The labor market in China is governed by a complex array of regulations designed to safeguard workers’ rights. Among these is a provision that limits the proportion of labor dispatch workers to only 10 percent of a company’s workforce. However, despite such regulations, enforcement is often inconsistent, prompting companies to exploit loopholes. Shein, a fast-fashion giant, has been implicated in this ongoing issue. The company’s use of various outsourcing methods has allowed it to sidestep the strict requirements concerning labor dispatch workers, raising significant questions about its compliance practices.
Zhang, an advocate for labor rights, has noted that businesses frequently navigate around these restrictions by reclassifying workers under different employment schemes while retaining similar labor dynamics. This strategic maneuvering effectively undermines the intent of the law. Shein’s response to inquiries about its labor practices reflects a blend of defensiveness and ambivalence. A spokesperson stated that the company engages third-party vendors for the majority of its warehouse operations, yet remained vague on the specific percentage of labor dispatch workers utilized. This lack of transparency brings forward the pressing issue of worker exploitation in the global supply chain.
Shein’s warehouses employ many workers classified as gig workers, a status that significantly impacts their compensation frameworks. Unlike traditional employees, gig workers lack a guaranteed wage, echoing the experiences of Uber drivers and delivery couriers. Although job advertisements suggest a fixed monthly salary, workers at Shein are ultimately compensated based on their output—a setup that cultivates a high-pressure environment where “more work equals more pay.”
Conversely, while this system offers the potential for higher earnings during busy periods, it simultaneously leaves workers vulnerable during downturns. A worker’s financial stability becomes contingent upon unpredictable demand, as clarified in a video shared on social media. Here, a Shein employee lamented her financial struggles stemming from a lack of available goods to package and ship, contradicting the expectations she had for her job security. This precarious financial situation is emblematic of the gig economy’s shortcomings, where the promise of flexibility often masks significant risks.
While Shein asserts its commitment to fair labor practices and worker dignity, such promises seem to falter against the realities faced by workers in their warehouses. The company claims to invest heavily in improving governance and compliance within their supply chain, yet concrete evidence of their impact remains ambiguous. Employee experiences indicate a discrepancy between corporate rhetoric and day-to-day operational realities.
Shein’s spokesperson claimed that junior warehouse workers earn approximately 7,000 RMB ($997) monthly, while senior workers can garner over 12,000 RMB ($1,709). In comparison, the minimum wage in Guangzhou—a city where many of Shein’s warehouses are located—stands at a mere 2,300 RMB ($327). This vast disparity raises further concerns regarding the legitimacy of Shein’s wage claims and the true nature of workers’ compensation relative to prevailing wage standards in the region.
The controversies surrounding Shein are not new; investigations into the company’s labor practices date back to at least 2021. Reports highlighted excessive reliance on labor dispatch agencies, which have historically been linked to a host of labor-related issues, including job insecurity, poor working conditions, and inadequate regulatory compliance. Despite these alarming findings, Shein has not discussed its reliance on labor dispatch in its sustainability reports, a glaring omission that calls into question the authenticity of its social responsibility efforts.
Shein’s operational model illustrates the complexities and challenges embedded within the fast-fashion industry and its labor practices. As scrutiny intensifies regarding the ethical implications of its labor sourcing strategies, the company must navigate a path toward genuine compliance and worker welfare—and only time will reveal its commitment to manifesting this change.