Corporations, China and Unions

So the Big Lie of the free trade fundamentalists has been that by getting US corporations into countries like China, no matter how horrific the human rights and labor violations are, those corporations will end up being a politically liberalizing force.  Slowly and surely, those companies will encourage a free society, far better than imposing fair trade rules as a condition for trade.

What's pathetic is that China's leaders on their own, through what appears to be a fascinating internal ideological reassessment, is now pushing to change their laws to give workers more legal protections (although not full labor rights).  It's a small step but it's something.

And the big US corporations are fighting these labor improvements tooth and nail.

Hoping to head off some of the rules, representatives of some American companies are waging an intense lobbying campaign to persuade the Chinese government to revise or abandon the proposed law.

The skirmish has pitted the American Chamber of Commerce — which represents corporations including Dell, Ford, General Electric, Microsoft and Nike — against labor activists and the All-China Federation of Trade Unions, the Communist Party’s official union organization.

The workers’ advocates say that the proposed labor rules — and more important, enforcement powers — are long overdue, and they accuse the American businesses of favoring a system that has led to widespread labor abuse.

The official Chinese labor unions have traditionally been the lapdog of the government and used more to suppress labor rights on behalf of employers than to help workers, so this shift, where the US corporations are taking a more anti-labor position than the Chinese governments agents is astounding. 

Global Labor Strategies released this report on the conflict and the proposed Chinese law.  What's pathetic is how minimal the rights are-- enforceable labor contracts, severance pay regulations, and some negotiations over workplace policies and procedures.  

But US corporations, having enjoyed the essentially fascist anti-labor policies of past years in China are now demanding that the Chinese government maintain the same degree of near-total labor suppression of those years.

China's leaders apparently have relented on that labor crackdown because it hasn't been fully working.  Labor riots have periodically been breaking out and the government is coming to terms with the fact that either workers get a fair share of the returns on their labor or a more serious revolt might happen-- an oddly slow realization by a supposed Marxist government to come to but then the Chinese have been socialistic in name only for decades.  

And if the Chinese leadership might be edging back towards even some basic levels of labor rights, that's to be applauded.

But let's have this little story put an end to the free trade rhetoric that US corporations push for anything other than the most anti-labor policies in any country they set up shop.  There is a long history of trade and US corporate presence going hand in hand with illiberal violations of human rights and labor rights.   


Comments (23)

It has never been and never will be about human/workers rights and all that "sappy" stuff...it has always been about the bottom line and always will be about the "bottom line"...$$$  And unions/workers rights just get in the way of that. Sorry to be so cynical but corporate America repeatedly has given no reason but to be...

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an oddly slow realization by a supposed Marxist government to come to but then the Chinese have been socialistic in name only for decades.

Heh, that would make them "SINOs"!

In all seriousness, was corporate goodwill really supposed to be the major mechanism of higher standards of living? I thought the whole point was that the corporations would serve as "carriers" for Western cultural values which would lead to their workers demanding political change. Of course, that sounds like a fairy tale too, but one I'd think more Americans would buy.

Oh I don't know. It seems to have worked.

After all the benefits of Western workers only came about because corporations beat them so far into the mud it was revolt or die.

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Western firms moving into China have had some beneficial effects. By providing employment and a market for manufactured goods they helped spawn both a blue collar and managerial class. They also exploited the workers and helped promote ecological disasters. But should we blame these side effects on the firms or on the inability or unwillingness of the Chinese government to establish and enforce proper labor and environmental conditions?

If one gets into the cage with a tiger and gets eaten, then its your fault. You can't change a tiger's nature. The same goes for capitalist firms, they only change their behavior when inhibited by the cages of law.

--- Policies not Politics
Daily Landscape

Of all the progressive issues, I understand "labor rights" the least and, typically, I agree with the US stance of "hands off."

Certainly, US and European workers, who negotiated a higher up place on the foodchain, via pensions, rely on the proletariat classes in China and other places...

I don't understand why corporations like Nike, and others, are blamed when their US and European workers, in reality, make demands of unequal economic treatment.

As much as I don't admire Hilliary, she's talked about the "plantation econonmy" and, as far as I can tell, that issue trumps edward's "two americas" theme by far.

In my opinion, cheap foreign labor isn't a threat to the US labor market but our ability to stay competitive is because it takes so much focus and energy. We must, I think, understand that labor, and its products, have a political component and, of course, we have our egos and expectations too since nobody wants to be part of the proletariat class.

We've ignored MLK's observation that violence contains military, racism and poverty and we're in the thick of all of these right now.

Instead, we should take heed of information like Jared Diamond's book "Collapse: How Societies Choose to Fail or Succeed [Discussed On Living Room]."

We have bigger things to care about than ourselves and our jobs and, paradoxically, those other things will bring us prosperity...

"They also exploited the workers and helped promote ecological disasters."

Isn't that because America couldn't export its waste so the only "politically viable alternative" was to export jobs and polution?

The book review Collapse: How Societies Choose to Fail or Succeed on KPFA's "Against The Grain" (I mentioned it on another thread) talked about how Japan, for example, saves it trees and agressively cuts down trees in OPF (other people's forests).

There seems to be a disconnect between labor and sustainability because everybody knows that "money talks and everything else walks" even though "money ain't the answer..."

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Libertine, I think your cynicism is entirely correct, but hardly a reason for despair. China's government appears to be instituting labor reforms not due to a change of heart but over concerns that its workers will revolt if their concerns are not met. It is in the Communist Party's narrow political interest to do a better job of sharing the profits from foreign factory investment. MNPundit's wry assessment of the situation is essentially correct, as China's widening income gap and despicable labor conditions would not be nearly as dramatic, nor as (presumably) unpalatable to workers without massive foreign investment. Success for some, rather than universal poverty, seems to me a much more likely environment to foster labor unrest.
The corporations benefiting from low wages and tyrannical factory administration will certainly fight these reforms, and so will factory supervisors who benefit from high levels of investment. They could hardly be expected to do otherwise. Draw attention to and express your displeasure with their choices, by all means. Economic growth, particularly unequal economic growth, is famously destabilizing for any regime. I expect this sort of reform to continue, not because corporations got all lovey or because a Chinese leader belatedly noticed that Marx said something about workers being important, but to reduce the likelihood of unrest.

It is hardly a surprise that American Corporations are fighting Chinese efforts to grant its workers more freedoms. Why? Because it means these workers, who are being exploited, stand to gain pay raises.

Fundamentally, however, we can extrapolate this issue to within our own borders.

Namely, prices of goods will inevitably rise if workers demand higher wages.

There is nothing un-Democratic about this phenomenon. If workers demand to be paid more for their services, companies will increase the prices of goods to offset this.

It's hardly rocket science.

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Gettysburg:

You are mostly correct, but whether prices rise or not is only partially controlled by increases in wages. Sometimes companies just accept a lower profit margin instead. This depends upon competition and other market forces.

This is one of the reasons Walmart is held in such low esteem, with their enormous profits they could afford to treat their workers better, other smaller competitors like Costco do so.

 

--- Policies not Politics
Daily Landscape

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It was only a matter of time. I've often wondered whether China will really be final stop in the corporate quest for cheap labor. Is there any other untapped, disciplined pool of cheap labor left in the world? What happens then?

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I'm a little confused by your post.

I fail to see how the efforts of US corporations to undermine Chinese labor protections disproves the theory that free trade will lead to a more free society in China.

Are you equating laws protecting labor with a more free society?

Do you understand that such a definition of freedom is a Marxist one not held by much of the free world and probably not held by those who advocate the theory you're trying to disprove?

In fact, in a politically free society both sides of an issue such as labor policy generally have the right to push for their view. Companies fighting against these labor policies is therefore not inconsistent with a politically free society so long as laborers have the right to push for what they want too.

Frankly, I don't think any of what you've written disproves anything about the theory you refer to. What the companies are doing is normal politics in a free society. They do it here all the time.

In short, you're confusing and mixing up too different issues -- freedom and justice. The absence of justice doesn't mean that a society isn't free and freedom is no guarantee of justice. But justice is unlikely where there is no freedom.

I listened to an NPR show starting with an American who had lost his assembly line job to Mexico, followed by an interview with a Mexican who had just started to enter the middle class when his job went to China. The next interview was with a Chinese official indignant about job loss to Vietnam.

Get on good terms with Opus; sooner or later someone is going to start hiring penguins in Antarctica. I don't know about other roles, but there should be great restaurants, with built-in headwaiters.

--
Howard

*equal opportunity offense to both extremes*

Labor rights are a basic part of international law represented by almost all nations as part of the International Labor Organization.

The idea that this is "Marxist" is a bizarre artifact of American rightwing ideology.   We aren't talking about the government owning the means of production, just the freedom of workers to advocate for unions and negotiate together for better wages-- not a definite result just the right to talk without being fired.

That's is freedom of the basic sort.

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Are you equating laws protecting labor with a more free society?

You're goddamn right we are.

Let me put the shoe on the other foot. Are you saying that workers' having the ability to better their standard of living through things like the eight-hour day, clhild labor restriction, etc. are not part of a more free society? Are you saying that once a corporation sets up shop somewhere, they and they alone set the wage rates and policies - and those who agree to be employed enjoy take it or leave it status?

Frankly, I don't think any of what you've written disproves anything about the theory you refer to. What the companies are doing is normal politics in a free society. They do it here all the time.

You've got it exactly wrong. It is the fact that they do it here too that disproves nothing. This is why this is clearly a less free society than it once was. A reasonable level of egalitarianism is inseparable from the idea of a free society. A free society in which only a plutocratic elite is free to do what they want without the threat of economic ruin is not truly free.

Unbelievable.  You not only accept the "race to the bottom" but define it as the essence of freedom. 

 

 

 

 

The freedom part resides in the freedom to associate, on the part of both companies and workers. The lack of freedom occurs when workers are prevented from associating.

An old argument, actually. In Socrates' time they were debating who had the right to govern: The rich or the citizen. Pericles came down for the latter; Socrates for the former. Which do we celebrate?

I. F. Stone's "The Trial of Socrates" highlights this divide, and shows how despots since have used Socrates and Plato to justify elite rule. While this rule-by-the-already-powerful vein was present at the founding of American Democracy, it has never been morally secure, only practically argued.

Only an equality of the rich and poor has been codified in the Bill of Rights, the Declaration of Human Rights, or our Declaration of Independence. Rule by money/influence always happens but let's not make that a moral justfication.

I belong to a union.

"Are you saying that workers' having the ability to better their standard of living through things like the eight-hour day"

The unions say they "invented the 8 hour work day" but most business owners I know have to work 12 or more hours a day to make things work. They sacrifice "freedom" for freedom-- i.e. they want to buy assets that an 8 hour day cannot afford.

If you look at the "big 3," "police officers," "firemen," etc... all of them will give up an 8 hour work day for more money.

As far as China goes, they might become the next big super power because they made the necessary sacrifices to be one. In the US, 60% of our GDP, I think, is financial services. From what I've heard, WWII was partly caused by this fact.

Only time will tell if the US can lop off parts of its economy and still survive.

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Of all the progressive issues, I understand "labor rights" the least and, typically, I agree with the US stance of "hands off."
It is clear from Newman's orginal post that "hands off" is NOT the game that these multinational corporations are playing now.  His point, as I see it, is that the corporations are now lobbying the government from implementing policies that are being demanded by the people who are working for these corporations.  Nike et al were formerly very quick to point out that people in China were lining up to take these "supposedly awful" jobs - but now that they've taken them and had several years to reflect on it, and decided that after all, they would like more compensation than they currently get, the corporations are putting pressure on the government not to allow this.  

The owner not only sees the capital gains and excess profits for his efforts, he can decide whether to stay late.

Police, firemen, nurses, enjoy overtime pay, of course, and prefer having a choice whether to stay late, but will yield on that for pay. Ask a "supervisory-role" if she enjoys staying late for no differential, and without any ownership rewards either.

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This says nothing about how these companies treat their workers, which if James Galbraith is anything to go by, is surprisingly good by the standards of the country not to mention the wages of chinese working in western owned facotires have generally been higher than the state median. But these new tougher labor laws would go towards directly raising wages & making it tougher to fire workers for poor performance. No self respecting amoral bottom dollar Profit seeking company would look forward to something like that. The object of Labor is to get the most it can for the least amount of work. The object of Capital is to get the most it can out of labor with the least amount of compensation. That's how class war works.

And regardless of this situation, keep in mind that these tougher labor regulations in China are being put forward by the Chinese government themselves, saying to Western companies that if they want to operate there, they have to abide by such standards. A much better way than Western countries telling other countries what policies they have to adopt.

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Dustin, aren't you contradicting yourself? First you start off with

This says nothing about how these companies treat their workers, which if James Galbraith is anything to go by, is surprisingly good by the standards of the country

which sounds an awful like the standard pro-corporate BS we hear too much of. You seem to be getting ready to arrogate to yourself the power to determine whether these wage increases are justified based on Western economists' analysis.

But then you seem to make the opposite (and very good) point in your final paragraph

And regardless of this situation, keep in mind that these tougher labor regulations in China are being put forward by the Chinese government themselves, saying to Western companies that if they want to operate there, they have to abide by such standards. A much better way than Western countries telling other countries what policies they have to adopt.

Indeed! While the corporate apologists COULD and did use the line that the stream of Chinese workers taking these jobs disproved the western anti-sweatshop activitsts that's a little harder then the workers themselves are demanding these increases.

So which Dustin Ridgeway am I misunderstanding?

 

There's nothing wrong with sensible markups, that's economics. But when the price of the goods is raised so that profits can rise from 100% to 150% it's time to step in.

We're living in an age where corporate profitability is higher than it's ever been and there's a reason for that.

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The object of Labor is to get the most it can for the least amount of work

This is one of those libertarian truisms that has never been proven. In my 40 years in the work force I only came across five or six real slackers. Most people take pride in their jobs and put in extra effort to satisfy their own internal standards. I'm talking about everyone from clerks to college presidents. In the "battle" between labor and management the power is always unequal. At most organizing can help equalize the forces, but the firm always has the upper hand.

Even if workers push the costs up this doesn't mean that the company will have a smaller profit. They can always increase prices, especially if their competitors are in the same labor market and face the same pressures. This is why the big three auto makers always ended up with union contracts that looked pretty similar.

Blaming the weak for trying to obtain some rights is an old capitalist trick.

--- Policies not Politics
Daily Landscape

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If you've been following China or know anything about its history, there was nothing shocking about the Chinese Government's decisions. Two more from the Times:

"BEJING, Oct. 11 — China’s Communist Party, devoted in recent years to expanding the economy at any cost, on Wednesday endorsed a new doctrine that puts more emphasis on tackling the severe side effects of unrestrained growth.

The annual meeting of the ruling party’s Central Committee formally adopted President Hu Jintao’s proposal to “build a harmonious socialist society,” a move some analysts said was one of most decisive shifts in the party’s thinking since Deng Xiaoping accelerated the push for high growth rates in the early 1990’s.

The leadership declared that a range of social concerns, including the surging wealth gap, corruption, pollution and access to education and medical care, must be placed on a par with economic growth in party theory and government policy.

“There are many conflicts and problems affecting social harmony,” the Central Committee said in a statement released Wednesday after the close of its four-day planning session. “Our party has to be more proactive in recognizing and dissolving these contradictions.”

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Co-editor of China’s leading intellectual journal, Dushu (Reading), and the author of a four-volume history of Chinese thought, Wang, still in his mid-40’s, has emerged as a central figure among a group of writers and academics known collectively as the New Left. New Left intellectuals advocate a “Chinese alternative” to the neoliberal market economy, one that will guarantee the welfare of the country’s 800 million peasants left behind by recent reforms. And unlike much of China’s dissident class, which grew out of the protests in Tiananmen Square in 1989 and consists largely of human rights and pro-democracy activists, Wang and the New Left view the Communist leadership as a likely force for change. Recent events — the purge of party leaders on anticorruption charges late last month and continuing efforts to curb market excesses — suggest that this view is neither utopian nor paradoxical. Though New Leftists have never directed government policy, their concerns are increasingly amplified by the central leadership."

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