Peter Eliassen reflects on his experiences visiting glasses manufacturers in the high-growth city of Wenzhou, China, including what goes on behind the scenes of the factory floor.
Recently, I had the opportunity to visit Wenzhou, China with the goal of finding a glasses supplier that can help us deliver on our strong growth plan over the next few years. Wenzhou is located in southern Zhejiang province, about an hour’s plane flight south of Shanghai on the east coast of China. Just 20 years ago, it was a modest city with only a few restaurants and minimal infrastructure. Recently, Wenzhou has greatly benefited from globalization, becoming one of the richest cities per capita (3rd highest disposable income) in China by supplying the world with affordable eyeglasses, cigarette lighters, and Italian shoes (among other exports). Wenzhou now produces 80% of the world’s affordable glasses and its citizens are known throughout China as some of the country’s best entrepreneurs.
While visiting the factories of our current and potential suppliers, I at first felt saddened by the large numbers of young workers I witnessed slaving away at menial labor. I saw countless young men and women ages 18-24 sitting in the same chair and performing the same task for up to 11 hours per day, 6 days a week. The employees were so concentrated on their labor that only a few of them took the time to glance up at us; most continued working on pair after pair. I couldn’t help but think that they should be in university right now, building a better future for themselves.
Yet as with most issues, there are two sides to the story of young factory labor. In each of the factories we visited, I asked about salaries and employee benefits for the workers. I learned that employees are paid by the pair or task completed, so their intense focus began to make sense. Each of the factories provided a similar wage range — between 1300-3000 RMB ($191-$441 USD) for the month — depending on their experience and the type of job. Most of the factories provided free food and lodging to workers, housing them in dormitories connected to the factory, which enabled the workers to save most of their monthly salaries.
A good majority of the workers come from poorer western China to work for 1-2 years, save up their earnings, and return home to their villages with money in their pockets to pay for a wedding or aid their families. One supplier told us that wage inflation has been at least 30% over the past 3 years, and the cost of health insurance has quickly risen for employers (some pay as much as 370 RMB, or $50 per worker per month). While these factors may not bode well for maintaining prices at a level that our Base-of-the-Pyramid consumers can afford, they are certainly positive changes for the young Chinese workers.
At the end of the trip, none of our team members ever felt the “sweatshop” experience, and after hearing both sides of the story, I feel proud that the global demand we are generating for affordable glasses is enabling these factory workers to earn and save money. This, to me, is an almost pure definition of the term “market maker,” and a key reason why social entrepreneurship holds so much promise for the BOP.
