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Labor Article

Looking Ahead


The future of American manufacturing jobs: Many economists and experts, and even some politicians know, that many of these labor-intensive manufacturing jobs are gone and will not return, but few political leaders appear to have the gumption to admit this honestly to the American people, or the will to reorient or retrain workers towards more competitive industries, for retrenching often takes time and money. However, if China were to move into capital intensive or high technology products and more complex services, as they will surely do in the years to come, there is a good possibility that they would then take high-skills jobs from the U.S.[1] U.S. policy makers and businesses would do well to start preparing now for that eventuality, by innovating even more to stay competitive.

China’s Labor Movement: China must continue to improve its labor practices, in particular the enforcement of existing labor laws. While many, like Guo Jianmei, a law professor at Beijing University, think that there is little incentive for the government to enforce labor and health and safety laws,[2] perhaps the greatest motivation is the mass discontent and unrest that has been happening around the country by exploited workers, especially at construction sites and at mines. The fear of social instability may turn out to be the greatest incentive for the government to enforce labor laws and standards.[3]

So far, there have been some complaints that the new labor law has increased labor costs anywhere from 20% to 40%[4] with many squeezed businesses starting to look to other low-cost countries to relocate to. Observers have noted that this is in line with the Chinese government’s long-term goal of moving from low-cost labor-intensive industries to more value-added businesses.

While Chinese workers' rights may not be advancing as swiftly as they would if workers were allowed to form independent trade unions, the new labor law is at least advancing the notion of workers’ rights a big step in the positive direction. As Auret van Heerden, president and CEO of the Washington, D.C.-based Fair Labor Association noted, although enforcement of labor laws is the biggest challenge in China, this new labor law actually does not depend on external enforcement.[5] The very fact that workers now have written contracts means that they can take these contacts into the legal or administrative system to ensure compliance or to seek redress. As more people get involved in the legal system, this can only strengthen the system and expedite China’s move towards the rule of law, which should in turn help strengthen future labor laws and workers' rights.

Also, even without independent unions, Chinese workers are finding that by themselves or in small groups, they still have some power, as evidenced in the case where workers went on strike against Zhang Yin, the CEO of Nine Dragons Paper and the richest woman in China when she tried to circumvent the new labor law. [6]

Americans can help China improve its labor practices, whether through government-to-government engagement via the International Labor Organization, or through American unions who have a great part to play in helping labor organizers in China better understand the role and function of trade unions in protecting workers.

1 Adam Kritzer, blog post on “Could China Crash the Dollar on A Whim?,” The Seeking Alpha Blog, posted October 23, 2007, http://seekingalpha.com/article/50944-could-china-crash-the-us-dollar-on-a-whim (accessed 7/23/08).

2 Loretta Tofani, “Salt Lake Tribune Special Report: Chinese workers lose their lives producing goods for America,” Salt Lake Tribune, Special Report, http://extras.sltrib.com/china/ (accessed 12/7/07).

3 Jonathan Adams, “Chinese Union”, Newsweek Web Exclusive, February 14, 2008, http://www.newsweek.com/id/111027 (accessed 2/20/08).

4 Adams, “Chinese Union.”

5 Adams, “Chinese Union.”

6 Adams, “Chinese Union.”