Workers continue strike over unpaid welfare benefits

Workers gather on Tuesday at the gate of Yue Yuen Industrial Holdings in Dongguan, Guangdong province. A strike began a week ago after the company missed a deadline to address workers' concerns. [Photo by Zou Zhongpin / China Daily]

Tens of thousands of workers continued a weeklong strike on Tuesday over what they claimed were underpaid social security benefits by a major shoemaker in Dongguan, Guangdong province.

Strike reveals problems in social security system

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The protest sends out a warning to companies that rely on low wages and minimum welfare for workers amid an upgrading of the Chinese economy, analysts said.

The strike started on April 14 when workers learned that Yue Yuen Industrial Holdings had for years underpaid into their social security accounts - government-mandated insurance for health, retirement and unemployment.

Public information on the website of Pou Chen Group, the parent company of Yue Yuen in Taiwan, shows that the group produces more than 300 million pairs of shoes a year, accounting for 20 percent of the global market of sports and casual-wear shoes.

On Tuesday, factory worker Peng Xiaohui, 24, joined his colleagues on strike. He has been working for six years for Yue Yuen, which owns several factories in Dongguan making footwear for brands including Nike and Adidas.

Peng, who earns 3,500 yuan ($565) a month, recently found out that the company allegedly understated his salary and paid less than required into his pension account. That means Peng will receive less money from the social insurance program after he retires.

Under Dongguan's social security regulations, employers must pay 11 percent of a worker's monthly income into the pension accounts. But Peng said Yue Yuen paid only 27 yuan into his pension account every month.

Peng and other workers on strike were also upset that most of them did not have housing funds, which were supposed to have been paid by the company.

A local social security official was quoted by Xinhua News Agency as saying that there are gaps in the social security system, with basically no verification of the amount supposed to be paid by employers.

Yue Yuen said on Monday it will fully pay into the workers' social insurance and housing funds, plus a monthly living subsidy of 230 yuan for every employee starting next month.

It also promised to make up for the unpaid social insurance benefits by the end of next year.

But on Tuesday afternoon, China Daily reporters saw workers still on strike.