Why Quash China's Labor Reforms?

The pathetic enforcement of China’s labor laws has been instrumental in the success of many American companies manufacturing goods in the communist nation, which has become notorious for embracing raw unregulated capitalism.

But international condemnation of sweatshops and worker abuse has forced Beijing to rethink its laissez faire attitude. In October the central government announced plans to reform its labor law, provoking howls of protest from the American Chamber of Commerce in Shanghai and other business interests. Officials said they would allow industrial unions to do what unions do in the developed world – bargain on behalf of the men and women on the assembly line.

The reaction by individual American corporations has been mixed, according to a study by San Francisco's Business for Social Responsibility, which solicited responses to the proposed legal changes from multinational corporations. BSR, it should be noted, has evolved admirably in recent years from a group that provided fig leaves for its members to a supporter of serious monitoring of human rights and labor standards in the devoloping worlld. .

The results of the survey cited on BSR’s web site include a report on Nike, for example, which has repudiated the Shanghai AmCham for its position on China’s labor law reform. This comes from an ethically-reborn company that was once condemned for sweatsh0p conditions in its apparel factories across Asia.

General Electric is another major company that expressed support for labor reform in China, where BSR and other non-government organizations have advocated strict codes of conduct for U.S. and European businesses on the ground.

But Wal-Mart, one among may companies that has been criticized for unsavory practices in Chinese factories, conspicuously declined to comment. Same with UPS, a maj0r player in the global supply network. Microsoft and Disney, which are heaviliy invested in China, said they had no comment at this time.

The background here is that the violation of human rights and the disregard for principles of decency in labor practices has been rampant since China became the cost-effective manufacturing base for the world. Legitimate labor unions have been denied the fundamental right of assembly and the option of collective bargaining for better wages and conditions in these factories. The only officially sanctified representative of workers has been the All China Federation of Trade Unions, toothless by design and recognized as an organ of the ruling, dissent-crushing Communist Party.

The central government’s current labor law sets internationally accepted standards for overtime, but it is thwarted at the provincial level by local labor bureaus that have been allowed to waive such restrictions to create a business-friendly environment for foreign investors. The result is a widespread practice of abusive marathon work shifts for mostly young women on the factory floors of plants making toys, clothing and electronic gear.

American companies need to face up to the fact that China is starting to get serious about the rule of law. The protest that this may dampen their profits is an unconscionable excuse for opposing progress in the human rights environment of an economic giant that is slowly rediscovering the values of social justice.

#