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December, 01 2008 |  Download PDF |  Share

Holiday Toys for Hasbro and RC2--including Bratz Dolls Made in Abusive Chinese Sweatshop

SUMMARY

by Charles Kernaghan

  • Pictures were smuggled out of the Yongsheng Toy Factory which clearly show boxes ofHasbro (Hasbro Toy Group/Canada) and RC2 Toys, including RC2’s Bratz Doll “PartyPool.”
  • Workers’ dirty and overcrowded dorms infested with bed bugs. Red welts cover thebodies of workers. Twenty-four workers share each room, sleeping in narrow, triple-levelmetal bunk beds. Twenty-four workers must share a toilet. In the 95-degree summertemperatures workers are drenched in their own sweat.
  • No maternity leave with pay: No paid national holidays or vacations.
  • Forced to work 13 ¼ hour shifts, from 7:45 a.m. to 9:00 p.m., seven days a week duringthe peak holiday season. Workers are at the factory 93 hours a week, while working 37hours of obligatory overtime, which exceeds China’s legal limit by 345 percent! Workerswho miss a single overtime shift will be docked three days’ wages. No overtime premium ispaid.
  • Workers cheated of the legal minimum wage and the overtime premium. Some hourlywages are as low as 46 cents. Workers are routinely cheated of up to 36 percent of thewages legally due them, earning just $44.23 for 77 hours of work when they should haveearned at least $69.24. In the peak holiday season alone workers are shortchanged of theequivalent of five months’ regular wages.
  • Workers more than 30 minutes late to work will be docked three days’ wages. Workerssinging on the job are docked seven hours’ wages. Workers need a “pass” to use the toilet.
  • Workers describe the factory food as “horrible...when the food is in your mouth, you canhardly bring yourself to swallow it.”
  • Harsh working conditions: Grueling hours, excessive production goals, arbitraryproduction speed-ups, workers drenched in their own sweat. Due to the excessive heat,workers in the spray paint department do not wear respiratory masks.

The National Labor Committee believes that neither Hasbro nor RC2 would knowingly allow
their toys to be made under such abusive and illegal sweatshop conditions.

It is now up to both companies to explain how their toys ended up at the Yongsheng factory and
what immediate and concrete steps they will take to clean up their contractor’s plant to bring it
into compliance with at least China’s minimum labor rights laws.

The research for this report was based solely on worker accounts and interviews, including
pictures and documents smuggled out of the factory.

Yongsheng Toy Factory (English Name: Wingshing)
Weihuije Ling Cun.
Lianping Village, Dalingshan Town
Dongguan City, Guangdong Province
China

Management contact: Li Haozhen
Phone: 076-933-52625

  • Youngsheng, which was built in 2003, is a large factory with over 1,000 workers,approximately 70 percent of whom are young women.
  • Production for Hasbro and RC2: Pictures were smuggled out of the factory which clearlyshow boxes for Hasbro—Hasbro Toy Group/Canada—and RC2 Toys, including RC2’sBratz Doll “Party Pool.”
  • The factory signs contracts with the workers which last a little more than a year.Youngsheng also hires temporary workers. New workers are charged 10 RMB ($4.46) fortheir summer uniforms and 20 RMB ($2.92) for their winter ones. If the workers stay formore than one year, management will reimburse the workers for the cost of the uniforms.


Peak Toy Season: Forced Overtime, Grueling Hours Seven Days a Week, while being
Cheated of their Wages


The peak toy season at the Yongsheng factory lasts five months, August through December.
During this busy period, the routine shift is 13 ¼ hours a day, 7:45 a.m. to 9:00 p.m., seven days
a week. At most, workers will receive one or two days off a month. It is common for workers to
be at the factory 93 hours a week, while actually toiling 77 hours, including 37 hours of
mandatory overtime, which exceeds China’s legal limit on permissible overtime by 345 percent!
All overtime is compulsory and workers are paid no overtime premium.

Assembly Line

(13 ¼ hours, seven days a week)
7:45 a.m. to 11:45 a.m. Work, 4 hours
11:45 a.m. to 1:00 p.m. Lunch, 1 ¼ hours
1:00 p.m. to 5:00 p.m. Work, 4 hours
5:00 p.m. to 6:00 p.m. Supper, 1 hour
6:00 p.m. to 9:00 p.m. Overtime, 3 hours

Such a schedule puts the workers at the factory 93 hours, while toiling 77 hours a week. Some
overtime shifts last to 9:30 p.m. In the spray paint department, the shift is from 8:00 a.m. to 9:15
p.m.

In September 2008, a worker from Assembly Line A reported the following:


“We work every day until 9:00 p.m….We haven’t had any days off this month. All our
overtime is compulsory, not voluntary.
Sometimes it is very tiring, and I have no desire to work
overtime at night. But if I don’t go, the foreman will cite me for skipping work.”

[“Skipping work” is punished with the loss of three days’ wages.] Our wages are not higher
than normal. They are the same as the regular work hour wages.
I really don’t like working
overtime. I’m not willing to do it. We now work 11 hours a day. I’m extremely tired. After I
get off work, I either have a pain in my lower back or my back just feels uncomfortable.
We
get up really early in the morning. There have been many times when I just don’t want to go to
work. Usually, I lie in bed until just ten minutes before my shift, and then I finally get up, brush
my teeth, wash my face and rush to work without breakfast.”


Sometimes workers are let out “early” on Sunday night, forced to work an eight-hour shift and
not the routine 11 hours they normally toil. In this case, the workers would be toiling 74 hours a
week. As mentioned, during the peak season the workers are allowed one or at very most two
days off a month.

Under China’s labor laws, all overtime must be voluntary and cannot exceed 36 hours a month.
At the Yongsheng Toy factory, the workers routinely toil 77 hours a week, including 37 hours of
overtime each week, and 160 hours a month, which exceeds China’s legal limit by 345 percent!

The slow season at the Yongsheng plant is five months long, from January to June, with July and
January being transitional months. If there is work during the slow season, the workers are
required to toil six days a week. If the factory is slow, with few orders, the workers are forced to
go on unpaid holiday. For example, in May 2008, most workers were forced to take a two-anda-
half-week unpaid vacation. At Yongsheng, the toy workers—illegally—are not paid for
national holidays or vacation time. Due to the forced unpaid holidays, during the slow season
many workers earn just $16.84 to $20.21 a week, which does not come close to meeting the most
basic subsistence-level needs.

Workers Routinely Cheated of their Wages

First, as already mentioned, at the Yongsheng factory no overtime premium is paid, which is
blatantly illegal.
The legal minimum wage in Dongguan City is 65 cents an hour, and all
overtime must be paid at a premium. Weekday overtime must be paid at a 50 percent premium,
or 98 cents an hour, while weekend overtime must be paid as double time, or $1.30 an hour.
Holiday overtime is to be paid at a 300 percent premium, or $1.95.

Legal Minimum Wage
(770 RMB per Month)

65 cents an hour
$5.17 a day (8 hours)
$25.94 a week (40 hours)
$112.40 a month
$1,348.81 a year

(Note: The current exchange rate is 6.8505 RMB to $1.00 U.S. The minimum wage in China is
calculated using an average 21.75 work days a month: 365 minus 104 weekend days = 261 days.
Two hundred sixty-one days divided by 12 months = 21.75 days per month.)

In the assembly department, workers are paid on a piece rate system, not individually, but rather
on a team basis. However, when production slows down, management switches to an hourly rate
of just 3.17 RMB, which is just 46 cents an hour, and a full 36 percent below the legal
minimum
of 65 cents. When management switches wages back and forth from piece rate to an
hourly wage, the workers have no idea how their wages are calculated.

When asked how his wages were calculated, a young worker from Henan Province who worked
in Assembly Department B responded: “I’m not very sure. When I first arrived in the factory, I
asked someone at the human resources department. She just told me that the piece rate wages
are calculated collectively. I asked her, ‘The wages are all divided up among the workers
equally?’ She told me that they were divided up according to work hours. But, when I asked
some of the senior workers how their wages were calculated, they told me that sometimes the
wages were piece rate and other times they were hourly wages. In reality, nobody seems to
know how the wages are calculated.”


The workers sign a pay stub on the 25th of each month, and their wages are transferred into the
workers’ bank accounts on the 28th. This is also illegal, as one month’s wages are always
withheld from the workers.


Another worker was also confused: “I’m not even sure how the base wages on my pay stub were
calculated. I have no idea where the numbers come from, and I’ve tried, but I can’t figure it out
on my own. After that, the pay stub only shows the deductions for the dorm, food, insurance and
the net wage.”


In the spray paint department, workers are paid on a piece rate basis. In this department,
management posts wages tables every other day so the workers can track their piece rates and
what they are earning. However, here too, the workers complain that management’s totals are
often different from their own calculations.

Workers have no choice but to accept whatever wages management gives them.

However management calculates wages, one thing is clear: The workers are being cheated of the
wages legally due them. At the very most, during the peak season, the workers report earning
1,313 RMB ($191.66) a month, including the mandatory 37 hours of overtime demanded each
week. (The majority of workers earn 1,230 RMB--$179.55—or less. The workers monthly takehome
wage is much lower—1080 RMB ($157.65)—after deductions for room, board and in
some individual cases pension insurance are taken out.) Including overtime, the workers should
have earned at least $300 a month, and not the $191.66 they were paid. This shows the workers
being cheated of 36 percent of the wages legally due them.


Highest Peak Season Wages Reported by Workers
(1,313 RMB per month, for toiling 77 hours a week)

$44.23 per week
$191.66 a month
$2.299.98 a year

Under China’s wage laws, these toy workers should have earned at least $69.24 a week, and not
the $44.23 a week which they report as their highest wage during the peak season.

For Working a 77-hour Week,
The Workers should have Earned $69.24

40 regular hours: $25.94
15
hours of weekday overtime: $14.70
(3 hours overtime x 5 days x $0.98 = $14.70)
22 hours of weekend overtime: $28.60
(11 hours x 2 days x $1.30 = $28.60)
Total: $69.24

This shows the workers being cheated of $25.01 each week, or 36 percent of the wages legally
due them.
They should have earned $69.24 and not the $44.23 they report being paid. Being
cheated of $25.01 in wages each week would surely seem wrong to anyone in the U.S., but
perhaps it would not be seen as such an incredible hardship. But for the poor toy workers in
China, in just the five month peak season period—when they are toiling long hours cranking out
toys for children in the U.S.—they are being cheated of $541.88, which is the equivalent of
losing nearly five months regular wages each year!


Even if we allow for Sunday off, which happens only once or at most twice a month, the workers
should have earned at least $54.94 for the week and not the $44.23 which is their highest wages.
Under this scenario, they are toiling six days a week, 66 hours. Even under the best
circumstances, the toy workers are still being cheated of $10.71 each week, or 20 percent (19.5)
of the wages legally due them.

Draconian Discipline and Fines Further Erode Workers Wages

  • Workers are fined 15 cents (1 RMB) for every minute they are late to their shift. A workerwho is twenty minutes late will be fined 20 RMB, or $3.00, which amounts to the loss of 4 ½hours’ wages!
  • Workers who are more than 30 minutes late for their shift will be docked three days’wages!
  • Missing a day or refusing to work an overtime shift will also be punished with the loss ofthree days’ wages.
  • Workers are fined 30 RMB, or $4.38, for singing on the job! This is the equivalent oflosing nearly seven hours’ wages.
  • Workers are forbidden from leaving their workstations during the shift. Anyone daring toleave a few minutes before the bell rings at the end of the shift will be punished with a fineof 10 RMB ($1.46), which is the equivalent of losing 2 ¼ hours’ wages.
  • Workers are fined 10 RMB ($1.46) for not wearing their factory uniforms and five RMB (73cents) for failing to have their factory ID card.
  • If a worker loses his magnetic factory ID card, there is a 20 RMB ($2.92) fine—equivalent tothe loss of 4 ½ hours’ wages.
  • If a worker forgets to punch his or her time card and sign in at the start of a shift, they willbe docked three days’ wages.
  • Workers must receive a “pass” from their supervisor in order to use the bathroom. Withoutit, they are forbidden to leave their workstation. There are just two toilet passes for eachassembly line of up to 35 workers.
  • There is a dorm curfew at 12:00 midnight. Anyone arriving late will be fined two RMB, or29 cents for each minute past the curfew. A worker who is unlucky enough to arrive 30minutes late will be fined $8.76, which amounts to the loss of nearly two days wages.
  • It is not all gloom and doom. The workers receive a monthly attendance bonus of $1.75 (12RMB) if they are never late, never leave early and do not miss a day.

Benefits:


No maternity leave:
Also blatantly illegal, there is no paid maternity leave at the Yongsheng
plant.

Nor are there paid national holidays or paid vacation time as required by law.

However, the factory does pay for work injury insurance for its employees and does have a free
factory clinic. (Workers do have to pay a 2 RMB—29 cents—registration fee each time they use
the clinic.) If the workers want to be covered under the national pension plan, 83 RMB ($12.12)
is deducted from the worker’s wages each month. There are no other benefits.

To participate in the national pension insurance program, a worker must be inscribed and pay
into the program every month—83 RMB, or $12.12—for a minimum of twenty years. After 20
years, a worker becomes eligible to receive a pension of 360 RMB ($52.55) a month--$631 a
year.

The vast majority of migrant workers choose not to pay into the pension program for several
reasons. First, workers have very little understanding of how the system works and tend not to
stay at the same factory for more than two years. Further, after toiling for several years, older
workers are anxious to return home to their villages, but would not have worked long enough to
have accessed any of the benefits.

Harsh and Exhausting Working Conditions

The Assembly Department is divided into two sections. Division A has eight assembly lines
(currently just five are in production) with an average of 25 to 35 workers per line. Division B
has 10 assembly lines (with six currently in production) with the same 25 to 35 workers. During
the long, humid semi-tropical summers, the assembly rooms are extremely hot. The only source
of ventilation is fans, and the workers are often soaked in their own sweat.

The spray paint department has 15 assembly lines with 20 people per line. The workers report
that conditions are bad. There is a strong, sickening smell of paint. The factory does provide
disposable face masks, but they become very hot if they are worn for a while. Generally the
workers do not wear the masks.

The toy molding department has 60 machines and is dark, humid and extremely hot.

Throughout the factory, production goals are set excessively high, and workers receive no short
tea breaks during their shifts. There are just the lunch and supper breaks.

An 18-year-old toy worker from Hunan Province described his work as “exhausting”.


“I wake up at 7:30 a.m. and go to work without breakfast. We work all day and into the night.
While we are at work, we have to be moving all the time, and there are no breaks… Sometimes
I’ll have a pile of products next to me and all I can do is work faster and faster.
Sometimes the
pile gets so large that there is no space to put anything else. All I can do is work faster and
faster. If the pile gets too large, then I’ll get scolded. The supervisor sometimes makes an
assembly line run faster. When this happens, we just keep going. There is no way we can stop
or slow down.


“If you need a break [to use the bathroom], you have to ask the supervisor for a pass. One day,
one of the workers on my lines asked the supervisor for the pass several times, and the
supervisor just wouldn’t give it to him. Even when you ask the supervisor, sometimes one of the
workers has already taken the pass. An assembly line has about 30 workers, and only two can
leave their workstation at a time. If your relationship with your supervisor is not good, he also
may decide not to give the pass to you!”


Primitive, Overcrowded Dorms Infested with Bed Bugs

The Yongsheng factory has three primitive dormitories. Buildings A and B, both five stories, are
set aside for male workers. Due to the global economic slowdown, Building B is currently
empty, as is the fifth floor of Building A. The women’s dorm, Building C, has seven floors.

The dorms are horribly overcrowded. Twenty-four workers share each dorm room, sleeping on
narrow triple-level metal bunk beds.
Each room measures about 323 square feet, or 17 by 19
feet. There are just two electric lights and two old fans in each room. Nor are there any electric
outlets in the dorm rooms for the workers to charge their cell phones.

Incredible as it might sound, there are just two small bathrooms on each floor, with a total of
four faucets and ten toilets—squat toilets that resemble holes in the floor—for all 240 workers
to share!
Each morning, workers have to join long cues waiting their turn to brush their teeth
and use the toilet. Each faucet must be shared by 60 people and each toilet by 24 workers.

Management does not provide hot water to the dorms even during the winter months—
November, December, January—when temperatures at night drop into the low 40s Fahrenheit,
often with a cold rain. Workers complain bitterly that they often fall sick due to the cold
showers. When Building B was occupied, it was even worse, as the cold showers were located
on the first floor, meaning the workers had to walk up and down several flights of stairs in order
to wash.

Not unexpectedly, a worker from Guangxi Province described dorm conditions as “Horrible”:


The dorm is really overcrowded. Each dorm [room] can fit 24 people, but they are only 30
square meters [323 sq. feet]. The dorm here is about the same size as the one in the last factory
I worked in, but the last factory only fit ten people into a dorm—no more than 12 at the very
most. The dorm rooms themselves are pretty bad. For all these people, there are only two fans
and they spin very slowly. Also, there are columns and walls that partially block the breeze
coming in from the fans and there is no natural breeze. One of our fans even broke a few days
ago. I had to hassle management for a long time before they fixed it. We pretty much have no
breeze at all. We’re very hot. It seems like we waste our time taking showers because as soon
as we have washed all the sweat off, we return to our dorms and are covered with sweat all
over again.
Nighttime is noisy. I usually cannot sleep until after 12:30 a.m. There are bugs all
over the dorm.
[He’s referring to a serious infestation of bed bugs in the dorms, along with
mosquitoes.] When I wake up in the morning, there are often red bumps all over my body
where the bugs bit me. Some workers have bites all over their legs.


“Theft has been a serious problem lately. The theft usually happens soon after we get paid.
Recently one worker lost his cell phone. He bought it right after getting paid last month. He had
it less than one month, and some thief took it from him. I had an MP3 music player stolen
yesterday.”

An outside observer confirmed that there is a serious, widespread infestation of bed bugs in the
Yongsheng dorms, which is a huge and very annoying problem for the toy workers.

Management deducts 30 RMB ($4.38) from the workers’ wages each month for dorm fees.

Regarding what entertainment is available to the workers during their time off, a young man
from Yunnan Province explained: “There is nothing interesting to do here. There’s an internet
café nearby. It is really expensive so I only go once in a while. Some workers rent novels and
read in the dorms. That’s all there is. Life outside of work is pretty disappointing. There’s
nowhere to go to have a good time.”

Factory Cafeteria: “When the food is in your mouth, you can hardly bring yourself to swallow
it. It’s horrible.”

The Yongsheng toy workers also describe the cafeteria food as “horrible.”

There are two grades of food at the factory. The top grade, served on the first floor of the
cafeteria, costs 7 RMB [$1.02] per day, which is overwhelmingly reserved for office workers
who can afford the dollar a day food. The vast majority of the workers have to dine on the
second floor, paying 4 RMB [58 cents] a day for a lower quality food. There are 20 rows of
tables each of which sits eights people. The workers have to buy a magnetic food card which
keeps track of what the workers spend each day.

Another worker commented on the cafeteria food:
“The food on the first floor is okay, but it is too expensive. The workers have trouble
paying for it. We generally have no choice but to eat on the second floor. Food on the
second floor is much much worse than on the first floor. When the food is in your
mouth, you can hardly bring yourself to swallow it. It’s horrible.
There is no oil in it.
[It was not cooked in oil.] They serve winter mellow every day, but it tastes terrible. All
of the vegetables are seasoned with just oil and salt. There is no flavor. The rice gruel
served in the morning is just the last night’s rice boiled in a little water. We never eat
breakfast.
Sometimes some of us will get together to eat breakfast outside. There’s a
restaurant [fast food street stall] nearby that charges 4-5 RMB [58-73 cents] for
vegetable dishes. If you pay 5 RMB they’ll cook the vegetables with egg. They usually
serve leafy greens and other vegetables like gourd, eggplant, and water spinach.”

Company Union: Looks good on paper but amounts to nothing


At first glance, it sounds impressive. Could it be that the US toy companies prevailed upon their
Chinese contractor to allow the workers to organize?

Unfortunately, the “union” is a company union that does nothing. It’s meant for “show and tell”
for the US clients.

One worker summed up how the factory workers felt about the company union.

“The factory has a union, but workers have little faith in it. Workers think that the
factory and union are just part of the same organization. In reality, if workers have a
problem, they usually go directly to the supervisors. Some of them have no idea how to
even contact the union.
There is a box in the factory where workers can place questions
or comments, but no one has seen anyone drop a comment inside. They figure that if you
put in a comment or question, it wouldn’t help at all.”


Foreigners have visited the Yongsheng Factory, but according to the workers, these visitors just
say a few things in English—they imagine some polite greetings or other pleasantries—and
quickly pass on to other tasks.

Company Profiles

Hasbro Inc.
1027 Newport Avenue
PO Box 1059
Pawtucket, RI 02862-1059
Phone: 401-431-8697
Fax: 401-727-5544
CEO and President: Brian Goldner

Hasbro earned $4.09 billion in total revenue this year (as of 09-30-2008) and $2.26 billion in
gross profit, making it second to only Mattel as the largest toy company in the world.

RC2 Corporation
1111 West 22nd Street
Suite 320
Oak Brook, IL 60523
Phone: 630-573-7200
Fax: 630-573-7575
CEO: Curtis W. Stoelting

RC2 earned $453.91 million in total revenue and $214.32 million in gross profit this year (09-30-
2008) making it the fifth largest toy company in the world.