Chinese Workers in Comparative Perspective by Anita Chan

Author:Anita Chan [Chan, Anita]
Language: eng
Format: epub
Tags: Political Science, Labor & Industrial Relations, History, Asia, China, Comparative Politics
ISBN: 9780801453496
Google: ldUYogEACAAJ
Goodreads: 23737089
Publisher: ILR Press
Published: 2015-01-15T07:14:04+00:00

Pauperizing Workers

About a decade ago, Neil Kearney, president of the International Textile, Garment and Leather Workers’ Federation (ITGLWF), commented on the state of his global trade union federation. Crisscrossing the globe many times a year, trouble-shooting, helping unions whose workers who were on strike, initiating training programs, bargaining with recalcitrant employers’ associations, and linking unions representing a workforce of several millions spread over 110 countries, Kearney had a bird’s-eye view of the plight of union members. When negotiating with corporations and governments in countries where workers were paid rock-bottom wages, he warned them that their race to the bottom strategy was not conducive to the country’s economic development.65 That was at a time when several academics and extensive press coverage were exposing the terrible conditions of Chinese migrant workers. China’s low wages in the late twentieth and early twenty-first centuries were driving down wages in other developing countries.66 These low wages, so attractive to foreign capital, seemed at the time to be a factor propelling China’s economic development. The situation in China did not square with Kearney’s prediction. Wages have been rising in China since the mid-2000s. Yet, our research project on the world’s soccer ball industry suggests that Kearney was right. A low-wage policy that pauperizes a country’s workers, where wages are so low that China’s wages appear “high” in comparison, retards not only the workforce physically but also the country’s ability to develop.

The essential focus of China’s overall economic development strategy of the past two decades has been to encourage economies of scale, production efficiency, technological upgrading, mechanization, automation, and division of labor in production. It is the very opposite of South Asia’s de facto strategy in many industries, including soccer ball production, of atomization of production into minute units and engaging in a race to the bottom in wages in the belief that racing to the bottom will enable local manufacturers to compete internationally.67 This strategy has, in fact, been counterproductive, and both Sialkot and Jalandhar have been losing market share to China. What the “race to the bottom” cheap-labor strategy does not take fully into account is that cheap labor is not the only consideration. After all, cheap labor is offered by many developing countries. A difference of a few US cents an hour does not make that much of a difference to the overall production cost. Other factors such as the quality of labor, logistics, an efficient supply chain, access to high-grade raw materials, governance, the social and legal environment, R & D capacity, and productivity, when factored into the costing, easily outweigh the relatively small difference in labor costs. Table 6.4, using South Korean labor costs as a standard, shows that labor costs in China were still, by comparison with Korea, on the low end as of 2008, albeit 1.56 times higher than India; but when China’s skill base, R & D capacity, infrastructure, and government capacity are factored in, producing in China is advantageous overall. Manufacturers can easily absorb the higher labor costs.

TABLE 6.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.