and powerful American companies not content with using economic inequality
to devastate working- and middle-class Americans are now using their clout
to fight efforts in China to combat economic inequality there. They want
to keep wages low there so they can drive wages down here and everywhere
The leadership of the Chinese Communist
Party that values a "harmonious society" has awakened to the need to
combat economic inequality. Workplace exploitation to keep wages very low
creates high profits for the new Chinese ownership class. The latest
annual China Rich List revealed 500 Chinese nationals worth at least $100
million. The first China Rich List, published just eight years ago,
counted only 50 Chinese worth over $6 million.
As to working-class Chinese, in 2005 there were 87,000 "mass protests"
inside China involving over four million workers, up from just 10,000
protests in 1994. As Robert J. Rosoff noted in The Chinese Business
Review: "The rights of Chinese workers are routinely violated. Workers
are often required to work far more than 40 hours a week, have few days
off, are paid below the minimum wage, and are not paid required overtime.
Improper deductions from wages are common. Some Chinese workers must pay a
large sum of money as a 'deposit' to their employer, and they may have to
pay a 'recruitment fee' in order to be hired. These payments can prevent
workers from leaving jobs where their rights are violated. Physical abuse
of workers, and dangerous working conditions, are also common."
A workers "revolt" has Chinese officials deeply worried. A generation ago,
the leadership of the Chinese Communist Party abandoned the "class
struggle," embraced the market, and declared that "to get rich is
glorious." Now the communist leadership sees widening inequality as chief
among the "contradictions and problems that impair social harmony." An
analyst with the China Foundation for International and Strategic Studies
said recently, "Know well that it is dangerous when the disparities and
differences become too wide to be bridged, and threaten to disrupt the
Too bad U.S. political leaders don't seem to feel the same way about
growing American economic inequality.
Big-time American corporations are threatening to shut down their
extensive Chinese operations should China's top officials adopt a draft
new law that increases labor rights for Chinese workers. Get it? We are
now exporting the worst aspects of our capitalist system. Amazingly,
Wal-Mart, Nike, and other major U.S. companies currently generate
two-thirds of the products China exports to the rest of the world.
The draft new law emerged this past spring, in a surprising move to start
narrowing the widening "disparities and differences" now quite visible in
China. Chinese officials unveiled a "Draft Labor Contract Law" and openly
asked for public comment on it. It offers Chinese workers what the
international union rights group Global Labor Strategies calls a "modest"
package of workplace job protections. It would give workers more of a
right to negotiate over workplace policies and procedures. But the
proposal does not "provide Chinese workers with the right to independent
trade unions with leaders of their own choosing and the right to strike,"
said the group. Though it would apply to all companies in China, its focus
is on foreign-owned companies and the suppliers to those companies.
China Labor Watch, a pro-labor group, said it "welcomes the new labor
contract law that the Chinese government is drafting. The proposed new law
includes specific stipulations to protect Chinese workers' rights. It
emphasizes the role of the All China Federation of Trade Unions (ACFTU),
the official labor union affiliated with the Communist Party, strengthens
the power of the law enforcement agencies and raises penalties on labor
law violations. The new labor law, if passed, will provide greater
protection for Chinese workers."
From a New York Times article: "I don't know about the labor law,"
said Zhang Yin, an 18-year-old migrant who washes dishes in Shanghai.
"During the three months I've been here, my boss has delayed the salary
payment twice. I want to quit."
Who got really upset over the draft law? U.S. corporations have gone nuts.
Along with The U.S.-China Business Council that represents 250 US
companies doing business across all sectors in China, the American Chamber
of Commerce in Shanghai, a powerhouse that includes 150 Fortune 500
companies, including Dell, Ford, General Electric, Microsoft and Nike, is
fighting the new law. The Chamber filed 42 pages worth of objections to
the draft law. They communicated a not-so-veiled warning. The adoption of
the new labor standards said the Chamber just might "negatively impact"
China's "appeal as a destination for foreign investment." This shows what
crap the grand position of American companies that the American corporate
presence in China is building a respect for basic democratic values.
American companies want low wages more than they want democracy in China.
"This is really two steps backward after three steps forward," said
Kenneth Tung, Asia-Pacific director of legal affairs for the Goodyear Tire
and Rubber Company and a legal adviser to the Chamber.
Interestingly, workers have set up unions at all 66 Wal-Mart outlets in
China that have 33,000 workers, beginning what a Chinese union official
described as a wider campaign aimed at other foreign companies. Meanwhile,
Wal-Mart has successfully kept out unions at its U.S. stores. Chinese
labor leaders have now targeted Eastman Kodak and Dell for unionization.
"By opposing a labor contract reform law
that would elevate labor and human rights standards," noted Global Labor
Strategies, "American and other foreign corporations are aggravating the
very conditions they claimed they would ameliorate." Exactly! The group
also made the point that the U.S. corporate attack on the draft code -- if
successful -- will "hurt not only Chinese workers, but workers around the
world who are put into competition with them." Keeping wages low in China,
in other words, is part of corporate globalization's intent to drive down
wages in industrialized countries!
Will the new Chinese labor code go into full
effect as early as next year? That depends, says Global Labor Strategies,
in part on how much pressure American labor groups can place on U.S.
corporations to "reverse their opposition to the draft labor code." Sure.
Just look at how powerful American labor groups are here. If the Democraps
take over the House, is this something they will pay attention to? Will
our political leaders stand up and fight for workers' rights in China
because it helps American workers? Or will they avoid this situation like
the plague for fear of offending their corporate supporters that want
slave wages everywhere? Without strong American action, the global race to
the bottom for labor wages will speed up. Class warfare is bubbling up.
Will the Democraps take the side of workers?
Joel S. Hirschhorn
is author of the new book,
Democracy: Fixing the Republic Without Overthrowing the Government.