• Is there a label for toys produced in fair conditions?

Unfortunately, the answer is no. All existing labels for toys are designed to indicate the safety of toys for children or the environment, for instance by indicating the absence of know toxic chemicals in the final product. No label tackles social responsibility. In fact, international toy corporations avoid any communication to the public regarding working conditions on assembly lines. That is why consumers must remain actively critical and the business model changed.

If you want to be absolutely certain that a toy you purchase has been produced in fair working conditions, you have no alternative but to purchase from the limited offer from fair trade stores. Short of that you can purchase used toys. While you can always try and get information about the precise origin and production conditions of a toy from regular toy store employees or managers, most will not actually have any useful information to provide.

  • How can I learn who made my toy and where it was manufactured?

The first source of information is the package where brand names can be found. The country of production is also often indicated, although not always. When available, this information is however not sufficient to ascertain actual production conditions as these vary widely within countries.

  • Should the informed consumer boycott Chinese toys?

Boycott does not improve working conditions. In the worst of cases, major brands could move production to other countries where wages are even lower and working conditions even more precarious. This would result in Chinese workers being laid off, with no effective improvement in their living conditions. The goal therefore, is to improve existing conditions. And it is the responsibility of international toy makers to act. They must take responsibility in their supply chains, change their business model and stop pushing for lower cost and higher profits when these depend on lower labor costs and appalling working conditions in factories. Toys cannot be produced at increasing pace and diminishing costs forever without dire consequences for factory employees. Toy brands must push to establish long term and socially responsible contracts with the factories that produce their toys.

  • What can consumers do?

There is no simple answer: here are some leads:

  1. Increase pressure: If consumers show that transparency and good conditions for manufacture workers are important to them, they can convince toy brands that action is necessary. By asking questions in stores both traditional and online, you can let retailers know how important the issue is for you. You can also write directly to international brands. Support the campaigns of NGOs as pressure from the broad public is an effective signal.
  2. Share your knowledge: You can inform your friends, family, and other contacts about the issue including children who can also grasp the challenges of finding toys produced in fair conditions.
  3. Less is more: Be mindful of quality when you make a gift. A toy that lasts longer is also fairer. Indeed, one fundamental driver of worker’s exploitation is the competition for low prices. Factories are driven to cut any possible expense in a race to produce fast what today’s fashion dictates. Used toys can be as pleasing to children as new ones and result in a more sustainable resource use. Why not give a coupon for a fun activity? Children’s rooms are often full to the brim with toys. A visit to the zoo, the movies or a play is always a beautiful gift to make.

  • How much do workers get paid when they make a toy?

Workers receive the equivalent of one cent for each toy they contribute to producing. For a stuffed teddy bear for instance, this makes up a mere 0.05% of the 20 USD at retail (Source Report 2018). On average, 30 to 36 workers will contribute to the manufacturing of a toy from assembly to packaging. Accordingly, it would only take an extra 75 cents per toy to double the wage of all workers involved.

In practice, workers are not paid according to the number of toys produced. Their salary has two parts: a base salary that is often close to the legal minimum wage, and a salary computed from overtime and other variables. In order to achieve a salary on which they can sustain themselves, workers often clock in more than 100 hours overtime per month, despite the legal maximum in China of 36 hours per month.

  • Why are wages so low in Chinese factories?

The factories manufacturing toys for international brands only receive a small share of the pie. The lion’s share goes to multinational corporations*. They are the ones who determine purchase prices from factories and the ones making the profits.

*Profits (EBITDA, source Marketwatch.com)
Mattel : 2016 $948 millions (USD)/ 2017 $55 millions (USD)
Hasbro : 2016 $952 millions (USD) / 2017 $1 billion (USD)
Disney : 2016 $16,7 billions (USD)  / 2017 $16,6 billions

  • What is the legal minimum wage in China and how short is it from a subsistence wage?

Minimum wages are lower bounds set by the State. In China, minimum wages are set by province and may evennvary from region to region inside provinces. In Guangdong, the southern province where most of the toy industry is located, the minimum wage is among the highest in the country at 2030 RMB per month (about 295 USD).

A subsistence wage in contrast, is what is required to sustain a family. Expenditures include not only food, but also rent, health costs, clothing, transportation, and education. This subsitance wage should also allow the building of moderate savings to allow coping with unexpected changes in circumstances. It is essential that such a wage should be reached while working a regular weekly schedule, rather than through excessive overtime, as is the case in the Chinese toy industry. In fact, even the wages of overtime schedules sometimes fall short of meeting the threshold of subsistence. Furthermore, employers contributions to retirement plans are mostly only partial. Finally, factory employees are often the breadwinners for their family and bring home the livelihood for several family members. According to Asia Floor Wage the minimum vital wage in 2017 was of 4547 RMB per month (~ 662 CHF).

  • What are the most significant issues concerning working conditions?

Low wages paid for brutally long shift are unfortunately not the only issue for workers in toy factories. To these must be added the health and safety hazards of the workplace, the squalid conditions of living quarters and the lack of legal protection or representation.

Masks and gloves are lacking. Despite the existence of alternatives, benzene is still sometimes used in factories for painting, gluing or cleaning operations. Benzene is highly carcinogenic and inhalation of its fumes can trigger seizures, paralysis, abnormal (potentially fatal) heart rhythms (cardiac arrhythmia), and cessation of breathing (apnea). Chronic poisoning damages internal organs such as the bone marrow, leading to leukemia. Estimates of yearly benzene poisoning range from 150 000 to 300 000 globally, with a dominant share occurring in China.* To make the situation worse, manufacturing firms only pay a fraction of social insurance (in violation of the law). This transforms illness or accidents in poverty traps as health care bills end up dragging the worker’s family further back into poverty. The grim situation will also remain inescapable so long as workers have no recourse to defend their rights. In China, independent unions or similar institutions do not exist and is there no representation for workers outside of and independent from factory managers

*Source: Labour Action China, World Health Organization, official Chinese statistics.

  • Are the dire working conditions in the toy industry representative of all Chinese manufacturing?

China is the country where extremes coexist. What is true in the toy industry does not apply to all other manufacturing and industrial sectors. Factories employing the most advanced production technologies can be found right next to medium and small size operations. Working conditions in the toy industry are representative of the sectors focused on exports goods that are sold worldwide by multinational corporations. These sectors rely on cheap labor in the production of textiles, consumer electronics, or toys.

  • Who works on Chinese factory floors?

Birthplace determines status in China. The “Hukou” system connects birthplace to access to social services related to retirement, housing, health and education. However, the rapid economic development of China has unleashed massive migration of labor force within the country, without any significant departure from the Hukou rules. As a result, migrant workers are not entitled to all civil rights and benefits in their work place and don’t receive social subsidies, like illegal migrants elsewhere.

The Hukou system needs to be reformed in order to make sure migrant workers are treated fairly, equals to their fellow Chinese citizens. The current effort to reform the Hukou system is insufficient and its effectiveness varies widely from place to place. Large attractive urban centers such as Peking, Shanghai, and Shenzhen are resisting any improvements in conditions for migrants. In smaller and less developed cities, immigration rules are in contrast more flexible. This discrepancy is in fact part of the effort of the central government to redirect migratory flows and try to promote economic development in the smaller urban centers.

  • Would the toy industry not simply move out of China if wages were increased?

The toy industry is similar to the textile industry as far as how labor-intensive the production process is. However, its products are more complex since toys can take many shapes and forms: they range from the plastic doll, the stuffed animal all the way to electronic robots. One toy factory almost always produces several different toys, requiring a variety of raw materials as well as pre-processed pieces. China provides an outstanding combination of diverse materials suppliers, efficient transportation infrastructure, and low labor costs. Despite wage increases in its economic centers, China is a vast country with still many rural and relatively poor areas from which a sizeable labor force is available for factories. As a consequence, Southern China remains the dominant region in global toy production, and this despite some growing activity in countries such as Vietnam and India.

  • How can we convince multinational corporations to change their business practices?

In principle, the rules of any economic activity are set by states. Unfortunately, there is in many countries a wide gap between the legal framework and its actual implementation. This is the case in China where labor laws are very good in principle but often circumvented or ignored. It is therefore crucial for multinational corporations to meet minimum requirements and norms for labor conditions and human rights not only in their home country but also in every part of their supply chain. This reasoning is a key element of the “United Nations Guiding Principles on Business and Human Rights” which where unanimously adopted by the United Nations Human Rights Council and which demands that multinational corporations be required due diligence for all their suppliers and that they be held responsible for human rights in the countries where they produce.

In Switzerland, more than a hundred organizations from the civil society have put this demand on the political agenda in an initiative on responsible multinational corporations. A counter-project is currently in debate in the Parliament. If this parliamentary effort were to fail, the initiative would be submitted to the general public for vote no later than in 2020.

While no legal constraints exist, public pressure will remain the only lever to move multinational corporations into action. Voluntary and self-motivated changes are scant and cannot be relied upon, while concern for brand and reputation and the corresponding losses in profit do trigger action. Incidentally, this is something that has been observed in the toy industry in the past. The two blazes which devastated toy factories in 1993 where followed by public outrage and a media campaign which pushed manufacturers to start implementing social responsibility practices, among the first at the time. Unfortunately, these efforts to improve working conditions proved as short lived as the focus of general media on the topic. Today, the toy industry is lagging behind textile and other problematic industries.

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