A Shot at Solving China’s Angry Worker Problem – China Real Time Report – WSJ

Labor unrest is on the rise in China and likely to increase as the leadership grapples with a dangerous combination of an economic slowdown and the lack of effective institutions to cope with worker unrest.

A new set of regulations put forward by one province offers a potential solution while at the same time illustrating the difficulty the Communist Party faces in effectively addressing workers’ grievances.

Regulations for “collective contracts” adopted by the Standing Committee of the People’s Congress in southern China’s Guangdong Province took effect on January 1, 2015, giving employees more leeway to initiate collective bargaining with their employers.  Observers in the government, chambers of commerce, the state-backed All-China Federation of Trade Unions and workers’ rights organizations will be watching to see whether the new rules represent a meaningful step forward in advancing labor rights.

The need for rules that would allow China’s workers to negotiate better conditions is great.  Labor disputes are the most prevalent form of social conflict in the country, according to the Chinese Academy of Social Science’s annual report on social trends. Labor incidents during the fourth quarter of 2014 rose to 569, more than three times the number in the previous year, according to the China Labor Bulletin (CLB), which finds that 87% of  workers’ demands are for “wage arrears, pay increases and compensation.”

In 2014, workers went on strike around the country in a range of industries, from manufacturing to teaching to transportation.

The causes of the unrest varied accordingly: In April, for example, the majority of workers at a Taiwanese-owned factory in Guangdong that makes products for Adidas struck to protest the company’s failure to pay its 40,000 workers their full social security and housing allowances. The strike, which cost an estimated $27 million in loses to the factory, drew large numbers of police into the streets. Workers later accused local officials and company executive of using force to get them to return to work, though the government denied any force was used.

In December, thousands of teachers went on strike in six cities or counties in Heilongjiang to protest low salaries and the required contributions to pension plans; in Guangdong, teachers’ strikes protested low monthly salaries that were below what the government had promised.

And earlier this year, taxi drivers walked out in the cities of Nanjing, Chengdu, Shenyang, and Qingdao to protest local government limitations on taxi fares and smartphone apps that allow passengers to negotiate fares.

As the CLB notes, the majority of enterprise trade unions are controlled by and represent the interests of management. ACFTU officials, meanwhile, are “essentially government bureaucrats with little understanding of the needs of workers or how to represent them in negotiations with management.” The state-sanctioned trade union, CLB adds, “still sees itself as bridge or mediator between workers and management rather than as a voice of the workers.”

In recent years, the government emphasized mediation as a way to solve labor disputes and protect social stability, followed by what University of Michigan expert Mary Gallagher has called a “more interventionist stance” that involved government officials helping to settle disputes typically in favor of workers.  All the while, Gallagher writes, collective organizations outside the ACFTU have been restricted to prevent any workers’ collective action from growing into “anything long-term, programmatic, or institutional.”

via A Shot at Solving China’s Angry Worker Problem – China Real Time Report – WSJ.

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