Do Chinese firms operating in sub-Saharan Africa pay lower wages than other firms? We investigate this question in our latest paper in which we compare wages for African workers in Chinese and non-Chinese in Angola and Ethiopia. sciencedirect.com
The short answer is that the nationality of the firm matters much less than other factors. @estariade provides a nice overview of the paper here:
Workers face low wages and long hours in most firms but conditions are largely comparable in both Chinese and non-Chinese firms. We argue that divergences are best explained by examining how distinct labour regimes emerge. In the paper we identify five distinct regimes:
1) In the construction sector workers with rarer skills are able to command substantial wage premiums and tend to travel with firms from project to project. This includes machine operators, carpenters, masons, etc. They are often housed on or near the project site.
2) This contrasts sharply with lower-skilled construction workers. These workers are generally hired locally close to project sites. Wages for these workers are very low and employment is precarious. Chinese firms were more likely to be working on road projects in remote areas.
3) We found a distinct dormitory labour regime among (some) Chinese firms in Angola. Cash wages in these firms were lower but workers were provided with food and accommodation which compensated for wage losses. We found no such pattern in Ethiopia.
4) Some Angolan-owned manufacturing firms had much better conditions than comparable companies. Workers had longer term contracts, higher wages, and superior non-wage benefits. Most of these firms had strong links to the ruling elite of former President Dos Santosβ network.
5) Lastly, a low-wage labour regime was in operation in light manufacturing in Ethiopiaβs new industrial parks (IPs). Many firms located in industrial parks were integrated into apparel global production networks (GPN) where labour control is tighter and wages repressed.
In addition to GPN links, wages in Ethiopian IPs were also lower due to location effects, with some parks situated away from Addis Ababa, and the fact that many apparel exporter were comparatively new to Ethiopia. None of this is unique to Chinese firms.
In previous work we have shown how low wages in Ethiopia's industrial parks fueled strikes and industrial action. sciencedirect.com
Firms in Ethiopia's industrial parks are currently in the process of being unionized, following a long campaign by Ethiopian trade unionist and a change of heart by the Ethiopian government. Hopefully, this will enable workers to win wages sufficient for a dignified life.
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