Archive for ‘labour reform’

09/06/2015

Modi to launch India’s biggest labour overhaul in decades | Reuters

Prime Minister Narendra Modi is preparing to launch India’s biggest overhaul of labour laws since independence in a bid to create millions of manufacturing jobs, at the risk of stirring up a political backlash that could block other critical reforms.

Prime Minister Narendra Modi waves towards his supporters during a rally in Mathura, May 25, 2015.  REUTERS/Adnan Abidi

Three officials at the central labour ministry told Reuters that the ministry was drafting a bill for the upcoming parliamentary session that proposes to loosen strict hire-and-fire rules and make it tougher for workers to form unions.

The changes, if approved by parliament, will be the biggest economic reform since India opened its economy in 1991, but it is likely to meet stiff opposition in parliament and from labour activists.

The prime minister enjoys a majority in the Lok Sabha, but not the Rajya Sabha, hobbling his ability to pass politically contentious measures.

That handicap has stymied his efforts to make it easier for businesses to buy farmland and convert Asia’s third-largest economy into a common market.

Rajiv Biswas, Asia-Pacific chief economist at IHS Global Insight, said Modi had little option but to push ahead with the measures.

“Without these reforms, the economy would stagnate, and frustrated investors would look elsewhere,” he said.

“You cannot make political opposition an excuse for not taking tough decisions.”

Since taking office in May last year, Modi has taken a series of incremental steps to make labour laws less onerous for businesses, but fear of a union-led political backlash made him leave the responsibility for unshackling the labour market with Indian states.

He let his party’s governments in Rajasthan and Madhya Pradesh take the lead in this area.

Encouraged by a successful and peaceful implementation of the measures in those states, the federal labour ministry now intends to replicate them at the national level, one of the ministry officials said.

Manish Sabharwal, one of the brains behind Rajasthan’s labour reforms and co-founder of recruitment firm Teamlease, said the federal administration would have been better off without attempting these changes.

“Let states carry out these changes and save your political energy for other policy reforms,” he said.

via Modi to launch India’s biggest labour overhaul in decades | Reuters.

08/04/2015

China Aims to Soothe Labor Unrest – China Real Time Report – WSJ

As slowing growth fuels labor unrest in the world’s second-largest economy, China’s top leadership is pushing for greater efforts to foster harmony across its increasingly agitated workforce. As the WSJ’s Chun Han Wong reports;

In a recent directive, top Communist Party and government officials called on party cadres and bureaucrats across the country to “make the construction of harmonious labor relations an urgent task,” to ensure “healthy economic development” and to consolidate the party’s “governing status.”

The policy paper was issued late last month and has circulated widely among Chinese labor scholars, lawyers and activists, who say it signals Beijing’s growing concern that festering labor tensions could soon threaten social stability or even weaken the party’s grip on power.

With China “currently in a period of economic and social transition,” labor relations have become “increasingly pluralistic, labor tensions have entered a period of increased prominence and frequency, and the incidence of labor disputes remains high,” the paper said, according to a copy reviewed by The Wall Street Journal. It cited problems including unpaid wages to China’s legions of migrant workers, growing protests and other issues.

Labor scholars say the paper—titled “the Communist Party Central Committee and the State Council’s opinion on the construction of harmonious labor relations”—marks a rare move by Beijing to formally outline policy priorities for tackling worker unrest. It also comes after Premier Li Keqiang pledged in early March, during an annual policy speech, to curb unpaid wages for migrant workers.

“The government is acknowledging the reality of rising worker unrest and wants to make this a bigger priority,” said Wang Jiangsong, a professor at the China Institute of Industrial Relations in Beijing. “But it also lacks specifics on implementation—it remains to be seen how this would work on the ground.”

via China Aims to Soothe Labor Unrest – China Real Time Report – WSJ.

28/04/2014

Labour unrest: Danger zone | The Economist

THE Pearl river delta in the southern province of Guangdong is no stranger to strikes, most of them small and quickly resolved. But a walk-out by workers at factories owned by a Taiwanese company, Yue Yuen, the world’s largest maker of branded sports shoes, including big names such as Nike and Reebok, has been remarkable for its scale and duration. It began on April 5th and has grown to involve tens of thousands of employees. On a sprawling industrial estate, angry workers watched by riot police rage about an issue few cared much about until recently: their pensions. For bosses and officials, this is a worrying sign of change.

The government has imposed a virtual news blackout on the unrest in the city of Dongguan, a place synonymous with the delta’s manufacturing heft (nearly 80% of its 8.3m people have moved there from other parts of China over the past three decades, or are the children of such migrants). Foreign journalists have been allowed onto Yue Yuen’s main estate in Gaobu township, a Dongguan suburb, but strikers complain that Chinese media are kept away. This contrasts with a relatively free rein given to Chinese reporters in 2010 to report on a large strike over pay by workers at a factory owned by Honda in Foshan, another delta city. That incident involved putting pressure on a Japanese company, an uncontroversial target for most Chinese. This latest, bigger strike (one of the largest in years involving a non-state enterprise in China) has touched a more sensitive government nerve.

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The workers accuse Yue Yuen of failing for years to make due contributions to their pensions, which are administered by the local government. Lax application of social-security laws is common, since local authorities do not want to drive away business. “The government is corrupt,” calls out one man among a group of strikers who have gathered near a row of factories. Such comments—directed at local officialdom, not Beijing—are almost as commonly heard as tirades against Yue Yuen itself. Workers fume at the heavy deployment of police, and the beating of some of the thousands of strikers who have been marching through nearby streets, most recently on April 18th (see picture).

Many employees say they are now too afraid to march again. Their protest has become a silent one: they clock in each morning, but then leave the factory and do no work, coming back to clock out when their shift is supposed to end. Workers say all 40,000 employees at Yue Yuen’s seven factories in Gaobu are on strike. A member of Gaobu’s Communist Party committee, Su Huiying, says 40% of them are at work and the rest are only on a “go-slow”. Her assertion appears unconvincing.

A Taiwanese manager at the company says “progress” is being made towards settling the strike. Yue Yuen has offered to make up social-security contributions that it has failed to pay; it has also agreed to start making full contributions from May 1st. But as they listen to repeated broadcasts of the company’s offer through loudspeakers, strikers respond with howls of derision. They also tear up copies of a letter from the government-backed trade union which is mediating in the dispute. The missive calls on workers to go back to work and acknowledge the company’s “sincerity”. “The unions aren’t like the ones in the West,” says one worker. “Here they just represent the government.”

Such anxieties about pension provision among a workforce in Guangdong mostly made up of young migrants may sound surprising. But they are becoming increasingly common as factories try to cope with a growing shortage of young workers from the countryside by retaining employees for longer. Many of Yue Yuen’s workers are in their 30s or even 40s, and many say they have been with the company for a decade or more. Geoffrey Crothall of the Hong Kong-based China Labour Bulletin says this has been the largest strike in a non-state factory over social-security payments, but protests over such issues are becoming more common.

via Labour unrest: Danger zone | The Economist.

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13/02/2014

Labor Issues Prompt Inquiry into Tata’s Tea – India Real Time – WSJ

Nearly a year after human-rights groups complained about working and living conditions on tea plantations run by Amalgamated Plantations Private Ltd., the World Bank has ordered an inquiry.

APPL, a joint venture of Tata Global Beverages Ltd.500800.BY -1.67% and the International Finance Corp., the private-sector lending arm of the bank, employs around 30,000 people on 20 plantations in the northeastern state of Assam.

Tata Global Beverages owns the Tetley Tea brand.

Rights groups, including People’s Action for Development and Nazdeek, told the bank’s Compliance Advisor Ombudsman that the plantations weren’t adhering to Indian laws.

Many tea workers earn less than $2 a day and it “is impossible to properly feed themselves and their family with this amount of money,” the complaint said. “As a result, many workers suffer from malnutrition.”

Ashoke Bordoloi, chief financial officer of APPL said, “We look after our workers and are compliant with the law.” He said the company would extend “full cooperation” to World Bank auditors.

In 2009, Tata Global Beverages received an investment of $8 million from the IFC to address issues concerning workplace and community health and safety.

But civil rights groups allege that the money hasn’t been used.

“Facilities like living quarters, safe drinking water and toilet facilities and proper education for them, have not yet been provided by the management,” Barnabas Kindo, social activist working with PAJHRA, a group working for improving living conditions of tribal people in the northeast told India Real Time Wednesday.

via Labor Issues Prompt Inquiry into Tata’s Tea – India Real Time – WSJ.

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31/07/2013

China’s New Migrant Workers Want More

BusinessWeek: “The red neon sign over the front door of a new entertainment complex in Beijing’s suburban Daxing district—a local garment manufacturing hub—reads simply “The Skating Rink.” Inside, Lady Gaga’s “Poker Face” crackles over loudspeakers, and a strobe light casts red and green pixels of light across a hardwood floor. The young migrant workers who toil in the garment factories nearby typically work on weekends, and have only two or three days off a month. So a crowd begins to form only in the evenings, after overtime shifts end around 9 or 10 p.m.

Twenty-one-year-old He XiaoJie (right) lives in a five-person dorm room within his factory

On a recent Sunday afternoon, the rink has just a handful of early skaters. Among them is a family of five. (Many migrant families manage to disregard China’s one-child policy.) Pudgy 3-year-old Zhefang, wearing a yellow sundress and short pigtails, tugs playfully on the laces of her 5-year-old brother’s skates. Her other brother, who is 9, races full speed around the rink. Juping and Xinfing, the parents, are both 29 and moved here from Jiangxi province seven years ago. Today is one of the precious few days all year that they are together as a family. Because the parents lack a Beijing hukou—or residence permit—they cannot enroll their children in local schools. The two boys now live with their grandparents back in Jiangxi. Xinfing says she “really wants our girl to stay with us” once Zhefang reaches school age, but knows it’s not likely. She scoops up the little girl in her arms and lovingly pats down stray hairs that have shaken loose of her pigtails.

China’s great modern migration from countryside to city began roughly 30 years ago. Starting in the 1980s, new factories in southeastern China began to churn out goods for export and lured workers who could make more on the assembly line than on the farm. In the 1980s and ’90s, most of those who left home were young single people, like the women described in Leslie Chang’s book, Factory Girls. A majority of migrants expected to work for a few years, save money, and eventually return to their hometowns. However, in recent years this pattern has notably shifted. Government planning documents refer to migrants born after 1980 as “new generation migrant workers,” and recent reports from China’s National Bureau of Statistics show how they differ from their predecessors. Just as Juping and Xinfing moved to Beijing as a married couple with a young child in tow, several studies show that a majority of migrant workers now move with at least one other family member.

Beijing’s Daxing district lies outside the Sixth Ring Road, a 90-minute drive from the city center. The local government has made a push to attract garment factories ranging in size from those with a few hundred employees to those with less than a dozen. The workers who come here are mostly in their late teens and twenties. Like previous generations, they have come to start a new life with little savings and a lot of gumption. But they are more tech-savvy, fashion-conscious, and educated than their parents. Most significant, they expect to integrate permanently into city life—putting more urgent pressure on the government to change China’s current system of allocating social services (including schooling and health care) only to those with difficult-to-obtain city residence permits.

In his recent book, China’s Urban Billion, analyst Tom Miller of GK Dragonomics writes, “Surveys show that the majority of the new generation of migrant workers [have] no intention of returning to the penury of rural life.” In explaining the attitudinal shift, he notes: “They are significantly better educated than their parents, and usually adapt far more quickly to urban ways. They hope to become fully fledged urban citizens and enjoy a modern consumer lifestyle.””

via China’s New Migrant Workers Want More – Businessweek.

03/05/2013

* China Factories Try Karaoke, Speed Dating to Keep Workers

WSJ: Third in a Series: China’s Changing Work Force

“After years of offering production bonuses and other financial incentives to boost employee loyalty, TAL Group this year tried an unconventional tactic at its factory here in southeastern China: holding a “Sewing Olympics.”

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The manufacturer for such companies as Burberry Group BRBY.LN +1.21% PLC and Brooks Brothers Group Inc. had workers race to cut, stitch and fold raw fabric into high-end dress shirts. The 10 winners received small cash prizes and had their life-size images hung at an outdoor location where thousands of workers pass on the way to meals.

Cheng Pei Quan is a winner of the ‘Sewing Olympics’ at a factory. Manufacturers are looking beyond bonuses to retain workers and boost production in China.

First in the Series: China Manufacturers Survive by Moving to Asian Neighbors

Second in the Series: A Billion Strong but Short on Workers

“Chinese people put quite a lot of value on ‘face,’ ” says 23 year-old winner Cheng Pei Quan, who earned the nickname “The King of Collars” because he can sew 95 collars an hour, a third more than average. “This competition gives me a sense of pride that other benefits such as rising wages cannot give me.”

After boosting pay to compete with other manufacturers, factory owners are finding money alone no longer is enough to attract and retain a generation of workers that demand a greater work-life balance than their parents did.

Companies are holding “American Idol”-esque singing contests, sponsoring dating events, constructing libraries and karaoke rooms on campus, and organizing small dinners between managers and top workers.

Businesses also are sending postcards to workers who visit their families during the Lunar New Year—when manufacturers can lose 20% or more of their staff—urging the employees to return to work.

The measures are a response to an unprecedented shortage in China’s workforce. Demand for workers exceeded supply by a record in the first quarter. China’s working-age population, defined as people from ages 15 to 59, fell last year for the first time in decades, a result of the national one-child policy that was implemented in 1980.

While the number of migrant workers in China rose 3.9% last year, manufacturers face stiff competition from construction, mining and other industries for staff. The average monthly wage for such workers has increased 74% in the past four years, to $395 in the first quarter.

For factory owners, the ability to recruit workers is a matter of survival. If plants can’t find or replace staff quickly enough, they won’t be able to fill customer orders on time. Those that can’t will be forced to turn elsewhere in Asia to manufacture goods—or go out of business.

via China Factories Try Karaoke, Speed Dating to Keep Workers – WSJ.com.

09/03/2013

* Where Have China’s Workers Gone?

Bloomberg: “Xi Jinping and Li Keqiang are taking over China’s leadership at a time when growth has slackened and labor issues have become more complex.

China's Disappearing Surplus Labor

Reports that businesses such as Foxconn Technology Group are raising wages and struggling to recruit workers in China have intensified debate over just how many surplus workers the country still has. Meanwhile, a boom in college-educated Chinese has raised concerns of an impending threat to U.S. competitiveness. These seemingly disparate concerns about China’s labor force are actually linked by common underlying factors, with critical implications for China’s ability to remain the growth engine of the world.

China’s large pool of surplus labor has fueled its rapid industrial growth. Now this “demographic dividend” may be almost exhausted, and its economy reaching a Lewis turning point: a shift named after the Nobel prize-winning Arthur Lewis, who was the first to describe how poor economies can develop by transferring surplus labor from agriculture to the more productive industrial sector until the point when surplus labor disappears, wages begin to rise and growth slows.

Citing periodic labor shortages and unskilled wages that have risen since 2003, prominent Chinese economists suggest that time has come. The International Monetary Fund disagrees and puts the turning point much later — between 2020 and 2025, based on a model analyzing labor productivity. A third view is that China’s surplus labor is still plentiful, given that about 40 percent of the labor force is still underutilized in the rural sector, mostly in agriculture, which accounts for only 10 percent of gross domestic product.

Mobility Restrictions

In China, many market imperfections impede the mobility and use of labor. Thus, actual availability may fall far short of what is potentially available. The hukou residency system that restricts migrant workers from accessing services where they are employed is the most glaring example of this kind of imperfection. Less obvious is the extent to which China’s rural- support policies, including subsidy programs, may be encouraging workers to stay in agriculture longer than they should.

Surplus workers may not be in agriculture as in the original Lewis model but in smaller towns, underemployed at depressed wages. The result is that China has the highest rural- urban income disparity in the world.

Why don’t these workers move to more productive jobs in more dynamic settings? In formal terms, it is because their “reservation wage” has increased — that is, the minimum wage they demand to move is much greater than their current wage, because for a generation that didn’t experience the hardships of the Mao Zedong era, the monetary and emotional costs of relocation have risen. Many workers won’t move to major cities that lack affordable housing. They may also have rights to land that can’t be sold for full market value — thus, staying in familiar surroundings is now a more attractive proposition.

If recent decades saw a huge migration that “brought workers to where the jobs are” along the coast, the future may mean the reverse, involving “bringing the jobs to where the workers are” with profound implications for China’s economic geography.

In lesser known provinces such as Henan, with a country- sized population of 100 million, large numbers of young workers seek factory positions but are unwilling to relocate to seemingly foreign places in coastal China. As China becomes more consumption-oriented with rising incomes and urbanization, the center of economic gravity will naturally move inland where two- thirds of the population resides.

College Graduates

Just as young workers are demanding more satisfying jobs, they also increasingly feel entitled to a college education. Government policy has expanded access to higher education. From 2000 to 2010, the percentage of college-age cohorts enrolled in universities more than tripled in China, a rate of increase far above that of India, Malaysia and Indonesia. China wants to produce 200 million college graduates by 2030; they will make up more than 20 percent of the projected labor force, more than double the current ratio. The push to expand higher education means the number of college-educated has leapfrogged — and excessively so — ahead of those holding only vocational or junior college degrees.

These college-educated workers are unwilling to settle for factory work and compete for office-based positions. College graduates are four times as likely to be unemployed as urban residents of the same age with only basic education, even as factories go begging for semi-skilled workers. Given the underdeveloped service sector and still-large roles of manufacturing and construction, China has created a serious mismatch between skills of the labor force and available jobs.

As the economy moves up the value chain, substituting more capital-intensive manufacturing for unskilled labor-intensive assembly, a shortage of semi-skilled workers is appearing. But the excessive growth of college graduates has outpaced the structural transition and prematurely shifted the labor supply from semi-skilled manufacturing workers to more knowledge- intensive service professionals. More emphasis on vocational training and industry-specific engineering skills will help China fill its immediate need for manufacturing workers.”

Yukon Huang and Clare Lynch are, respectively, a senior associate and a junior fellow at the Carnegie Endowment. The opinions expressed are their own.

via Where Have China’s Workers Gone? – Bloomberg.

30/12/2012

* China tightens loophole on hiring temporary workers

Further labour reform is being implemented. This set will make China more progressive than many western countries!

Reuters: “China amended its labor law on Friday to ensure that workers hired through contracting agents are offered the same conditions as full employees, a move meant to tighten a loophole used by many employers to maintain flexible staffing.

A worker welds steel bars at a construction site for a new train station in Ningbo, Zhejiang province, December 6, 2012. REUTERS/China Daily

Contracting agencies have taken off since China implemented the Labor Contract Law in 2008, which stipulates employers must pay workers’ health insurance and social security benefits and makes firing very difficult.

“Hiring via labor contracting agents should be arranged only for temporary, supplementary and backup jobs,” the amendment reads, according to the Xinhua news agency. It takes effect on July 1, 2013.

Contracted laborers now make up about a third of the workforce at many Chinese and multinational factories, and in some cases account for well over half.

Some foreign representative offices, all news bureaus and most embassies are required to hire Chinese staff through employment agencies, rather than directly.

Under the amendment, “temporary” refers to durations of under six months, while supplementary workers would replace staff who are on maternity or vacation leave, Kan He, vice chairman of the legislative affairs commission of the National People’s Congress standing committee, said at a press conference to introduce the legislation.

The main point is that contracting through agencies should not become the main channel for employment, he said, acknowledging that the definition of backup might differ by industry.

“In order to prevent abuse, the regulations control the total numbers and the proportion of workers that can be contracted through agencies and companies cannot expand either number or proportion at whim,” Kan said.

“The majority of workers at a company should be under regular labor contracts.”

Although in theory contracted or dispatch workers are paid the same, with benefits supplied by the agencies who are legally their direct employers, in practice many contracted workers, especially in manufacturing industries and state-owned enterprises, do not enjoy benefits and are paid less.

Employment agencies have been set up by local governments and even by companies themselves to keep an arms-length relationship with workers. Workers who are underpaid, fired or suffer injury often find it very difficult to pursue compensation through agencies.

China would increase inspections for violations, Kan said, including the practice of chopping a longer contract into several contracts of shorter duration to maintain the appearance of “temporary” work.”

via China tightens loophole on hiring temporary workers | Reuters.

30/12/2012

* Signs of Changes Taking Hold in Electronics Factories in China

Labour reforms, urged by major western firms whose products are outsourced to China are beginning to be felt.  However, one aspect, that of reduced overtime, is not welcome by many workers who would rather earn more even at the cost of leisure and health.

NY Times: “One day last summer, Pu Xiaolan was halfway through a shift inspecting iPad cases when she received a beige wooden chair with white stripes and a high, sturdy back.

At first, Ms. Pu wondered if someone had made a mistake. But when her bosses walked by, they just nodded curtly. So Ms. Pu gently sat down and leaned back. Her body relaxed.

The rumors were true.

When Ms. Pu was hired at this Foxconn plant a year earlier, she received a short, green plastic stool that left her unsupported back so sore that she could barely sleep at night. Eventually, she was promoted to a wooden chair, but the backrest was much too small to lean against. The managers of this 164,000-employee factory, she surmised, believed that comfort encouraged sloth.

But in March, unbeknown to Ms. Pu, a critical meeting had occurred between Foxconn’s top executives and a high-ranking Apple official. The companies had committed themselves to a series of wide-ranging reforms. Foxconn, China’s largest private employer, pledged to sharply curtail workers’ hours and significantly increase wages — reforms that, if fully carried out next year as planned, could create a ripple effect that benefits tens of millions of workers across the electronics industry, employment experts say.

Other reforms were more personal. Protective foam sprouted on low stairwell ceilings inside factories. Automatic shut-off devices appeared on whirring machines. Ms. Pu got her chair. This autumn, she even heard that some workers had received cushioned seats.

The changes also extend to California, where Apple is based. Apple, the electronics industry’s behemoth, in the last year has tripled its corporate social responsibility staff, has re-evaluated how it works with manufacturers, has asked competitors to help curb excessive overtime in China and has reached out to advocacy groups it once rebuffed.

Executives at companies like Hewlett-Packard and Intel say those shifts have convinced many electronics companies that they must also overhaul how they interact with foreign plants and workers — often at a cost to their bottom lines, though, analysts say, probably not so much as to affect consumer prices. As Apple and Foxconn became fodder for “Saturday Night Live” and questions during presidential debates, device designers and manufacturers concluded the industry’s reputation was at risk.

“The days of easy globalization are done,” said an Apple executive who, like many people interviewed for this article, requested anonymity because of confidentiality agreements. “We know that we have to get into the muck now.”

Even with these reforms, chronic problems remain. Many laborers still work illegal overtime and some employees’ safety remains at risk, according to interviews and reports published by advocacy organizations.

But the shifts under way in China may prove as transformative to global manufacturing as the iPhone was to consumer technology, say officials at over a dozen electronics companies, worker advocates and even longtime factory critics.

“This is on the front burner for everyone now,” said Gary Niekerk, a director of corporate social responsibility at Intel, which manufactures semiconductors in China. No one inside Intel “wants to end up in a factory that treats people badly, that ends up on the front page.”

The durability of many transformations, however, depends on where Apple, Foxconn and overseas workers go from here. Interviews with more than 70 Foxconn employees in multiple cities indicate a shift among the people on iPad and iPhone assembly lines. The once-anonymous millions assembling the world’s devices are drawing lessons from the changes occurring around them.

As summer turned to autumn and then winter, Ms. Pu began to sign up for Foxconn’s newly offered courses in knitting and sketching. At 25 and unmarried, she already felt old. But she decided that she should view her high-backed chair as a sign. China’s migrant workers are, in a sense, the nation’s boldest risk-takers, transforming entire industries by leaving their villages for far-off factories to power a manufacturing engine that spans the globe.

Ms. Pu had always felt brave, and as this year progressed and conditions inside her factory improved, she became convinced that a better life was within reach. Her parents had told her that she was free to choose any husband, as long as he was from Sichuan. Then she found someone who seemed ideal, except that he came from another province.

Reclining in her new seat, she decided to ignore her family’s demands, she said. The couple are seeing each other.

“There was a change this year,” she said. “I’m realizing my value.””

via Signs of Changes Taking Hold in Electronics Factories in China – NYTimes.com.

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