A recent study in the Harvard Business Review found that companies with political connections have more frequent worker deaths. Ray Fisman, an economist at Columbia University, and Yongxiang Wang, a finance professor at the University of Southern California, hypothesized that well-connected executives “might be able to grease the wheels” in terms of safety regulations. The two may have been right. According to the study, the worker death rate at firms with top-level executives who previously held a government job was five times higher than at other firms.
Read the article here: In China, Politically Connected Firms Have Higher Worker Death Rates
Corruption seems to be a problem in many, many sectors of China’s economy and government. I wonder if the government or outside forces have a plan to curtail it before corruption leads to the downfall of China. That might be a little extreme, but it could very well prevent China from taking that next step from developing to becoming a developed country with a stable government and economy.
There is also a selection bias: foreign invested firms are more likely to report accidents and deaths, and among those firms are many in “heavy industry” that may be intrinsically more dangerous. I suspect however that all the reported deaths are nevertheless but a fraction of those in coal (where many private firms operate with horrific safety records, as anyone from West Virginia might guess).
I also looked at the numbers afer the US media headlined suicides in Foxconn, which among other things assembles Apple products. When I compared the number reported to the overall Chinese suicide rate times the number of workers at Foxconn, it turns out suicides at Foxconn were actually lower than the average! So we need to use common sense when we read such reports.