April 26, 2006


China grapples with a labor dragon (Antoaneta Bezlova, 4/27/06, Asia Times)

Labor unrest has surged despite the Chinese authorities' efforts to keep workers quiet. The CCP has found itself unable to intervene because the proportion of the workforce belonging to the official state-run trade union, the All China Federation of Trade Unions, has declined and now represents a minority of workers.

Most of the industrial workforce no longer works in state factories, but in private enterprises, foreign-invested factories, and a huge cluster of enterprises run by local governments. Even in state factories, union enrollment has been falling, since the legal union body is run by the CCP.

The result has been a proliferation of underground and illegal trade unions and a dramatic surge in labor disputes.

"The government's use of anti-union tactics such as crackdowns on industrial actions and imprisonment of those fighting for workers' rights is simply fanning the flames of what is emerging to be a major threat to their own rule," said the ICFTU report.

China labor watchers said many of the disputes related to workers demanding that employers paid them the minimum wage. Many employers have been able to take advantage of the ignorance of their workforce and pay rates half those set by the authorities, and they add on unrestricted overtime.

For example, in the export-processing hub of Shenzhen, which offers the highest minimum wage, the rate is set at 690 yuan (US$85) per month. But studies show that average manufacturing wages are only between 38% and 75% of this minimum.

However, there is growing pressure from inside and outside the country to raise labor regulations to international standards.

As your economy develops and folks demand rights, including decent wages, you price their labor right out of the market and the jobs move to the next country.

Posted by Orrin Judd at April 26, 2006 8:45 PM

Seems to be a 'prime the pump' moment OJ. Now if we could just get the C&C people to see that their efforts just prolong this unpleasent but needed stage.

Posted by: Robert Mitchell Jr. at April 26, 2006 8:57 PM

"folks demand rights, including decent wages, you price their labor right out of the market" Minimum wages may have aready been paid by the investors. I've just watched a frontline program on PBS. They pay construction workers at the end of the year to make sure the workers won't quit in the middle of a job. But by the time wages are due, the foreman who is to disperse the fund disappears. Similar thing may happen here. Someone skims off the wages. For some reason, workers are always exploited the most in wokrers' paradise.

Posted by: ic at April 26, 2006 11:21 PM