 and completed a year later.

To eradicate the problem created by government projects, the State Council issued a document that all luxurious image projects which were constructed to show off officials' political achievements so they may be promoted were to be banned. Government departments at various levels were also required to clear up all the defaulted wages within three years and they had to make reports on their work on the fifth day of every month starting in February to the Ministry of Construction.

Cao Heping, an economist from Peking University, analyzed the large scale of wage defaults in an interview with the Xinhua News Agency.

"Millions of migrant workers have surged into cities over a short period of time, which created heavy pressure on the finance departments of local governments," he said.

Cao also noted that migrant workers lacked a tight and solid organization.

"In their state of disunity, the workers lack negotiating ability and that, to some extent, is why they cannot get payment on time."

Although the government is now going all out to solve the non-payment of wages headache, some people have also criticized the weakness of the Labor Law and associated regulations.

"Now, the campaign is mainly being pushed by the administrative power and it just underlines the inadequacy of the law," Dong said.

He said that the time taken to hear a case under current legal procedures was usually long. However, the attempt by migrant workers to recover their unpaid wages always rises to a flood during the period immediately before the Spring Festival. Most of the workers rely heavily on their earnings to spend during the festival.

"Also, the punishment of companies and contractors who owe the money is not rigorous enough and they may shrug it off easily," Dong said.

"The amount of money recovered for the workers is important yet so is the amount of fines collected from employers, and heavy fines can be a good method of deterring companies from willfully delaying the payment."

(Shanghai Star January 15, 2004)