Wall Street Journal: Not Part of the Bargain: Chinese Premier’s Speech Omits Key Phrase for Workers

China Labour Bulletin is quoted in the following article. Copyright remains with the original publisher.

March 6, 2015

Sputtering economic growth may have claimed a new victim in China’s policy toolkit: Promoting collective bargaining among the country’s vast and increasingly disgruntled workforce.

A year after backing the practice as a way of fostering “harmonious” labor relations, Chinese Premier Li Keqiang dropped his reference to collective bargaining in an annual policy speech Thursday—an omission that labor experts say signals concerns over the potential fallout from rising wages in the world’s second-largest economy.

Mr. Li, in delivering the government’s annual work report, instead promised to “deal with ‘missing’ or delayed wages of migrant workers, improve the mechanisms for supervising the handling of labor issues and disputes, and ensure the law fully functions as the protector of the rights and interests of anyone in employment.”

His speech reprised language used by his predecessor Wen Jiabao in earlier work reports, which also called for better mechanisms to resolve labor conflicts. It omitted last year’s pledge to “encourage collective wage bargaining,” a policy that labor researchers say would have helped China cope with rising worker grievances (pdf).

Labor disputes have become China’s most prevalent form of social conflict, the Chinese Academy of Social Sciences said in an annual study on social trends last year.

“The language points to a shift in the government’s attitude, placing more emphasis on legal institutions in tackling labor disputes,” said Wang Kan, an assistant professor at the China Institute of Industrial Relations in Beijing. “Perhaps the government feels that—in a period of economic slowdown—collective bargaining may not be suitable, and that protecting minimum legal standards would be more beneficial for workers.”

Mr. Li’s revised rhetoric also hints at the government’s reluctance to give up influence in the management of labor relations, long considered a cornerstone of social stability, legal experts say.

“A push for collective bargaining would have meant an increasingly passive, neutral role for the state,” said a Beijing-based lawyer familiar with Chinese labor law. Easing this push, at least for now, appears “consistent with the dominant ruling ethos we’ve seen out of this administration,” he said.

Collective bargaining—the process of negotiating terms of employment between employers and organized groups of workers—is a sensitive issue in China, where state-controlled unions are the only legal form of organized labor and are supposed to negotiate on behalf of workers.

The practice has increasingly featured in industrial disputes in southern Guangdong province, the affluent manufacturing hub often used as a test bed for new labor policies. Labor unrest there, like elsewhere in China, has worsened over the past year, and local activists have responded by teaching workers how to collectively negotiate with employers to resolve disputes.

Guangdong authorities recently rolled out a law that gives workers the right to collectively demand talks with employers over wages and benefits. Legal experts, however, have criticized the legislation as weak and unlikely to pressure companies into undertaking serious negotiations.

“The government’s attitude toward collective bargaining remains rather conservative,” given its worries that popularizing the practice could hurt the economic growth, said Meng Quan, a labor scholar at the Capital University of Economics and Business in Beijing. “Promoting collective bargaining could have the effect of driving wages higher, while many regions in China have yet to make the necessary structural upgrading to their economies.”

For now, as Premier Li said Thursday, Beijing is focusing its attention on tackling labor disputes arising from unpaid wages, a longstanding scourge among China’s migrant workforce of 270 million people. The problem has grown particularly acute in the property and construction sectors, which have been reeling from a slump in housing prices.

“Over the last year or so, the nature of labor disputes has shifted away from demands for higher wages toward disputes over wage-arrears, lay-offs, factory closures, etcetera,” said Geoff Crothall, a spokesman for China Labour Bulletin, a Hong Kong-based advocacy group.

“Once the economy stabilizes a bit more and businesses become more profitable, the need for a collective-bargaining mechanism will climb up the political agenda again.”

— Chun Han Wong

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