U.S. Corporations Work to Prevent Chinese Workers' Rights

By Jeremy Brecher and Brendan L. Smith and Tim Costello, AlterNet. Posted October 16, 2006.

The New York Times reported on its front page Friday that U.S.-based corporations are fighting a proposed Chinese law that seeks to protect workers' rights. The law is "setting off a battle with American and other foreign corporations that have lobbied against it by hinting that they may build fewer factories here."

The Times reports that Global Labor Strategies, a group that supports labor rights policies, is releasing a report in New York and Boston "denouncing American corporations for opposing legislation that would give Chinese workers stronger rights."

"'You have big corporations opposing basically modest reforms," said Tim Costello, an official of the group and a longtime labor union advocate. "This flies in the face of the idea that globalization and corporations will raise standards around the world.'" The Times article drew heavily on the Global Labor Strategies report, Beyond the Great Wall: U.S. Corporations Opposing New Rights for Chinese Workers which was released today. (The Spanish translation is available here.)

According to the report, U.S.-based global corporations like Wal-Mart, Google, UPS, Microsoft, Nike, AT&T, and Intel, acting through U.S. business organizations like the American Chamber of Commerce in Shanghai and the U.S.-China Business Council, are actively lobbying against the new labor legislation. They are also threatening that foreign corporations will withdraw from China if it is passed. China's Draft Labor Contract Law would provide minimal standards that are commonplace in many other countries, such as enforceable labor contracts, severance pay regulations, and negotiations over workplace policies and procedures. The Chinese government is supporting these reforms in part as a response to rising labor discontent.

Corporate opposition to the law is designed to maintain the status quo in Chinese labor relations. This includes low wages, extreme poverty, denial of basic rights and minimum standards, lack of health and safety protections, and an absence of any legal contract for many employees.

According to Beyond the Great Wall, the proposed legislation will not eliminate Chinese labor problems. It will not provide Chinese workers with the right to independent trade unions with leaders of their own choosing and the right to strike. But foreign corporations are attacking the legislation not because it provides workers too little protection, but because it provides them too much. Indeed, the proposed law may well encourage workers to organize to demand the enforcement of the rights it offers.

This corporate campaign contradicts the justifications that have been given for public policies that encourage corporations to invest in China. U.S.-based corporations have repeatedly argued that they are raising human and labor rights standards abroad. For example, the American Chamber of Commerce in Hong Kong asserts among its "universal principles" that "American business plays an important role as a catalyst for positive social change by promoting human welfare and guaranteeing to uphold the dignity of the worker and set positive examples for their remuneration, treatment, health and safety." But U.S.-based corporations are trying to block legislation designed to improve the remuneration, treatment, health and safety, and other standards of Chinese workers.

At a time when China exerts a growing impact on the global economy, efforts to improve the conditions of Chinese workers are profoundly important for workers everywhere. As U.S. wages stagnate, many Americans worry that low wages and labor standards in China are driving down those in America. Improving labor conditions in China can help workers in the rest of the world resist a "race to the bottom" that threatens to bring wages and conditions worldwide down to the level of the least protected. The opposition of corporations to minimum standards for Chinese workers should be of concern to workers and their political and trade union representatives throughout the world.

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Tim Costello, Jeremy Brecher and Brendan Smith are the co-founders of Global Labor Strategies, a resource center providing research and analysis on globalization, trade and labor issues.

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