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October 13, 2006

unions in China

The New York Times reports that China is prepared to strengthen labor unions. The regime solicited responses to the proposed legislation and received 190,000 comments. I can't tell whether the law would make a real difference: it may be inadequate because "it does not provide for independent unions with leaders chosen by their members and the right to strike." (pdf). The Times, however, claims that the law would "give labor unions real power for the first time."

Unions could raise wages and working conditions in China, reduce wage pressure on workers in other countries, and enhance political pluralism inside the world's largest dictatorship. However, the American Chamber of Commerce and various American companies are against the proposal, modest as it is. They argue that stronger unions would move China backward toward socialism. In fact, unions would be a huge move forward toward pluralistic democracy. (The Communists never tolerated independent unions.)

The American Chamber's White Paper takes a relatively moderate tone:

The new draft Labor Contract Law, scheduled for enactment by the end of 2006, contains much that would affect the operations of multinationals. AmCham commends authorities for their recently announced decision to invite public comment. Concern over the draft legislation is high given a variety of its provisions. For example, under a recent draft, if an employee was hired under a thirty-six month contract and terminated for cause after six months, the firm would still need to compensate him for another thirty months of pay. AmCham acknowledges Chinas need and desire to target unethical employers, for which provisions such as these may be targeted, but the impact of these and other equally onerous provisions on responsible FIEs serve to undermine the attractiveness of Chinas labor market, one of the key factors that make China such an enticing place to do business.

I'm not sure if the 30-month provision is wise, but it may be a red herring. The Times and Global Labor Strategies assert that the American Chamber is working against the whole new labor law. The Chamber represents so many firms (e.g., Wal-Mart, Google, UPS, Microsoft, Nike, AT&T, and Intel) that it's hard to envision a targeted response. If we could single out a few leaders in this effort, I would definitely boycott them. I can't think of a clearer case in which the companies to which we give our money use it against our interests and against human rights. Alas, there are so many culprits that it's extremely hard to boycott them.

(One of my articles in defense of unions was pubished in China, or at least I gave permission for it to be translated into Chinese.)

[Addendum: I'm beginning to think, based in part on a conversation with a Chinese activist I know, that the Times's lead misled me. The proposed law would not in any way increase the independence of unions in the PRC. It would impose some new labor laws, but they might not be enforced fairly. Workers would have no voice in their enforcement. There would be no increase of pluralism or democracy.]

October 13, 2006 9:41 AM | category: none


Your right, this is a good move for developing democracy in China.

As I have theorized, democracy is best achieved and enshrined through economic means. It is a perverse way of establishing democracy but that seems to be the way of humankind.

October 13, 2006 12:22 PM | Comments (2) | posted by airth10

The New York Times mislead us? Is that even possible? I think we have been misled on two counts, both of which you raise. First off, I have seen nothing to support the contention that AmCham and its MNC members oppose the entire set of proposed laws. They oppose passage of the new laws as they stand, with the 30 month provision entact. Also, I fear you are absolutely right that these proposed laws will do nothing for worker democracy. The Chinese government wants to give workers enough to keep them off the government's back for a few more years, but it certainly does not want to give them a real voice. Only the government gets that.

October 22, 2006 8:08 AM | Comments (2) | posted by Dan Harris

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