EconoChina

A blog on Chinese economy & society

When labor is not labor

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Naked Capitalism has highlighted a piece on the NYT  about protesting ex-bank workers. The article itself wasn’t too bad by NYT standard despite snides about poor divorced protester moving to Beijing to be “closer to the country’s leaders” and other useless commentaries. The interpretation by Yves Smith, though, is completely off by suggesting “the futility of labor action against entities near and dear to the officialdom”.

Yes, Honda and Foxconn are foreign-owned (btw, the Chinese do not see Taiwanese as foreign), and strikes against them had subtle governmental support. But could there be other reasons behind this difference in tolerance? Things like:

  1. The southern manufacturers with “approved” strikes are mainly exporters, while the banks focus on domestic market.
  2. Workers at the southern manufacturers are mostly young, unskilled country migrants while the ex-bank employees are middle-aged, effectively unskilled, officially city dwellers.
  3. Raising the wages of the unskilled migrants force the exporters to be more competitive while the banks need to reduce their bloated headcounts to be efficient.
  4. Raising wages for migrants helps rebalancing the Chinese economy and builds a middle class, while rehiring the ex-bank employees will…hmm…make their lives better.

Whatever you think of firing these middle-aged people with no real marketable skills, the fact remains that there is economic rationale behind stonewalling their efforts and supporting the cause of the migrant strikers. Whether national policy should be determined solely by economic considerations is another issue though.

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Written by Cindy Luk

August 16, 2010 at 7:42 pm

Posted in China, Industries & Companies, Media

Tagged with ,

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