Moderated mobilization: the case of YT Union
The first model of workplace collective bargaining is “moderated mobilization” (Luo and Yang 2020). In this model, state officials support enterprise unions to achieve organizational autonomy from management through shop floor elections and mobilize worker participation in collective bargaining through an elected workers and staff congress. Workers can meaningfully participate in the bargaining process, as they can make demands for negotiation, veto the union-negotiated collective contract if unsatisfied, and even take collective action to press employers for concessions.
Nevertheless, workers’ meaningful participation is granted under three conditions: (1) labor strike experience forces employers and officials to recognize worker representation and collective bargaining rights on the shop floor; (2) a relatively stable, (semi)skilled workforce holds strong workplace bargaining power in a capital-intensive sector; and (3) collective strike experience fosters workers’ collective identity and inspires them to use strong workplace power to bargain for their interests, which makes potential business disruption a constant threat to employers.
Thus, even though Chinese enterprise unions of this kind are constrained by the lack of genuine representation (as many managers may be elected to union leadership) and the right to organize strikes, the presence of state support (institutional power), legitimate enterprise union organization (associational power), workers’ strong on-job bargaining power (structural power), and employers’ perception of disruption leads to a moderated mobilization model of collective bargaining. Most scholarship on the recent development of Chinese collective bargaining has recognized the moderated mobilization model (Cao and Meng 2017; Pringle and Meng 2018; Luo and Yang 2020; Deng 2020).
The YT Union collective bargaining exemplifies moderated mobilization. YT is a joint venture between Y City Port Company and a Hong Kong firm. The investor controls the company, which has more than 2000 employees. On April 7, 2007, approximately 800 crane operators went on strike, disrupting the largest seaport in South China. The workers initially demanded a decade’s worth of unpaid half-hours—a substantial amount of compensation. When officials arrived at the scene, the workers’ demands shifted to include a pay raise and union representation. Officials and YT managers refused, arguing that the crane operators’ income was already higher than the average monthly income in Y City (2,926 yuan in 2006) and considerably above the local minimum wage of 700 yuan per month. However, workers complained that their wages had been stagnant for a decade as the company’s profits kept rising, arguing that the company should share its earnings with the employees.
Soon, the S provincial party authority sent a message to demand that the Hong Kong investor negotiate with the workers. The local government’s withdrawal from the state-capital alliance forced the Hong Kong tycoon to negotiate with the strikers. Then, the Y City party authority let the Y City Union take the lead in mediating the strike, helping the workers set up an enterprise union, and establishing collective bargaining. After seven negotiating sessions, the company and workers agreed to a 3% wage increase, a 500 yuan monthly allowance, and a company-paid contribution to a housing fund (totaling 13% of monthly income) as an alternative to the half-hour back pay. In total, the employer paid approximately 40 million yuan for the settlement.
At the same time, the Y City Union and YT workers and staff took two and a half months to elect the first YT Union Committee, as there was a disagreement between the workers and the Y City Union on nominations. Many workers treated managers, supervisors, and team leaders as unqualified for the “rank-and-file” union leadership. However, union officials finally persuaded workers to elect a union committee including both workers and managers, with the latter sitting in the union chair position. One practical reason workers accepted this arrangement was that managerial staff have access to company information and good negotiation skills. After successful unionization, the YT union and management agreed to hold an annual collective bargaining session every November beginning in 2008.
Two major problems emerged in the initial 2 years of collective bargaining. On the one hand, many members of the bargaining team were elected based on aggressiveness in making radical demands during the 2007 strike rather than leadership or the ability to negotiate; on the other hand, except for electing a bargaining team, workers were not engaged in wage negotiation, which made the union’s bargaining team rather isolated from members. Management often challenged the YT Union’s representativeness in making wage demands, and collective bargaining was quite difficult during the 2 years. In 2008, the YT Union negotiated a 2% wage increase amid the global financial crisis. In 2009, when the port business returned to high profit, the union secured an offer of up to a 4% wage increase, but the YT workers and staff congress vetoed the collective contract.
In 2010, 153 representatives elected a new YT Union Committee, including three managers and 18 workers; Wang, a financial manager, won the chair position. Under the new leadership, the YT Union approached collective bargaining with a relatively participatory strategy. For example, during the bargaining process, the union mobilized workers to collect wage and welfare information across seaport companies, regularly communicated with worker representatives, and published proceedings from the negotiation sessions to maintain workers’ collective attention. In addition, Chair Wang purposefully made the workers aware of the ongoing labor unrest in S Province and composed the union’s bargaining team of both moderate and aggressive workers.Footnote 4 Later, the YT Union Committee also asked workers to propose negotiation items and voted on the top five demands to bring to the collective bargaining table. Such moderated worker mobilization established the union's legitimacy among the workers and put pressure on the management, who gauged workers’ opinions and the risk of logistic disruption. From 2010 to 2012, YT workers won 10%, 8%, and 5% wage increases, respectively.
In addition, another strike episode in 2013 is worthy of attention regarding my analytical purpose. That June, when Wang was reelected as the chairman of the YT Union, workers and the management began to negotiate how to implement the city’s new policy on the housing fund contribution. According to the policy, the original company-paid contribution to a housing fund (totaling 13% of monthly income), a benefit workers won in the 2007 strike, became a legally mandatory payment shared between workers and employers. Despite the disagreement, the worker representatives voted on a plan after a few rounds of heated debate—the company and workers would equally share a contribution totaling 26% of monthly income to the housing fund. Effective in August, workers experienced a 13% loss of cash income on wage slips at the end of the month, and the outburst of panic and anger led to a wildcat strike on the morning of September 1, initiated by approximately 200 crane operators and then joined by all employees. Workers demanded an across-the-board 2,000 yuan increase in living allowance.
The YT Union represented workers negotiating with the company for three sessions until 2 am. The company offered a 500 yuan allowance increase; the strikers refused to make concessions but lacked consensus in making their demands. On September 2, the Y City Union came to mediate the strike. The official leader denounced the strike as illegitimate, reminding workers that collective bargaining in November should be their way to advance their demands instead of a wildcat strike. Then, he turned to negotiate with the management for a new package of close to a 30% wage increase and a 5,000 yuan bonus for resuming production. In the official announcement, the union official warned all workers that things would go beyond their control if they did not stop or were they to conduct a wildcat strike again. Workers resumed work at 4 pm.
The dynamics of moderated mobilization
The case of YT Union collective bargaining illustrates how the interactions between structural power, institutional power, associational power, and employer response produce the dynamics of the moderated mobilization model of collective bargaining. In one of the world’s busiest seaports, crane operators’ skills and on-the-job experience give them strong workplace bargaining power to disrupt global trade logistics. Crane operators’ exercise of this structural power, manifested by wildcat strikes, pushed the state to respond to workers’ economic demands by recognizing their rights to organize a “rank-and-file” enterprise union and negotiate wages with the management. The state’s enforcement of labor relations policies and laws generated effective institutional power that forced the employer to accept the establishment of the YT Union and collective bargaining in the company. Because crane operators’ highly valued skills and work experience make it difficult for the company to replace them in a short time, the crane operators’ strong workplace bargaining power compelled the management, who perceived workers’ structural advantages, to recognize the elected representative organization and make concessions in collective bargaining. The YT Union acquired organizational legitimacy and relative autonomy from the state and company management. Thus, workers seem to have acquired associational power through state law enforcement and their elected YT Union and the workers and staff congress.
The YT crane operators formed a “worker identity” based on occupational skills, strike experience, and active participation in union elections and collective bargaining. The initial wildcat strike in 2007 resulted from their shared grievances of wage stagnation and declining social status; as workers complained, “In the 1990s, the crane operators’ income and social status could match them to marry school teachers in Y City, but today, no teachers in Y City would like to marry a crane operator.”Footnote 5 The crane operators gradually forged a collective identity by participating in representative elections and collective bargaining, such as vetoing the 2009 collecting contract. As a union official observed on the scene, “You can obviously see that the crane operators view themselves differently from other staff and employees in YT.” With the formation of workers’ collective identity, the crane operators went on strike again in 2013 when the YT Union failed to address their concern about losing the housing fund benefit. Thus, the crane operators’ strong structural power may lead to militant workplace unionism.
Notwithstanding, the YT workers’ structural and associational power is moderated by the organizational and political constraints imposed by the official Y City Union in China’s context. The official union did not allow the workers to fully run the YT Union by nominating managers to union leadership positions based on their employee status and arguing for their administrative and communication skills, which workers need. By creating a legitimate manager-led enterprise union, the YT Union became a de facto intermediary between workers and management and between the official union and the company. However, because the crane operators’ structural power is too strong and disruptive for the employer and the government, the company and the Y City Union accepted incorporating the workers into interest bargaining. The YT Union was also pressed to have workers participate in union affairs and wage negotiation openly and transparently in order to release pressure from workers and the company. Meanwhile, such “mobilization” made the YT Union more legitimate and powerful in collective bargaining with the company, thus enabling workers to benefit from the associational power embodied in the manager-led YT Union.
However, not all workers’ demands, or grievances, could be addressed through the YT Union’s moderated mobilization and wage negotiation, and the YT Union may fail to contain workers’ disruptive power when workers’ grievances become salient or suddenly erupt. As the 2013 strike demonstrated, when the workers and management could not reach a satisfactory solution on the housing fund payment, although a resolution passed in the union-organized ballot, the crane operators still circumvented the YT Union to start a wildcat strike. When enterprise unions fail to contain labor conflicts, the official union or government agencies intervene to mediate and even punish worker militancy if they can no longer control workers, as the Y City Union leader threatened the YT strikers with public security intervention if they continued to strike or were to strike again.
Technical negotiation: the case of the RH Union
The second model of workplace collective bargaining is “technical negotiation.” Like the moderated mobilization model, wildcat strikes pushed state officials to support enterprise unions to acquire organizational autonomy from management through shop floor elections and mobilize worker participation in collective bargaining through an elected workers and staff congress. The perception of strike disruption and state pressure also compelled employers to accept the establishment of worker representation and collective bargaining.
Unlike the moderated mobilization model, worker participation in the bargaining process is limited because it only involves the elected representatives in the workers and staff congress and because a manager-led enterprise union controls the workers and staff congress composed of shop floor supervisors, technicians, team leaders, and office staff—a structure of worker representation imitating the structure of company management. During collective bargaining, enterprise union leaders’ technical skills, production knowledge, and managerial authority (these union leaders are, in fact, managers) are central to wage negotiation. Worker representatives passively participate in the process, as they can hardly put forward workers’ demands, confront their higher-up managers or take collective action. Ordinary workers give little attention to wage negotiation, as they feel no power to influence the union decision and no compulsion to participate, as they would not stay in the factory for long.
The limited worker participation and technocratic domination in enterprise unions result from workers’ weak workplace bargaining power in a labor-intensive industry, where a low-skill workforce and high labor turnover weaken workers’ structural power. Thus, the presence of state pressure (institutional power), enterprise union legitimacy (associational power), and employers’ perception of past strike disruption leads to a technical negotiation model of workplace collective bargaining.
Perhaps, the RH Union collective bargaining best exemplifies the technical negotiation model. RH Industrial Development Lit., founded in 1991, employed approximately 4,000 workers to make printers and optical instruments. In 2013, the RH Union was recognized as one of the ten best Chinese enterprise unions; it was the only recipient that was not a state-owned enterprise union. Thus, the RH Union was recognized as a national model for China’s foreign-invested enterprise unions.
In 2007, when RH was called on to form an enterprise union, the company nominated nine managers as candidates for seven union committee member positions, and workers contested the election by electing a non-nominated female workshop manager to chair the new RH Union. The RH Union focused on welfare provision and dispute mediation in the first term. For example, the union regularly organized social events, hobby associations, and sports clubs, distributed holiday gifts, and provided financial aid to workers. The union also regularly arranged public lectures to help workers adjust to urban life, covering mental health, makeup and dressing, dating and marriage, sexual health, and communication skills. When a spontaneous wildcat strike occurred in late 2007 due to workers’ anger with the company’s new work evaluation scheme, which led to an income decrease, the RH Union mediated the dispute between worker representatives and management and coordinated both sides to accept a revised policy. The strike led the RH Union to hold regular consultative meetings with worker representatives and management to process workers’ grievances and the company’s concerns.
In 2010, the RH Union Committee organized its second election, in which the company did not interfere. The record of the 2010 election shows that there were 248 representatives, with 190 coming from the shop floor and 58 from administration and research units. Workers and staff in small union groups raised hands to elect their representatives, and primary-level supervisors, technicians, and team leaders made up most worker representatives. The representatives and the election committee nominated 14 union committee candidates. Because all the former union committee members were managers, which did not seem truly representative, the election committee decided that at least four candidates must come from the shop floor. In the nomination process, most representatives nominated their managers, whom they thought of as having high authority, strong managerial skills, and a good reputation. By adopting relatively democratic procedures, the election produced a union committee including seven managers and four shop floor supervisors, imitating the company management structure.
Liang and Gang were elected to be the chair and vice-chair of the RH Union and were also the directors of the department of products and the department of quality assurance, respectively. The RH Union held future union elections the same way, and Liang and Gang stayed in the chair positions until the company moved to a neighboring city in 2020. Using their managerial skills, the two leaders built an efficient union administration. Under the new leadership, the RH Union drew up a full range of rules, standards, and regulations through the workers and staff congress, such as RH Union membership regulations, worker and staff congress regulations, union committee operation standards, union committee meeting rules, union financial management procedures, union procurement procedures, union sport activity rules, and union financial aid standards. Standardizing and institutionalizing union administration became a salient feature of the RH Union.
The RH Union became a well-functioning welfare workplace union focusing on distributing benefits and mediating workplace disputes, playing a comfortable intermediary role between workers and the company. However, the RH Union was still unable to advance workers’ interests by allowing workers to negotiate wages and benefits. The greatest challenge for the new RH Union was collective bargaining. In 2011, the Y City Union, with local party and government support, required the RH Union to sign a collective contract with the company, but the company did not want to negotiate wages with the union, and the RH Union was afraid that they might not obtain a result from the company that could pass the vote in the workers and staff congress.
Coincidently, a wildcat strike gave birth to collective bargaining in the company. On November 3, the molding department, where most employees were skilled workers, went on strike when the company broke an early agreement on raising molding workers’ wages. That May, without the RH Union’s help, the skilled molding workers had demanded the company increase their wages with a threat of work stoppage, and they negotiated with the company a wage increase that would be effective in October. When the molding workers found the company did not raise their wages upon receiving the wage slips, they planned the strike and let their union representative notify the RH Union on the morning of November 3.
The departmental strike immediately threatened production on the assembly lines by disrupting the supply of molds. The company fired all the strikers the next day, and then the strikers staged a protest in the factory. The RH Union went to mediate the strike, promising that no punishment would apply if they returned to work immediately with no mention of the wage increase. Sixteen protesters returned to work, and 22 received dismissal. Later, when the dismissed workers held a hunger protest in the factory, the RH Union stopped the company from paying compensation for terminating the workers’ contracts.Footnote 6
After the strike, the Y City Union officials also met the company management without defending the dismissed workers. The officials pointed at the strike as a warning to management, warning that the company would experience more devastating disruption soon if it continued to reject collective bargaining over wages and benefits—a fate that had befallen several well-known large manufacturers since 2010. Pressured by workers’ activism and official warnings, the company and RH Union signed the RH Wage Collective Negotiation Methods in December and agreed to begin collective bargaining after the 2012 new year.
The RH workers and staff congress elected a collective bargaining commission including eight worker representatives and ten union committee members, from which five persons formed a negotiation team. Then, the commission was divided into four task groups: the information group collected data on wages, food, rent, child-raising, and education; the communication group reported the negotiation progress to worker representatives and gathered their feedback; the publicity group was responsible for recording the process and developing proceedings from the negotiation; and the negotiation team focused on strategy-making and bargaining. This division of labor has since been institutionalized for collective bargaining at RH.
The RH Union took a technical approach to balance the interests between the company and workers in collective bargaining, emphasizing data analysis and modeling. Gang had led the negotiation with the company since the first collective bargaining in 2012, and he constructed a mathematical model to estimate the rate of increase in wages and benefits. His model included government wage guidelines, industry-level wages, the consumer price index, rent, family size, child-rearing expenses, and other variables. The union refined the model each year, depending on which items were advantageous to the union’s demands. For example, in 2012, the union included infant formula prices in the model because many Chinese parents bought expensive foreign brands after a poisonous infant formula scandal exploded in China. In 2013, the information group sampled 146 employee households in migrant neighborhoods and 200 urban apartments in local neighborhoods. The union found that although the rent for urban apartments was higher, the rent in migrant neighborhoods increased at the highest rate in Y City. The commission, therefore, suggested including rent in migrant neighborhoods in the model.
In 2012, the model estimated a 19% raise (350 yuan), but the management proposed an 8% raise, arguing that Japan’s earthquake, Thailand’s flood, and the European debt crisis dropped the company’s profits (RH was operating in those regions). However, because the union’s data were prepared in a convincing way that the company did not expect, the company could not resist the evidence that the past wage was set too low to meet workers’ rising living costs. After four negotiation sessions, the RH Union and management agreed on a 15% raise (300 yuan) in the collective contract in 2012. The workers and staff congress were also persuaded to approve the contract, although worker representatives initially demanded a 30% raise, a number the RH Union deemed “irrational,” “realistic,” and “unscientific.” In the same way, the RH Union negotiated a 10% raise (200 yuan) in 2013. In addition to wages, the RH Union negotiated other benefits for workers over the years, including a work program for pregnant workers, child education subsidies, rent subsidies, a factory clinic, a company bus, and an annual field trip.
In fact, however, mathematical modeling might be a game of numbers to generate a moderate percentage of raise that can be justified in front of workers and showcased as a “rational,” scientific” negotiation to state officials. Insider company knowledge was important for the RH union committee to cap the wage increase and to negotiate new benefits for workers. The RH union chairs were senior managers who had a good sense of company productivity and annual profit. They gauged a “reasonable” wage increase and used the “scientific” method to set up the rate of wage increase as long as the rate did not go above their “reasonable” estimate. Even then, they still felt pressure from the company and increasingly preferred to negotiate new benefits with the company, rather than a higher rate of pay raise, because new benefits not only sounded attractive to workers but also saved a considerable amount of the company’s cost associated with a pay raise, such as overtime hourly pay and the employer’s contribution to a housing fund, pension, and social insurance.Footnote 7
Worker representatives gradually discovered the “secret” of the union’s negotiation strategy—a low raise plus more benefits. Beginning in the mid-2010s, the RH Union received more challenges in the worker and staff congress when representatives were asked to vote on the negotiated pay raise and benefits. Sometimes, the RH Union leaders had to employ their managerial authority to suppress the sparked challenges, with statements such as, “If you do not agree with the deal, you talk to the company” or “whoever can negotiate a better deal should go to talk to the company.” The challengers and the congress were silenced when receiving these counterchallenges based on the union leaders’ managerial positions, but the ballot reflected the increasing dissatisfaction among the worker representatives. While the negotiated collective contract received above 90% approval for a few years, the approval rate subsequently dropped to below 80%.
In 2020, the company closed the factory and relocated the production to a neighboring city, and the RH Union negotiated a compensation package for workers who chose not to move with the factory. The RH Union reported that from 2012 to 2020, workers' basic wages increased by 1,617 yuan through collective bargaining. However, if we take the increase in Y City's minimum wage into account, which increased by 880 yuan during the same period, the real gain from collective bargaining was not impressive, only 737 yuan. A union committee member's and a worker’s comments reflected how meaningful collective bargaining was for them. A union committee member said in an interview:
“Our wage level was relatively low for workers, and so the raise looked like a lot to outsiders, but it was not very much for workers. [Nevertheless,] we think it was a good result—if an agreement could not be reached (by workers and company), it would be a failure [for the RH Union].”Footnote 8
Furthermore, a worker representative commented,
“Regarding collective bargaining, before, the wage was totally decided by the company. Now, [we] have only a little voice. In the past, wages increased by about 10 yuan a year, sometimes dozens of yuan a year. We heard about collective bargaining in 2010—union members could bargain with the company—but we did not have real bargaining until 2012. About the wage increase, now it has increased a little more than before. For me, I am not satisfied with the company […]. For labor strikes, there was a strike before. [You won’t go on strike] unless you cannot tolerate it anymore or the grievances cannot be addressed.”Footnote 9
The dynamics of technical negotiation
The case of RH Union collective bargaining exemplifies how a different configuration of labor power and employer perception shapes the formation of a technical negotiation model of collective bargaining. The exercise of workers’ structural power, manifested by the molding workers’ wildcat strikes, provided the state officials with an opportunity to push the company and the manager-dominated RH Union to institutionalize collective bargaining, as both the employer and RH Union already perceived the possible threat of production disruption. However, the power dynamics on RH’s shop floor are different from the moderated mobilization model in the capital-intensive sector composed of a stable, (semi)skilled workforce.
Although dozens of skilled molding workers in RH had strong workplace bargaining power in disrupting the machine assembly, their failure to build solidarity with assembly workers crippled the opportunity to push for a greater representative union and meaningful workers’ participation in RH’s collective bargaining. Assembly workers in RH were characterized by low skills and high turnover, and they could not form a stable collective or expect to build a long-term career tied to the promotion and wage increases. Moreover, when the molding workers exercised their structural power by organizing a strike, they were disciplined by the manager-dominated RH Union and punished by the company. They were unable to form a stable solidarity network in the company either. Hence, while molding workers’ militancy led to an official establishment of collective bargaining, RH workers could not harness the associational power created by the RH Union for their advantage due to their weak structural power.
Without union members’ pressure on the company, the RH Union was comfortable playing an intermediary role in balancing labor relations, having no interest in mobilizing workers and forging their collective consciousness. Unlike the YT Union, which was pressed to incorporate worker participation in interest bargaining, the RH Union only included representatives, mostly primary-level supervisory staff, to participate in information collection and go through the procedures, thus legitimizing collective bargaining. Then, the core of RH’s collective bargaining was not solidarity-based interest negotiation but manager-dominated technical analysis, insider production knowledge,Footnote 10 and managerial authority to obtain approval of the collective contract from the company and worker representatives. The result of collective bargaining was the limited increase in wages and company welfare, a sort of interest balancing between workers and the company, which satisfied the official unions’ mission to build “harmonious labor relations.” Thus, without strong structural power, a technical negotiation model of collective bargaining developed from the interaction of institutional power, associational power, and employers’ perception of threat in a sort of state corporatist institutional setting.
Collective consultation: the case of FX Union
“Collective consultation” is the third variant of workplace collective bargaining, which is also the Chinese official name for collective bargaining. Enterprise unions are supposed to consult with management on employment issues and sign collective contracts on behalf of workers without triggering a worker–management confrontation. As a national policy, it was rarely enforced since the national union began to promote collective consultation in 1994.
Similar to the technical negotiation model, state officials formally require employers to establish enterprise unions and collective bargaining. Enterprise unions can build associational power through a relatively democratic election, welfare and service provision, and labor dispute mediation. Unlike the technical negotiation model, because no labor strike ever occurred in the companies, employers do not directly perceive the threat of disruption and do not feel an urgent need to recognize workers’ right to collective bargaining. The enterprise unions still lack organizational autonomy from management. With these conditions, collective bargaining becomes a de facto consultation between manager-dominated enterprise unions and company management; workers and their representatives are largely excluded from participating in any matters except complying with their union leadership to pass the drafted collective contract. As a result, with no strike experience and the absence of strong structural power, the combination of institutional and associational power produced a “collective consultation” model of collective bargaining in Chinese state corporatist settings.
As RH’s largest competitor in Y City, FX Union collective bargaining may be the best example to demonstrate the collective consultation model compared to the RH Union’s technical negotiation model. FX employed approximately 8,000 workers to produce printers and other electronics. The FX Union was formed in 1995. In the mid-2000s, Zhou, a young shop floor supervisor, was elected as the union chairman. Seeing that all his predecessors were senior managers who barely ran the union with the workers’ interests in mind, Zhou proposed banning senior managers from running for union elections, which the employer accepted. Since then, the FX Union committee has been composed entirely of elected workshop managers, technicians, supervisors, and team leaders. Zhou also persuaded the company to fund entertainment and social events for workers. During his tenure, Zhou’s union work offended some managers, who later blocked his promotion in the company, so he chose to resign and started his own business after his term ended.
In 2010, Yu won the union chair election after Zhou. The FX Union election was similar to the RH Union elections. Workers were grouped based on production divisions, workshops, lines, and teams and elected their representatives in the groups. Then, the representatives elected the union committee members, including a chair and a vice-chair. However, since FX had not experienced any strike demanding wage hikes or union representation before, the union did not achieve organizational autonomy from management, and the company maintained its interest in controlling the union by sponsoring union chair candidates. In an interview, Yu acknowledged that the company played a key role in promoting him as the chair candidate in 2010. While many workers knew Yu well because of his active role in participating in various union activities, he could only mobilize workers’ support in his division—approximately one-fourth of the company workforce—and it was the company that used administrative channels to promote him as a strong candidate in workers’ daily shop floor meetings. In 2014, when Yu retired from the union leadership role as a newly promoted company manager, a chair candidate backed by him lost the election because the company chose to support a different candidate to chair the union.
Despite company interference in union elections, like the RH Union, the FX Union did well in providing welfare and mediating labor disputes. The union organized many associations and social events for workers, such as sports teams, dance clubs, music bands, yoga groups, and reading societies. The union normally sent gifts and distributed resort tickets to workers on holidays. Before the Chinese New Year, the union even booked train tickets and arranged buses to take workers to train stations. The FX Union also collected and addressed workers’ grievances through an internal online platform. When a worker lodged a complaint online, the union committee member brought the case to the relevant managers. Whether or not it could be resolved, the union would reply to the worker with a result. For example, some workers complained that it was unreasonable to deduct a two-day wage for a one-day absence in the employee handbook, and after the union talked to the human resource manager, the company changed the penalty to a one-day wage.
In 2011, like most enterprise unions in Y City, the FX Union was required to initiate wage collective bargaining with the company. Because the union did not have enough autonomy from the company and because the union committee members did not have high managerial status in the company, the FX Union could not bargain in the way that the RH Union did. As Yu said, “Our negotiation team members are weaker than the RH Union’s in terms of information collection, negotiation power, and mobilization capacity. Even though we take the same approach as they do and collect the same quality data, we cannot obtain the same results because our status within the company is different.” “We do not dare to do the same. They are one team with two brands (union and management), but we are not.”Footnote 11 Nevertheless, the union needed to bargain for some gain to enable the workers and staff congress and union officials to approve the collective contract.
The FX Union approached collective bargaining with a consultative strategy. Before kicking off formal collective bargaining, Yu and other union committee members went to consult with each head of department and the general manager about appropriate union demands on wages and benefits. Through informal consultation, the union collected company information and tested negotiable space on the issues that would be discussed in formal negotiation sessions and secured some support from the management. After the preparation, formal collective bargaining began, but there was only one formal negotiation session between the union and management, as both sides immediately agreed upon the wage and benefit adjustment. Since everything was already negotiated, the formal session was a ritual to legalize the agreement. Then, the union called the workers and staff congress meeting to approve the collective contract. There was no worker or worker representative participation in the process except for voting on the collective contract in one meeting.
The first collective contract in 2011 only won a raise of 50 yuan, a “victory” that disappeared when the municipal minimum wage was raised by 13%. Since 2012, the FX Union has planned collective bargaining only after municipal minimum wage adjustments and has managed to gain at least an extra 5% raise in addition to the official minimum wage increase. In 2014, when the municipal minimum wage increased from 1,600 to 1808 yuan, the union demanded an extra 5.6% raise, and FX workers’ base wage rose to 1910 yuan. During Yu’s tenure, the company had no collective labor disputes. Collective bargaining was de facto a consultation process between the union committee and management.
The dynamics of collective consultation
The case of the FX Union collective bargaining demonstrates a collective consultation model resulting from the operation of workers’ institutional power and associational power but a lack of structural power and employers’ recognition of that structural power. Since the local state enforced the organization of an enterprise union and signing of the collective contract in FX, the official enforcement generated institutional power that pushed FX management to accept unionization and collective bargaining. Then, enterprise union elections placed responsive shop floor managers in union leadership, who then made efforts to improve workers’ welfare and working conditions in the company and built some associational power for the FX Union.
However, since there was no wildcat strike in the company's history and because FX’s major workforce (like their RH counterpart) had no strong structural power or collective identity due to low skills and high turnover, the company did not perceive a direct threat of production disruption or feel pressure to give up its control over the FX Union and recognize workers’ rights to collective bargaining, while the FX Union did not feel it necessary to achieve organizational autonomy from the management. Thus, although the FX Union held formal organizational status and legitimacy among the workers through union elections, welfare distribution, and dispute mediation, it was still more dependent on the company than on its members. It did not engage workers or their representatives in collective bargaining at all. Ultimately, collective bargaining became an internal consultation meeting between the union and the company, and workers and their representatives were excluded from participation.
Managerial domination: the case of WM Union
The fourth model of workplace collective bargaining is “managerial domination.” Like the other three models, state officials compelled employers to formally establish enterprise unions and collective bargaining. However, unlike the other three, the institutional power derived from state law enforcement is the only available power source that workers could rely on in collective bargaining. While an enterprise union is created on the shop floor, company management fully controls the union elections and operation, and there are no democratic procedures to produce accountable union leadership. The company-picked enterprise union committee does not serve workers’ interests and may not run the union at all. Consequently, the enterprise union cannot foster workers’ associational power in the company. Moreover, a docile, low-skilled, high-turnover workforce can neither challenge the management by disrupting production nor pose a potential threat with strong structural power. The enterprise union cannot represent workers, and management dominates the union and collective bargaining.
I find two forms of practices in the managerial domination model of collective bargaining. One form is the widely reported formalistic collective bargaining, in which a company and its picked union leaders fill out a collective contract template that contains little substance but repeats legal clauses, and no bargaining process takes place. The other form is that the company and its picked union leaders are forced to go through a formal collective bargaining process due to high official pressure, but the enterprise union works with management to pass a collective contract that would benefit employers more than workers. In this study, I provide the case of WM Union collective bargaining to illustrate the second form, which has not been well researched.
In 1996, WM set up a Chinese headquarters and opened its first Chinese branch in Y City. While the Y City Union had been persuading WM to set up workplace unions for years, the company had successfully lobbied the city government to avoid creating unions until 2006, when the central party leader instructed the national union to unionize all foreign-invested enterprises. Then, Chinese official unions started by organizing WM workers. Since WM refused to accept unions, the official unions revamped their revolutionary tradition and took a rare bottom-up approach to organizing workers.Footnote 12 Soon, WM gave up and allowed official unions to establish branches in company branches and headquarters.
However, when WM began to comply with official unions’ requirements, official unions withdrew from grassroots organizing and coordinated with WM management to set up workplace unions. Human resource managers organized union elections in many stores, including nominating candidates and selecting worker representatives to vote for union committee members. There was no ballot in some branches, and the picked representatives raised their hands to vote. As a result, except for a few workplace unions created during the early grassroots organizing campaign, most WM workplace unions were not representative but controlled by the management. Furthermore, the WM workplace unions were independent of each other, and each union reported to the official union federation in the local district or street office. Therefore, the WM Unions had almost no organizational autonomy from management, and they did not have associational power.
In late 2006, the national union federation approved the Y City Union’s request to initiate collective bargaining with WM. In November, the Y City Union organized a collective bargaining training session for the WM Headquarters Union constituted by managers. The union officials quickly found that the headquarters union members aligned their interests more with the company than the workers. The headquarters union even prepared a collective contract template without wage specifics but that repeated the basic labor standards. In 2007, the Y City Union turned to WM branches to collect workers’ demands and drafted a new collective contract, but the WM Headquarters Union opposed the draft and said they could not agree to it. Back and forth, the negotiations between the Y City Union and WM China made no progress in 2007.
In 2008, the Y City Union threatened to denounce WM’s anti-collective bargaining stance at a press conference, which brought WM’s deputy global CEO to lobby the national union leaders in Beijing. After the national union leaders’ mediation, WM accepted collective bargaining in China. Soon, the Y City Union guided WM workplace unions to elect representatives. Each branch sent three representatives—one union chair, one worker, and one union committee member (or worker)—to participate in collective bargaining. Among 48 representatives in total, each gave a short speech on why they wanted to be a representative and why they were qualified, and then they voted for ten people to form a negotiation team. The WM-D branch union chair, a worker who participated in the early grassroots organizing campaign, was elected as the chief representative.
Before the negotiation began, a senior national union official flew to Y City to supervise the negotiation, and he persuaded WM to offer a 9% wage increase—1% more than WM had budgeted for wage adjustment. In July, WM signed a collective contract with employee representatives in Y City, with a 9% wage increase plus a 1% performance-based increase—lower than the 13% proposed by workers based on the S provincial wage guideline.
Because the headquarters management often adjusted wages without the intention to negotiate and because most WM unions did not truly represent workers, the WM workers heavily relied on the Y City Union to pressure the company to make concessions. In 2010, when the Y City Union found no progress between union representatives and management, the union officials organized meetings with WM workers, who pressured the company to accept an 8% wage increase in the final negotiation. In 2011, when WM asked representatives to accept a 5.5% wage increase, the Y City Union threatened to hold a press conference to criticize WM’s bad faith bargaining, which caused the company to offer a 6.5% raise. In 2013, when WM insisted on a 3% raise and ignored workers’ demand for 6%, the Y City Union asked the representatives to notify each branch manager that the workplace union would call for a formal meeting with workers to discuss the wage negotiation on the afternoon of May 2, from 2:30 to 3:30 pm, a threat of work stoppage during holidays that forced WM to accept a 6% raise in the end. In 2014 and 2015, the Y City Union did not intervene in WM collective bargaining, and the wage increase for the 2 years was 5.5% and 4%, respectively, but workers were unsatisfied with the outcome. In 2014, a few worker activists established an independent WM Chinese Workers’ Association (WCWA) as an alternative organizational vehicle to build associational power, but they were unsuccessful in building workers’ solidarity.
While the Y City Union supervised WM's collective bargaining and helped store representatives gain small wage increases over several years, company management still dominated collective bargaining, and WM workers’ income and working conditions did not improve. Management often took away workers’ subsidies and benefits while increasing wages. For example, with the WM unions’ consent, the company removed the 400 yuan monthly rent subsidy in 2012 collective bargaining despite the widespread opposition from the workers. Additionally, not every worker had received a raise as specified in the collective contract; some workers could not receive a raise due to a “bad performance evaluation.”
In addition, working conditions in WM became increasingly precarious. For example, by 2015, WM had reduced the number of workers by half and employed a substantial number of part-time workers; it also required suppliers to employ salespersons to replace WM workers. In 2016, without any consultation with unions or workers, the management announced that WM would switch the regular work hours to a flexible work schedule in which store workers could be on call at irregular hours without overtime pay. While the WCWA tried to organize workers to resist the new policy, WM prevailed when branch management came to intimidate individual workers one by one and when neither WM Unions nor the Y City Union intervened on behalf of workers.
The dynamics of managerial domination
The case of WM Union's collective bargaining demonstrates a managerial domination model. Although the national federation and Y City Union asserted a salient role in unionizing WM and installing collective bargaining in the company, most WM workers did not achieve union representation or associational power through grassroots organizing or shop floor elections. Their structural power was weak, as they worked in a low-skilled sales sector and were easily replaced by the company, and they had not organized any effective collective action to halt WM’s business in Y City. Thus, they were unable to compel the management to respect their rights to union representation and collective bargaining.
In the end, due to the lack of associational power, structural power, and the business disruption caused by the workers’ strike, the presence of strong institutional power alone through the national union federation and Y City Union’s policy enforcement could produce collective bargaining manipulated by WM management. In many other companies where the officials did not supervise collective bargaining closely, workplace collective bargaining simply comprises a formalistic collective contract template filled out by an employer and his or her handpicked union chair.