U.S. Corporations Are Opposing New Rights for Chinese Workers

The New York Times reported on its front page today that US-based corporations are fighting a proposed Chinese law that seeks to protect workers’ rights. The law is “setting off a battle with American and other foreign corporations that have lobbied against it by hinting that they may build fewer factories here.”

The Times reports that Global Labor Strategies, a group that supports labor rights policies, is releasing a report in New York and Boston “denouncing American corporations for opposing legislation that would give Chinese workers stronger rights.”

“‘You have big corporations opposing basically modest reforms,” said Tim Costello, an official of the group and a longtime labor union advocate. “This flies in the face of the idea that globalization and corporations will raise standards around the world.’”

The Times article drew heavily on the Global Labor Strategies report, Beyond the Great Wall: U.S. Corporations Opposing New Rights for Chinese Workers which was released today. (The Spanish translation is available here.)

According to the report, US-based global corporations like Wal-Mart, Google, UPS, Microsoft, Nike, AT&T, and Intel, acting through US business organizations like the American Chamber of Commerce in Shanghai and the US-China Business Council, are actively lobbying against the new labor legislation. They are also threatening that foreign corporations will withdraw from China if it is passed.

China’s Draft Labor Contract Law would provide minimal standards that are commonplace in many other countries, such as enforceable labor contracts, severance pay regulations, and negotiations over workplace policies and procedures. The Chinese government is supporting these reforms in part as a response to rising labor discontent.

Corporate opposition to the law is designed to maintain the status quo in Chinese labor relations. This includes low wages, extreme poverty, denial of basic rights and minimum standards, lack of health and safety protections, and an absence of any legal contract for many employees.

According to Beyond the Great Wall, the proposed legislation will not eliminate Chinese labor problems. It will not provide Chinese workers with the right to independent trade unions with leaders of their own choosing and the right to strike. But foreign corporations are attacking the legislation not because it provides workers too little protection, but because it provides them too much. Indeed, the proposed law may well encourage workers to organize to demand the enforcement of the rights it offers.

This corporate campaign contradicts the justifications that have been given for public policies that encourage corporations to invest in China. US based corporations have repeatedly argued that they are raising human and labor rights standards abroad. For example, the American Chamber of Commerce in Hong Kong asserts among its “universal principles” that “American business plays an important role as a catalyst for positive social change by promoting human welfare and guaranteeing to uphold the dignity of the worker and set positive examples for their remuneration, treatment, health and safety.”  But US based corporations are trying to block legislation designed to improve the remuneration, treatment, health and safety, and other standards of Chinese workers.

At a time when China exerts a growing impact on the global economy, efforts to improve the conditions of Chinese workers are profoundly important for workers everywhere. As U.S. wages stagnate, many Americans worry that low wages and labor standards in China are driving down those in America. Improving labor conditions in China can help workers in the rest of the world resist a “race to the bottom” that threatens to bring wages and conditions worldwide down to the level of the least protected.  The opposition of corporations to minimum standards for Chinese workers should be of concern to workers and their political and trade union representatives throughout the world.

Download a full pdf version of the report here. The Spanish translation is also available. For those interested in a copy of the English translation of the Chinese draft Labor Contract Law, the American Chamber of Commerce's letter to the Chinese government, or a list of AmCham's corporate membership categorized by industry, contact us at [email protected].

Comments

[lilyzhai]

China legislation about draft labor contract law

In the April of the last year, China People’s Nation Committee promulgates the China’s draft labor contract law, opening up a period of one month of comment on the law. Just only one month later, more than 190 thousand comments from all over the country poured to the committee. The respond is enthusiastically and never occur in other legislature in China.
China owns the most people and labor in the world. This law will be used by most people in the world. The extraordinary difference about the draft from the form labor law is it gives more right to employee, emphasizing the written labor contract, strengthening the inspection of the labor contract, limiting the labor dispatch. Those changes not only receive a lot of government agency, institute and worker’s response, but also have sharp difference in academic. The focus is about should give more right or the protective is excessively. At the same time, a voice to lob the legislature come from the foreign commerce committee, just like the American Chamber of Commerce in Shanghai and Europe commerce committee, They give the against voice to the draft law, a representative of Chamber said if the draft law pass in the future, they will withdraw the investment from the China. He said in the highest level meeting conclude the legislation officers ,the government offices and the scholars from the all of the China, in June 2006, in shanghai.
I think the draft law has many significant developments to protect the worker’s right and interests.
A the background of the draft labor contract law
The system of China labor law is different from the USA law. In China, there is no clear boundary between the labor law and employment law. In 1994, the China people’s notion committee regulates the first law about the labor and employment relation. Although the legislature’s name is the republic of China labor law ,this law is divided thirteen charters ,conclude the general rule ,promoting job, labor contract and collective contract ,work and rest time ,wages, occupational safe and health, the special protection for woman worker and juvenile workers, occupational training ,social security and beneficial ,labor dispute resolution, inspection ,legal ability and appendix. So the content of the labor law is so broad, but the law only have 117 articles, including individual employment contract and collective contract. In China, the individual employment contract is called labor contract, the relationship between the individual and the employer is called labor relationship .The contract between the employer and the group employee is called collective contract, the relationship is called collective labor relationship.
Because there is only one official union in China, the collective negotiation and collective agreement is having no real role in protecting worker’s right. Although the number of union is large, the role is small. When employees begin working for an employer, according the labor law, there must have a written labor contract. So in China, the individual labor contract is a main style to adjust the labor relationship ,the articles of the contract are the occupational post, work time, salary, occupational health and insurance, termination and penalty.
1, The worker’s right is serious infringe by the employer.
China’s labor contract system was begin in the mid-1980s, shift the tenure worker “iron rice bowl” to have relationship with enterprise by contract, this improvement confirmed in 1994 legislation. With the China economic development, the notional enterprise shifts the system, more and more agriculture immigration into the urban, called immigrate worker, they worked for every sorts of employers. The worker’s right is serious infringe by the employer. Accounting the labor law inspection investigation by the people’s notional committee, found some serious questions in real life, just like the ratio to have written labor contract is very low ,less than 20% in middle and little enterprise , the lower in the individual enterprise.
Many employers are avoiding bearing the legal liability for the worker. Employee often worked long hours, the overtime work is popular in China, but still earn so little. There is minimum wage in many province and cities, eve in the highest minimum wage city, the minimum wage of a month is around 100 us dollars , and the regular minimum wage is between 50-60 us dollars. The lowest minimum wage is only having the 30 dollar a month. But many workers could not get the minimum wages and over-time wages, they lived in very poverty life. Many employers would not buy any mandatory social insurance, workers have no any occupation protection in workplace, many workplace injuries occur every year . Another situation is the worker’s interest is harmful .some enterprise manual and employee handbook have infringe worker’s right, for an example “born, old, illness, death have no relationship with employer” “Employer have no liable with the accident”, “The man and women could not have in love, could not to marry, and no pregnant”, some employer make employer signature in blank contract.
The another problem in labor relation is the short term in labor contract. There are three term contract in labor law, definite term ,indefinite term and the term depending finish the task .Because definite term contract give more freedom and less cost , the employer prefer the short term labor contract avoiding the legal obligation . The one year term contracts are popular, and the tendency is the term become more shorter and shorter.
2, The labor law couldn’t give enough protection to workers.
There is only 11 articles to regulate the individual labor contract and 8 article of the collective agreement .After 1994 ,China rapid economic development and the workers rapid entrance the nonagricultural work to show the labor law ‘s defective ,the ministry of labor and social security have a lot of regulation to supplement the labor law ,and some have internal contradict ,
3,social conflicts
Some social conflicts is serious just like the no pay to worker ,short-time labor contract ,shortage the essential insurance ,low pay and overtime work hours ,no compensation to occupation injury and disease ,the long and complicate procedure to deal the labor dispute. The problem make the Chinese social contradict is deeply .Chinese worker’s foundation right and interests could get the enough protection. Many foreign academic could not understand China’s special problem .like why worker continual to work for some employer with no pay? Why the union leader respective the employer have litigation with the worker? just like the no-pay in China was once the popular social problem in last several years ,the phenomenon is improve after a women ask the premier wenjiabao to help her for her husband’s wage, this is actual situation in China ,many immigrate worker could not get own wages and the law’s protection is weak. The China government has pay concerned with the workers, and want protect the worker to keep harmony society. So the draft law have rapidly renounce, is a sign to protect the workers right.
labor dispute is raise rapidly ,in 1995 ,when the labor law effect ,there is 33 thousand case in the every level of labor dispute arbitration committee in the hole country, the employee involve in dispute is 123 thousands people ,in 2006 ,the number of labor dispute is , and the labor dispute is the most rapid case in China and courts.
B、the merit of the draft law
1,emphasis to protect the employee’s right and interests
In this law’s first article ,it is clear to claim the aim of this legislation have two , one is the protect the workers’ right ,the second is to improve the labor relationship to harmony, this aim of legislation have many debate, some people think the draft labor law is the labor relationship law ,just like the general contract law ,so the legislation’s aim to give the employer and employee same protection ,and this question have last for a long time ,but in the end ,the draft which annoyed is to emphasis to protect the worker. Maybe this question is not having so intense in foreign country, but it is importance for China labor law. From the first one item, the indirection of the law is clear.
2, emphasis to protect the employee have native influence on the investment? Some commerce committee said Many Atcham Shanghai member companies are concerned that, as the draft stands, it is a step backwards for Chinese economic reforms -- away from global trends of flexible labor markets needed to ensure continued economic growth. this question quarrel for a long time after the effective of the labor law .Some government didn’t strictly to supervisor the law just because want to appeal more foreign investment, but scarce the basic protection to worker could not get the enough workers, in general ,in recently years ,the zhujiang river district ,have serious problem like as “shortage of worker”, many factory only to quit just because there is no enough worker . No pay to workers ,no pay to overtime work, no enough prevent the employer illegal conduct ,the immigration worker could say by their feet . Some origination of USA estimates that even after five years of double-digit wage inflation in China, hourly compensation for Chinese manufacturing workers remains at only 3% of levels prevailing in the major industrial economies. So in China, the worker are the bottom of the society, the law should give them the basic protection.

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[Weaver]

Professor Robinson is correct about organizing labor, but a simple code of ethics may suffice.

The Prisoners' Dilemma
(Axelrod, 1984)
http://pespmc1.vub.ac.be/PRISDIL.html

Take a moment to read the Prisoners' Dilemma, think of the 2 prisoners as labor and the globalists as the cops.

Axelrods experiment shows that Cooperation between the criminals is the best policy in the long run.

[Jeff Crosby]

Great work in spreading the news that corporations like GE are fighting efforts of the Chinese government to increase trade union rights there in response to civil strife. GE unions were just informed that GE sent out an e-mail pushing its new light-bulbs as an "eco" environmental breakthrough, and asked people to "take the pledge" to buy only the new GE bulbs. Tens of thousands did so. Only problem is the old bulbs are made in the US, the new "eco" bulbs are made in China. GE even asked their own employees in lighting plants in places like Ohio to take the pledge to put themselves out of work! These workers have already negotiated wage cuts to keep their jobs. No doubt GE is a leading force to clean up the environment in China, right?

[Leland W. Robinson]

Global Labor Strategies is providing a tremendous service by bringing this critically important issue to public attention. For more than a quarter of a century I have been arguing and teaching (I am a now retired university professor) that the most fundamental economic problem is a tremendous imbalance between the level of organization of capital and labor. Capital is organized internationally, while labor is organized nationally at best, and in most countries not even that. Power primarily stems from level of organization, so capital now has the predominance of power. The result is world-wide labor exploitation and a "race to the bottom." If we wish to support the living standards of the vast majority of the world's population, nothing is more important than the organization of labor on an international basis. All workers suffer when any worker anywhere is exploited.