Can't Hide: China's New Labor Law Spells Doom For Some!

By Number Six

Saturday, May 03, 2008 at 02:42 PM

It was bound to happen, and maybe this is some good news for a change, and amazing, yes, that the MSM chose to ignore this story, to which I was tipped off to: China's new contract law for workers is already kicking the shins out of foreign companies...now, where do they go for the cheapy labor, mmmm?

A friend of mine tipped me off to this, seems some in the import business are up in arms: China's new contract labor law, which into effect 1-1-2008 gives the Chinese workers far more rights than ever before.

And to those from outside of China wanting the good old days of El Cheapo labor, this spells doom, indeed:

For companies already struggling with inflation, high energy costs, the falling dollar and an environmental crackdown, however, the new law has been devastating.

It has added to the rising cost of doing business in China -- contributing to an exodus of what is estimated to be thousands of factories from places like the Pearl River Delta in southern China, for 20 years synonymous with cheap and abundant labor and the engine behind China's rapid growth.

The shift in power has far-reaching consequences for the Chinese economy, raising questions about whether this is the beginning of the end of China's role as the world's factory floor.

Far-reaching consequences, indeed. So reaching that, before the law went into effect, many firms...US and others...tried like hell to get this law taken out...and why didn't the MSM report this, we wonder?

And which firms? Take a guess! GE, UPS, Wal-Mart, Nike, etc...

In March 2006 the Chinese government, with considerable popular backing, proposed a new labor law with limited but significant increases in workers’ rights. But the American Chamber of Commerce in Shanghai (AmCham), the United States-China Business Council, and U.S.-based global corporations lobbied to gut the proposed law. They have even threatened to leave China for countries like Pakistan and Thailand if the law is passed.

But...?

But as AmCham and other corporate lobby groups congratulated themselves and prepared to escalate their demands, forces inside and outside of China organized to oppose this undue corporate influence. International union federations have pressured their employers to reverse course; human rights organizations have mobilized support for Chinese workers’ rights; U.S. members of Congress have introduced legislation decrying the corporate intervention and apparent Administration complicity; and China’s official labor organization, the All-China Federation of Trade Unions (ACFTU), has taken a strong stand against corporate pressure.

The impact of this new law is just now beginning to be felt. Already, some firms have packed up and left for somewhere else, of course. One then wonders where the "end of the road" for cheap labor is, eh?

Meaning? I can see why the MSM buried this story, most of the sources I found were well outside the US. Such affects way too many of the power brokers on Wall Street, so, news like this is, yes, not good for them, but quite poetic for the rest of us: Even low-paid workers deserve a raise, eh?

It does mean that Chinese-made goods and services are going to go up in price along the course of this year and more. This breaks my heart, especially for Nike, Wal-Mart, Google and others. It also puts the workers of other nations closer to a more competitive footing, something we've wanted all along.

So, what happened to globalization? Seems it ran smack dab into dear old Karl Marx. Oh well, can't have everything, can you?