China's labor unrest worse than suspected

Independent researchers have published findings about China's labor unrest, saying that it is much more widespread than it ever has been before, and that the state is cracking down on independent union organizers who seek to ameliorate the dismal wages and working conditions, with torture and intimidation:

[A] growing number of economists say the unrest proves that it is not the exchange rate but years of sweatshop wages and income inequality in China that have distorted global competition and stifled domestic demand. The influential Far Eastern Economic Review headlined its latest issue “The coming crack-up of the China Model”.

Yasheng Huang, a professor at the Massachusetts Institute of Technology, said corruption and a deeply flawed model of economic reform had led to a collapse in personal income growth and a wealth gap that could leave China looking like a Latin American economy.

Richard Duncan, a partner at Blackhorse Asset Management in Singapore, has argued that the only way to create consumers is to raise wages to a legal minimum of $5 (£3.50) a day across Asia – a “trickle up” theory.

The instability may peak when millions of migrant workers flood back from celebrating the Chinese new year to find they no longer have jobs. That spells political trouble and there are already signs that the government’s $585 billion stimulus package will not be enough to achieve its goal of 8% growth this year...

A legal advocate for migrant workers, Xiao Qingshan, told a tale of violent intimidation by the state in collusion with unscrupulous businessmen.

On January 9, Xiao said, 14 security officers from the local labour bureau broke into his office, confiscated 600 legal case files, 160 law books, his computer, his photocopier, his television set and 100,000 yuan in cash.

“That evening I was ambushed near the office by five strangers who forced a black bag over my head and then threw me into a shallow polluted canal,” he said. His landlord has since given him notice to quit his rented home.

Xiao said he was defying bribery and threats to speak to the foreign media because he wants international businesses to know what is really happening in “the workshop of the world”.

Violent unrest rocks China as crisis hits (Thanks, Marilyn!)

• [tyler the perfect child]

  ameliorate? you lost me.

• [jjasper]

  The question isn’t “whatever will China do?” it’s how log will the predictable campaign of brutal repression take to put workers back in their place.

• [prunk]

  China is not alone. Something is going to have to change.

  France
  Iceland
  Europe
  Greece
  Russia

• [snax]

  Does anyone remember the protests in Tiananmen Square back in the late 80′s? Growing up, all I knew was the image of the lone man standing in front of the tanks. There was much more that came before that, though. Millions of working people from all areas of industry came together to peacefully protest unfair wages and labor practices. They shut down Beijing.
  You know what happened? The Chinese government came in with soldiers and tanks and opened fire. They didn’t ask questions. They just opened fire using bullets you would use in the battlefield–bullets that tear and shred internal organs. Many, many people were killed.

  What do I think the government will do if people begin to protest? Based on what they’ve done before, I can’t imagine it will be good.

• [ab5tract]

  Its scary to read these items, knowing that in the US secret renditions are still legal and that all communications are tapped 24/7. That, coupled with the engineered disdain for unions, could easily lead to similar things happening in the US. The spectacle will respond with “Of course he gets a black head bag and a dip in a canal, he was trying to UNIONIZE. Now here’s another video of an underage teen girl shaking it like an iPhone.”

  Sound farfetched? I doubt too many of the folks on the Long March thought that in less than 75 years their people would be wage slaves to industrial capitalists.

  The point is we are all on a very slippery slope here, and those who oppose unions in the US need to carefully assess just what the hell they are thinking. That goes double for supporters of full spectrum wiretaps.

• [Marcel]

  Oh how terrible what these independent researchers discovered!

  Were we already aware of these goings-on before the recession or the Olympics and did we conveniently choose not to listen, or have these things quite suddenly come to pass?
  Timing is everything.

  Now pass me the bong Michael!

• [jjasper]

  We get little enough news about what massive industrialization does to China. Let’s try talking about the topic at hand, what we think China’s response might be, and not use this post as a springboard to pet topics.

• [Marcel]

  Rindan:

  China’s real challenge now is to manage their financial woes. China is not set up for economic crisis.

  To put China’s “financial woes” into perspective, they had a trade surplus (yes, surplus) of 280 billion dollars over 2008.
  I just checked the trade ticker for the U.S.. It has a trade deficit of roughly 63 bilion dollars.

• [Anonymous]

  Fun fact: Income disparity in China is greater now than when the Kuomintang were in charge.

• [Keeper of the Lantern]

  SHRDLU:

  I basically agree, though in my own opinion I would favor tariffs and other trade decelerators for countries with weak or nonexistent labor and environmental laws, otherwise we get the bleak China scenario and we are ineffect forced to compete against countries that don’t spend anything on health and safety or protecting the evironment.

  Other than that, though, I agree with the capitalists that trade barriers can havea very negative effect on the world’s economy, so I would tend to shy away from protectionism in the greater sense.

• [zuzu]

  purely hypothetically, how many refugees spilling out out of unregistered, rusty freighters would say, North America and Mexico, be able to absorb?

  Ooh, this is one of those fun estimation and relativity questions that HR at Microsoft and Google ask when they’re hiring people (if they still were hiring people)!

  Answer: As many as are willing to stay! :D

  Next question: “How many gas stations are there in the United States?” :p

• [prunk]

  A while back I had the sinking suspicion that eventually something would break in China. The never ending human rights violations and the poor working conditions in a country so heavily divided in developed and undeveloped status. With farm lands and factories with working conditions and health concerns on par with many undeveloped nations and then business centres that are forefront in the world. Something was askew. I chalked it up to the economy riding on the tolerance of the lower class. That as long as there was enough lower class tolerating enough it could continue. As long as they were kept in the dark about their rights and fed lies the tolerance could last much longer. I knew one day it would break.
  However, I never knew it would break everywhere. A friend of mine has sent me some associated links.
  France
  Iceland
  Europe
  Greece

• [Takuan]

  hey, I only supply the lit matches, you can do the gasoline.

• [zuzu]

  What do I think the government will do if people begin to protest? Based on what they’ve done before, I can’t imagine it will be good.

  Wait, are you talking about China or the United States?

  I imagine that riots from the coming rationing and shortages already have counter-measures in place via FEMA camps and readiness exercises.

  If you’re fortunate enough to work in healthcare, you’ll merely be conscripted however.

  Time to go watch Doctor Zhivago and prepare…

• [zuzu]

  Richard Duncan, a partner at Blackhorse Asset Management in Singapore, has argued that the only way to create consumers is to raise wages to a legal minimum of $5 (£3.50) a day across Asia – a “trickle up” theory

  Meme tracking can be fun. Funny how price floors (aka “minimum wage“) is used in the same breath as “trickle up” — the latter a preferred talking point phrase by the Obama administration and their government actions in response to the severe swings of the business cycle in the USA (i.e. the current depression).

  I have little doubt that the PRC’s “socialism with Chinese characteristics” economy is unsustainably based on authority and violence not unlike Mao’s communist economy was, but it’d be nice to read this in English without being colored by an American / Western normative lens.

• [noen]

  I favor the French solution. It’s the only way to get their attention and make sure their listening.

• [Takuan]

  well Zuzu, now that they are built, those camps have to be used for SOMETHING. How about republicans? As chief authors of the global economic crisis, they should be the ones interned. That way their property could be freed up for the innocent jobless as well as the climate refugee hordes.

• [dainel]

  Unions in communist countries? Isn’t that usurping the function of the Party?

• [zuzu]

  Mr. President, we cannot allow a mineshaft gap!

• [Takuan]

  how come no one ever made a sequel?

• [ab5tract]

  @8

  As far as I can tell, the Nation is one of the few periodicals that does semi-regular analysis of Chinese industrialization. The Nation’s China Feed

  (The Economist probably does as well, but that magazines schizophrenia is thankfully open for all to see now that the very financial instruments they promoted have brought global economic ruin.)

  A heady preamble to today’s story: Chinese Struggle Over Resources Under a Quasi-Maoist Capitalism from last August.

• [Rindan]

  Richard Duncan, a partner at Blackhorse Asset Management in Singapore, has argued that the only way to create consumers is to raise wages to a legal minimum of $5 (£3.50) a day across Asia – a “trickle up” theory.

  The instability may peak when millions of migrant workers flood back from celebrating the Chinese new year to find they no longer have jobs.

  Does anyone besides me see that as a perfect contradiction? If a lack of jobs is about to cause massive unrest, is the right response really crank up the cost of hiring a worker in China? If it costs nearly as much to hire an American as it does a Chinese, why on earth would an American company bother hiring workers in China? China needs global trade worse than any other country in the world. The shutting down of global trade will leave China a twitching corpse.

  India tried the self reliance path that drives out foreign companies, and we can see where that got India. India is still slowly trying to undo the damage to its faltering economy.

  China is in an ugly spot economically but I personally think that for being totalitarian despots, they were doing the best they could. The central government was slowly but steadily stamping out corruption and implementing rule of law. That isn’t to imply that it was all roses and there wasn’t a long way to go, but it has dramatically improved over the years. Wages were slowly rising as their frantic growth rate pushed wages up.

  It is pretty easy to criticize, and there is a lot to criticize China about, especially in the realm of civil rights, but I don’t see any other developing doing any better economically. Where China has come in 30 years economically is pretty astounding. China went from basically being in the same spot as North Korea to blasting past India.

  China’s real challenge now is to manage their financial woes. China is not set up for economic crisis. China had joined the club totalitarian countries that rule by the consent of the people. Most people in China were happy with their leadership from the central government, but that happiness and consent was built from having a growing economy that was dragging people into a new middle class and giving hope to the still poor. If the economic crisis lasts too long the consent is going to vanish. People in China are not going to want to go back to where they came from. China suffers a real risk of a very pissed off population… and with a population of over a billion… well, any sane dictator should be damned nervous in such a situation.

• [urbanspaceman]

  “Far Eastern Economic Review”, the acronym for which would be “FEER”.

  Am I the only one who thinks that’s quite a coincidence?

• [Takuan]

  purely hypothetically, how many refugees spilling out out of unregistered, rusty freighters would say, North America and Mexico, be able to absorb?

• [Patrick Nielsen Hayden]

  Of course, somewhere in China, there are no doubt bloggers eager to explain that, really, working conditions there are just fine and that anyone suggesting otherwise is probably a “professional hand-wringer” or a predatory union interested only in collecting dues.

• [Anonymous]

  If only Boing Boing were published in Chinese so that Charles Platt could tell these people that unions only drive up prices and hurt nonunionized workers.

• [ThreeFJeff]

  I thought we did?

• [Keeper of the Lantern]

  Ugh.
  Hopefully, China will navigate through this, but it’ll be necssary rough going.

  I think China’s factory workers have tolerated horrible conditions and outgeous labor practices because there was the belief that things would eventually get better as China’s wealth expands.

  Take that hopeful scenario away, and present most workers with the idea that “this could be permanent”, and I’d bet labor unrest will really break out to the points where it can’t be controlled or stifled.

• [Takuan]

  the porn version doesn’t count

• [mdh]

  What could China ever do with millions of unemployed young men? and what can we do to discourage that?

• [noen]

  China, a supposedly Marxist state, suppressing labor unions. If irony isn’t dead it’s certainly on life support.

• [Shrdlu]

  I remember when giving MFN status to China was an outrage to many–no, it wasn’t about human rights. It was about Communism.

  Of course big business has sold a us bill of goods with regard to global free trade (rising tide lifts all boats, what is good for GM is good for America, etc.) in tandem with a vicious smear campaign against unions. Nobody blinked.

  But there is a fundamental problem. What is unfair about lessened trade restrictions is that business is free to shop around for the cheapest means of production and goods, whereas workers are not free to shop around for the highest wages and best working conditions.

  Unless we open our borders to the world, free trade is not really free trade but a distortion of the free market. Such exploitation is inevitable. A minimum wage will do little to alleviate poverty and abuse. They cannot even enforce minimum health standards in China. Other Asian nations are far worse.

  And what has the end of protectionism done for the U.S.? Sure, you can buy cheap disposable goods at Wal-mart like never before, but what of our quality of life and where is the value in having an economy based on consumerism, and what are we doing to our environment?

  This, in a nutshell, is why I shop wisely and buy local whenever possible. But a world-wide recession and worker revolutions in Asia might be the only thing that can break this cycle of exploitation, short of an open immigration policy in developed countries. At least the second option might drive up our housing market.

• [noen]

  I mean, it isn’t like our economy isn’t “based on authority and violence”. Nor as if our prison slave laborers are not rioting over inhuman conditions.

• [Rindan]

  To put China’s “financial woes” into perspective, they had a trade surplus (yes, surplus) of 280 billion dollars over 2008.
  I just checked the trade ticker for the U.S.. It has a trade deficit of roughly 63 bilion dollars.

  If China’s exports get cut 50% because of an economic slump and its people become poorer and so import 75% less goods, their trade surplus will go up. That doesn’t mean that China’s economy isn’t in ruins.

  Trade deficits tell you basically nothing about the health of a nation. The US has had a trade deficit since 1970 without interruption… that is 40 years. During the height of Japan’s economic malaise in the 1990′s they had a trade surplus. Trade deficits and surpluses tell you nothing worthwhile about the health of an economy.

  China has a very serious problem. It is kind of interesting in that China’s political system relies more on consent than that of say the US (or any stable democracy). The last election was a great example. As Bush was getting shown the door he had basically zero consent from the population that he governed. Under many systems, for a ruler to be so reviled as Bush, you would be in serious risk of uprisings. Instead, in a healthy democracy that anger is channeled into an election. Bush gets shown the door, he voluntarily leaves without letting the door hit his ass on the way out, and all is well. The US has political harmony despite it being run into the ground. Even if Obama manages to screw up bad enough to incur the wrath of the US population, the election cycle starting up will again will channel the anger and give it an outlet. Wide spread rebellion in a democracy like the US is extremely hard. It is a hell of a lot easier to get people to spend an hour voting their pleasure than it is to arm them with guns and get them to go murder their fellow humans.

  China has a different problem. When anger builds up, it has not outlet. The only thing the ruling power can do is bring out bigger guns and clamp down harder… and by doing so increase anger and discontent. When a government like China loses consent of the people it has no effective way of bleeding off the anger and rage. In a sense, China’s government is more dependent upon consensus than the US government.

  China had a very high level of consent to the government. It got that consent to be ruled by bringing in the economic good times. China had its problems, but it had an exploding middle class and many people were offered the hope to join the ranks of the new middle class. China is about to suffer because it can’t offer that hope. Worse, the middle class (who lead most revolutions) are about to get brutalized as the world economy cools off. 100 million college educated discontented middle class folks backed up by 900 million poor peasants is a powder keg waiting to be set off.

  China still has plenty of time to do something to let off the steam or for the economy to revive, but China’s leaders should be starting to feel uneasy.

• [Tweeker]

  International businesses know, its why they are their. Good service is hard to find.