Some local governments are to be blamed for wage arrear
2016-03-15
To curb wage arrears phenomenon, the central government since 2003 has issued dozens of measures by both holding companies defaulting wages maliciously accountable and establishing law aid mechanism to facilitate migrant workers to get back their wages, and the legislative authority in 2011 had added the charge of maliciously defaulting wages in the criminal law to severely punish violators.
Wage arrears remain a critical issue in recent years, though, especially in the construction industry. As the Spring Festival had once again shown, hundreds of thousands of migrant workers, waged a persistent war of demanding their bosses to pay them wages.
However, when it comes to wage arrears, people will easily come to a conclusion that it is the greedy construction bosses who have made huge profits but refused to pay wages. Lamentably, sometimes, it is not bosses but some local governments, who have contracted out government-funded projects to developers but can’t pay them in time, to blame.
In reality, local government funded projects are always contracted to developers, and subsequently distributed to subcontractors, who in turn assign construction tasks to dozens of construction crews, mainly consisting of migrant workers. To finish projects, subcontractors and construction crews have to use their own money or borrow money to buy construction materials and employ migrant workers, which brings about uncertainty of whether their prepaid investment will be gotten back.
In recent years, cases of local government defaulting migrant workers wages are not rare. In 2011, a migrant worker from Xinjiang Uyghur Autonomous Region who spent 27 years in getting back his unpaid 5,000 yuan wage was owed by the education bureau of a county in the region. In 2012, over 2.1 million yuan wage was defaulted by a town government in Dongguan City, Guangdong province. In 2014, a construction crew chief from Anhui province committed suicide because he couldn’t get back over 10 million yuan project money owed by one county government and was constantly pressured by his crew colleagues and loaner to pay wages and debts.
Because local governments only pay for finished projects and some local government can’t pay even when they are finished thanks to their limited fiscal revenues, subcontractors and construction crews can’t get paid in time and a long debt chain is formed, stretching from some local governments down to the migrant workers.
Migrant workers, at the chain bottom, have the smallest say and suffer the most damage in the chain: they are habitually paid their whole year wage at the year end, and once they are defaulted wages, not only would they miss their Spring Festival holidays to reunite with their families, but also some tumultuous factors would be resulted in to affect social harmony.
The reason why some local governments initiate projects that they can’t afford is to fuel GDP growth. Some local governments know they don’t have enough money to launch projects, but for the sake of creating growth, many are capriciously launched. Some local officials care little about whether the projects will cause problems of wage arrears, on the contrary what occupies their mind is to seek promotion by launching good-looking projects at any cost. According to the latest date, 17 cities in an eastern province by late 2014 had piled up over 100 billion yuan defaulted project money, in which over 80 billion yuan was created by local governments that didn’t allocate fiscal money in time or didn’t have enough money to pay off the debt.
Actually, most wage arrears, directly or tangentially related with some local governments’ inability to pay project money, have not been exposed, and these governments should have set a good example in this regard. Instead, they on one hand are spending a considerable amount of resources in combating illicit wage arrears, on the other hand are defaulting wages themselves.
If labor policy violators were some local governments, who are labor law enforcement entities as well, labor protection measures and law articles to curb wage arrears will become hard to implement. Hence, to circumscribe local governments’ capriciousness in defaulting wages, the recently revised budget law, stipulating that any government project investment without guaranteed money source will not be approved, should be strictly implemented.
Also, the finished projects that still haven’t paid off subcontractors or construction crews should be paid without delay. Moreover, wage arrears by some local government should have been exposed and supervised by the public to put their power into cage.
Thank you for this illuminating article. I knew migrant workers were at the very bottom of the pay scale but had no idea that they would not be paid for an entire year, if indeed at all!
Last semester, several of my colleagues and I taught way more classes than our contracts permitted. We've all yet to get paid our overtime, although we did get our regular salary. According to our school's finance office, we will get our extra pay at the end of the school year. Frustrating!
Now that I've read your article, I understand a little better what the holdup is on our pay. Thanks.
Thanks for sharing your story here, we have highlighted it in our blog homepage.
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