Zombie Workers
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Zombie factories hide China’s true economic state The full picture of the Chinese economy can’t be known by looking at its official statistics.
By JENNIFER WELLS Is it too much of a stretch to raise the phrase Potemkin Village in the context of China? Well, yes. The transformation of China reaching back a quarter century to become the world’s second largest economy is real, and the potential impacts of the ongoing slowdown can be seen as potentially devastating without tipping to hyperbole. But when reporter Michael Shuman travelled through the industrial city of Changzhi for the New York Times, his phrase “march of the undead” evoked the ghostly image of factories-as-illusion. “Changzhi and its environs are littered with half-dead cement factories and silent, mothballed plants, an eerie backdrop to the struggling Chinese economy,” Shuman wrote, in a piece published last August. The following month, NPR’s Frank Langfitt described his experience travelling through the city of Luliang to radio listeners. “Well, I was actually visiting a cement plant yesterday, and it was really wild. It was basically a zombie plant. They’d gone from a thousand to a hundred workers in a very short period of time.” For anyone trying to get a handle on China, the story of Luliang and its zombie factories says a great deal about the power of illusion. Consider, first, that in November, 2008, the Chinese government announced a four trillion yuan stimulus package ($586 billion) specifically aimed at spurring infrastructure investment. Think about that for a second. Lehman Brothers had collapsed two months earlier. The global economy was in crisis. Chinese exports had collapsed. And the Chinese government decides to embark on what the European Chamber of Commerce in China described as an “unprecedentedly large lending program.” Then consider just one peculiarity: that the career development of local officials was tied to local GDP growth. Again, quoting the European Chamber. “To attract investments, local officials often gave implicit lending guarantees to companies whose investment plants showed no consideration for the country’s overcapacity situation.” “Overcapacity” doesn’t quite capture it. Consider flat glass, or plate glass. Capacity at the end of 2008 was 650 million weight cases. Production was 574 million weight cases, or roughly half of total global production. In the first six months of 2009, capacity was increased to 700 million weight cases, with additional production aimed at bringing further production lines on stream taking capacity to 800 million weight cases. You will not be surprised to hear that there was no corresponding increase in demand. The story with cement and those factories in Luliang was even more dramatic: after bringing new production on line, China was looking at more than one billion tons of overcapacity. Steel. Aluminum. Chemicals. There are plentiful examples of unwanted capacity being pushed by cheap credit. Luliang is rich in coal and, as it turned out, corruption. The online magazine Caixin was just one of the publications to examine the favour exchange between businesses seeking concessions and a local government in a position to dispense said favours. A Luliang miner told the magazine that every Lunar New Year he would set aside 1 million yuan ($152,000) for gifts for local officials. "Sending gifts to officials before the holidays will help us win a better business environment," he said That was in 2014. Five years earlier, the Financial Times astutely pondered the disequilibrium in the Chinese economy and concluded, “China has become hooked on an unbalanced pattern of economic development, in which investment cures this year’s excess capacity by increasing next year’s.” Has that changed? The Chinese government sends mixed signals. In December, at an all-important economic development meeting, addressing excess capacity was set as a top priority. Yet on Tuesday, Li Pumin, secretary general of the National Reform and Development Commission, noted that 280 million fixed asset investments were approved last year. The price tag: roughly $383 billion. One fifth of those investment funds were dedicated in just the last month. China’s fourth quarter and full-year GDP numbers are due out next week. The country’s politicians are loath to have annual growth reported at anything less than seven per cent. Is it real? Who knows. With all that excess capacity, zombie factories and, sadly, zombie workers, the full picture of the Chinese economy can’t possibly be known. At least not yet.
‘Zombies’ go unpaid as Vietnam sputters
Vu The Nguyen was excited when he heard he would be a father, but just eight months later, the young steel factory worker is living in fear. “My wife is having a baby next month and she’s expecting me to provide the best conditions for our first child,” says the 26-year-old who works in northeast Vietnam. “But I can’t tell her the truth – that I haven’t been paid for six months.” Mr Nguyen is one of tens of thousands of “zombie” employees at troubled state-owned companies in Communist-run Vietnam. The workers turn up to work each day, despite the fact that their debt-riddled companies cannot afford to pay them. Unwilling to try their luck in a fragile jobs market, they feel trapped. “If I quit, I will lose the six months’ salary that they owe me and also become unemployed,” says Mr Nguyen. Vietnam’s economy took off as it opened its markets in the mid-2000s, following the lead of its neighbour China. But amid rampant corruption and a huge expansion of credit, the boom soon turned into a bubble that blew up in 2008. As the government tried to restore economic stability by restricting credit flows, growth in gross domestic product slowed to 5 per cent last year, the weakest pace in 13 years. That was barely enough to create sufficient jobs for the rapidly expanding workforce, which is growing by about 1m a year in this nation of 90m. Some foreign fund managers say they are turning their gaze away from Vietnam toward more stable and faster-growing southeast Asian markets, such as Indonesia and the Philippines. With many banks and state-owned companies saddled with huge debts they cannot repay, the thousands of unpaid workers are not the only zombies to be found in Vietnam’s sputtering economy. Large state-owned companies such as Vinashin, a shipbuilder, and Vinalines, a shipping line, face an uncertain future after racking up billions of dollars of debt to invest in non-core and, sometimes, non-existent projects. More than a dozen former executives of both companies are now in jail having been charged with or convicted of economic crimes. This belated action is little comfort for workers such as Bui Thi Hoa, a 32-year-old secretary, who works for a Vinashin subsidiary in the northern port city of Haiphong. “My mother has to support my children financially, because I haven’t been paid for the last three months, and only received half of my salary in the three previous months,” says Ms Hoa. “I’m thinking of joining my mom working as a maid because I can’t find any better job.” More than 60,000 workers were going without pay regularly in Hanoi and Ho Chi Minh City alone late last year, according to a recent news report by Vietnam Television, the official state broadcaster. Pham Chi Lan, one of several economists urging the government to reform failing state-owned companies, says the zombie workers reflect a wider problem. “These state-owned companies can’t even pay their own debts and solve their own salary problems, so how can they ever hope to do anything to benefit our country?” says Ms Lan. Vu Thanh Tu Anh, the director of research at the Fulbright Economics Teaching Program in Ho Chi Minh City, says that from 2006 to 2010, state-owned companies absorbed 45 per cent of investment in Vietnam but had no positive impact on employment. Roughly 100,000 companies went out of business in 2011 and 2012, equal to half the number of companies that closed in the previous 20 years, and there is growing evidence that the lack of job creation in recent years is taking its toll. Street robberies have increased dramatically in recent months in Ho Chi Minh City, Vietnam’s financial centre, prompting concern from foreign investors and a crackdown by the city police. In October, after surviving an internal party putsch to unseat him earlier in 2012, Prime Minister Nguyen Tan Dung apologised for the government’s weakness in economic management, especially in the supervision of state-owned companies such as Vinashin and Vinalines. But action has proved harder than words. “It’s a very difficult task for Vietnam to resolve the bad debts in state-owned companies,” says one senior government adviser. “We need to stop putting the budget for state-owned companies under the direct supervision of the prime minister.” While the talk of reform continues, Mr Nguyen still heads to work at the steel factory every morning in the chilly northern Vietnam winter, hoping that he might get paid before his baby is born. “I feel hopeless, not only for my life but also for my next generation.”
AIHce 2010: Zombie Walkers: Safety Initiatives to Awaken Your Employees They walk among us: zombie employees who have grown complacent and seem oblivious to safety procedures. At the 2010 American Industrial Hygiene Conference and Expo (AIHce), Steve Laughlin of CJ & K Training Services offered attendees tips to awaken these zombies and create a safer workplace.
Laughlin brought a streak of energy into the conference room in Denver on May 25 as he discussed these at-risk zombie employees. “Apparently, there is an affirmative action program in this country for dummies,” he cracked. “Every company is required to hire a certain number of idiots. I can tell a lot of you have already met your quota … The politically correct term for dummies is ‘zombie walkers.’” All jokes aside, Laughlin said that becoming comfortable and complacent in routine tasks is a real concern for any worker. While safety training often addresses non-routine work, Laughlin explained that he was more worried about routine work and the employees who do the same thing day in and day out. “This is how zombie workers get created,” he said. After time, “they do things now they wouldn’t have dreamed of doing in the beginning. Never confuse luck with safety.” This is a problem, he stressed, that EHS professionals need to address. “At some point, we [EHS professionals] are responsible for this,” he added. “We’re part of the problem. We have to find a way to get through to these people and can’t keep relying on the same old run-of-the-mill stuff.” Laughlin offered a few creative initiatives to snap employees out of their “zombie” ways. Uniforms for everyone. Laughlin worked with a company that placed every employee, from the CEO on down, in the same uniform, complete with an embroidered nametag. This destroyed the sense of a hierarchy and helped employees get to know each other. “The amount of teamwork and openness at this plant is something I’ve never seen before,” Laughlin said. Public speaking. If an employee violates a safety policy or becomes injured, he or she must provide safety training (while paired with an EHS representative) to the entire department to explain how and why the injury occurred. Games. Find ways to incorporate games, activities and interaction into training programs whenever possible to keep employees interested and involved. For a new twist on old games, like safety bingo, try safety poker. Employees can receive playing cards when they are observed working safely; at the end of the week, the employee with the best hand wins. Top-down attendance. One of Laughlin’s clients tied their manager bonuses to attending safety classes, essentially making safety training part of the management evaluation process. “How much will employees think of the training program if the management doesn’t attend?” Laughlin asked. Posters on the move. Many companies are guilty of hanging safety posters and leaving them there – for years. After time, these posters become invisible to workers. Laughlin suggested purchasing a stock of posters, rotating them and moving them to different places to better grab the workers’ attention. “Why I work safely” buttons. Employees can wear buttons or cards featuring pictures of their loved ones with the phrase “Why I work safely” printed across the top. This reminds everyone of the importance of going home safe and sound at the end of the day. Safety walk. Take employees on a “safety walk” to encourage them to look at the plant with new eyes, as if they were safety professionals. Employees should point out any violations they might notice. Simply providing employees with the time to think about safety can make a difference, and according to Laughlin, EHS professionals might be surprised to find what workers notice. Step outside the OSHA box. The challenge, Laughlin said, is getting management to understand OSHA is a minimum standard – the very least you can do. Consider engaging employees to help develop the site safety plan to go above and beyond OSHA regulations. Potty training. (No, not that kind.) Consider placing safety information above urinals or inside bathroom stalls. “They’ve got nothing else to do,” Laughlin joked. The information could even be tied to prizes, such as “find the safety hazard” picture challenges. The pig of shame. Another client of Laughlin’s purchased a stuffed pig and “awarded” it to the department deemed to have the worst housekeeping practices. The losing employees are each photographed with the pig, and the pictures are hung in the cafeteria. “It becomes a good-natured competition to not be in the department who gets the pig,” Laughlin said. He added that housekeeping at this company vastly improved. Crash test dummy. Another company purchased a crash test dummy and tagged it whenever someone got injured. An injured hand, for example, would get tagged with a short blurb of what happened. Employers can use a poster or chalkboard drawing instead of purchasing a crash test dummy.
Knowledge Graph
Examples
1 While the book is full of anecdotes showing how the apathetic attitude and poor work ethic of such zombie workers can infect otherwise happy and healthy work environments, can we really place the blame exclusively on these employees when they decide to put their feet up and start punching the clock? Certainly not.
2 He warns that, contrary to popular belief, zombie workers thrive in all levels of management.
3 These zombie workers (yep, we're breaking out the “Z word”) were created thanks to two major changes in history as we know it.