Labor unrest in China

“It is not implausible to predict that the 2008 Labor Contract Law will likewise serve as the catalyst for a wave of labor militancy in China – especially if employers (as is likely) attempt to evade the law and if the arbitration system becomes too burdened with cases to be able to resolve workers’ grievances quickly, encouraging them to turn instead to direct action” (177).

      These measures (the Labor Contract Law that went into effect on 1 January 2008 and the Arbitration Law that went into effect in May 2008) have helped up to a point, but why is the Chinese government not taking a more proactive role in resolving workers’ widespread grievances, especially in light of recent strikes and protests?

      The laws enacted in 2008 were intended to channel worker frustrations through a system of arbitration and courts so no broader protest movements would threaten political stability.  According to an article in The New York Times on 20 June 2010, the labor laws have raised expectations but Chinese workers remain relatively powerless by Western standards.  Civil courts and arbitration committees, which are made up of government employees, have been overwhelmed by a flood of labor cases.  In addition, China’s economic reform and development has created an almost unbreakable alliance between business and government.  According to a report issued in October 2010 by China Labour Bulletin, local officials stand to benefit economically and politically from sustained growth and development in their jurisdiction, and many have a direct interest in the economic success of local enterprises through the ownership of shares or other monetary arrangements, such as excessive taxation, arbitrary fees, and bribes.  Consequently, lax enforcement by local officials often allows companies to evade compliance with labor laws, especially with regard to minimum wage requirements and overtime pay.  The ability of the 2008 laws to protect workers’ rights is constrained by the continual push for economic growth, the over-supply of labor, the overwhelming power of capital, and the widespread collusion between business and government.

      It seems that in order to avoid the costly strikes and demonstrations that occurred at several factories last summer, the CCP and government must acknowledge and accept the reality of labor relations in China today; namely, that the interests of labor and management not only have diverged but also have coalesced into opposition and conflict.  The government needs to entitle and empower the workforce to engage in collective bargaining.  But if and when new regulations are implemented, the government will have to be scrupulous in its enforcement of the law.  By establishing a system to proactively resolve the grievances that underlie growing worker militancy, the Chinese government can achieve the labor peace essential to its official goals of “harmony” and “stability.”  In addition, pay increases and improved working conditions will help China to develop its own, more prosperous working class, thereby increasing domestic consumption and reducing the country’s reliance on exports for economic growth.

      The authors were too timid in referring to the possibility of “China becoming the epicenter of world labor unrest . . . in the coming decade” (177).  It would appear that China already has reached that point, and labor unrest will certainly intensify until the government can develop and implement its own form of “social contract” between employers, workers, and the state.

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