[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
THE FINANCIAL CRISIS AND THE CHANGING ROLE OF WORKERS IN CHINA
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ROUNDTABLE
before the
CONGRESSIONAL-EXECUTIVE COMMISSION ON CHINA
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
__________
JUNE 19, 2009
__________
Printed for the use of the Congressional-Executive Commission on China
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CO N T E N T S
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Page
Opening statement of Charlotte Oldham-Moore, Staff Director,
Congressional-Executive Commission on China.................... 1
Grob, Douglas, Cochairman's Senior Staff Member, Congressional-
Executive Commission on China.................................. 1
Chang, Leslie T., author of ``Factory Girls'' (Spiegel & Grau,
2008); former China correspondent, The Wall Street Journal..... 3
Munro, Robin, Research Director, China Labour Bulletin........... 6
Ennis, Erin, Vice President, U.S.-China Business Council......... 9
Brown, Jr., Earl V., Labor and Employment Law Counsel and China
Program Director, Solidarity Center, AFL-CIO................... 12
APPENDIX
Prepared Statement
Brown, Jr., Earl V............................................... 30
THE FINANCIAL CRISIS AND THE CHANGING ROLE OF WORKERS IN CHINA
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FRIDAY, JUNE 19, 2009
Congressional-Executive
Commission on China,
Washington, DC.
The roundtable was convened, pursuant to notice, at 10:01
a.m., in room B-318, Rayburn House Office Building, Charlotte
Oldham-Moore, Staff Director, presiding.
Also present: Douglas Grob, Cochairman's Senior Staff
Member, Anna Brettell, and Wenchi Yu Perkins.
OPENING STATEMENT OF CHARLOTTE OLDHAM-MOORE, STAFF DIRECTOR,
CONGRESSIONAL-EXECUTIVE COMMISSION ON CHINA
Ms. Oldham-Moore. Good morning. My name is Charlotte
Oldham-Moore and I'm Staff Director of the Congressional-
Executive Commission on China. We've been holding most of our
events on the Senate side lately, so it is kind of nice to be
over in the House today.
I'm going to turn it over to Douglas Grob, my colleague,
who will take it from here.
STATEMENT OF DOUGLAS GROB, COCHAIRMAN'S SENIOR STAFF MEMBER,
CONGRESSIONAL-EXECUTIVE COMMISSION ON CHINA
Mr. Grob. Well, on behalf of Senator Byron Dorgan, Chairman
of the Congressional-Executive Commission on China and
Representative Sandy Levin, Cochairman of the Commission, I'd
like to thank you very much for attending this morning's
roundtable. This morning's roundtable topic is ``The Financial
Crisis and the Changing Role of Workers in China.'' My
colleague and Staff Director of the Commission, Charlotte
Oldham-Moore, will give brief introductions and then turn it
over to our panelists, who will give brief oral remarks, and
then we will, of course, turn the floor over to you in the
audience for questions.
But, first, let me just give a brief overview of the
questions that we're going to be looking at today. Our
distinguished panel will discuss the impact of the current
financial crisis not only on the rights of workers in China,
but on the lives of workers in China. This presents a very good
opportunity for us to examine the changing role that workers,
including migrant workers, are playing in shaping the future of
economic, legal, and political reform in China.
It is not uncommon these days to examine the financial
crisis by focusing attention on the response of government and
business to changing economic conditions. However, workers in
China, over 170 million of whom are migrant workers, also have
responded, and their response has been structured somewhat
significantly by three major legislative developments that took
effect in China last year: the Labor Contract Law, the
Employment Promotion Law, and the Law on Labor Dispute
Mediation and Arbitration, all of which became effective in
2008. These legislative developments, in part, were the product
of ferment from below, and reflect growing contestation of
labor rights in China. So today we ask whether the contestation
of labor rights in China now creates some space for civil
society, space for the realization of the aspirations of
workers, in a manner somewhat different from the past. We ask
whether, under current conditions, the role that workers,
including migrant workers, play in shaping the future of
economic, legal, and political reform in China is undergoing,
or is likely to undergo, fundamental change.
The question is an important one because, as this
Commission reported last year, workers in China still are not
guaranteed, either in law or in practice, full worker rights in
accordance with international standards. China's laws,
regulations, and governing practices deny workers fundamental
rights, including, but not limited to, the right to organize
into independent unions. So, current developments prompt us to
ask again, does this description still serve as an accurate
description of conditions in China today, and if so, what are
the prospects for change, if any, on the horizon? If not, in
what ways does it not serve as an accurate description?
Now I'd like to turn the floor over to Charlotte Oldham-
Moore to introduce our distinguished panelists.
Ms. Oldham-Moore. Hi. We have an exceptional group of
people here today and will move quickly through the
introductions so we can have as much time as possible for your
questions after the panelists present.
Leslie T. Chang lived in China for a decade as a
correspondent for The Wall Street Journal. Her book, ``Factory
Girls--From Village to City in a Changing China'' was published
last October by Spiegel & Grau, an imprint of Random House, and
was named one of the Notable Books of the Year by the New York
Times. She is a graduate of Harvard University and has worked
as a journalist in the Czech Republic, Hong Kong, and Taiwan.
She now lives in Colorado, so we're quite fortunate to have her
here today.
Robin Munro is the research director for the China Labour
Bulletin. He was recognized internationally for his
groundbreaking book, ``Dangerous Minds,'' which was a study of
the political misuse of psychiatry in China. Dr. Munro has
published numerous other books and articles on human rights and
rule of law in China. From 1989 to 1998, he served as the
principal China researcher for Human Rights Watch, and before
that, a China researcher for
Amnesty International in London. He is currently also a
research associate at the Law Department of London University's
School of Oriental and African Studies. He lives in Hong Kong,
so we are very fortunate to have him today; we've got people
from all points of the compass.
Erin Ennis is vice president of the U.S.-China Business
Council [USCBC] and has served there since May 2005. In that
position she directs USCBC's government affairs and advocacy
work for member companies and overseas USCBC's business
advisory services. Prior to joining USCBC, Ms. Ennis worked for
Kissinger McLarty Associates, the Office of the U.S. Trade
Representative, and former U.S. Senator John Breaux. She's a
native of Louisiana and graduated from Mt. Holyoke and Catholic
University.
Earl Brown, to my far right, is employment law counsel for
the American Center for International Labor Solidarity and has
represented trade unions and employees in U.S. labor law and
civil litigation since 1976. He serves as general counsel to
the International Brotherhood of Teamsters, and was previously
associate general counsel to the United Mine Workers. Brown has
also brought cases before international tribunals under
international labor rights instruments such as the North
American Free Trade Agreement [NAFTA]. He's a graduate of Yale
and University of Virginia Law School.
It's a great pleasure to have all of you here with us
today. I'm going to begin with Leslie. If you could please
begin your opening statement, that would be great. Thank you.
STATEMENT OF LESLIE T. CHANG, AUTHOR OF ``FACTORY GIRLS''
(SPIEGEL & GRAU, 2008); FORMER CHINA CORRESPONDENT, THE WALL
STREET JOURNAL
Ms. Chang. Hi. Thank you very much for having me. I thought
I would start off talking a bit about the research I've done
for my book, ``Factory Girls,'' and some of the discoveries
I've made that have bearing on how migrants are responding to
the economic slowdown.
I first visited Dongguan--which is in Guangdong Province--
in early 2004 as a reporter for The Wall Street Journal. At
that time, most of the major foreign papers had done articles,
or whole series, about the situation of migrant workers. They
generally tended to focus on the abuses and the violations of
the system and some truly horrible experiences that workers had
undergone.
I became curious about what migration might feel like from
a migrant's own point of view, how it felt to come out as a
teenager from a small village to the city, to learn how to make
friends, to learn how to find a job, to date people from
different provinces, to cope with their parents, kind of a more
personal experience of migration than I felt had been covered
to date. In terms of my approach, I tried to be as open-minded
as possible, to not go in with any preconceptions and to just
hang around and see what developed.
One thing I was very clear I did not want to do was to
target newsmakers. When you're a reporter you often hear about
a case of a terrible factory or some terrible things a migrant
has gone through, either from the local Chinese press or from
an activist or someone involved in that field, and then you go
and find that person or that factory and you tell their story.
What I wanted to do was just find ordinary people who were not
headline makers, but might have interesting stories just the
same.
Another thing I tried not to do was to ask too many
questions, which might seem strange as a reporter, but I felt
like often we bring our own ideas into what we think the
migrants are thinking. For example, if you ask a migrant: Do
you dislike the government? They might say, yes, I hate the
government, the officials are awful. But if you spend time with
a migrant and they almost never talk about the government, I
think that says something very telling about what their
priorities are.
So what I tried to do was just hang around and be with the
migrants as they spent time with their friends or hosted a
sister visiting for the weekend. I even went on a migrant blind
date with 11 people, which I think says something about how
hard it is to get a little privacy in China. I also followed
what social scientists might call a longitudinal approach,
which was to spend a long period of time observing changes in
their lives before I wrote anything. In this case, I spent
about two years following two young women.
My overall conclusion was that migrants were very
misunderstood and they were often portrayed as pawns, or
victims, or as sources of social unrest. I felt, in general,
all of these things were not true.
I feel like the language that is used to describe migrants
contributes to this misperception. For example, in the old days
in China they referred to migrants as mangliu, which means
``blind flow,'' which tells you what the urban stereotype of
migrants was, ignorant and aimless, and potentially dangerous.
These days the phrase liudong renkou, which means ``floating
population,'' as many of you know, and even the English phrase,
``migrant,'' I think still suggest a sense of aimlessness and
wandering that I don't think really reflects how the migrants
see their own lives.
The migrants I knew were very resourceful and resilient and
very focused on climbing up the ladder and improving their own
lives. And while migration is definitely a major hardship for
them--many of the migrants said to me, coming to the city is
the hardest thing I've ever done--at the same time, they felt
very proud of what they accomplished, and also saw migration as
an opportunity to improve their lives.
Just quickly, I will talk about a few qualities of migrants
that I thought were especially striking that has some bearing
on how they're coping with the current economic slowdown. One
was just how mobile they were and how comfortable they were
with this extreme mobility. Min, one of the two young women I
write about in my book, held five jobs in two years. This was
pretty standard.
It amazed me that she often quit a job for the flimsiest of
reasons. One time she quit a job because she hated her boss.
Another time she wanted to break up with her boyfriend who
worked in a factory, but she didn't know how to tell him so she
just decided to leave and figured he would find out that way.
I think the point is that being laid off, being between
jobs is something that migrants are very accustomed to. I mean,
it's not like they like it, but that everyone they know has
gone through it. They have gone through it. Being temporarily
laid off or finding another job that's not that great and
moving up again is part of their experience. It's not so much
associated with shame and fear as we might expect.
Another thing that struck me about the migrants was just
how self-reliant they were. That kind of became a point of
pride. You'd often meet people who said, I've done all this by
myself, I never got help from my family or my friends. That's
how they saw their life: I'm going to make it in the city, and
it's up to me and no one is really going to help me. In the
same way, I don't think they expect government help. I don't
think they blame the government in general when things go
wrong.
In this sense I feel that they're quite different from the
earlier generation of workers at state-owned enterprises [SOEs]
who definitely felt like they had a contract with the
government. They would work for this enterprise for their whole
life, and the enterprise, in return, would give them benefits.
I think when this contract was broken, mostly during the 1990s,
a lot of these workers were angry and felt very betrayed. But I
feel like the migrants are quite different. They come from
rural China. The government has never really given them
anything. They don't have any expectations on that front.
Finally, another thing was just how apolitical the migrants
were. I mentioned that in hanging out with these young women,
that politics and government almost never came up. I think, in
general,
migrants are just very pragmatic and they don't really see the
government as helping them, so they don't really want to spend
much time thinking about it.
There is an incident in my book involving the young woman,
Min, that I wrote about. We were having lunch with a couple of
older people from her factory and talking about growing up
under Mao in the 1970s and how hard it was. She turned to me
and she said, ``Who is Mao Zedong, now? I don't even know.''
And I said, ``Hu Jintao.'' And she said, ``Oh, I thought it was
Jiang Zemin.'' I said, ``No, he's already retired.'' She said,
``Oh, I thought Jiang Zemin was dead.''[Laughter].
And then she just said, ``These people are very far away
from me,'' and I think that really captured how, generally, for
the migrants the government is a very abstract thing.
I think when we talk about how Chinese workers are
responding to the global economic crisis all these qualities
come into play. Dongguan is definitely very hard hit; a lot of
factories have closed or fired workers or cut their salaries.
But I think workers are adjusting to hardship and making do
with very little, as they always have.
My impression from talking to migrants who are still there,
my friends there, is that some migrants have gone home and are
holding on to odd jobs close to home until the climate
improves. Some others went back for the lunar year and then
came back out again to try their luck with new jobs. They
definitely tell me they feel the difference on the streets.
There are a lot more people wandering around looking for work,
and there's a lot more petty crime and people try to stay home
if they can.
The women I wrote about specifically are doing pretty well.
Chunming, the older woman I wrote about, just took a job at a
synthetic leather factory, which she feels is more stable, and
she's going to hang out there until things get better. Min, the
other woman I wrote about, recently took a 15-percent pay cut
from her factory, but also signed a two-year contract.
I think her general sense is that short-term there will be
some pain, but long-term her prospects are still good. So, in
general I feel that workers have played a huge role in China's
economic reform and will continue to do so, but I don't see
them playing an equivalent role on the political front at this
point.
Thank you.
Ms. Oldham-Moore. Thank you, Leslie.
Robin Munro.
STATEMENT OF ROBIN MUNRO, RESEARCH DIRECTOR, CHINA LABOUR
BULLETIN
Mr. Munro. Thanks, Charlotte. It's great to be here. Thank
you all for coming, and thanks, Leslie. I actually totally
agree with something that Leslie just said, or an idea she
developed, about China's migrant workers--I think she said two
things, really. One, is that they are very self-reliant, and
another is that they don't blame the government for things that
happen to them. I'd like to kind of try to develop some of the
implications of those two observations, because I think they're
very important.
I think it's so true that Chinese migrant workers have a
very different life experience and background from traditional
urban workers. The urban workers were employed by the state for
decades, had jobs for life, and when they lost all that their
reaction was one of dismay, obviously, but also of going to the
government to seek help: you owe us, come and fix the problem.
So they're in a sort of supplicant position.
But when migrant workers, as happens so much nowadays, of
course, with the economic miracle which has been built on their
toil and sweat, when they encounter abuses--such as not being
paid, getting beaten by factory security staff, or laid off
with no compensation--they don't go and blame the government.
They know who the culprits are: it's the employers.
Now, there are very important implications here for a theme
I want to develop, which is that China now has an emergent
labor movement. It's not the same as 10 years ago, or even 5
years ago, when you just had isolated incidents of worker
protests. Now workers--mostly migrant workers--are on strike in
cities around the country on almost a daily basis. They're
protesting, they're standing up for themselves. They're not
passive, they're very assertive. But they don't couch their
demands in a political way.
I think it's awfully important for the labor movement in
China that this should be so, because the greatest fear of the
Chinese authorities, I think, where workers' issues are
concerned, is that if they're not terribly careful, an
independent labor movement along the lines of Polish Solidarity
will emerge. That fear, I think, has governed a lot of
government policy in this whole area for decades now. It
explains why worker activists were so ruthlessly persecuted for
many years after the start of the reform and the opening
period.
I think the key difference now is that when there are labor
protests, they are not between the workers and the government.
I mean, in Poland, the economy was all state-owned, so when the
Gdansk shipyard workers went on strike in 1980 under Lech
Walesa, who were they targeting their demands and their
complaints at? It was the government. So from the outset, the
Polish labor movement took on a political cast. But that isn't
the case in China, where worker protests are mainly happening
in private enterprises, and it doesn't need to be. This is very
important because when migrant workers have problems they blame
the employer, who is a private actor. It's all happening inside
the civil society sphere.
This means that the government, if it is enlightened, can
stand above the labor relations fray and do what government
should do, and what in our Western societies we're familiar
with, which is to play a constructive facilitating role and
provide the contesting parties--the workers and employers--with
appropriate, effective channels for resolving their disputes,
through arbitration committees, complaint mechanisms, and
courts that are responsive to workers' demands and complaints.
The government comes out looking good. It's not the bad guy.
So again, referring back to the two points Leslie
mentioned: first, migrant workers are not passive, they're very
self-reliant and self-assertive. Probably no official in the
countryside has ever done anything for them, or their families,
in their entire lives. More often, they're the target of
depredations by corrupt local officials. That's been their
experience with officialdom, so they stay away from it, and
away from politics. And, second, unlike many former SOE
workers, they don't blame the government for their workplace
problems, they blame the real authors of their misfortune: the
private employers.
These two factors give a strong basis for hope that the
Chinese labor movement--which as I suggested is now emerging in
a spontaneous, unorganized, uncoordinated way for sure, but
it's nonetheless a de facto movement because it's so
widespread--will develop in a healthy direction and one that's
actually acceptable to, if not welcomed by, the government.
It's something the authorities can maybe live with, and I think
this perception is beginning to sift through at quite senior
levels.
Next, Doug talked about the great progress that was made in
the labor rights field in 2008, with the passage of three
landmark labor laws in one year: the Labor Contract Law, the
Employment Promotion Law, and the Law on Arbitration and
Mediation of Labor Disputes, all of which did strengthen
workers' rights. These laws weren't perfect, there's a lot
still to be done, but they all raised the bar for protection of
workers' rights. But what's crucial to note, in my view, is
that these new laws were essentially a concession by the
government, a positive response to the rising labor unrest and
growing workers' voice in China today.
Also, last year we saw an astounding development, which was
that official circles at quite senior levels, including within
the All-China Federation of Trade Unions [ACFTU]--which of
course is China's sole legally permitted union, but until now
it has shown very few signs of life in terms of actually
protecting workers' rights, especially migrant workers--the
ACFTU came out openly in several parts of the country saying,
we want to try out real collective bargaining.
This has been a no-go area, collective bargaining in China,
for decades because, as I was suggesting, of this nightmare
scenario the government has of organized labor turning into a
huge political threat that will destabilize everything a la
Polish Solidarnosc. So for decades, the authorities have not
been prepared to even countenance any kind of collective
bargaining. But I think the situation now is, as I was
suggesting, that senior levels are recognizing that the labor
movement that's now emerging needn't be a political threat--if
it's addressed intelligently and in the right kind of way.
Above all, I think the official government perception
increasingly is that to resolve this growing tide of labor
unrest--which itself is, of course, the result of several
decades of neglect of social justice issues across the board,
which has produced massive anger, resentment, and discontent at
the grassroots--something fundamentally effective has to be
done, because if it's not, by gosh, these social developments
at the grassroots, if just left to fester, are one day going to
become a major political challenge for the government.
I think probably the leadership has taken a look at Western
Europe, North America, and other places where collective
bargaining has been used for a long time. They found, you know
what? It really does work. It reduces social tension, and it
leads to constructive resolution of friction and conflict in
the workplace, and society becomes more stable. These are the
results of having free collective bargaining between workers
and management as equal partners.
You get an outcome that is ideally a win-win situation: the
employer gets something, and workers get part of what they
want. Collective bargaining produces compromise. It defuses
things. In this sense it can serve the government's goals, the
most preeminent of which these days, of course, is keeping the
ship of state and economy sailing smoothly and not being
deflected or capsized, someday, by a huge wave of
uncontrollable social protests or anger.
At China Labour Bulletin, which my colleague Han Dongfang
founded 14 years ago, we've always tried to be forward-looking
and optimistic. Mao liked to say he was a ``revolutionary
optimist''--geming leguanzhuyizhe--but of course we're not
revolutionary. But we do believe that one must be optimistic
where trying to promote a labor movement in China is concerned.
I mean, it's a massive task, and there aren't going to be any
shortcuts to it.
But I think there are good grounds for seeing the glass as
half full in China, and even given this great setback of the
financial crisis of the last nine months or so, I still think
none of it is going to stop the impetus and dynamic of greater
worker organization, looking for constructive solutions and,
again, the migrant workers who keep on standing up for
themselves. They're not going to lie down. I was going to cite
some examples, but I'll leave those to the discussion. So,
thank you. I'll leave it there.
Ms. Oldham-Moore. Thank you. Thank you, Robin.We are very
honored to have Erin Ennis with us today, and she will speak
about the role of workers from the enterprise perspective.
STATEMENT OF ERIN ENNIS, VICE PRESIDENT, U.S.-CHINA BUSINESS
COUNCIL
Ms. Ennis. Thanks, Charlotte.
I thought what I would do is start off with just a little
perspective on who the U.S.-China Business Council is--so that
you can understand the perspective that I'm bringing to this
conversation.
I want to provide a little context of kind of why U.S.
companies do business in China, since I think there is
frequently very robust discussion in the United States about,
why do companies do business in China, whether that's good or
bad. Then finally, I'm going to come back and talk a little bit
about the impact of the recession and how it has affected
company operations and in terms of how that really affects how
companies deal with their workers.
So at the outset, the U.S.-China Business Council is an
association of over 200 U.S. companies that do business in
China. We represent companies that are in pretty much every
sector--so services, manufacturing, large and small companies,
companies that do work in China, that export to China, and
actually the majority of them now are companies that do
business in China to access China's market.
As a consequence, that gives us a pretty broad scope of
what companies are doing in China. In addition to that, the
Council was founded in 1973, right after relations with China
were normalized. We have had an office in China since 1979,
which was the first time that a foreign office could open for
an association like ours. We hope, as a consequence, our long
history in China in dealing with the Chinese Government and
trying to advocate open flows of trade between the two
countries has given us some respectability on these issues and
we've tried to approach them with a balance, recognizing that
China doesn't do everything right, and frequently they do
things wrong.
When those cases come up, we don't hesitate in speaking to
China about where the problems are. I'll come back to that,
actually, at the end when I talk a little bit about the Labor
Contract Law's development. But at the same time we also feel
the need to talk about where things are going right, and it is
a balance between those two things.
So that's my overview, throwing in what my perspective is.
In general, I would say that when approaching the issue of
companies doing business in China, I like to use the question
that probably many of you are familiar with that frequently
comes up in political campaigns: are you better off now than
you were four years ago? In this case, I think the question is,
are Chinese workers better off with U.S. companies operating in
China or were they better off before they entered? I would
argue that, without a doubt, they're better off.
Our surveys of our companies show that they tend to pay
higher wages, they provide better working conditions, they
offer better benefits, and they generally set a higher standard
that we all would hope would have a broader impact on China's
society over time. And don't forget that these are the
companies that are helping to contribute to the growth of
China's economy that has lifted millions out of poverty, and at
the same time has created more of a market there for exported
U.S. goods.
One of the things that we've learned over our years of
doing business and interacting with the Chinese Government is
you can make more progress in persuading China by demonstrating
to them that changes are in their interests, and that does a
lot better job than trying to pound on the table and demand
change from them. The alternative takes a lot longer, but we
firmly believe that it can work.
So there's three points that I would like to make for you
on companies' operations in China before I move to a little
discussion of the recession. The first point is that U.S.
companies are a positive force in China. They tend to bring
their global employment practices and environmental health and
safety standards, and in most cases these practices exceed what
the local law is, and U.S. companies act as a model for other
companies in that area.
We do a survey of our companies every year, and one of the
questions that we ask them is, are the wages that you pay
below, at, or above what the prevailing wage is in the area,
and do you bring your environmental health and safety standards
to the practices. In last year's survey, 83 percent of our
members reported that they paid above what the prevailing wage
is, and an additional 15 percent said they paid the prevailing
wage. In addition, 91 percent of them reported they bring their
global environmental health and safety standards to their
Chinese facilities.
Let me put that in a little context of what that means. By
bringing their global practices it means that they are
exceeding whatever the minimum requirements are that China's
localities and government have in environmental standards.
China has, no doubt, many substandard labor practices, but
substandard employment and environmental health and safety
practices typically occurred in local enterprises. Sometimes
the enterprise is owned by foreign investors, but very rarely
an enterprise is directly owned by U.S. companies.
We feel the results speak for themselves. A couple of years
ago, Manpower did a survey of Chinese employees and asked them
who they would prefer to work for, a wholly foreign-owned
company or a domestic Chinese company, and 75 percent of them
said they would prefer to work for a wholly foreign-owned
enterprise rather than a joint venture between a foreign
company and a Chinese company or a wholly owned Chinese
company.
Second, the majority of U.S. companies are very sensitive
to labor issues and they take steps to make sure that their
suppliers meet Chinese law. Now, this hopefully should not
surprise you: Most very large corporations have supplier
auditing--very extensive--programs and when problems are found,
they do their best to address them. They work to make sure that
their suppliers come into compliance, and if those efforts
aren't effective, then they end their relationship with that
supplier.
Now, China has a lot of good laws on the books and I
suspect that probably what you'll hear multiple times during
today's discussion is the fact that enforcement is a problem.
That is absolutely the case for many problems of non-compliance
on supplier issues. Better enforcement ultimately is the best
solution for all involved.
Company auditing can help toward that but it is not a
complete solution. They can only be in so many places at so
many times, and problems will continue to surface. When they
do, they need to be addressed directly.
In that, non-governmental organizations [NGOs] have an
important continuing role in improving working conditions in
China. We all gain from a fact-based approach, and if factories
are identified with problems and have failed to comply with the
laws, then they need to be brought into compliance. Companies
need to make sure that those problems don't happen again.
Finally, on just a general overview, I would note that we
believe strongly that China's labor practices are better
because of the presence and influence of U.S. companies, not
worse. It is not perfect. There is a long way to go, but
ultimately U.S. companies, especially those with good track
records here in the United States and elsewhere around the
world, are part of the solution in China rather than part of
the problem.
Now, let me turn for a minute to some of the issues that
the recession has brought up, and one in particular that you've
heard mentioned several times already: the Labor Contract Law.
This is something that I think has been--for those of us that
deal with China's Government and the development of laws and
regulations--probably one of the more heartening developments
of laws. The Labor Contract Law was not fully transparent in
how it was developed, unfortunately. Rather than publishing for
comment various modifications, at least two of the drafts were
given only to a handful of groups and companies and other
interested parties for comment.
But what we saw as it developed were changes that reflected
an interest in balancing the inputs that they actually got on
that law. While we represent companies--we submitted comments
three times on various drafts of the law--we didn't get
everything we wanted. The labor unions, and the ACFTU in
particular, didn't get everything that it wanted in that law.
But what came out was a balanced law that we think provides a
good context for how to move forward and ensures that Chinese
workers are protected and that companies operating in China
have a predictable enforcement in which to operate.
One interesting example of the proof of how the Labor
Contract Law has worked, and it is an unfortunate example but
one to keep in mind. The Labor Contract Law had very specific
provisions of what had to be done if you had to reduce your
workforce, if you had to downsize your factory or close a
factory, for that matter.
What our companies have found when they've been in those
circumstances is that it's actually provided a very convenient
road map of how to have those discussions. There is a very
specific set of criteria that had to be held with local
governments about how this operation is going to be done, very
open and frank discussions about the fact that no company wants
to shut down factories. Obviously, everybody wants to continue
to grow. It's been a very useful implementation.
And the final point that I would make is that the recession
has moved us toward a better balance between how companies and
workers work together. Many of you may have read that prior to
the recession there was a massive labor shortage--probably much
of what Leslie was talking about in terms of employees working,
moving to multiple jobs in very short periods of time was the
fact that there was actually a labor shortage in China. It
meant that workers could go to the highest bidder or find the
best conditions that they wanted, and that was great for
workers.
But the recession has meant, with fewer jobs, that
companies and employees are engaging in very robust discussions
of how to retain the best workers. How do you make a worker
want to stay at your factory if it's a great worker and you
know that you're going to need them as you continue to expand
what your operations are? That is, I think, going to be an
interesting development on how labor contracts continue to
improve and how that labor market continues to develop.
I'll stop there.
Ms. Oldham-Moore. Thank you. Thank you, Erin.
Earl Brown, please.
STATEMENT OF EARL V. BROWN, JR., LABOR AND EMPLOYMENT LAW
COUNSEL AND CHINA PROGRAM DIRECTOR, SOLIDARITY CENTER, AFL-CIO
Mr. Brown. Thank you for having me speak to such a diverse
group of very close and thoughtful China observers, and I hope
to make a contribution if I can.
I work for the Solidarity Center, which is a labor and
human rights non-governmental organization [NGO] of the AFL-
CIO. We have worked in Asia since the 1970s with garment
workers, tobacco workers, plantation workers, and a wide
variety of industrial workers.
My history is as a labor lawyer in the United States for
industrial unions and as a teacher of labor law. I'm going to
try to bring a focused industrial relations perspective here,
and I think that's very different, perhaps, than the ordinary
human rights perspective that we've had thus far. I may be
wrong, but I think it's a different focus. It's not an
abandonment of any position, but it is a focus on the
industrial relations problems at hand.
That is that China has the greatest and most rapidly
assembled working class in the history of mankind; it is simply
breathtaking. If you took a taxicab, like I did several years
ago, around the industrial areas of Guangdong just to look at
the factories, you would begin to appreciate the rapidity and
scale of this industrialization process. The new factories
didn't even have street numbers they were put up so fast. You'd
have to have a cell phone to find out where they were because
they had been built before the streets were named, and to see
masses and masses of workers and contemplate something that has
never happened so quickly, to my knowledge, in history.
It is also, I think, true that it's a rare industrial
society--and I mean an industrial society, not a service worker
society, a society with a huge mass of industrial workers--with
a lot of grievances to sustain itself over a long period of
time without some form of worker voice and representation at
the plant level. There is no way that labor standards and
norms, which are a part of human rights norms--if wages get too
low people can't live, abusive labor conditions are violations
of people's human dignity--can be enforced by labor ministries,
by professors, by sociologists, or any other group. They can
only be enforced by an institution that acts as an agent of
workers at the plant level, on the spot, where and when the
violation is occurring.
Witness mine workers. Mine workers in China that are three
miles underground in the mines at Liaoning Province where you
travel one kilometer down and two kilometers out do not have
access to any lawyer, academic, government official if there's
an imminent danger. They have to have an institution and a
right and a confidence in their right to remove themselves from
the dangerous situation.
So I think that what I'm proposing is the need for
industrial relations--the continuous negotiation of standards
by representative institutions of the workers, and of the
employers. There's a sequencing problem. There's an institution
that calls itself a union but has no presence at the plant
level, to speak of, in the private sector, this huge, massive
private sector. The question is: what's going to happen with
that institution that is not adapted to private sector labor
relations?
Now, I don't think anyone knows exactly the ramifications
of the downturn, but let me just talk today about some other
segments of the working class in China. We are all familiar
with the plight of migrant workers' environment and of other
light industrial sector workers in export factories, but there
are also a lot of skilled workers, a lot of high-tech workers,
a lot of young urban workers entering the workforce, seeking
jobs. There are taxicab drivers, there are pilots, there are
dock workers. There are all kinds of other workers that are
also involved in labor disputes as well. These workers are
spontaneously using the new Chinese labor law to improve their
situation and are seeking to bargain with employers.
We had a case of workers--I'm not going to describe them,
but they have reached out on their own to the Danish union that
represents the workers at the Danish employer's facility in
Denmark. It's a very creative act of workers. They are seeking
to assert standards. Unions that are responsive to their
constituents are one important mechanism for enforcing
standards, I think along with strict law enforcement that is
going to be the future of industrial relations. But we don't
yet know the full impact of the economic downturn.
One of the major factors we've talked about is the 2008
contract law. It has assigned many bargaining functions, many
plant-level representation functions, to a union that is
institutionally, as I said, absent and otherwise not equipped
structurally.
It doesn't have employer-specific research--it doesn't have
bargaining expertise, it doesn't have skill and grievance
handling and mediation. It's a sign some of those function in a
very skeletal, undeveloped form to this union. The question is,
can the union step up to the plate? If not, what groups will
emerge to take advantage of that space?
I just want to suggest that one of the functions, one of
the great things the international labor movement can do better
than any other group, is assist pro-worker voices in China, in
the union, with policymakers, in their legal aid societies, to
begin this industrial relations function, to begin to work to
help and partner with Chinese counterparts on bargaining skills
and to begin to bargain so that you can have the bargaining.
You might even have the bargaining before you have the perfect
institution to do the bargaining. Imagine what would happen if
you actually had the most minimalistic form of bargaining; for
example: imagine miners were able to obtain a 0.5-percent wage
increase throughout China, or one small sector of one industry
in Guangdong Province was able to get some minimal wage
increase. How many millions of workers would be directly
affected and how many other workers would watch that bargaining
and seek to replicate bargaining in their factory or sectors?
Under Article 41 of the 2008 Labor Contract Law there is
bargaining going on now about layoffs. The union must get, now,
notice of every layoff and has bargained for reduced salaries
and furloughs versus unilateral mass layoffs. In the United
States, employers can unilaterally discharge. In China, they
have to negotiate in some manner. This is incipient
negotiation, this is very inchoate, but it's the beginning of
negotiation. I think this is where a focus on industrial
relations and the skills of the international labor movement
can actually contribute to improving industrial relations in
China if done appropriately and with a sense of equality and
mutual respect, and not for extraneous agendas.
Thank you.
[The prepared statement of Mr. Brown appears in the
appendix.]
Ms. Oldham-Moore. Thank you, Earl.
We have an extraordinary group of people with us today who
have an immense wealth of experience. At this stage in the
proceedings we will turn to the audience to pose questions.
There will be an official transcript, that will be published on
our Web site.
So when you stand and offer your question, please feel free
to offer your professional identification and your name, of
course. But if you don't want your name to be listed in the
transcript that will later become a public document, just let
us know.
So let's now turn to the audience. Our first question is
from Anna Brettell.
Ms. Brettell. Hi. I'm Anna Brettell from the Congressional-
Executive Commission on China. My question relates to strikes
in China. I am just curious if strikes are still illegal in
China and if there are these strikes, as Robin pointed out, on
a daily basis, then what happens to the strikers? Are they
treated differently now than they were maybe 10 years ago?
Ms. Oldham-Moore. Who are you directing this to?
Ms. Brettell. It could really be directed to anyone who
wishes to answer, but I'd like to hear from at least Robin and
Earl.
Ms. Oldham-Moore. Robin, then Earl.
Mr. Munro. The question was, how is the government dealing
with striking workers?
Ms. Brettell. Basically, are strikes still illegal and what
happens to the strikers? Are they treated differently now than
they were 10 years ago? So, it's three parts.
Mr. Munro. Okay. As I mentioned in my talk earlier, I think
the government's reaction, and local police authorities'
reaction to incidents of labor unrest has changed significantly
over the last, certainly, 20 years, and even within the last 5
years. In the old days, including the 1990s, any effort by
workers to stage protests, to organize unofficial campaigns
against bad conditions in a factory just triggered all of these
paranoid reactions from the authorities, who would tend to
label them as politically subversive elements, and they'd be
arrested and sent to jail.
I'll give an example. In 1999, a labor lawyer in Baotou in
Inner Mongolia, named Xu Jian--a man of the people, he worked
for himself, a self-trained lawyer--was very committed to
representing workers in court who were involved in labor
disputes. He had a law office there, and because he was in
contact with so-called ``overseas hostile forces,'' meaning
foreign NGOs and the like, he was arrested and charged with
``subverting state power,'' the most serious charge in the
Criminal Law, and was sentenced to four years in prison. He was
brutally beaten, often starved, and made to serve his entire
four-year sentence.
Now, that was 10 years ago. The same kind of thing was
happening in the early 2000s. Overall, I think what's changed
nowadays is that the sheer scale of worker activity has become
so great--with workers carrying on strikes or mass protests
almost every day in cities around the country--that it would be
politically untenable for the government to continue to see all
these incidents as politically motivated challenges against the
government. It would be ludicrous. It's obvious they're not.
Overall, the government realizes that these events are driven
by real livelihood issues on the workers' part: they're under
pressure, and in many cases their backs are against the wall,
because their wages are so low and some of them haven't been
paid for six months, for goodness sake. How can you live that
way? So you protest. The government realizes this, and so it
stops, by and large, arresting them.
So there's this recognition that worker protest is not
inherently a political threat. At the same time, I think the
authorities are very aware that if they're not very careful, if
they overreact with police suppression to what are just
livelihood-based issues, then they will make things much worse.
So, there's also an anxiety on the government's part not to
inflame an already volatile situation.
What we find nowadays, more often than not, is that if
there's a big enough protest going on, local governments will
probably intervene and try to negotiate a settlement that will
probably benefit both sides in the end. And workers know this
and they actively play this game, even though protests are
banned, technically. This is the kind of dynamic we're
increasingly seeing now. Again, it's quite hopeful, I think.
But of course, there are notable exceptions. I'm not trying
to suggest that repression in China is really easing up
fundamentally. Certainly, the more high-profile cases involving
political dissent, overtly human rights-related law cases, and
lawyers representing the victims, these are the kind of people
who are still A-1 targets for repression and who often do still
go to jail. So overall, it's a mixed picture.
Ms. Oldham-Moore. Okay. Earl?
Mr. Brown. Well, I think I agree with Robin. There is less
of a--but I want to recount a discussion I had with a Chinese
labor lawyer who was shocked to learn that comparatively under
U.S. labor law the right to strike is not a constitutional
status and that in the United States, many strikers are
arrested. He and I went through the history of it, and he said,
``Oh, you mean when the strike becomes effective on the
employer it becomes illegal? ''
I said, that would be a fair, practical summary of the law
of the United States, which also leaves people in the United
States, as we speak right now with the few strikes we're
having, do get thrown into jail and do get put in jail for
civil contempt for 18 months without a right to jury trial. So
I think you have to have a comparative perspective on what
happens.
I think there is an unholy alliance around the world
between local government and local employers to use the
criminal law to criminalize industrial disputes and to bring
out the police to whack people on the head and get them back to
work and suppress the dispute. I think that was the standard
operating procedure in China. I think there has been a retreat
from that.
But I think, as Robin says, off the stage in quiet places,
strikers are getting thrown in the pokey and beaten up and hit
and everything else. We have a partner right now that is under
a lot of pressure strictly through the facts of both employer
and local government. I think this is the bond between law
enforcement, local government, and the local branch of the
ACFTU. There can often be very detrimental alliances for
workers.
However, the Party is realizing that with this scale of
striking, you can't use the billy club to solve it and has
issued a directive to the Party officials, which I thought was
great, saying get out from your desk and get out there from
hiding behind the police and solve the problem. So, I think
that's a hopeful trend.
Ms. Oldham-Moore. Okay. Thank you.
Robin? Twenty seconds, you said.
Mr. Munro. Yes. I'll just quickly mention one item. China
Labour Bulletin has a large project in China called the Labor
Rights Litigation Project, through which we bring workers and
lawyers together and provide pro bono assistance in the form of
lawyers' fees, so the workers can sue abusive employers.
Under that broad heading we also have the Criminal Defense
Project, which is expressly designed so that we can provide
defense lawyers to worker activists who get arrested in the
line of union duty, or union-type duty. They are mostly workers
who have organized protests, or people identified by the
government as ringleaders of disputes that have been met with
repression. We are
actively providing lawyers and legal assistance to a number of
workers in that situation right now who are in detention.
Ms. Oldham-Moore. Great. Thank you.
We have a lot of people who want to ask questions, so
please direct your question to one person. The lady in the
first row, please, and then Mary.
Ms. Kwang. Orinne Kwang, Center for Diplomacy and
Democracy. I was wondering whether--one person? I'm going to
say Leslie, because you've interviewed a lot of people. In the
non-worker community, because when this migrant migration
started, the urban dwellers always looked at them as trouble,
or the crime rate goes up. So what is the situation now? If we
have an opportunity to educate the non-worker community,
especially those ones who are influential, for example,
bloggers, what kind of activity would you recommend to expose
them or help them with their impression or support for the
worker community? Thank you.
Ms. Chang. Yes. I do find that it has improved over the
years. I think the government is actually part of it, because
in the 1990s you would often read stories in the paper, the
government-influenced or controlled newspapers, noting that
crime was high in the city in Shanghai or Beijing because of
the migrant population.
But I think starting around 2002 or 2003, the government
made a pretty concerted effort to acknowledge that migrants
actually have made a huge contribution to the economic growth
of the country and we should start protecting them more, and we
started seeing laws coming out saying migrant children should
be able to go to school in the city, and all sorts of things.
Again, enforcement is the issue, but I think the general
mindset has shifted.
In terms of average people in the cities, I feel like there
is still a certain condescension and misunderstanding toward
the migrants. For example, one of the two women I wrote about,
Chunming, started off as an assembly line worker, and then over
the years she became a salesperson and kind of a proto-middle-
class type worker.
One time she was walking down the street with one of her
friends who is a nurse, so in a similar class as Chunming but
more educated, and they were passing a place where there were a
lot of migrant workers who were eating snacks and singing
karaoke. This nurse turned to me and said, ``Oh, look at the
poor migrant workers. Their lives are so terrible. You give
them just a little snack and they're happy, because they're so
desperate.'' I was standing next to Chunming and she didn't say
anything, even though she should know better, coming from this
world.
So I think there's this automatic kind of condescension and
pity that urban people have for rural people and migrants and
you see that a lot in the Chinese press as well. The articles
tend to be, look at these poor migrants, we should help them. I
think the instinct might be good, but the attitude is very
disrespectful. In terms of what we can do, if you can reach
bloggers and reporters and get them to try to spend a bit more
time really understanding how migrants operate and what their
lives are like, I think that would make a difference. I think
the problem is, most people in urban China who have worked and
clawed their way into comfortable positions do not like to
spend a lot of time in local factory towns or in villages. I
felt that even among a lot of scholars who were supposedly
studying migrants, they really liked to spend most of their
time in Beijing in nice offices and in academic departments.
Ms. Oldham-Moore. Thank you.
Mary Gallagher, please?
Ms. Gallagher. I have two questions, but they're for two
separate people.
I have a question, I think, for Leslie, first. I think
there's sort of this juncture between some of the things that
Leslie said and some of the things that Robin and Earl said,
particularly in terms of this idea that there's an emerging
labor movement that is heavily concentrated in the migrants.
So what I want to ask, and maybe if Leslie would answer it,
or somebody else, is maybe what we need to do to figure this
out, is there an emerging labor market or is, perhaps,
migrants--apolitical and very self-reliant is to break migrants
down more and to talk about what are the differences within the
migrant population and where we might see variation.
I know your remarks focused on women. So is there a
gender--what makes migrants--not necessarily--government--
active. My own impression would be perhaps that it has to do
with how long they stay in the city and how stable they might
feel, and then that--interests in their political life, their
social welfare, activate them.
So the second question is for Erin, and it's about the
labor contract law debate and about the role of the foreign
business associations. I think that was a really interesting
debate and I think it was really, like you said, heartening in
the sense that it was relatively transparent, relatively
participatory.
I think the problem for foreign business associations is
that you did the work for all employers in China, at least
publicly, and in a sense we're blamed for that in the media.
I'm wondering what your impression is in going forward. Does
the U.S.-China Business Council want to continue to take that
role very publicly, or in the next round where there's a law
that you have a big stake in, will you also perhaps go through
the back door like a lot of Chinese employers do?
Ms. Oldham-Moore. Both of those questions get to get
answered. Okay. Thank you. Leslie.
Ms. Chang. Yes. I guess it sounds like there's a natural
conflict between what I'm saying and what Robin was saying. I
think my approach was just that--I felt people were maybe
getting the wrong impression that every worker is on the edge
of unrest and protest. Once something goes wrong, they're out
on the street. I felt like, by focusing on a few so-called
``ordinary'' people who were not activists or organizers, that
that would convey a very different impression.
But definitely, there are protests all the time in cities
all over China. In fact, when I was in Dongguan I saw some
small-scale protests on all sorts of issues. Again, as Robin
was saying, there isn't one kind of over-arching political
grievance, but it's more like, we didn't get paid, or they're
favoring local people over migrants, all sorts of nitty-gritty
issues.
In terms of how to identify the migrants who are moved to
protest versus those less likely to do so, maybe others have
done more studies on this. I do think that young women may be
less likely to protest than, say, 45-year-old men, just because
they feel like they're very vulnerable and therefore their
focus is all the more on their own personal situation.
Ms. Oldham-Moore. Erin, please.
Ms. Ennis. Thanks for the question. I'll be honest with
you, we are big fans of transparency. One of the things that
makes it possible to do business is knowing what your operating
environment is going to be like. The advantage to transparency
and having more and more laws out for comment, is the goals
that are set out. So while I think we probably did do a lot of
work for others who might have been potentially working to try
to make it a less stringent law behind the scenes, our approach
to it was, we have to represent the interests of U.S.
companies. We try to do everything as close to the United
States' legal standards as we possibly can because it's a
predictable business environment that companies like.
The issue of transparency itself is one that we take
seriously. For those of you who follow China a little more
broadly, the end of 2007, I believe it was, beginning of 2008,
China had put out several directives on mandating transparency
from the central government, mandating that laws be put out for
comment.
Then it was modified in 2008 as well to mandate for the
state council that laws not only had to be put for comment on
the central Web site, but they had to be out for 30 days so
that you could actually comment on them. What had happened in
the intervening years, is rules would be put out for comment
for two weeks or so. If you're dealing with something as
detailed as a patent law that's 300 pages, how do you ever come
up with a full set of comments in that period of time?
The implementation of even a state council directive on
this has been spotty. Some things have come out for comment,
others have not. We comment on as many as we possibly can, if
for no other reason than to encourage the government to
continue to put these out for comment and to recognize that at
the end what it's going to get is constructive input that is
designed to enhance what they are trying to do--as in the case
of the Labor Contract Law--rather than trying to stop them from
putting out anything. So, we'll keep at it and there are others
trying as well.
Ms. Oldham-Moore. Thank you, Erin.
Mr. Bork.
Mr. Bork. My name is Thomas Bork and I'm with America's
Development Foundation. I have a question about the
urbanization that's going on. China is going through a fast
mobilization of the rural people into the urban centers, with
creating new cities in several provinces. How is this going to
impact migrant workers in Hebei, Liaoning, and also Hunan
Provinces? They have some big projects being financed by the
Asian Development Bank and things--so they're taking huge areas
in a rural area, bringing people into the cities.
Ms. Oldham-Moore. Okay.
Mr. Bork. It's like--for lack of water, a lot of the cities
tripled in size over the last few years. How will this impact?
Ms. Oldham-Moore. Okay. Who would like to take that?
Ms. Ennis. I'll take a crack at it. I don't know that I can
necessarily speak to how it affects migrant workers because I
can only talk about companies. Just to put this in a little bit
of perspective, China ranks its cities and they do it in tiers,
a first-tier city--the ones that are on the Pacific Coast--and
then on down as you go to the interior. They have had programs
for the past few years trying to get companies to invest in
third-tier cities, fourth-tier cities, fifth-tier cities.
You're getting further and further into the interior--we're
still talking about cities with over a million people. We're
not talking about small towns necessarily where companies are
not going to be able to find a workforce, but definitely
difficulties up until recently in infrastructure problems in
getting companies out there.
So I think the number one challenge from a company
perspective is, while China is very interested in dealing with
kind of developing more cities, creating more jobs, the further
you get from an infrastructure system where a company can
produce a product and distribute it within China itself, it
becomes a little more difficult the further you get away from
where the heart of that system is. Companies are going to be
looking at, number one, ways they can get a product to market,
and number two, if they have the workforce that's going to be
able to get to where they are and to be able to function in a
modern factory. So, just some considerations on the company
perspective. I'm sure there are other comments on the migrant
aspect.
Ms. Oldham-Moore. Thank you, Erin.
Robin wants to comment, briefly.
Mr. Munro. Yes. A few thoughts on that interesting
question. To the extent that the kinds of cities you're talking
about are coming out of nowhere, which is basically the case,
the population is all
migrant workers, apart from the professionals who come there to
provide high-level services. They're basically migrant worker
towns--or as Erin says, cities, large ones. Dongguan is a great
example of this, where Leslie spent so much of her research
time with workers.
In these situations, the established discourse from
previous decades on migrant workers becomes irrelevant. That
discourse says that market workers are out-of-towners, that
they have conflicts with the majority, the established urban
population. That problem clearly doesn't exist, so there's kind
of a fresh-start element here.
In fact, in many cities now, as part of the overall effort
by the authorities to raise the profile and public image of
migrant workers, the local government is promoting terms like
``new urbanites''--xin shimin--as a new name for migrant
workers, which is much more respectful, and also acknowledges
that they're here to stay, they are a new immigrant population
and therefore deserve some new rights. Names are very
important, especially in China--Confucius and the
``rectification of names,'' et cetera.
So there are some positive things, but I think these new
cities are also a huge challenge administratively and fiscally
for the government, because the old arguments--they're out-of-
towners and the city has to use its resources for the
established population, and so forth--against providing migrant
workers with full social welfare services, access to subsidized
medical care in the cities, subsidized health and education for
their children, are simply no longer valid.
But so far I think what we've seen is that, rather than the
government saying, well, the whole population is made up of
migrant workers, therefore we have to give them all the social
services and welfare that urbanites in other cities enjoy--the
example of Dongguan and other new cities shows that they just
don't do that. It's a city of over 10 million, nearly all
migrant workers, and they still have very little in the way of
social services. So I think a real shift of vision is needed
from the government on this issue quite urgently.
Ms. Oldham-Moore. Thank you.
Yes, sir?
Mr. Ostwick. Yes. I have a question actually for Mr. Brown.
My name is Peter Ostwick. I'm an intern in Senator Sherrod
Brown's office. I'd like to thank the panel for their work in
China. I think you guys are doing a great job with your
inspirational work.
Mr. Brown, how do you think--my Senator is from Ohio, and
we're representing Ohio. How do you think that opening auto
industries in China would benefit workers in Ohio?
Ms. Oldham-Moore. That's a great question. This gentleman
from Ohio asked, how does opening auto industries in China
benefit Ohio constituents.
Mr. Ostwick. Ohio, and auto industries in general.
Ms. Oldham-Moore. Okay. Go for it. Are you running for
Congress now? [Laughter].
Mr. Brown. I am a great admirer of Senator Brown.
Ms. Oldham-Moore. Yes. He's wonderful. He's a commissioner.
Mr. Brown. I do not think that--one of the problems posed,
and this is why I argue from an industrial relations
perspective and I argue for bargaining and I argue for an
actual labor movement approach to China, adapted to China's
circumstances, is to stop the race to the bottom. I think we
have in this country--since you asked the question, we have one
of the few countries in the world without an industrial policy
and we shift our manufacture overseas.
I don't think it helps American workers to take American
work to China and produce it at a lower labor cost. I think it
is the very definition of a race to the bottom. I think it is
part of the reason that the world economy is unbalanced. I
don't think we stop that alone with human rights interpositions
from outside. I think we need an agency in China to improve
wages, hours, and working conditions.
Everybody says, to that answer, well, call me in the next
century. My answer to that is, if you had been in Shenzin in
1980 and worked with the 30,000 fishermen in the fishing
village there, and you went there now to see the fishermen--who
knows, 10, 12, 13 million, you would have said that was not
possible in 30 years. China has accelerated labor contract law
and can be, as Robin has said, with appropriate investor
relations focus, the beginning of the--race to the bottom.
If I could just say, one of the things--this is a somewhat
complex question. That is that I'm not advocating that anyone
give up their position or their trade remedies that American
workers receive. I do think we have to be careful not to blame
Chinese workers for this crisis. I think we have to make
distinctions between, what is taking American jobs and what is
opening up jobs that are for the Chinese market, which is a
hugely developing market. There will probably be, no matter
what anyone says, production in China to do that. But I think
that American workers and Chinese workers have common problems
and should work mutually to solve them for everyone.
Mr. Ostwick. I'm going to refer to that other question of,
what are Chinese workers doing from--people like yourself are
focusing on human rights in China, labor conditions, and that's
wonderful. But what are the Chinese workers doing for us over
here?
Mr. Brown. What do you mean by----
Ms. Oldham-Moore. His question was, what are Chinese
workers doing for us here in the United States?
Mr. Ostwick. Right.
Ms. Oldham-Moore. That's a huge question. Would you like to
take that, Robin? You're very smart.
Mr. Munro. Okay. Let me be provocative here.
Ms. Oldham-Moore. Yes. You can say it and we'll throw
tomatoes.
Mr. Munro. I think it's an unfair question, to be honest:
what are Chinese workers doing for workers here in the West?
Actually, they have quite enough problems of their own right
now. I mean, it's notoriously difficult to get workers
anywhere, even in developed countries, to cooperate in any kind
of cross-border solidarity action. It very rarely happens. The
American Center for International Labor Solidarity [ACILS], I'm
sure, know this very well, working in the area of international
labor solidarity. Workers have to deal with the situation and
the problems in the place where they're living. Chinese workers
are confronting not just their employers, but sometimes also
the local government. It's asking too much of a labor movement,
even in a highly developed country, to spend a lot of time
worrying about workers in other countries, to be honest. I
think that's the short answer, and particularly in China, where
the labor movement is still so underdeveloped.
I'd also like to return briefly to an earlier point: I
don't actually think there's any kind of conflict or
contradiction between what Leslie was saying and what I'm
saying. I'm not trying to argue, when I say there's an emerging
labor movement in China, that workers are all on the move now
and becoming ever more militant and challenging. But then,
that's hardly the case in any country. Here in America, what is
it: 14, 15 percent of the workforce is unionized? That's all?
But no one would say that America doesn't have a labor
movement. Indeed, it has a strong one--one that wants to be a
lot stronger, but it's certainly there, no question.
What I'm saying is there are now significant numbers of
workers in China who are fighting back and standing up for
their rights all over the country. We're now able to say,
whereas 10 or 15 years ago there was a dismal void where worker
action and solidarity was concerned, that's no longer the case.
There is something happening. It's definite and it's a reality.
I also believe that political history tends to be made by
minorities anyway.
If you have an entire workforce on the move and being
militant, it probably means you have either fascism or
revolutionary Communism. Those tend to be the only two forces
that can achieve such a result, and I don't think anyone here
wants that. So we're talking about a minority of workers in
China, but a significant and important minority. That's what I
mean by the emerging labor movement, and I would also
characterize it as being at a ``pre-union'' stage of
development.
Ms. Oldham-Moore. Earl wants to make a quick comment, and
then the young woman with the stripes is next.
Mr. Brown. There are concrete examples of joint action
between Chinese workers, Asian workers, and people in that
labor market--it's not just China--that I'm happy to talk to
you about off the record.
Mr. Ostwick. All right.
Ms. Oldham-Moore. Earl and the gentleman from Ohio will
have a tet-a-tet up here. Okay.
Ms. Guthner. Hi. I'm Carol Ann Guthner. I'm from the State
Department. This is a question to Leslie. I was wondering what
you think the implications are of the Chinese Government
relaxing and changing the hukou system for workers you
observed, and kind of all workers.
Ms. Chang. Yes. I think it's different in different places,
as with so many things in China. Where I reported in Dongguan,
which, as Robin said, was almost all migrants and very few
local residents, I didn't find the hukou to be much of an issue
because almost everyone in the city is an outsider. I actually
spent six months in Dongguan before I met my first local
Dongguan person.
Ms. Oldham-Moore. Leslie, may I interrupt?
Ms. Chang. Yes?
Ms. Oldham-Moore. Just define the term ``hukou'' for our
non-China experts.
Ms. Chang. Oh, I'm sorry. Yes. The hukou refers to the
household registration system. When someone is born they're
issued a document that identifies what place they're attached
to based on, I think, where their mother lives. In the old
days, this meant that even if a migrant went to a city, he or
she would not have any benefits and would always be a second-
class citizen and suffer a lot of discrimination.
But in a place like Dongguan, because there's no sense that
there is that much of a local population, the hukou was not
really an issue for migrants. They would come to the city, find
a job at a factory, and then be paid their wages and just focus
on personal issues. I did get to know some couples who had
lived there much longer and eventually bought apartments. I
knew one migrant couple who had lived in the city about 10
years and were able to buy a local apartment, and then also to
buy a local hukou registration, so that when their daughter
entered elementary school she would be able to be registered.
So I feel like in a place like Dongguan things sort of
evolve as they go and people figure out solutions by the time
they have to. In a place like Beijing or Shanghai where there's
a very strong local population with a relatively small number
of migrants, there might be more issues for migrants. They
still feel very much discriminated against, can't get certain
jobs, and their kids can't go to good schools. But I think,
again, that is also changing. The government has policies in
the smaller cities now that allow people to move there from the
countryside and apply legally for local hukou registration. It
seems that eventually these moves will get to the big cities as
well.
Ms. Oldham-Moore. Thank you, Leslie. I want to encourage
the audience to visit our Web site. We have a lot on the
household registration system and hukou reform. Wenchi Yu
Perkins, of our staff, has done a great deal of work on that,
and she's right there if you want to talk to her after the
event.
Ms. Seger. Hi. My name is Kayla Seger. I'm an intern for
Senator Max Baucus. I had a question more about the Olympics
and how that has impacted migrant workers. This is more
directed toward Leslie. Sorry about all the migrant worker
questions. But I just returned recently from China, and I lived
in Beijing.
A lot of times, while they were preparing for the Olympics,
they would absorb workers into the workforce who would do
things like paint the sidewalks green to make it look like
there was grass, plant trees for 100 meters on each side of
Xingchao Mu, which is the big highway there, in order to kind
of put out this impression that China was urbanizing and
developing, but also becoming green.
So my question is more, how do these people who were
absorbed into these roles, especially during the Olympics, how
are they impacted by the recession, but more so, is the
government helping them to get jobs now that the Olympics are
over, and how is that carrying on long term----
Ms. Oldham-Moore. That's a good question.
Ms. Chang. Yes. Thanks for your question. I don't know
specifically whether the government had any policies for this
group of people. I would say, in general, the government isn't
doing that much for these migrant workers. Again, I think the
migrants just figure things out on their own. In terms of all
the building that went on surrounding the Olympics, I think the
migrants came and realized there was a huge opportunity,
especially for the young men who work in the construction
trades, and realized that we're going to have six months of
really good work and then it's going to be finished.
So they know all these things. They know all the
information they need to know about employment in terms of
their own interests, and then when the time comes and the job
is finished, then they might hear of another job in another
place or hear of something else closer to home. So again, I
just feel like they're very fluid and they just operate the way
they always have, which is just to hear about work and pursue
leads as they go.
Ms. Oldham-Moore. Okay. Thank you. The last two questions:
the gentleman there in the black shirt, and then Wenchi. Thank
you.
Mr. Osh. My name is Tyler Osh. I'm here on behalf of the
U.S.-Asia Institute. I have a question for Mr. Munro about the
development of the rule of law in China.
It's been mentioned that labor rights legislation has been
developing, but just because there's legislation, that doesn't
mean it's actually going to be put to use. This is true for
industrial societies, especially in the Korean labor movement.
So I am just wondering, you mentioned the litigator program or
project, right?
Mr. Munro. Yes.
Mr. Osh. And I'm just wondering, how much do workers
understand their rights via this new legislation, and how do
you create a space in which they can learn more about these
rights so that they know they have the right to be----
Mr. Munro. Thanks. A very good question. Well, I think to
begin with, the first part of the answer is that migrant
workers in China increasingly do know that there are laws that
protect them. Now, I think most citizens, even in economically
developed countries, including well-educated people, are not
going to be experts in laws. They need a lawyer to explain the
details to them.
But the awareness is sufficient if you know there are laws
that protect you and you have a rough idea that employers
should not be allowed to do X, Y, and Z to you. They shouldn't
be allowed to withhold your wages indefinitely, or at all, and
they also shouldn't be allowed to expose you to toxic
chemicals, for example. They should give you a safe working
environment. You should be entitled not to have to do forced,
compulsory overtime to ludicrous levels such as 13-, 14-hour or
even longer days. China's migrant workers know quite enough in
this general area to know that they have rights. As you've
suggested, the main problem with the new labor laws is there is
no real will on the part of local authorities to enforce them,
as Erin was saying. This is the big problem. There are lots of
reasons why that is.
The central government, by the way, even following the
impact of the economic crisis, which you would have expected
perhaps to lead to a backtracking and soft-pedaling of these
new laws, in the interest of keeping enterprises viable and
avoiding anything that might make the economy even worse--
they're not doing that.
The central government is sticking to the line that these
are vital laws, they must be enforced. I think this reflects
the leadership's keen awareness that unless they do something
genuinely effective to halt the steady increase in labor
protests, they're going to have a political problem, a
stability problem in the country.
The central government, by and large, is committed to these
laws. It is local governments that do not enforce them, and
there are several reasons. One is that local authorities are
afraid if they enforce the labor standards and law, they'll
scare away investors. They'll go to the neighboring county or
city--their competitors--and they don't want that. That's a big
problem.
Another is that there's not enough labor inspectors. In
fact there are pitifully few of them under the local labor
agencies. It's just a massively under-funded, under-valued area
of the administration in China. I think, Mary, you probably
know this better than I do. In the whole of Shenzhen, where
there are tens of thousands of factories, there's only a small
handful of labor inspectors. How can they enforce the law?
Also, the inspectors are not paid enough, so they're
vulnerable or susceptible to bribery by employers. They come in
to inspect a factory and the owner will say, ``By the way,
there's a package there, feel free to take it away when you
leave; no need to open it, you know what it is.'' All these
things make enforcing the labor laws a big problem.
But what is crucial, though, is that even after the
economic crisis began, workers themselves have not been scared
off or discouraged from bringing labor dispute cases into the
courts or to the labor arbitration committees--the
administrative bodies that workers, by and large, have to go
through first before they can sue, if suing is necessary.
The figures from the government show this. In 2008, after
the Labor Contract Law was brought in, there was a 98 percent
increase in registered labor disputes over the previous year.
Of course, the financial crisis only began last autumn, really.
But hey, the latest figures show that for the first three
months of this year, labor dispute cases have risen at a
similar, or even higher rate than last year. So clearly workers
are not being discouraged. They know their rights and they want
to have them enforced.
What they don't have is proper legal advice and
representation. The cost of hiring a lawyer usually outstrips
what migrant workers can afford. Last year China Labour
Bulletin adopted, through our Labor Rights Litigation Project,
around 600 new labor dispute cases, and over half of them
eventually had to go to the court litigation stage. In our
experience, the average cost for a migrant worker to hire a
lawyer--covering labor arbitration, first trial, and often also
an appeal hearing--is about 5,000 yuan, which can be at least
three months' total salary for many workers. An impossible
amount. So they need access to legal aid, but it's just not
available. There's huge overall demand from workers seeking
redress and compensation from employers, but they mostly can't
afford to make use of the available legal channels.
Ms. Oldham-Moore. Thank you, Robin.
Very briefly, Erin. Then we'll go to Wenchi for the last
question.
Ms. Ennis. I just want to pick up on one quick point that
Robin had made, and that was at the beginning of this year, as
the recession was really starting to take place, we started
hearing noises that some companies, and particularly some
provincial governors, were potentially trying to go to Beijing
to suspend implementation of a labor contract law. Our
recommendation to the Chinese Government at the time was that
that was the absolute wrong thing to do. The reason why you
have a labor contract law is to guarantee that workers and
companies have a predictable environment.
It shouldn't be based on what the economy is. And if you
want to avoid something like what Earl has suggested, a race to
the bottom, then you suspend your laws that protect workers and
companies, so they know the playing field, at a time just
because the economy isn't doing well. We've been very pleased
that the law has not been suspended.
Ms. Oldham-Moore. Thank you, Erin.
Wenchi Perkins, please.
Ms. Perkins. I'm from the Congressional-Executive
Commission on China. My question is for Leslie. I think we
talked a lot about workers in factories. What about migrant
workers working in informal economy such as nannies and the so-
called dagong mei, there are more and more of them--what kind
of protections are available for them? And I have another
question for Erin. You've said a lot about American companies
doing great things--raising the bar, higher standards. I wonder
what American companies have been doing to help their
counterparts, the Chinese companies, raise their bars or help
them improve their policies to further the protection of
workers. I think that Chinese workers have done a lot for us
and the world, producing goods and supplying all kinds of
materials.
Ms. Oldham-Moore. Let me just say one thing. We're really
over time now, so I know some of the panelists will stay after
and talk to you if you have further questions.
Leslie, please address the informal economy.
Ms. Chang. Yes. I didn't specifically focus on workers in
these other industries that you're talking about. I think in
general, most of these workers live in a gray economy in the
sense that, as the other panelists mentioned, a lot of laws are
being violated and things are being done under the table and
they're being paid less and treated less well than the law
requires. So I think in terms of their own experiences, they're
just trying to cope in whatever ways they can to try to get the
most out of their employer, or to find a better position if
that doesn't work. But in terms of protections for women
working as nannies, or hairdressers, or karaoke girls, I don't
know specifically what's being done.
Ms. Perkins. Thank you. Erin?
Ms. Ennis. I'll be very quick and say that I don't know
that necessarily the Chinese companies are going to be praising
U.S. companies for what they do on this front, but what our
companies are doing is requesting and advocating that laws be
enforced across the board, regardless of whether you're a
domestic company or a foreign company, and that's labor,
environmental, health, everything.
And then also I think trying to drive home the point that
the reason why there are labor, environmental, health, and
safety standards isn't because the government wants to intrude
upon what you're doing. It's because those things actually make
you a better and more productive company.
It means that you have a product that is produced that does
not have as many problems, and it means that your workers are
actually able to work better because they're not being
overworked in one period of time, with nothing to do later on.
The reason for all of those protections actually is that it
protects workers, but it also means that companies do better
business. So hopefully, at least by example, we are bringing
something to the table on that.
Mr. Grob. Well, I'd like to thank very much all of our
panelists for this most illuminating discussion. Clearly,
you've raised more questions than you've been able to answer,
so that's a sign of a good program. I would urge you, please,
all to stay on top of the postings on the CECC Web site:
www.cecc.gov. We'll be following up on many of these issues.
Thank you all again. [Applause].
[Whereupon, at 11:35 a.m. the roundtable was adjourned.]
A P P E N D I X
=======================================================================
Prepared Statement
----------
Prepared Statement of Earl V. Brown, Jr.
june 19, 2009
introduction
Thank you for inviting me to make this presentation.
My name is Earl Brown, and I am a U.S. practicing labor and
employment lawyer. I have worked on Chinese and South-East Asian labor
and employment law issues for the AFL-CIO's Solidarity Center for ten
years. Prior to my work in Asia, I represented U.S. industrial unions
and individual workers in all sorts of labor and employment law
matters. I worked for such unions as the United Mine Workers and the
Teamsters.
Because China is so vast and diverse, outsiders like me tend to
look at China and see reflections of our own experience. The rapid pace
of change--a phenomenal growth rate for the past ten years--and the
diversity of and lack of transparency in China often defeat our earnest
efforts at objectivity. What follows, therefore, is inevitably the
perspective of one U.S. labor lawyer with practical legal experience
advocating for industrial workers in both the United States and Asia.
My views also derive from many years of work by colleagues in the
American and international labor movements, and in the Solidarity
Center, to promote autonomous trade unions and rule of law frameworks
that protect workers' rights and interests in Asia. What follows is
also accompanied by an awareness of the deterioration of worker rights
enforcement in the West and that we are not always the model we would
like to be, or represent ourselves to be.
I, along with many others, view China as the most significant
experiment in industrial relations in the global economy. Along with
issues of the environment, the ``labor question'' in China is a
paramount one for China's own development, for labor movements around
the world and for the shape of any global economic recovery. This
question of worker voice and power in the Chinese economy encapsulates
all the broader governance questions China must address to achieve
sustainable and balanced growth. U.S. trade unions and worker rights
advocates, as well as many employers and policy makers, are acutely
aware that developing viable industrial relations arrangements in China
is necessary to sustaining Chinese and global economic progress. It is
recognized that China (and other countries) cannot continue to rely on
business models that depend upon evasion of labor standards and norms,
and that leave working citizens without channels to effectively redress
basic workplace injustices or sufficient purchasing power to afford a
decent life for themselves and their families.
the current crisis
The impact of the current global economic crisis on China's workers
is not yet clear. There is little reliable data that would allow us to
tell the story. By the time this current crisis manifested itself in
China in 2009, China had already survived wrenching changes as it
opened to the global economy and privatized much of its industrial
economy. Millions of older state enterprise workers were laid off in
the 1990s and first decade of this century, just as millions of younger
peasant workers were drawn to the new private sector. In three short
decades, China created a huge new private sector employing millions of
workers. As the state owned enterprises shed workers and the new
private sector industrial geared up, so did labor strife. In the
industrial North East, laid off state workers demonstrated for
subsidies to survive in old age. In the new industrial zones throughout
China, factory and construction workers hit the streets and ringed
government offices to get back wages from employers. The dislocations
occasioned by this new economic crisis may appear to many in China as
yet more of the same--wrenching and continuous changes that can be
survived. Many Chinese view these dislocations against a backdrop of
astounding economic growth and modernization.
China's new private sector working class contains millions of young
peasant workers migrating from rural areas to regimented work in the
factories of China's export zones. This new class also includes
millions of young skilled, hi-tech and service workers. As this century
dawned, China's younger workers from both rural and urban settings
began to harbor increasingly distinct notions of their rights as
individuals and wage earners and became correspondingly assertive of
those rights. Contestation for those rights at all levels--on the
streets, in courts and in interactions with often militaristic
supervisors--increased, as did rights awareness campaigns by lawyers,
women's' groups, legal aid societies and NGOs.
Young rural women, often only teenagers, waved labor regulations
that had been faxed to them by legal aid or worker rights groups in the
faces of supervisors demanding the full legal measure of wages.
Desperate workers often hit the streets, tying up traffic. Sometimes,
workers followed abusive supervisors to their homes and exacted private
vengeance. Young workers began to quit employers that offended them, or
failed to accommodate their needs for scheduling or promotions. Younger
workers began to ``shop'' for employers. Higher skilled and semi-
professional workers also sought to bargain with employers and even, in
the case of airline pilots, struck. As did dock workers and taxi
drivers. The range of labor disputes expanded beyond recovering wages
due but not paid, expanding to demands for
improvements in wages, hours, working conditions and status and
treatment. The intense level of labor strife in China required some
responses by employers and government.
To make the issue more pressing, campaigns by consumer, human
rights and trade union groups in global export markets amplified and
fueled labor controversy inside China. All this labor strife became a
staple of both the Chinese and international media. In response, a
significant number of employers in China, both foreign and domestic,
and international brands, began programs of social work, relief and
compliance with Chinese law.
Yet, in all this furious activity, the entity charged with labor
rights enforcement and giving voice to workers' demands and interests,
the All China Federation of Trade Unions (ACFTU), seemed largely silent
and absent in the lives of workers. Although politically influential at
the top, the ACFTU has not represented or defended workers in their
actual struggles with employers. At least in other industrializing
countries, large-scale industrialization and the accompanying
concentration of masses of industrial workers with grievances has
pushed workers into trade unions. Programs of social work and legal
compliance alone were not enough to meet the level of controversy
generated by unremediated industrial grievances. In those situations,
employers and government were compelled to recognize and bargain with
autonomous worker voice expressed in trade unions. There is little
reason to think that industrial China will prove to be an exception to
the growth of worker voice and the emergence of bargaining.
By the time the 2009 economic crisis became manifest, China had
already launched a series of controversial labor law reforms that
strengthened the hands of ordinary workers vis-a-vis employers. Those
labor law reforms, enacted in 2008, did not go so far as to create a
legal and industrial relations framework compliant with international
labor law. Nonetheless, the 2008 reforms do lay the basis for enforcing
some fundamental labor standards and have therefore evoked passionate
employer opposition in a labor relations culture that already
overwhelmingly favors the employer and is rife with employers who make
labor law avoidance central to their business operation.
In the 2008 labor law reforms, China sought to define the private
sector ``employment'' relationship--what is an employer and what is an
employee and what are their inescapable obligations and rights. This is
the fundamental question in labor law, as most obligations and rights--
ranging from the ``employee's'' duty to safeguard the employer's
intellectual property interests to the ``employer's'' duty to honor
labor agreements when corporations are transferred--hinge on the
definitions of these two words. The centrality of these definitions is
confirmed by the great efforts expended by employers to structure
industrial relations so that employers are not ``the employers'' but
rather ``contractors'' or ``purchasers'' of naked assets and employees
are not ``employees'' but ?``independent contractors,''
``subcontractors,'' ``interns,'' ``temps'' or other legal creatures
with lesser rights in the workplace.
The linchpin of the 2008 reforms is the Employee Contract Law. That
law was drafted to remedy specific socially disruptive labor abuses
such as wide-spread wage arrearages, manipulations of corporate forms
to shed labor law obligations for wages and benefits, and devices to
classify workers as temporary or contract workers in order to avoid
affording them the full legal protections due employees. The Contract
Law lays down, for the first time, basic, universal norms: all workers,
be they peasant workers, ``temps,'' contract workers, apprentices or
probationary employees,
regardless of geographical location or industrial sector, are entitled
to certain protections and possessed of certain rights. Thus, the
Contract Law protects most private sector workers.\1\
---------------------------------------------------------------------------
\1\ I am putting aside the application of this law to public
employees and state-owned enterprise employees.
---------------------------------------------------------------------------
The Contract Law also expresses an unambiguous command to judges,
arbitrators, mediators and bureaucrats to resolutely enforce the
employers' obligation to pay legal and contractually established wages
in full and on time. This law further reflects a defined national
policy favoring job security by erecting protections against arbitrary
dismissal, by promoting long-term employment arrangements and by
requiring due notice of and consultation about layoffs (retrenchments).
The Law creates a clear right to severance pay for most workers with
any seniority. The remaining 2008 legislative enactments seek to
channel labor disputes into credible and efficient avenues for dispute
resolution--against the backdrop of a judicial and administrative
system that is a work in progress. Taken together, these reforms also
define and expand the ACFTU's role in representing workers in
interactions with employers over a broad range of issues.
Some employers in China, in the region and in the West have made
alarmist forecasts about the economic impact of these laws on business.
At the same time, other employers and their lawyers have begun to
stress the need for strict adherence to Peoples' Republic of China
(PRC) labor laws and regulations, and forthrightly eschewed industrial
relations policies founded on strategies of law avoidance and
impunity.
Whether this policy of strict adherence to legal norms succeeds in
fostering compliance on a significant scale remains to be seen. Will a
sufficiently large group of employers implement the advice of their
lawyers or will they continue to be tempted by strategies of avoiding
labor law obligations? The devolution of labor law obligations through
chains of contracting remains a significant obstacle to compliance as
well.
Despite these questions, a significant group of employers and
employer-side labor lawyers have recognized what many Chinese policy
makers and worker rights advocates also understand: that labor law
violations cannot continue as the order of the day. Many foreign
investors and brands could not sustain the level of controversy sparked
by production and business models premised on evasion of fundamental
labor standards and norms. These forces, against the backdrop of labor
strife, combined to propel the legal reforms described above that
stiffened basic labor rights, charged the union with discrete and
important functions in protecting workers rights and interests and
provided avenues for redress of industrial grievances. Authoritative
voices in the Western and Chinese employer bar, the set of lawyers
advising employers operating in China, have now firmly counseled strict
compliance with Chinese labor law as essential to sound business
operation.
Predictably, the 2009 crisis has prompted some employers and policy
makers to call for suspension or outright repeal of the prior year's
reforms. Just as the initiation of labor law reforms in 2008 sparked a
broad and open debate in China, and followed years of contention about
the role of workers in China's new society, the 2009 economic crisis
has set a new stage for rehearsals of the ``labor question.'' The signs
appear to augur for a ``Singapore'' solution. During downturns in
Singapore, there is a public ritual of sacrifice--ministers, among the
most highly paid in the world, cut their salaries, managers do also,
and government directed union announces corresponding cuts and
reductions in hours. Even furloughs. The objective is to freeze or roll
back wages while preserving jobs until the crisis passes. The Chinese
often cite this Singapore model and there seems to be a temporizing
truce now in China that entails avoiding mass layoffs in favor of wage
and hour reductions and preservation of jobs, but no outright repeal of
the 2008 reforms. However, it is clear that the economic crisis had
caused export and related employers to shed millions of jobs by early
2009.
Lawyers representing multi-national employers in China report that
this picture is varied and localized--in some regions with more active
official union presence or in sectors where employers seek to avoid
employee turnover, these ``Singapore'' bargains are negotiated with the
tools provided the union by the 2008 laws. Workers are furloughed or
work light hours rather than being laid off. In other areas, local
employers and their allies in the official union ignore the 2008 laws.
Some local officials have gone a long way in assuring employers and
investors that laws, criminal or civil, should not trouble them. For
example, lawyers working with Chinese counterparts on securities and
corporate regulations report that Chinese regulators have assured
certain investors that they need not be concerned about enforcement
actions or prosecutions in any area of regulation ranging from the
environment to securities law, and of course, including labor.
There is also the question of the millions of peasant workers who
went home last January during the Chinese New Year holiday and have
stayed home. Will the countryside absorb them? Will these be the only
peasant workers in world history to return to the farm and stay there
while young? And what about the millions of young Chinese graduates
leaving school this year for this job market? They are smart, educated
and have marked ambitions about how to live their lives. Will they
access jobs and salaries commensurate with their expectations? These
questions, however, should not cause an underestimation of the
demonstrated capacity to endure massive economic dislocation in China,
or of the agility of the governing party. China in the past thirty
years has faced and survived massive economic upheavals.
To my mind, the current crisis presents a more intense version of
the long standing internal debate about industrial relations and the
power of workers in China. While there are voices calling for repeal of
the 2008 reforms, there are other voices inside China that recognize
that workers need rights, voice and enhanced worker purchasing power if
socially sustainable development is to occur. That these voices inside
exist is demonstrated by the 2008 reforms, and the enhanced space for
worker rights and collective bargaining opened by those reforms. The
question for us is how to engage those Chinese actors inside China
calling for worker rights in a spirit of equality, deference to their
agency and with mutual respect.
a focus on internal chinese private sector industrial relations and
worker rights frameworks
Ascertaining how China will deal with the current crisis and its
impact on workers requires an assessment of the state of worker rights
enforcement and the capacity of China's own institutions to provide
worker voice. China's industrial development has progressed to the
stage where private-sector industrial relations expertise is required.
Given the level of labor strife in China, even the Chinese
government recognizes that there is a need is for private sector
institutions to express worker power in the market economy so that
peaceful and credible solutions can be negotiated directly by workers
and employers rather then on the streets. This means that external
worker and human rights advocacy and other external programs should now
be supplemented by focused and practical industrial relations capacity
building in the private sector. Part of this focus should be on how the
ACFTU can adapt to the
demands of representing workers vis-a-vis employers in the private
sector.
This industrial relations phase of China's development is a stage
beyond discrete and localized legal aid experiments, the often sporadic
support for labor rights NGOs, concocting better human resource systems
or dissemination of media reports about labor abuses. Rather, China
must now seriously contemplate industrial relations: the continuous
negotiation of industrial and labor grievances in the private sector
through autonomous and durable Chinese institutions capable of
representing workers and employers in a balanced fashion.\2\ The
current crisis just makes this long-time need more acute, and this is
no time for going backwards. Otherwise, a period of aggravated
disruption and strife may be the result of a retreat as workers seek
redress.
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\2\ In this respect, I do not mean to advocate for the notion
sometimes ascribed to U.S. industrial relations proponents that labor
relations must be conflictual and wholly severed from the state. The
state is always central to this bargaining, because without legal
pressure and appropriate state policy, employers will not bargain with
workers.
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We do have reservoirs of unique expertise in the U.S. labor
movement and industrial relations institutions in the unionized sector
that can be of significant utility in today's China. In the pre-New
Deal United States, we experienced labor strife and violence as intense
as any in present day China. A long debate over the role of workers,
their unions and the state in our society resulted in a framework for
negotiation of labor disputes and the creation of an industrial
relations system that held sway for a long period.\3\
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\3\ William E. Forbath, Law and the Shaping of the American Labor
Movement, Harvard University Press, 1989, p. 10-36.
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This system created a rich experience in plant, enterprise and
sectoral dispute resolution that, despite limitations, enhanced the
wages and purchasing power of
industrial workers and was consistently capable of solving industrial
problems peacefully. While we surely cannot plant the American flag in
Chinese industrial relations, and should therefore never want to, this
history has left us with expertise and skills which can be of use to
Chinese worker rights actors in the current debate over the role of
workers and the union in China in this crisis and thereafter.
how trade unions can help
Unions and Labor and Social Bargaining
China's work force is not monochromatic. It includes millions of
``unskilled'' industrial workers; many are internal migrants of
marginal legal status and limited
access to schools, health care and housing. It also includes millions
of high-tech workers and knowledge workers, service employees, workers
in supply chains for foreign brands, and state enterprise workers and
civil servants. Labor relations at U.S., Australian and E.U. companies
are distinctly different from labor relations in Japanese companies,
which in turn are different from labor relations in overseas Chinese
and Korean companies. Many Chinese workers are under the age of 30, and
have distinctive attitudes toward work and their rights at work and in
society.
Each of these segments confronts different problems; in the private
sector, however, too many workers do not have an accessible union to
represent them. China has a web of official union institutions that
parallel the state structure. The official union, ACFTU has not yet
attained a wide presence in the private sector.
However, the 2008 law reforms afford this union a huge role in
labor relations. Not only does the union have an important advisory and
gatekeeper role in formulating labor law and regulations, it also has
an invigorated mandate to collectively bargain for workers, including
migrant workers. Curiously, the 2008 labor law reforms cover most
workers within the boundaries of formal employment. This is in contrast
to a global tendency to create exceptions to laws governing formal
employment of such sweep that they undermine labor law and support the
creation of a precarious and vulnerable work force without rights and
collective voice. The ACFTU is now specifically charged with insuring
the rights of all workers covered by the law. But the law has not
created an institutional stage for this larger, encompassing role.
China is also staging Hamlet without the Prince of Denmark, because it
has not yet developed the necessary autonomous worker institutions at
the grass roots to implement collective bargaining.
At the same time, China has experienced a significant growth of
worker advocacy institutions and voices outside the union, in NGO
worker centers, in GONGOs,\4\ in legal aid societies, in universities
and in government regulatory agencies. These articulate voices for
worker rights often provide a welcome contrast to quiescence in the
official union, and may spur to the union to assume a more active role
in worker representation and labor rights enforcement. Assuming a more
active representational role in labor relations, however, will cause
the official union to change profoundly. At a minimum, it will need to
establish a grass roots presence; it must
consult with and secure the allegiance of members; it must have a
research department and it must organize employers under agreements in
relevant labor markets, sometimes from the bottom up rather than from
the top down.
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\4\ Governmentally authorized, funded and supervised ``NGOs.''
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The importance of this new role for the union in this downturn is
clear. The union has invoked Article 41 of the 2008 Employee Contract
Law to require prior notice to it by the employer of all layoffs
without exception. The union is further using the extensive notice and
consultation provisions of Article 41 (governing mass layoffs of 20
employees or over) to forestall and to initiate bargaining over layoffs
in this downturn.
Article 41 requires extensive consultation with the union and
workers prior to any ``mass lay-off,'' and protects certain older and
ill employees from layoff altogether. Via this Article, the union in
some places is forcing employers to bargain toward a Singapore
solution--reduced hours and/ or furloughs instead of unilateral mass
dismissals. Although this economic environment has forced many a
Hobson's choice, the law here does force the employer to bargain with
the union and workers before initiating terminations. The employer
cannot act unilaterally. Bargaining and labor negotiation is thus
occurring prior to the creation of viable local unions and other
similar industrial relations institutions. We cannot foreclose the
possibility that the law will force the union into a more active
representational role.
Our labor movement can assist in enhancing the capacity of
interested officers and staff of the ACFTU union and other worker
rights advocacy groups to begin to step into the industrial relations
roles assigned unions and workers by the 2008 laws:
We can provide expertise on structuring unions
internally to equip them for the functions of organizing,
bargaining, and rights advocacy;
We can provide expertise and collaboration on
occupational health and safety (OSH) technical issues, and on
establishing worker capacity to enforce fundamental
occupational health and safety norms via worker committees;
We can share models on how to represent public sector
employees;
We can help enhance the capacity of activists to
provide legal and other assistance to injured workers and their
families, and the families of deceased workers;
We can provide expertise on researching labor markets
and employers;
We can provide training in bargaining;
We can provide training in organizing;
We can provide models for broad rights advocacy;
We have expertise in the distinct field of
representing high-skilled technical workers and younger works
in service industries and working as contractors.
Labor movements in the United States and elsewhere are uniquely
equipped to provide such assistance as they possess the specific and
time tested bargaining and organizing expertise that academics,
development firms and NGOs often lack. Mobilizing this experience
during this crisis to assist internal actors advocating for worker
rights in the Peoples' Republic of China will enable us to participate
in addressing, in a targeted way, the universal problems of the global
economy--lack of stable employment, competition based on labor law
avoidance and lack of worker voice and purchasing power--as well as
assist our Chinese counterparts in addressing those very problems in
China.
China also needs a labor movement that is also capable of acting
outside the formal employment relationship to advocate for and to
represent marginalized informal sector workers. The U.S. labor movement
has made some strides in giving voice to informal and marginalized wage
earners by establishing worker centers and networks of advocates and
service providers that operate outside traditional craft and other
formal union categories. Interaction between U.S. and Chinese advocates
for marginalized workers would be helpful to both sides. In this
respect, the Solidarity Center has brought Chinese union lawyers and
labor rights activists to U.S. worker rights centers and initiated a
dialogue which we hope will continue on how to provide voice to and
enforce law on behalf of marginalized workers.
We should understand that E.U. and Japanese models of industrial
relations are also relevant, and that we are not internal actors in
China. Nonetheless, Chinese discourse about industrial relations has
reached the stage where concrete private sector trade union expertise
and skills are needed to assist in building capacity in Chinese labor
institutions of all kinds--in the formal union, in worker centers,
NGOs, and in legal aid institutions. This crisis has established that
economics premised on the race to the bottom--on relentlessly
depressing labor costs and living standards--is not sustainable. One
answer to this imbalanced global economy is an invigorated Chinese
labor movement. We should seek a role in reversing the race to the
bottom with the aid of invigorated labor movements in China, both for
the sake of U.S. workers and Chinese workers. This necessarily entails
working appropriately with counterparts in China.
labor, lawyers and the rule of law, even in crisis times
The labor issue in China is also at the heart of a broad debate
about human rights and the rule of law. Until 2008, many employers in
China simply discounted labor law compliance. Other employers under
imperatives to comply strictly with PRC law, such as foreign employers
with their own legal requirements to comply with Chinese law, or those
subject to consumer pressure, were constantly undermined competitively
by employers who violated Chinese labor norms. This fueled a larger
problem: a culture of impunity with regards to compliance with the law.
While aspects of labor and employment law, such as the technicalities
regarding workers' compensation and work place health and safety may
seem arcane, they are critical in China, where industrial death,
disease and injury remain at high levels. Unregulated labor competition
means that workers are maimed and slaughtered to save on labor costs.
Insuring that effective OSH and worker compensation laws and
regulations are in place and enforced is central to a rule of law
culture in China as elsewhere.
U.S. union lawyers and activists can assist Chinese counterparts in
union, NGO and legal aid society staffs with concrete and particular
practice-based advice on infusing rule of law norms into workers'
compensation structures, into regulation of work hazards in dangerous
industries such as mining, and into providing for social security and
protection within the framework of a private economy.
Further, U.S. union lawyers and their colleagues can engage in a
continuous dialogue on Chinese labor law compliance with U.S. and other
international lawyers who represent multinationals in China. The
Solidarity Center has initiated just such a dialogue through
participation in relevant ABA committees and finds that foreign lawyers
representing employers in China have openly committed to advising
compliance with PRC labor law and regulations. This is a major step--in
which
responsible employers and responsible employer counsel play an
indispensable role--toward pushing back the culture of noncompliance
and impunity in labor law. Foreign employers have thus often become a
force for labor law compliance. Of course, there are many
countervailing examples of foreign employers violating basic labor
norms.
As noted above, younger and more highly skilled workers in China
seem to part of the growth of regional ``civil'' rights movement among
younger workers in East and South East Asia. This movement arises from
expectations about autonomy and individual choice that are becoming
widespread among all younger workers, and among more skilled workers
like IT workers and airline pilots. Many elements of the 2008 labor law
reforms address the needs of young and more skilled workers, and they
have been used by those workers, both spontaneously and with assistance
of union and legal aid staff. Union lawyers and staff in the U.S.
movement have attained considerable expertise in representing and
reaching out to such workers and can be of assistance.
There is a widely acknowledged problem in China with enforcement of
judgments. In this respect, U.S. trade union lawyers can assist Chinese
counterparts on the staff of unions, legal aid societies and NGOs to
enforce wage and worker compensation judgments. In enforcing judgments,
workers' lawyers may find allies in the business community who also
encounter this very problem.
The need to include the labor movement in the core of rule of law
dialogue has become even more acute given the massive increases in
international and internal migration of workers in the past decade.
These migrant peasant-workers are invariable legally disenfranchised
and cut off from the most basic rule of law institutions. The
international labor movement and its allies realize that the rule of
law cannot co-exist with huge populations of marginalized and abused
migrant workers cut of from justice institutions and any means of
redressing fundamental deprivations of human and worker rights. The
U.S. and international trade union movements can play, by virtue of
their institutional networks, a broad role in providing forums and
assistance to Chinese worker rights advocates regarding enforcement of
rights across national boundaries, against foreign employers, or in
enforcing the rights of the ever increasing number of Chinese guest
workers abroad. No other institution can match the capacity of the
international labor movement to reach across the globe and down into
societies through affiliates.
conclusion
We should assist Chinese worker rights advocates in unions, law
faculties, NGOs and legal aid societies to take up the invitation
presented by 2008 labor law reforms to implement the mandate for
collective bargaining. In doing so we will be contributing in a modest
way to solutions for Chinese workers and workers everywhere in this
global crisis sparked by a race to the bottom that has gone too low.
Our assistance should be delivered with deference to the agency of
our Chinese colleagues, and with complete awareness that only the
Chinese will determine the contours of their labor relations system.
Since this global crisis has exposed ``Western'' and Asian workers, and
workers everywhere, to the dire effects of the unregulated race to the
bottom, we can contribute to overcoming the crisis by technical
assistance in the area of industrial relations and collective
bargaining.