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Review of Radical Political Economics
2014, Vol. 46(4) 481 –488
© 2014 Union for Radical
Political Economics
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DOI: 10.1177/0486613414537986
rrpe.sagepub.com
Labor Process and the
Social Structure of
Accumulation in China1
Zhongjin Li1 and Hao Qi1
Abstract
Inspired by the interplay between social structure of accumulation theory and labor
process theory, this paper is to specify the particular mechanism that labor institutions take
in accomplishing China’s rapid capital accumulation in the reform era. The paper starts by
proposing a framework to understand the relation among overtime work, labor process, and
the wage gap and presents the puzzling contradiction between low wages and the need to
sustain the reproduction of labor power for Chinese workers. The paper then details the
bi-directional determination between the subordination of labor in the workplace and the wage
gap, and further analyzes the critical conditions for the stability of the current labor institutions
and sustaining capital accumulation.
JEL Classifications: B51, J31, J53
Keywords
labor process, social structure of accumulation, wage gap, living wage, Chinese economy
1. Introduction
Social structural of accumulation (SSA) theory has been developed since the late 1970s to ana-
lyze the development and contradictions of capitalist economies. It emphasizes the complex of
institutions supporting capital accumulation, among which the labor process is crucial in extract-
ing surplus value (Kotz et al. 1994). A similar concern has been more specifically addressed in
labor process theory, which focuses on the managerial efforts to coordinate, motivate, and control
workers at the site of production for labor’s real subordination to capital (Marx 1867; Braverman
1974; Edwards 1980).
While SSA theory explains capitalist dynamics from a middle-range perspective, labor pro-
cess theory explores the contested terrain in the workplace from a micro perspective. Labor
1Economics, University of Massachusetts Amherst, Amherst, MA, USA
Corresponding Author:
Hao Qi, Economics, University of Massachusetts Amherst, Thompson Hall, Amherst, MA 01003-9277, USA.
Email: hqi@econs.umass.edu
537986RRPXXX10.1177/0486613414537986Review of Radical Political EconomicsLi and Qi
research-article2014
1This paper was presented in the URPE session “New Labor Process Research in the SSA Tradition” at
the ASSA conference on January 4, 2014. We are grateful to Don Goldstein, Jim Devine, Michele Naples,
Thomas Herndon, Gilbert Skillman, Victor D. Lippit, and David M. Kotz for constructive comments and
suggestions.
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482 Review of Radical Political Economics 46(4)
process theory contributes to our understanding of class contestation embedded in the SSA
framework, while the latter provides a structural and institutional setting for the labor process.
Inspired by the relationship between SSA theory and labor process theory, this paper intends to
apply the theoretical framework to the Chinese economy and explore the distinct labor institutions
comprising China’s SSA. We also attempt to understand the implications of the labor process to
the sustainability of the current SSA.
Given the fact that China’s growth has increasingly depended on investment and export (Zhu
and Kotz 2010), a full vision of China’s SSA should, at least, be composed of investment institu-
tions, foreign trade institutions, and labor institutions. Investment institutions sustain the high
rate of accumulation through massive investment led by state-owned enterprises and supported
by the state-dominated financial system. Foreign trade institutions sustain export-led growth by
stabilizing exchange rates and ensuring the foreign supply of crucial raw materials. Although
both institutions are important, this paper will focus on the labor institutions of the SSA.
As shown in Figure 1, labor institutions are featured by the relationship between the wage gap
and the labor process. The wage gap refers to the gap between wages received by workers within
a normal length of a working day and the living wages that are necessary for the reproduction of
labor power. Focusing on these labor institutions, the paper illustrates the following viewpoints:
first of all, due to the wage gap, workers have to depend on overtime work and the rural economy
in order to accomplish labor power reproduction, thus the wage gap produces the combination of
high labor productivity and low wages; second, the wage gap results from the power relations in
the labor process featured by skill polarization; third, the wage gap further weakens workers’
bargaining position in the labor process.
The rest of the paper is organized as follows. Section 2 presents the distinct contradiction with
the wage gap and its temporary solutions. Sections 3 and 4 go parallel to address the bi-directional
determination between the subordination of labor in the workplace and the wage gap. Section 5
discusses the stability of the labor regime within the current SSA. Section 6 concludes.
2. The Contradiction of the Wage Gap and Its Temporary
Solutions
Along with China’s market reform since 1978 and the march into global competition, the wage
level in China has been significantly low by international comparison. Even as China ascends as
a major economic player in the global economy, China’s manufacturing wage level has been far
below that of Japan, Korea, and Taiwan in their respective fast growth periods (Hung 2009). The
hourly labor compensation even lagged noticeably behind those of other developing countries
like Mexico and Brazil (Baister and Cook 2011). More important, the wage level is lower than a
living wage level. Here the wage level refers to the wages workers receive by working within a
normal working time. According to China’s labor law, weekly working time shall not be over 44
hours, which can be considered as a normal working time. A living wage level is defined as the
wage sufficient for the reproduction of labor power; hence a living wage should be sufficient for
Overtime Work Wage Gap Rural Economy
Labor Process
Figure 1. Labor Institutions of the SSA.
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Li and Qi 483
the basic needs of workers and their families, including food, clothing, housing, education, medi-
cal care, and necessary social services.
Although one can hardly observe the wage level for a normal working time given the preva-
lence of overtime, the minimum wage level can be taken as a proxy, because the dominant wage
system in the private sector divides total wages into basic wages and overtime wages and pegs
the basic wage rate on the minimum wage level. Thus in practice, if workers do not work over-
time, they often only receive basic wages at the minimum wage rate. A recent study found that
Chinese workers were largely paid below the living wage standard measured by the disposable
income of low-income urban households. As shown in Figure 2, in 2009, workers in the western,
central, and eastern regions only received 60 percent, 57 percent, and 54 percent of their living
wage rates, respectively (Li et al. 2012).
The existence of the wage gap reveals a puzzling contradiction: if workers are paid lower than
a living wage, how can they complete the reproduction of labor power? The fact that workers
have to complete the reproduction through other channels in addition to normal wages implies
that capitalists have transferred a significant amount of cost burden to the working class by fail-
ing to pay a living wage.
So far, one way for workers to maintain a basic living standard is to perform excessive amounts
of overtime work. According to China’s labor law, workers shall be paid 50 percent more for
overtime work. It is ironic that workers are forced by the wage gap to voluntarily perform over-
time work. A 2009 survey by National Bureau of Statistics found the weekly working time for
migrant workers reached 58.2 hours in manufacturing, 59.4 hours in construction, 58.5 hours in
social services, 61.3 hours in hotel and catering services, and 59.6 hours in wholesale and retail-
ing, far beyond the overtime ceiling stipulated in China’s labor law (NBS 2010).
The other way to supplement their normal wage income is to rely on the rural economy, given
that migrant workers from the countryside take a large share of the urban working population.2
Migrant workers leave their dependents in the countryside since the costs of living are much
lower in the rural areas compared to the urban areas and since their living can be subsidized by
agricultural income. In this regard, these workers’ proletarianization is stuck in a state of incom-
pleteness (Pun and Lu 2010).
Figure 2. Living Wages, Actual Wages, and Minimum Wages in the Eastern, Central, and Western
Regions (yuan/hour).
2Migrant workers took 44 percent of urban employment in 2011. Data sources: NBS (2012, 2013).
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484 Review of Radical Political Economics 46(4)
These two temporary solutions support workers’ reproduction of labor power by forcing them
to endure long work-day hours and by sacrificing their happiness with families. However, the
contradiction with the wage gap persists despite the solutions. In the following sections, we will
focus on the overtime solution to see how it is rooted in and further affects the power relations in
the labor process and how it relies on critical conditions within the whole SSA.
3. Why the Wage Gap Exists: A Labor Process Explanation
It is a recognized fact that cheap labor is one of the driving forces behind China’s spectacular
economic growth, especially the export sector, over the last few decades. While the conventional
argument for China’s low labor cost usually focuses exclusively on the excessive labor supply
over demand, we find the pure market argument is fatally inadequate. It attributes relative bar-
gaining power only to the market force and stops short of examining the contested terrain where
exploitation and the fight over control originate. In contrast, we argue that the organization of the
labor process, or a “factory regime,” has also powerfully shaped the interest and capacity of the
Chinese working class, especially their bargaining position in defending a decent living standard.
It is the key features of the labor process that safeguard China’s capital accumulation in the
global production chain at the expense of workers’ interests and rights.
The first feature of the dominant labor process in China is simplicity and repetitiveness. China
is still in the low end of the global value chain (Koopman et al. 2008; Dedrick et al. 2010).
Millions of workers end up in the labor-intensive manufacturing export sector located in coastal
regions, now gradually proliferating to the inner land, to hand, fast-paced, and repetitive assem-
bly work in short cycle times (Kilian et al. 2012). This feature effectively concentrates the power
of control to the hands of management. Workers can only gain dexterity by repeating particular
tasks under simplified instructions, without comprehension of the underlying technical reason-
ing. The constrained “learning by doing” effect renders workers vulnerable to claim their impor-
tance to the factory. Thus, capitalists have an upper hand to “cherry-pick” workers and to
manipulate employment relations. In 2010, more than nine million students from vocational
schools were forced to work in factories as interns to fulfill the requirement of their education.
Foxconn, the largest global electronics manufacturer, has disclosed that one-third of workers on
some production lines were student workers with minimum skill and working experience, which
yields some evidence of the low-skill component of jobs (China Labour Bulletin 2010). Another
piece of evidence is the remarkably high turnover rate. Recent studies have found 30-40 percent
was a fairly mid-range figure for China’s labor turnover, and for companies with foreign invest-
ment, the turnover rate was estimated to be between 30 and 90 percent (Hurtgen et al. 2009;
Kilian et al. 2012). While the high turnover rate could be due to low job satisfaction, it at the
same time implies that a large amount of workers are easily interchangeable.
The second feature of that labor process is the rare job-specific training and the difficulty to
accumulate skill in the workplace. For instance, a recent job dissatisfaction survey in Guangdong
found 65 percent of workers complained “I did not learn any useful skills for my future” (Jiang
et al. 2009). The overt form of low skill required can be illustrated by the general reduction of the
training and mentoring period along with the introduction of more sophisticated equipment and
the takeover of training by vocational schools. The widely adopted computer numerical control
(CNC) equipment is representative of certain key features, processes, and trends relating to
industrial skills occurring within China’s manufacturing sector.
The CNC program has become an integral part in response to flexible specialization in the
post-Fordist era. The program produces a computer file that is interpreted to extract the com-
mands needed to operate a particular machine via a post processer and then loaded into the CNC
machines for production. The managerial choice of the CNC program has produced a polarizing
effect on the skills involved in production. A few early studies found while programming workers
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Li and Qi 485
and machinists are regarded as skilled, the large amount of operators are deskilled to only “mov-
ing the component from machine to machine” because of the highly automated procedures
(Kelley 1986; Zicklin 1987). As many front-line operators become a homogeneous grouping of
“interchangeable parts,” this tendency serves as a contemporary echo of Harry Braverman’s
sharp observation of polarization of skills as a general trend inherent in the development of
capitalism.
Meanwhile, even skilled programming workers and machinists have increasingly become
replaceable. The programming and mechanical component of the job has been easily generalized
and largely taught in the growing vocational education system. From 2007 to 2011, the annual
number of graduates from vocational schools increased from 5.3 million to 6.6 million, and 90
percent of vocational school students were subsidized by the state.3 Almost all of China’s voca-
tional schools have a training program for CNC technology. In other words, traditional work-
place training has been largely outsourced to the schooling system and job-specific skills have
been successfully mass-produced.
In general, the simple, repetitive, and declining job-specific training labor process in China
radically oriented workers towards a weak bargaining position to demand a living wage. The
prevalent adoption of new technology in production, as David Noble argues, tends to reinforce
rather than subvert the exploitative social relations (Noble 1985). It does not only trap many
workers in the conceived Dickensian conditions by the systematic degradation of their human
labor, but also inevitably forces them to resort to overtime work to supplement their basic wages.
4. The Impact of the Wage Gap on the Power Relation in the
Labor Process
The wage gap has been rooted in the power relation in the labor process; however, the wage gap
in turn deepens workers’ subordination to capital on the shop floor, because employers have the
power to determine whether workers can overcome the wage gap and complete the reproduction
of labor power.
Overtime work is crucial for overcoming the wage gap for individual workers. Figure 3 shows
the share of overtime payment in total wages in March 2009 for 29 workers in a mechanical fac-
tory in Guangdong Province. Each worker worked for 246 hours in that month on average, and
22 percent of the working hours were counted as overtime, while the overtime payment of all the
workers took 45 percent of their total wages since overtime work was paid 50 percent more than
normal working hours. From Figure 3 one can see that for nearly two-thirds of workers the share
of overtime payment in total wages was over 30 percent.
As employers control the allocation of overtime work, they can use it as a carrot-and-stick
strategy to reward and punish workers. Only disciplined workers are allocated sufficient over-
time work to fill the wage gap. Under these circumstances, the power of workers is constrained
by the wage gap. The obedience of workers results from the joint effect of the reserve army, the
features of the labor process, and the wage gap.
The wage gap as a disciplinary tool has historically evolved during the reform period. With the
beginning of market reform, “politics in command” as a distinct management system under the
Maoist period was replaced by a system that emphasized material incentives, such as bonuses
and piece-rate wages. While “politics in command” encouraged workers’ participation in man-
agement, material incentives strengthened the power of management since they could decide
how to distribute bonuses among workers. Material incentives benefited workers in the short run
at the expense of their long-term interests. As workers’ income increasingly relied on bonuses,
3Data sources: http://edu.gmw.cn/2013-02/28/content_6845317.htm
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486 Review of Radical Political Economics 46(4)
workers had to be more obedient to management. From 1978 to 1990, the share of bonuses and
piece-rate wages in total wages boomed from 2 percent to 19 percent.4 This structure of dividing
total wages into basic wages and bonuses was the prototype of the current wage system that
divides total wages into basic wages and overtime payment.
In addition to taking advantage of workers’ need to overcome the wage gap, the current wage
system also disciplines workers through the ideology of “distribution according to work” which
was also advocated under material incentives of the early reform period. As for workers, the
direct determination of overtime payment by the length of overtime work appears to be a fair
reward; they usually only demand a higher overtime wage rate, rather than challenge the whole
legitimacy of this wage determination system. Therefore, capitalists can easily transfer the
higher-wage demand to the state which sets the overtime wage rate. As a result, it appears to be
workers’ own responsibility to earn sufficient wages via performing overtime work, rather than
the employers’ responsibility to raise wages as high as the living wage level.
The wage gap makes workers not only obedient to employers but also to the rhyme of capital
accumulation. If production stagnates due to cyclical fluctuations of capital accumulation, oppor-
tunities for overtime work would automatically decline, which would reduce the total wage bill
and eventually contribute to the recovery of profitability. Workers with fewer opportunities for
overtime work may ironically strike for more overtime work, while employers do not have any
responsibility to provide sufficient opportunities for overtime work.5 Under these circumstances,
workers would have to leave their current jobs without employers’ layoffs. Thus, the wage gap
forces workers to bear the burden of economic downturns by producing a flexible supply of labor
power. This flexibility further undermines the power of workers in the labor process.
5. Stability Conditions of Labor Institutions
The wage gap produces a combination of relatively high labor productivity and relatively low
wages. Meanwhile, workers have to heavily rely on excessive overtime work and subsidies from
the rural economy to barely reach the living wage level. The labor institutions facilitate the rapid
accumulation of capital, but at the same time challenge its own stability which depends on a
couple of conditions.
Figure 3. Share of Overtime Payment in Total Wages for 29 Workers in March, 2009.
4China Statistical Yearbook, various issues.
5See a series of reports on workers’ demand for overtime work in 2011. http://finance.ifeng.com/news/
special/zhusanjiao/
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Li and Qi 487
The first condition is the reproduction of labor power. Overtime payment and subsidies from
the rural economy must be sufficient to overcome the wage gap; otherwise mounting workers’
struggle for a living wage must follow, as the recent booming labor protests have already shown.
However, the cyclical fluctuation of capital accumulation would threaten capitalists’ demand for
overtime work. Meanwhile, in contrast to the migrant workers in the 1990s, the second genera-
tion of migrant workers are increasingly separated from the rural economy; thus the supportive
role of the rural economy tends to be marginal in the long run.
The second condition is the labor process. Excessive overtime work occupies a lion’s share of
workers’ life and challenges the limits of labor capacity. It is not only necessary to maintain the
wage gap to ensure the performance of overtime work, but also necessary to impose rigorous
management to push workers’ labor capacity to an extreme. Thus, no matter how voluntary work-
ers may appear to work overtime, they are still fundamentally in conflict with management. This
tension may destroy management’s effort to maintain industrial peace and lead to workers’ strug-
gle against long working hours and harsh management.
The third condition is the pro-capital state. On the one hand, the state does not intervene in the
overtime work “consensus” in the labor process. In reality, since both workers and employers
accept overtime work, the legal overtime ceiling is left to be futile. The way to implement the labor
law illustrates how the state serves as a pillar of support to capital accumulation. On the other hand,
while withdrawing from the labor process, the state intervenes actively in the labor market by pro-
moting the supply of skilled labor, as the example of vocational education shows in section 3.
6. Conclusion
This paper has examined the specific form that labor institutions have taken in comprising
China’s social structure of accumulation. We have identified the distinct function of the wage gap
in the Chinese economy and traced the weak position of the Chinese working class to the labor
process where exploitation and antagonistic relations originate. The paper has also underscored
the importance of the wage gap as a crucial mechanism by which Chinese workers have to per-
form excessive overtime work and further subordinate to management.
We argue that the high labor productivity resulting from the long working day and the low
wage compared to the living wage level have together facilitated the high profitability of Chinese
capitalism and safeguarded rapid capital accumulation. The remarkable economic growth during
recent decades is at the expense of workers’ living standards and their bargaining power. While
workers, in order to reproduce their labor power, have relied on working overtime and the subsi-
dies from the rural economy, capitalists have gained strong bargaining power both in the work
place and in the labor market. At the end of the paper, we have analyzed the stability conditions
for the working of this specific set of labor institutions. The current combination of high labor
productivity and cheap labor cost is conditional on sufficient rural support and sustaining capital
accumulation, the relative tolerance of long exploitation, and pro-capital state interventions. Any
of the weakening condition tends to pose a serious challenge to the stability of capital accumula-
tion and the sustainability of economic growth in China.
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or
publication of this article.
Funding
The author(s) received no financial support for the research, authorship, and/or publication of this article.
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488 Review of Radical Political Economics 46(4)
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Author Biographies
Zhongjin Li is a PhD student in the Department of Economics at the University of Massachusetts Amherst.
Her research interests include Marxian political economy and labor history.
Hao Qi is a PhD candidate in the Department of Economics at the University of Massachusetts Amherst and
an assistant professor in the School of Economics at Renmin University of China, Beijing (since the fall,
2014). His research interests include Marxian political economy and income distribution.
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