Global Labor Strategies

China's New Draft Arbitration Law

With China increasingly setting wages and working conditions for workers the world over, the ripple effects from changes in Chinese labor law are likely to be felt in each of our home countries. So head's up: new Chinese labor legislation is in the works.

The latest draft law concerns labor dispute mediation and arbitration.  Since Chinese workers lack the right to strike, arbitration has been one of the few institutional ways for workers to address grievances with their employers. But the current system is failing, triggering an increasing number of worker protests and social unrest.

The new draft was submitted to the National People’s Congress for its first reading on August 26, 2007.  It comes on the heels of the Labour Contract Law passed last August, which extended an array of basic rights for Chinese workers—including protections for temp workers, just-cause firing provisions, etc.

The arbitration law is designed to address a number of government concerns.  According to the China Daily, PRC figures reveal that “labor dispute cases in China are continuously increasing in recent years. Statistics show that labor dispute arbitration organizations at various levels dealt with 1.72 million labor dispute cases involving 5.32 million employees from 1987 to the end of 2005, with a growth rate of 27.3 percent annually.”

China’s New Contract Labor Law

China’s new Labor Contract Law was enacted by the National People’s Congress on June 29th. It will go into effect on January 1, 2008.

The law was enacted with an unusual amount of debate and controversy both in China and worldwide. GLS has written extensively about the attempts by foreign corporations to gut important provisions of the law. The law's final version has received mixed reviews from the foreign corporations and their lawyers doing business in China.

According to the New York Times:

Many multinational corporations had lobbied against certain provisions in an earlier draft of the new labor law. An early draft gave unions greater powers and made it more difficult to fire workers.

Companies argued that the rules would substantially increase labor costs and reduce flexibility, and some foreign businesses warned that they would have little choice but to move their operations out of China if the provisions were enacted.

International labor experts said several of the most delicate clauses had been watered down. But lawyers representing some big global companies complained that the new law still imposed a heavy burden.

''It will be more difficult to run a company here,'' said Andreas W. Lauffs, head of Baker & McKenzie's employment law group, which represents many of America's biggest corporations in China.

The Christian Science Monitor reports,

"As is always the case with China's laws, the real question will be in whether the new laws are enforced, how they are enforced, and against whom they are enforced," says Dan Harris, an expert at the law firm Harris & Moure.

But, he adds, "there is a feeling the new labor law is more likely to be enforced than the old and, in particular, will be enforced against foreign companies."

GLOBALIZING WORKER RIGHTS

This post is based on a contribution by Jeremy Brecher, Tim Costello, and Brendan Smith to the symposium "'Neither Slavery Nor Involuntary Servitude': The Thirteenth Amendment and the Contemporary Struggle for Labor's rights" that appeared in the March, 2007  New Labor Forum.

For generations, workers in the United States and other countries around the world have fought for the right to organize, bargain collectively, and strike. These rights have been increasingly contested in the era of neoliberalism. In response, some in the labor movement have been seeking new ways to ground these rights. One proposal has been to ground labor rights in the U.S. Constitution's Thirteenth Amendment barring involuntary servitude. In the era of globalization, a closely related possibility may be to also ground them in fundamental rights defined in international law.

Whatever Happened to the Right to Strike?

Review of “If the Workers Took a Notion”: The Right to Strike and American Political Development by Josiah Bartlett Lambert (Cornell University Press, 2005)

Reviewed by Jeremy Brecher

During the 1970s, the Bureau of Labor Statistics recorded nearly 300 major work stoppages per year.  By the 1990s, the number of major strikes had fallen to 35 per year, despite a far larger workforce.  In 2003 it reached 14.  Using such other measures as the total number of work stoppages, the number of workers involved, or the working time idle from strikes, the strike rate has decreased somewhere between 60% and 90% in the last three decades.

This unprecedented decline is not explained by a general pattern of “American exceptionalism”:  Between 1946 and 1976 the US was third among 18 Western countries in strike activity.  Nor is it explained through globalization or other historic changes affecting the industrialized world as a whole: Strikes have remained a vibrant vehicle for social struggles in many countries, as exemplified by the recent mass strikes in France.  Nor is it explained by the normal variation of strikes with economic cycles:  The change has now persisted through repeated cycles.   Nor is it the result of the decline in “union density”:  The strike rate for unionized workers has fallen comparably.

In “If the Workers Took a Notion”, Josiah Bartlett Lambert revisits the history of the right to strike to gain a new perspective on this situation. 

Raids, Reforms, and the Labor Movement

The December immigration raids at Swift & Co, and increased enforcement activity elsewhere, are a body blow against labor’s attempt to organize low wage workers.

Undocumented workers comprise a significant percentage of the workforce in many of the industries targeted for organizing by unions including cleaning contractors, hotels, meatpacking, food processing, light industry, and commercial laundries. The raids will make workers feel more insecure and may make them less willing to take the chances required to organize. The raids may also make employers more willing to use immigration status as a club to thwart organizing and more willing to cooperate with immigration authorities to protect themselves from prosecution or lawsuits. If a significant percentage of the workforce feels vulnerable, all workers will be hurt since chances of successful organizing campaigns will be greatly reduced.

With so much at stake the response by unions has been remarkably timid. Those unions that have spoken out have mainly issued press releases to condemn the raids and to call for Congressional action on immigration reform. That is simply not enough.

In fact, the raids also provide a good opportunity for labor to reframe the immigration debate with fresh ideas and new action. The raids were an affront to common decency. They were an assault on human rights, on labor rights, and on the notion of proportionality in the conduct of law enforcement. The raids were conducted under false pretenses —only a handful of those caught in the raids were charged with “identity theft”—the ostensible reason for the raids; and they were discriminatory—company officials who knowingly built an entire staffing system in the meatpacking industry based on undocumented workers walked away free.

As part of reframing the immigration issue, labor leaders need to stand shoulder to shoulder with workers from the affected communities, in the affected communities. They need to make a public display of supporting those swept up in the raids, many of whom are now unemployed and facing deportation.  And—very importantly—they need to stress that the raids undermine working conditions for all workers—not just undocumented immigrants.  One way to do this would be to hold public hearings in which workers in the industry—immigrant and non-immigrants—tell their stories. Properly done, reframing the immigration issue can both help build alliances between immigrant and non-immigrant workers for real immigration reform and cement the relationship of labor with immigrant communities in the upcoming policy debates and the 2008 elections.

Fair Globalization

In the days following November’s elections, New York Times columnist Thomas Friedman—an apologist for some of the worst aspects of corporate globalization and someone with whom we rarely agree—wrote this from China:

“Now that we've had an election that clarified which country is most important in shaping U.S. politics in 2006 -- Iraq -- I've come to visit the country that's most likely to shape U.S. politics in 2008: China.

“The civil war in the Republican Party, which you are about to see, will be all about Iraq -- whom to blame and how to withdraw before the issue wipes out more Republican candidates in 2008. But the coming civil war among the Democrats will be all about China.”

Although Friedman may be overly optimistic that US involvement in Iraq will be over and done with by 2008, he is right that China will be a central issue in the next election and that it could divide the Democratic Party.

Indeed, China has become the focal point of all of the insecurities that people feel about globalization. That insecurity played a major role in November’s election. Democrats’ running on economic populist platforms were able to sidestep dicey and divisive social issues and score significant gains among all sectors of a population increasingly worried its economic future.
In the dumbed-down world of public discourse and punditry there are two sides to the globalization debate: “free trade” and “protectionism.” This division, according to Friedman and others, is likely to split the Democratic Party, and we might add, organized labor, the Democrats’ key financial backer.

US Congress and Others Take Action on GLS's China Report

As many of you know, GLS recently released a report detailing US corporations' efforts to block Chinese new labor law reforms.  Our report and the resulting New York Times story has spurred a flurry of debate and activity.

We've heard from US and global unions, maquiladora activists, trade lobby groups, political campaigns, outsourcing campaigners, Chinese academics and legislators, even American banks, all asking for more information and how to get involved.  Letters have been sent to Wal-Mart and other corporations; the EU Chamber of Commerce has been condemned; the Spanish version of the report has been distributed in the Mexican maquiladoras...this all just in three weeks time.

We are also encouraged that US members of Congress have so quickly stepped forward to address the concerns raised by our report.  U.S. Representatives Lynn Woolsey (D-CA), Barbara Lee (D-CA), George Miller (D-CA), Barney Frank (D-MA and twenty-three other House Members recently sent a letter to President Bush "protesting the efforts US corporations to undermine the most basic human rights of Chinese workers and block proposed new worker rights and labor standards protections in the proposed new Chinese labor law."  They are urging President Bush to stand up and speak out to underscore the commitment of all Americans and our government to support internationally-recognized worker rights. [Here is a copy of the letter: Download china_labor_letter_final.pdf]

More Voices from China

Our second collection of comments from ordinary people on China’s proposed Draft Labor Law—culled from the web-site of the People’s Daily—focuses on the problem of labor law enforcement in China. See our previous post for the first collection and additional background information.

The People’s Daily web-site was put up last spring and drew over 100 pages of comments on the new law.

While the problem of actually getting labor laws enforced is faced by workers in many places, including the US, these entries zero in on the specific problems that Chinese workers face when they seek labor law enforcement. Many of the posts also reflect the hope that improvements in the law can also be the basis for improvements in enforcement.

Once again, we want to thank Julia Chuang and her colleagues for making these comments available to non-Chinese speaking people.

We recommend reading our report, Behind the Great Wall for a better understanding of the proposed draft law and the context of the comments.

Re: Draft Law I hope that this law isn’t an empty piece of paper, and that implementation will be strengthened so that those who violate contracts will be strictly punished. It should not just serve to “scratch the itch.”

Voices from China

It’s easy to find out about the lifestyles of the rich and famous around the world.  But it’s not so easy to learn about the actual conditions and concerns of workers in other countries.  This is even truer for countries like China, where communication with the outside world is limited.

Last spring a new draft labor law was proposed by the Chinese government. In a surprisingly democratic move, the government opened up a period of comment on the law. The comments of US and EU multi-nationals were the basis of our report: Behind the Great Wall.

But comments on the proposed law did not just come from corporations; over 190,000 comments poured in from ordinary people from all walks of life. Many—about 100 pages worth—appeared on a site hosted by the People’s Daily in Beijing. The newspaper asked people to comment “….as individual bloggers, rather than as representatives of the people.”

The comments open a window on the life and problems of ordinary workers in China.  Some of them are unique to workers in China such as problems associated with Chinese labor contract law. But workers around the world will recognize many others.  For example, workers in many countries know that there are labor laws that are supposed to protect their rights, but find that there is little or no way to access means of enforcing them.

We want to thank Julia Chuang and her colleagues for their work uncovering this trove of information and for making some of it available to non-Chinese speaking people.

We have grouped the first batch of comments into 3 categories. Today’s blog samples some of the problems that workers want addressed in the new law. Our next post, we will look at comments on implementation of existing labor laws. In our final post in this series, we will sample comments on the details of the new draft law. 

Our goal is to let the comments speak for themselves, but we recommend reading our report, Behind the Great Wall for a better understanding of the proposed draft law. 

It’s our hope to bring more of the voices of ordinary Chinese workers to our readers in the future.

To understand some of the comments it’s important to know that Chinese labor law is based on individual or collective contracts between workers and employers. (The bloggers sometimes use the phrases, “work units” and “employing units”) Each worker is supposed to be covered by an individual or collective contract, but often they aren’t. And when they are covered, the contracts are often ignored. The new law proposes to extend contracts to everyone and provide guidelines for the duration and coverage of the contracts. The law also sets out other basic workplace standards on a range of issues.

Here are some comments.

Re: Draft Law In low-paying industries, those who are injured, particularly those who are injured slowly over a long period of time, cannot obtain medical treatment because the medical fees (subsidy) are too high for their incomes to cover both living fees and limited medical supplies.  If we face a removal of the labor contract, those who are currently receiving medical treatment will need compensation, or at least some form of care.  This group of people is not a majority, but they rely on care in order to survive.  I hope we can take them into special consideration.

Wal-Mart and Chinese Unions

Wal-Mart, already America's largest corporation, has been going global.  It has extended its operations to 15 countries.  But recently it has hit some heavy weather in its international operations.  For the first time in ten years it has announced a quarterly decline in earnings.  The main cause: Wal-Mart’s decision to divest its German subsidiary and write-down $863 million.  German consumers and German unions apparently never warmed to Wal-Mart’s red state businesses ethos.

The German debacle followed trouble with the British union GMB at Wal-Mart’s big Asda chain in the UK. A strike was averted when the company agreed to giving the union broader collective bargaining rights and better access to workers.

In May Wal-Mart announced plans to close its Korean operations—the company’s original overseas outpost. The Koreans apparently also didn’t care much for big box stores.

Wal-Mart is famous for resisting unionization all over the world.  So it made worldwide headlines this summer when, after resisting for two years, Wal-Mart finally agreed to recognize unions in its Chinese stores.  To evaluate the significance of this, it is necessary to look at how Chinese unions usually operate -- and how Wal-Mart's case was different.