Some North Korean workers in China are set to sign better-paying contracts with Chinese companies, which would allow them to extend their stays in the country, Daily NK has learned.
A source in China told Daily NK on June 11 that some North Korean workers in the country have been preparing new contracts with higher pay since early this month. The contractual periods are reportedly at least two years long, although specific details such as contract signing dates and work periods vary depending on the Chinese company involved.
If they sign these new contracts, a recent return order handed down by North Korean authorities would essentially be disregarded.
Last month, North Korean authorities ordered some North Korean workers in China to return home, citing low wages and the spread of COVID-19 in China.
North Korea had reportedly demanded that Chinese companies increase the monthly salaries for its workers to RMB 3,500 (USD 494). Chinese companies ostensibly balked at the idea, given that increasing wages by 40% overnight would be too much of a financial burden.
Facing this refusal, North Korean authorities issued the return order, claiming that the decision was due to the spread of the virus.
There has long been widespread complaints among North Koreans about stagnant wages for workers in China. Some have pointed out that there is no money left for workers when they return home from their stints in China because of increasing demands by the state to contribute to the country’s “loyalty fund.” The spread of COVID-19 has also led many to lose interest in going overseas.
With COVID-19 cases again increasing in southern China, however, many orders originally handled by southern factories are flooding into factories located in the country’s northeast. Factories in Liaoning and Jilin provinces, which already employ many North Korean workers, now have an urgent need for cheap North Korean labor to fulfill the growing number of orders.
Chinese factory workers are typically paid a monthly salary of between RMB 3,500 (USD 494) and RMB 5,000 (USD 705), along with an insurance premium of RMB 1,000 (USD 141) covered by the factory. From the perspective of Chinese factory owners, it makes better business sense to hire North Koreans – even if they are forced to increase their wages.
North Korean authorities hastily began taking steps to prepare for the contract renewals as soon as it appeared likely that Chinese companies would accept the pay raise, Daily NK’s source said.
North Korean authorities also plan to increase the share of workers’ wages “donated” to the party’s “loyalty fund” once the pay increases are finalized.
“If monthly salaries increase to RMB 3,500 [USD 494], the [North Korean communist] party’s cut from these salaries will likely increase to RMB 1,800 [USD 254],” the source said. “That would be an increase of RMB 300 to RMB 500 [USD 42 – USD 70] compared to the past.”
Despite this, workers in China are reportedly welcoming the proposed salary increases and stay extensions.
If, however, the contracts are not renewed before they expire, North Korean trading companies managing the dispatch of workers to China may still have to bring their workers back home at some point.
“The border is closed due to COVID-19, so even workers who have completed their contracts are unable to return home,” another source told Daily NK. “Workers who fail to get new contracts with increased wages will likely return to North Korea by around September.”
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