Transcript Trade Unions in China`s Labor Market: Confrontational or Cooperative

TRADE UNIONS IN CHINA’S
LABOR MARKET:
Confrontational
or Cooperative
Cheng Wang
Institute of Economics
Chinese Academy of Social Sciences
ROLES OF TRADE UNIONS IN
TRADITIONAL MARKETS-1
Trade union (TU) is an important
element in altering free competition
and acts as a force of monopsony in
the traditional labor market
 TU shifts the equilibrium and create
more unemployment for the economy
and higher labor costs for the firms

ROLES OF TRADE UNIONS IN
TRADITIONAL MARKETS-2
W
Ls (TU)
Ls
W (TU)
W0
Ld
L
Traditional Employment or Labor Market
Early history of the market economy
 Transition from an agricultural society
 An under-developed capital market
 Slow advances in science & technology
 Very limited social education
 Long-term cycle for firm innovation
 Low rate of transmitting information
 Conflicts in: property rights, knowledge,
communication, social status and
unbalanced legislation

Labor Supply-side Theories
 reasonable
rebellion
 violent revolution
 confrontational & active trade
unions:
-striking
-production halts
-collective demonstrations
-pickets
Core Employment Market
 new
relationship between an
employer and employees
 modem entrepreneurial innovation
 information and communications
technology (ICT)
 human resources (HR)
management
 team production
 concern of stake-holders
Innovation
 introduction
of new
technology
 finding of new sources of raw
materials
 new adjustment of business
organization
 manufacture of new products
 expansion of new markets
Comparisons between Core and
Traditional Employment Markets-1
standards of labor type, grade, position,
working-condition, and compensation vs.
subjective judgments of a boss
 rule-of-law: legislations, laws, regulations
and decrees vs. official arbitrary manner
 modernization of managerial ideology in
production standard of SA-8000 vs. unique
interest of stockholders
 HR: designing of the employee's career vs.
cares
vs.
cares
onlyonly
for firm's
for firm's
profitability
profitability

Comparison between Core and
Traditional Employment Markets-2
widely spread of basic and higher
educations vs. poor education
 gap of knowledge between managers
and lower-tiered employees has
greatly narrowed
 ICT technology: employees can get
access to firm messages and contact
the top management
 potential contradictions in
management and labor relations can
usually be resolved before exposed

Trade-Union
Attitude
More
Cooperative
D2
D1
TU
E2
E1
More
Confrontational
Gov. & Firms Preferences
More
Rule-of-Governors
Non-core
Employment
More
Rule-of-Law
Core
Employment
Figure 1. Trade Unions Attitude vs. Government and Firm
Decisions
China’s Labor Market
 emerged
only after reform &
openness came about in 1978
 rural economic reform mainly in the
early period of the 1980s
 SOE reform mainly in the early
period of the 1990s
 urban-rural employment promotion
policies in the initial years of the
new millennium
LABOR MARKET AND CURRENT
TRADE UNIONS IN CHINA
Labor Supply: marketized labor force,
which is subject to market competition
 Demand for Labor: mainly from
'marketized' enterprises
 TU: largely retained the old features of
a traditional planned economy--activities of trade unions have to retain
consistency with the orientation of
government policies

STRUCTURE OF TRADE UNIONS IN CHINA
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2004: 136.9 million TU members.
51.7% of total urban employees (264.8
million) in China.
Employees in the government sector, SOEs
and collective-owned firms, have all entered
TU.
73% for privately-owned enterprises; TU
leaders in private enterprise are either
relatives of the firm head or are themselves
in positions of power.
Limited TU membership in foreign-funded
firms.
WHO REQUEST INDEPENDENT
TRADE UNIONS IN CHINA

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Low skill workers in traditional employment
(or non-core employment) markets,
Workers come from rural areas where they
have been farmers or casual farming
workers,
Workers have experienced poor working
status, wages and other labor conditions,
Workers find it very difficult to get
assistance from the local government and
official trade unions,
These workers have a strong motivation to
build an independent trade union to protect
their own interests.
TU Improvement with ILO Help-1

2001: Trilateral Meeting
-Ministry of Labor and Social Security
-All-China Federation of Trade Unions
-Enterprise Association of China and
Chinese Entrepreneurial Society

The meetings has been held annually
on a grand scale, and quarterly on a
smaller scale at both national and
provincial levels.
TU Improvement with ILO Help-2
To solve or alleviate problems in
-labor contracts
-labor conflicts during SOE reforms
-compensational contractions
-work conditions
-quarrels between employer & workers
 Find hard to:
-protect union leaders from revenge
-prevention of nepotism
-correct trilateral asymmetry of information

Why Is Independent Union
Movement Turning Down?
Government policy became more
neutral, fair and more convincing to
workers.
 Government changes its means of
policy implementation from the heavy
hand to educational and judicial
processes.
 Individuals take more responsibilities
for their personal security more cares
on their stable pays under new social
security system

(Continued)

Enterprises have begun to introduce
modern HR management techniques:
--linking job performance with wage
levels and promotions
--raising firm's internal cohesion by
training programs
--offering entertainment events
--developing a good relationship with
employees and union members
--introducing flexible working time
system
New Schemes Taking Place of
Independent Trade Unions
Models of HR, the corporate culture and
the idea of team production: Large Firms
 Measures of reform to "stabilize
employees to raise efficiency“
 Chair of a TU in a firm holds a concurrent
position as a director or a supervisor
 Government policy has begun to pay
increasing attention to the living and
working conditions of the migrant and
unskilled workers

CONCLUSION: Cooperative TU
is Possible.
Government: focus on insistence and
implementation of the principles of
"rule of law“; encouraging and
protecting enterprise innovation and
core employment development.
 Business: hold the idea of “a market
economy as innovation economy“;
achieve sustainable competitiveness
by ISO-9000, SA-8000, ISO-14000etc.
 Individuals: promote personal
knowledge of lawful rights and duties,
and working skills at desirable levels.

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0086-10-88454664(H)
Fax: 0086-10-68032473
Email: [email protected]