Why are wage demands so frequent? The government should reduce the burden on enterprises

Recently, news of a general strike by Meiyadi employees in Suizhou High-tech Zone to demand wages spread in major QQ groups in the LED display industry. It is reported that the reason for this general strike is to demand unpaid wages from January to March 2016. It is said that this is not the first time workers at Suizhou Meiyadi have gone on strike to defend their rights due to unpaid wages.

In fact, in addition to this phenomenon in the LED industry, similar wage arrears are also very common in China's manufacturing industry. According to an industry insider, "Only about 30% of companies can still pay wages on time under such circumstances." We can't help but think about why Chinese manufacturing companies frequently pay wages in arrears.

The root cause is that manufacturing companies owe a lot of wages, which is a reflection of the downturn in the entire industry. This wave of wage arrears is mainly due to the continued downturn in the global economy in the past two years and the decline in market demand. When supply exceeds demand, the problem of overcapacity in China's manufacturing industry begins to be exposed. Therefore, price reduction has become the main theme of the manufacturing industry. Endless price wars have left companies with no profits at all, so we see the scene introduced at the beginning of the article.

Here we can't help but wonder, is it true that Chinese manufacturing companies can only "look at the sky to eat"? Once the economic environment is not good, will arrears of wages and bankruptcy become the only choice for companies?

In fact, it is not the case. When the economic environment is not good, companies can survive by improving themselves. According to industry insiders, if small and medium-sized manufacturing companies can clearly define their positioning in the red ocean competition, segment the product market, be specialized and detailed, and base themselves on technological innovation, they can not only attract capital acquisitions from some listed companies, but also stand out from the whirlpool of vicious competition. Even if the profits are not high, they can still live a meaningful life.

But when the company has already encountered problems, it may be inappropriate to talk about market segments and technological innovation. At this time, small and medium-sized enterprises must have the determination to "slim down" the company. First, layoffs and adjustments are made to reduce the size of the company. Second, "take the best and discard the dross" to retain high-quality projects and monetize loss-making projects. For small and medium-sized manufacturing companies, they should first seek survival and then develop.

From an enterprise perspective, transformation and upgrading take a certain amount of time. In fact, many companies in today's manufacturing industry are unable to do anything when faced with difficulties, so many bosses have chosen to "secretly maintain their warehouses" and "Thirty-six Strategies to take the first step." The bosses can run away, but migrant workers still have to live, and the collapse of one manufacturing industry is likely to cause hundreds of upstream supporting companies to go bankrupt and form a larger wave of unemployment. If the manufacturing industry continues to close down or even collapse, tens of millions of people will lose their jobs and millions of families will fall into a survival crisis.

In the editor's opinion, the manufacturing industry is directly related to employment and is also an important part of the Chinese economy. The manufacturing industry cannot be turned into a "wage-owed industry". Otherwise, it will not be conducive to the development of the manufacturing industry or the protection of employees' rights and interests, and it will be a lose-lose result. Therefore, the key to preventing manufacturing companies from arrears of wages is to solve the company's survival problems. This not only requires business leaders to actively explore transformation and upgrading, but also requires governments at all levels to effectively reduce corporate burdens in terms of taxes, fees, loans, etc. - both overt burdens and some hidden burdens must be reduced.