Chinese toy factory workers seek missing pension funds from employer and Disney

Reporting from Shenzhen, China  —  When Qin Renfang first started working at the Mizutani toy factory on the outskirts of this city, the area was mud-pathed and barren. A decade later, rows of low-rise residential buildings and hawkers’ stalls form a teeming community, and the 43-year-old considers it home.

Qin and her colleagues — among the first wave of young migrants who flocked from China’s rural hinterlands to find work and cast their lot with the country’s blossoming free-market economy — planned to retire here.

However, the recent closure of their Japanese-owned factory, which supplied plush dolls to Tokyo Disneyland, left them in a bind. Just seven years short of the retirement age for women, “we can’t retire,” said Qin, “and we can’t find work.” And when they hit retirement age, there may not be any pension.

Since China began its transition into a market economy in the 1980s, the country has gradually dismantled the welfare state in which the workforce was employed by the government and was provided for after retirement. The government was slow to establish a replacement system, particularly for the hundreds of millions of migrants who turned their back on farming to work in factories. Not until the late 1990s did some counties and cities like Shenzhen promulgate requirements for employers and workers to contribute to pension funds.

And it wasn’t until 2011 that a national social insurance law went into effect. But despite the mandate, oversight has been spotty; coverage of migrant workers still hovers at 10% to 20%, depending on the sector, official statistics indicate.

“I think there has been a great disappointment among Chinese policymakers that the coverage rate is so low,” said Mark Frazier, a professor at the New School for Social Research in New York who has studied China’s social insurance system.

The gaps in coverage are fueling unrest. In 2012, there were 20 social-security-related strikes; this year, there were 119 through November, according to China Labour Bulletin, a rights group based in Hong Kong, south of Shenzhen.

Qin and her colleagues are among those who are agitated.

Only when they were let go this summer did they discover management had failed to set up pension accounts for most of them in the beginning and then contribute in full. Under the national law, workers won’t be entitled to a pension at retirement age unless they and their employers have contributed for at least 15 years. For the nearly 200 workers at Mizutani who survived rounds of downsizing — the factory had 1,600 on payroll in its heyday — the shortfall amounts to $1.5 million.

Because the company moved its production lines to the Philippines and has little assets left in China, the workers have tried seeking redress from Walt Disney Co. After addressing the workers at the plant’s closing in mid-June, the factory boss has been nowhere to be found. A call to the Philippines factory was answered by a manager who gave her last name as Li and said she wasn’t aware of the situation when she worked in Shenzhen.

So far, the workers said, Disney hasn’t responded to their demand to cover the shortfall. Shenzhen officials have verified the workers’ claim and told Mizutani to pay up, but management has yet to comply.

“We definitely take these cases seriously,” said Marcus Wong, spokesman for Walt Disney Co. Hong Kong. “Disney’s role is that of a mediator to facilitate the discussion between the workers and the factory. We’re assisting in bringing this to a resolution.”

Joined by labor rights activists in Hong Kong, Qin and two other workers’ representatives staged a protest outside Hong Kong Disneyland in August as it celebrated its 10th anniversary. Along with dozens of supporters, they picketed the theme park’s entrance for two days. They also handed in a letter containing their demands but have yet to receive any reply from Disney, Qin said.

“All along we felt that we should be safe working at a factory that produces name-brand merchandise and was subject to Disney’s supervision,” Qin said. She and her colleagues said they had placed their faith in the Chinese-language version of Disney’s “Code of Conduct for Manufacturers January 2007” prominently displayed on the shop floor.

During her decade at the factory, Qin advanced from sewing straight seams to tackling the challenging curves around the faces of Mickey and Minnie Mouse. As a team leader on the production line, she never thought she would have to school herself in labor regulations, but did so over a few short months. Thanks to the support from her brother, sister-in-law and husband, who all have settled here from suburban Changsha in central China, Qin could afford to stay and fight.

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Just a few years ago, few migrant workers had any expectation that they would receive pensions. As they hopped from job to job between provinces, many doubted they would ever see any retirement funds. Many of those lucky enough to have some money set aside cashed out their accounts when they returned to their rural hometowns to till the family farm or look for work

Now, workers like Zheng Wutu, 47, say they are planning to stay in the city and are counting on the pension system to deliver in their old age. A former sewing machine repair technician at Mizutani, he has since found work at a small factory. His new boss is flouting the pension contribution requirement, but Zheng keeps putting money — as much as one-fifth of his monthly income — into his account.

“I think it’s worth it,” Zheng said. “I hope to have some protection after retirement.”

Law is a special correspondent

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