The misery of Chinese working-class life
Afl-Cio, An
On March 16 the AFL-CIO filed a remarkable petition with the U.S. government asking that the U.S. trade representative take action to promote the human rights of China's factory workers. The...
...Fundamental workers' rights must be given the same protection that is now given to rights of commerce...
...Cities facing shortages of "drudge" labor may temporarily lighten registration fees and certification requirements or may reduce the level of police violence against migrants...
...Local officials also benefit directly from the official or unofficial revenues produced by work and residence permits...
...Local governments each year have held tens of thousands of migrant workers in "Custody and Repatriation Centers," on the ostensible ground that they cannot show temporary residence and work certificates required in that jurisdiction...
...Police extort payments from migrants or summarily expel them on the pretext that they fail to meet local regulations...
...As explained above, Party cadres have financial interests in the revenue produced • by export enterprises, either as direct "partners" or as beneficiaries of exactions and extortion, and therefore have a strong interest in maintaining a cheap facPOLITICS ABROAD tory labor force...
...China will continue to serve as the world's sweatshop, producing low-technology goods alongside high-technology goods for decades to come—unless the Chinese government radically reverses course and dismantles its controls over factory workers...
...The Sub-caste of Migrant Factory Workers The vast bulk of China's factory workers are temporary migrants holding rural hukou...
...Chamber of Commerce, was perhaps more honest about why the petition was rejected: "Had the administration accepted the petition . . . we would have married forever human rights and trade, and that would have been a huge mistake...
...Congress first mandated that our trading partners enforce workers' internationally recognized rights in the mid-1980s...
...That aim cannot be dismissed as "protectionist...
...In both the pre- and post-reform eras, economic development strategies systematically transferred resources from those holding rural hukou to those holding urban hukou...
...In the latter—the model of a laissez-faire constitution— it is enough to protect global rights of property, contract, and investment...
...All countries, including China and the United States, face strong incentives to compete for mobile capital and jobs by cheapening the labor and debasing the lives of their working citizens...
...The factories are sweltering, dusty, and damp...
...When China fully protects the basic rights of its workers, it can enjoy normal access to U.S...
...These basic workers' rights include freedom of association...
...Local officials compete for investment...
...They are expelled and relocated to the countryside when they are no longer needed in the factory, when they are injured or sickened, or when they seek to assert their labor rights...
...China has signed many toothless international agreements requiring it to enforce workers' rights and broken them all...
...They are paid far less than the legal minimum wage, which is itself set far below the minimum wages of countries at a comparable level of development...
...Enterprise managers also seize workers' ID cards, residence permits, and work permits, making migrants more vulnerable still to arrest, fines, imprisonment, and repatriation if they leave the factory compound...
...The president should therefore refuse to enter into any new trade agreements under the auspices of the World Trade Organization, until that organization gives protection to workers' fundamental rights that is equivalent to the protection given to commercial interests...
...Detainees are raped, beaten, and otherwise abused...
...Equally important, workers are not allocated to China's factories by a competitive market...
...But, again, the hukou system, regulatory controls over temporary residence and temporary work, and the strong opportunities and incentives for abuse by police and employers remain in place throughout China...
...Since the late 1990s, greater unemployment among workers holding permanent urban hukou has led to greater antipathy to migrant workers by urban authorities...
...The Declaration specifically affirms for each person the right to a job, the right to form and join unions, and the right to an adequate standard of living...
...The goal is to use the enormous economic leverage of the United States to induce positive change in China—to achieve respect for the basic rights of China's factory workers...
...The goal of those provisions, and of this petition, is not to deny jobs and economic advancement to China's workers...
...Their wages are often arbitrarily withheld or unpaid...
...The Chinese system is not formally based on racial differences, but in practice migrant workers are distinguished by dialect and ethnicity...
...freedom from compulsory labor...
...In this spirit, the USTR should also negotiate a binding agreement with China, specifying incremental decreases in the trade remedies if China increasingly complies with workers' rights, measured by specific and verifiable indicators...
...They are widely impenetrable to migrants, especially the many who are illiterate...
...In 1994, the Ministry of Labor issued regulations requiring migrants to obtain from their home government a "registration card for leaving the area for work" and from the urban government a "work permit for personnel coming from outside...
...But local officials demand about $37 per person in taxes and fees...
...These investments often exceed the migrant's life savings...
...They can do little to relieve their misery...
...Hourly wages and unit labor costs are therefore greatly suppressed...
...To the contrary...
...POLITICS ABROAD Through an extraordinary feat of state engineering, China created and perpetuates an enormous sub-caste of factory workers...
...Local officials in exporting areas compete for investment and, legally or corruptly, extract personal wealth from both state and private enterprises...
...To the contrary, local governments act as enforcers for enterprises' all-out suppression of labor costs...
...They face militaristic regimentation, surveillance, and physical abuse by supervisors during their long day of work and by private police forces during their short night of recuperation in the dormitories...
...And the powerful PSB sees the hukou controls as a necessary tool of social control...
...Migrants may be recruited only into designated occupations in a receiving area...
...The hukou system enmeshes factory workers in a system of bonded labor, a form of forced labor that violates Conventions 29 and 105 of the International Labor Organization and constitutes an unreasonable trade practice under section 301(d) of the Trade Act...
...It also helps explain why migrants' wages fail to conform with the neoclassical economic assumption that wage growth tracks productivity growth—why, that is, their real wages have fallen in the last decade, while productivity has steadily risen...
...For this reason, the president should direct the USTR to enter into no new WTO-related trade agreement until such time as all WTO members are required to comply with the core covenants of the ILO...
...The petition thoroughly documents the Chinese government's systematic violation of workers' rights and demonstrates how such exploitation costs hundreds of thousands of U.S...
...Urban officials sporadically and violently "sweep" migrants out of cities and towns in large numbers—often in response to the demands of permanent residents, who view the migrants as a criminal underclass...
...A recent OECD study concluded that, in the mid1990s, the Chinese government transferred more than $24 billion each year from the rural to the urban economy...
...Chinese workers are acutely aware of the cumulative penalties they face if they quit or are fired for protesting...
...BusinessWeek claimed it was a "milestone" that "articulated a coherent intellectual position that makes a logical link between trade and labor rights...
...In 1958, the National People's Congress enacted Regulations on Household Registration in the People's Republic of China...
...The right to form autonomous associations in civil society is a precondition to resisting state tyranny and to mobilizing citizens for participation in pluralist political institutions...
...Chinese citizens holding rural hukou who seek work in towns and cities without government permission are outlaws...
...Minimum Wages, Maximum Hours In its 2003 Annual Report, the CongressionalExecutive Commission on China concluded 20 n DISSENT / Summer 2004 that China's factory workers "continue to work hours well in excess of legal limits, and for wages that are frequently not calculated according to law...
...Workers in all countries have a common interest in safeguarding the human rights of China's factory workers...
...Section 301 protects the rights of U.S...
...Their movements are controlled by the Public Security forces, who ruthlessly enforce the pass system...
...In the pre-reform era, "[t]he main enforcement mechanisms included the state control of agricultural production and procurement, the suppression of food-staple prices, and restrictions on rural-to-urban migration via a household registration system...
...Some local governments require enterprises to pay "newhire" fees, but managers pass those fees on to new workers as well...
...Very often these women workers are the sole breadwinners...
...But there is a major difference...
...The 1995 Measures on Application for and Issuance of Temporary Residence Permits require migrants to obtain temporary residence permits from the urban PSB...
...Regardless of the clarity or transparency of the substantive regulations, they are administered arbitrarily and corruptly...
...Even if political elites wish to raise the labor standards of their people, they face extreme pressure not to do so, in the absence of global standards that ensure that their competitors will do the same...
...Public Security forces in many cities have implemented policies of detaining any worker who threatens to commit suicide as a means of collecting wages...
...In any event, U.S...
...companies, and many others...
...Second, the internal passport system denies migrant workers other basic civil and social rights in their temporary urban life, further suppressing their bargaining power and wages...
...First, unlike other unfair trade practices enumerated in section 301, the workers' rights provisions are aimed at safeguarding fundamental human rights...
...In recent years, autonomous worker organizations helped democratize such countries as South Africa, Brazil, Poland, and South Korea—a fact that is not lost on leaders of the Chinese autocracy...
...These goals can be met if all countries are obligated, as a precondition to gaining the rights and benefits of membership in the WTO, to comply with the covenants of the International Labor Organization, the UN agency authorized to promulgate and supervise compliance with internationally recognized workers' rights...
...The deposits paid to employers, the wages withheld by managers, the new-hire fees passed on to workers, the withholding of ID certificates and residence permits, the threatened penalties against co-workers, and the debt accrued by workers to pay both government officials and managers together constitute an effective system of up-front bonds posted by migrant workers at the start of their employment...
...Most firms implement few health and safety measures, exposing workers to death not only by exhaustion but by toxins and machinery as well...
...and destitute migrants are in no position to demand that wage-and-hour standards be honored...
...In evaluating the burden on U.S...
...If rural citizens were permitted to work in any urban job, not just in factories or construction sites, factory wages would rise—even if the relative wages of permanent urban citizens who now have privileged access to higher-paying jobs outside the factory system might fall...
...Tom Donahue, the president of the U.S...
...For the same reason, Congress could not have intended that the USTR count the cheaper price of U.S...
...Manufacturing wages for female workers range as low as 12 cents to 30 cents per hour...
...In Mexico, the context is quite different...
...For example, Beijing reported that it had taken 98,000 migrants into custody for lack of proper documen18 n DISSENT / Summer 2004 tation and that 300,000 were "mobilized to leave the city" in 1997 alone...
...Iin Mexico the workers who produce for export are, as in China, largely migrants from the countryside, and the majority similarly are female...
...It is therefore appropriate that the U.S...
...Many factories make sure that only single women are recruited by asking to see their officially issued identity certificates, which in keeping with the Chinese state's strict family-planning policy require that the marital and family planning status of each woman is listed...
...Even before the dramatic acceleration in the flow of manufacturing jobs to China in the last few years, Congress had concluded that "[t]he lack of basic rights for workers" in developing countries is "a very important inducement for capital flight and overseas production by U.S...
...Once released, migrants are forceably repatriated to their place of permanent registration...
...Migrants are required to carry the residence permits at all times and show them to PSB officers upon request...
...Reebok's director of labor monitoring throughout Asia states, Who enforces Chinese labor law...
...Nonpayment of wages is pervasive...
...Migrant factory workers "remain confined within . . . the state's persisting imperative: to ally urban growth and productivity with costsaving, and, as a 'socialist' state, to provide for the city dweller while preserving the ruralite as docile, disposable trespasser, and drudge...
...Those unfair trade practices include barriers to imports from the United States, subsidies of exports to the United States, failure to enforce the intellectual property rights of U.S...
...trade representative impose trade remedies against China commensurate with the cost advantage caused by China's repression of workers' rights...
...There are more than 750 million workers in China—more than the workforce of all OECD countries combined...
...We have no clear system that says who must bear responsibility when wages aren't paid, and how those responsible are to be punished...
...The hukou bu also designates each household as either rural or urban...
...China's failure to enforce minimum wage and maximum hours standards violates International Labor Organization Conventions and constitutes an unreasonable trade practice...
...The permanent residence of the vast majority of Chinese citizens, of course, is in rural villages...
...imports produced by China's exploited workers as a "benefit" to U.S...
...Or for American business, which is complicit in and profits from, the exploitation described below...
...Consistent with that model, section 301(b) authorizes the president not only to take trade action to improve China's immediate labor-rights practices but to take any action within his foreignaffairs power to change the rules of trade and finance that encourage China's violations...
...While most of the women workers in the maquiladoras are migrants from poorer regions, many of them have come with their families, since there is no pass system, and quite a number are single mothers...
...In the model of development embodied in section 301(d), the global integration of labor markets, capital markets, and markets in goods and services is not intrinsically a bad thing...
...Highly conservative methodologies show that China's labor repression displaces approximately 727,000 manufacturing jobs in the United States alone, and perhaps many more...
...Since the workers are poor single women living in dormitories, management only needs to pay them enough for their individual survival...
...Since the 1980s, peasants holding rural hukou have filled the need for labor in China's manufacturing sector, through a governmentally controlled system of labor allocation...
...In order to change her job, a migrant must retrace these steps—that is, the migrant must again obtain a permit to leave her place of permanent registration and then obtain a temporary residence permit and temporary work permit from the receiving urban government...
...Nearly seventy years ago, the United States rejected rules like these, in our domestic multistate system...
...No matter how ruthless, there is a limit to the amount of overtime that management can squeeze out of these Mexican workers—fewer hours than with the young single women in dormitories in China...
...Permanent urban residents view the new class of temporary migrant factory workers with extreme prejudice, hostility, and disdain...
...The petition attracted enormous attention around the world...
...For ruthlessly exploited workers in China...
...The degree of destitution in the Chinese countryside—and, therefore, the level of wages that must be offered POLITICS ABROAD by factories in order to lure migrant workers from the countryside—is anything but "natural" or "pre-political...
...For the same reason, all countries must be assured that those rights will be enforced evenhandedly from country to country...
...Developing I2 n DISSENT / Summer 2004 countries such as Bangladesh and Indonesia will each lose up to one million manufacturing jobs to China, and Central America and the Caribbean will lose up to one half million jobs in the textile and apparel sector alone...
...An urban hukou entitles one to public housing, health care, and pensions—all denied to holders of rural hukou...
...China's denial of workers' rights is encouraged by a system of world trade and finance that fails to enforce minimum standards of decency at work...
...In the next three to five years, China will add more workers to its urban workforce than the total manufacturing workforce of the United States, the European Union, and Japan combined...
...Quite the contrary...
...In order to eliminate each state's incentive to perpetuate substandard labor conditions, it was necessary to enforce labor rights at the federal level...
...These incentives are created by global rules that protect rights of property and contract but not rights of personhood and labor...
...Congress, to the contrary, recognized that an economic constitution lacking social rights will not produce equitable and sustained economic development, whether for developing or developed countries: [P]romoting respect for internationally recognized rights of workers is an important means of ensuring that the broadest sectors of the population within [developing countries] benefit from [access to U.S...
...The PSB is required to record the migrant's temporary address and ensure that the migrant's landlord has permanent urban hukou...
...Some of these payments are mandated by central and local law...
...The workers' rights provisions of section 301 are distinctive in several ways...
...If workers' rights are vigorously enforced, then the impoverished and underemployed—whether in China, India, Indonesia, Mexico, or the United States—may improve their standard of living and generate new domestic demand in a virtuous cycle of equitable development, while providing new markets for overseas investors and workers, including those in the United States...
...Nearly a century ago, Congress declared that "the labor of a human being is not a commodity or article of commerce...
...In 1984, when Congress first authorized the president to use this type of leverage, it made this purpose plain: The United States has embraced labor rights, in principle, as well as political rights for all of the people of the world upon adoption of the Universal Declaration of Human Rights in 1948...
...Congress was right...
...Ten to twenty million will enter the nonagricultural workforce each year during the next two decades...
...Unremitting repression of labor rights robs China's workers of wages, health, and dignity...
...They are not permitted to strike...
...Large concentrations of manufacturing enterprises are located in the well-known coastal export regions of the Pearl River Delta (Guangdong) and Yangtze River Delta (Shanghai and Jiangsu...
...workers—not on the revenue and profit of U.S...
...These Regulations are still in force...
...The petition charged that China's brutal repression of internationally recognized workers' rights constitutes an unfair trade practice under section 301 of the Trade Act of 1974...
...Repudiation of Free Labor Markets China is now moving up the technology ladder at a rapid pace, becoming an export powerhouse in such sectors as high -technology electronics and precision machinery...
...It may be true—under assumptions of full employment and perfectly competitive labor markets—that wages grow at the same rate as productivity...
...DISSENT / Summer 2004 n 21...
...manufacturing jobs—unless the president takes decisive action...
...Hundreds of millions of destitute peasants are unemployed or underemployed...
...The only real limits on wages and hours in China's factories are the physiological and psychological limits of the young women and men who work in that sector...
...Since they live with their families, a part of their waking hours has to be spent on "unproductive" chores (from management's vantage point): in commuting, in household tasks such as cooking, taking care of the old and the young...
...China's 2002 census showed approximately 160 million in manufacturing and mining, nearly twelve times the manufacturing workforce in the United States...
...The hukou system accounts in part for the fact that factory wages fell by 15 percent to 46 percent when temporary migrant workers— young, single, and bonded—replaced permanent urban residents in factory jobs...
...The real earnings of this subcaste have remained static or fallen throughout the unprecedented boom in capital investment...
...This results not from enterprises' financial difficulty but rather from employers' "deliberate malpractice," permitted by the negligible bargaining power of China's bonded workers...
...We can and must change these rules...
...Congress concluded that trade across borders "was the means of spreading and perpetuating . . . substandard labor conditions among the workers of the several states...
...If it were enforced, China would be a much better place for millions of people to work in...
...China enforces internal passport controls that create an enormous, submerged caste of exploitable factory workers who are temporary migrants from the countryside...
...It is recorded in the "hukou bu," or registration booklet that all Chinese households must hold...
...On April 29 the Bush administration rejected the petition...
...THE AMERICAN Federation of Labor and Congress of Industrial Organizations (AFL-CIO)—whose constituent unions represent more than thirteen million workers in the United States, including more than two million manufacturing workers—files this petition under sections 301 and 302 of the Trade Act of 1974, as amended, seeking action by the president to end the Chinese government's unremitting repression of the rights of its manufacturing workers...
...The Model of Economic Development Embodied in Section 301(d) Petitions under sections 301 and 302 are typically filed by U.S...
...In light of these circumstances, it becomes DISSENT / Summer 2004 n 19 POLITICS ABROAD possible to perceive how the Chinese hukou system can keep wages down more easily than in Mexico...
...The wages and hours of China's factory workers are effectively unprotected by legal regulation or by contract...
...Section 301(d) of the Trade Act provides that a trading partner's persistent denial of workers' internationally recognized rights constitutes an unreasonable trade practice...
...They have minimal access to China's legal system, which, in any event, is corrupted by the local Party officials, who extract personal wealth from factory revenue...
...If peasants obtain certifications from both sending and receiving provinces, they may migrate to manufacturing towns and cities—but only temporarily and only to fill designated jobs as laborers in factories, construction sites, domestic work for urban families, and assorted menial labor...
...It is true that the central Chinese government has formally promulgated guidelines for minimum wages and maximum hours...
...To pay for them, migrants incur substantial debt, often payable to their own employer...
...Congress also recognized that the denial of workers' fundamental rights distributes the benefits of economic growth to "narrow privileged elites," thereby "retarding economic development...
...Their impotence is reflected in their desperate acts of violence and their shocking rate of suicides intended to draw attention to their plight...
...The entire petition, over 100 pages long with 346 footnotes, can be downloaded from the AFL-CIO's Web site at www.aflcio.org/issuespolitics/globaleconomy/ uploadIchina_petition.pdf or at www.dissentmagazine.org...
...Third, the workers' rights provisions of section 301 are a sharp alternative to the model of globalization now embodied in the WTO...
...Local authorities force detainees in these centers to work on public projects...
...Local officials require detainees to pay "ransoms" to gain release from custody...
...In addition to the deposit and the debt to cover the deposit, employers frequently withhold several months pay, which workers will also forgo if they quit or assert their rights...
...They live in cramped cement-block dormitories, up to twenty to a room, without privacy...
...This petition is not targeted against "free trade" or against China's "comparative advantage" in global markets...
...But it is ignored more than in any other country I work in...
...BUT THE ASSUMPTIONS underlying this simple theory crumble against the hard realities of China's political economy...
...As described above, the required fees and certificates vary widely from locality to locality, and are administered by local officials with almost complete discretion...
...As in classic bonded labor, a workers' up-front deposit will be lost and her debts will be in default, if the worker attempts to exit the employment relationship...
...Nobody...
...As a result, a startling number of workers take desperate, violent measures simply to draw attention to their plight—from blocking roads and railways to self-immolation...
...Section 301(d) embodies an alternative model, in which human and social rights are the necessary precondition to democratic and equitable development...
...And when the fundamental right of association is denied, a crucial pillar of democratic governance is lost...
...An independent researcher found that "the illegal retention of workers' wages for between one and three months exists in 80 percent of foreign-financed firms" in Dongguan...
...They are often beaten and physically humiliated by supervisors and private security guards...
...Factory workers fear that they will be discharged and lose their deposit "if they pursue their wages...
...DISSENT / Summer 2004 n 13 POLITICS ABROAD Second, section 301 presupposes that securing the fundamental rights of China's workers is concordant with, and indeed a precondition to, protecting the fundamental rights of U.S...
...Some cheerleaders of globalization postulate that the pitifully low wage earned by China's export workers—as little as 15 cents to 30 cents per hour—and the brutal treatment they receive are "legitimate," owing to the workers' lack of skill, their abundance, and their low level of productivity...
...and standards for minimum wages, hours of work, and occupational safety and health...
...One wishes Mr...
...While refuting none of the charges made in the petition, the administration referred to it as an example of "economic isolationism...
...That is, every year, China will add more nonagricultural workers than the total manufacturing workforce of the United States...
...Therefore, all countries should be concurrently bound by fundamental workers' rights, or each country will seek competitive advantage by suppressing those rights...
...They benefit personally by extracting revenue from enterprises and workers...
...industries...
...It is time for the USTR and the president to implement this policy...
...Local regulations on temporary residence and work are often complex, ambiguous, or simply unavailable to the public...
...Several peasants who refused to pay last year were arrested...
...China's inflation-adjusted manufacturing wages have fallen in the last decade, while labor productivity has rapidly increased from year to year—creating an enormous "wedge" between wage and productivity growth that flatly contradicts naive economic theory...
...Workers routinely go into debt in order to make these various up-front payments...
...The purpose of the trade remedies is not protectionist...
...It was the first time in the history of section 301 that a petition has invoked the violation of workers' rights as an unfair trade practice, although it is quite common for corporations to use section 301 to challenge other unfair trade practices, such as violation of intellectual property rights...
...Like the discredited laissez-faire regimes of the nineteenth century, today's global rules protect rights of property, contract, and capital but not fundamental rights of personhood, community, and labor...
...Migrant workers therefore expect and get little legal protection or recourse from government officials...
...Many work twelve- to eighteenhour days, seven days a week, without a day of rest for months at a stretch...
...They are, rather, intended to bring about positive change for China's workPOLITICS ABROAD ers and to ensure fair global competition for workers everywhere...
...corporations seeking to protect their commercial interests against unfair trade practices by foreign governments...
...They produced a large, vulnerable underclass living in constant insecurity, accompanied by daily discrimination, repression, hardship, and denial of their human dignity...
...For laid off manufacturing workers in the United States...
...industries...
...That is, in order to attract the rural unemployed to migrate into unskilled factory production, employers need only offer a wage that marginally exceeds rural subsistence levels plus transportation costs, not a wage that adequately compensates the workers' productivity...
...These measures therefore enable the PSB to maintain surveillance of migrant workers in their urban domiciles as well their workplaces...
...Attempts to organize unions or to strike are met with summary detention, long-term imprisonment, and torture...
...multinational corporations, which may indeed benefit from the exploitation of overseas labor...
...commerce that offsets the burden on U.S...
...Alliances between locally entrenched interests and the PSB strongly support the continuance of controls over migrants...
...Under the hukou ("household registration") system enforced by the much-feared Public Security Bureau (PSB), all Chinese citizens must live and work only in the place where they are permanently registered, generally the village, town, or city where their mother or father was registered...
...some are "extra-legal" exactions by corrupt local officials and managers...
...This petition shows that the People's Republic of China (PRC) persistently denies these rights...
...Fourth, the "reservation wage" of migrant factory workers is set, in part, by the level of subsistence in the countryside...
...These primary sources of local revenue have become even more vital since 2002, when the central government curtailed the financing of local governments by revenues from stateowned enterprises...
...China's manufacturing workers are employed in several different types of enterprises— privately invested enterprises (PIEs), joint-ventures, foreign-invested enterprises (FIEs), urban collectives and cooperatives, township and village enterprises (TVEs), and state-owned enterprises (SOEs...
...The denial of internationally recognized worker rights in developing countries tends to perpetuate poverty, to limit the benefits of economic development and growth to narrow privileged elites, and to sow the seeds of social instability and political rebellion...
...The full force of state terror—beatings, imprisonment, psychiatric internment, and torture—is deployed against workers' attempts to exercise their right of association...
...China's current level of investment in new factories is unprecedented and will deliver an even greater supply shock to global industry in the next five years, producing even greater losses in U.S...
...In contrast with other developing countries, most Chinese migrant workers wish to return to the countryside rather than settle in the city...
...In free labor markets, according to neoclassical economic theory, all workers earn (and deserve) their marginal productivity— that is, they earn what their output is worth...
...A majority of workers must resort to begging or intimidating their employers simply to get paid...
...They are frozen out of the better-paying urban labor market and overcrowded into the lower-paying rural and factory labor markets...
...Almost all of the Chinese female migrant workers are single women in their late teens or early twenties who, because of the household registration system, cannot bring their families with them...
...China reduces labor costs by a system of government-engineered labor exploitation on a scale that is unmatched in the present global economy...
...Fifteen years ago, in section 301(d), Congress elevated the same policy from the interstate to the international level...
...One explicit goal of Congress was to implement the Universal Declaration of Human Rights of 1948, which declares that unionization, employment, and adequate wages are fundamental human rights...
...In practice, however, wage-and-hour rules are simply not enforced...
...But the vast majority of export workers labor in other facilities, out of public view, producing either directly for export or as subcontractors for larger export enterprises...
...By lowering wages by between 47 percent and 85 percent, the repression also diverts millions of manufacturing jobs from countries where labor rights are not so comprehensively denied, increasing unemployment and poverty among workers in developed and developing countries...
...It is time that the United States used its extraordinary bargaining power to ensure that no country enjoys the rights and benefits of WTO membership unless it complies with ILO covenants...
...Workers are fully exposed to chemical toxins and hazardous machines, and suffer sickness, disfiguration, and death at the highest rates in world history...
...According to Professor Chang Kai of the People's University School of Labor and Human Resources in Beijing, China "has ignored the protection of laborers' rights, especially migrant laborers' rights...
...China's rates of industrial death and lost limbs exceed any in history...
...Classical trade theory maintains that developing countries like China have a "natural" comparative advantage in labor-intensive, unskilled production owing to their large pool of impoverished workers in the countryside...
...These deposits are as much as four thousand yuan, exceeding one year's wages...
...and the privileged class of permanent urban residents DISSENT / Summer 2004 n 15 POLITICS ABROAD in fact treats migrant workers from the countryside as an ethnically inferior sub-caste...
...According to a government survey, three out of four workers are unable to collect their pay as promised...
...In the post-reform era, the government continue to undertake "massive transfer[s]," by means of large-scale government investments in city infrastructure and social services to urban elites, paid for in part by an inflationary tax borne principally by the peasantry and in part by urban subsidies channeled through the state-owned banking system, in which rural residents must deposit their savings...
...People in Xiaoeshan eat most of what they grow, and by selling the rest they earn an average annual income of about $25 each...
...They are prohibited by law and social prejudice from competing with people holding urban hukou for higher-paying jobs in technical, administrative, professional, or managerial jobs...
...If, however, the workers' rights of one-quarter of the world's workforce are radically suppressed— as they, in fact, are in China—then labor conditions for the world's unskilled and semiskilled workers are worsened...
...Some enterprises respond to a worker's threat to leave the job by imposing severe monetary penalties on co-workers—especially on the friends who initially referred the worker...
...Enmeshed in bonded labor, they frequently cannot even leave their factory jobs, no matter how abusive...
...If they assert their rights, they are sent back to the countryside, or worse...
...consumers themselves do not wish to buy goods that are cheapened by shattered workers' rights in China and tainted by shattered working lives in the United States...
...Rather, this petition challenges the artificial and severe reduction of China's labor costs below the baseline of comparative advantage defined by standard trade theory...
...DISSENT / Summer 2004 n I 7 POLITICS ABROAD The registration card and the work permit together constitute a "migrant employment permit...
...Summary and Conclusions This petition has shown that China's unremitting repression of workers' rights takes wages, health, and dignity not only from China's workers...
...manufacturing jobs and puts downward pressure on wages around the world...
...Perversely, global rules today give greater protection to articles of commerce than to the work of human beings...
...On top of these, the migrant was required to pay a bond or "deposit" to the employer...
...Bonded labor exists when a worker can exit or quit employment only after payment of severe monetary penalties, repayment of a debt, or loss of a "bond" posted by the worker upon initial hire...
...excess productive capacity is created...
...Congress knew that the lack of basic rights for workers in many [less developed countries] is a powerful inducement for capital flight and overseas production by U.S...
...The capacity to form unions and to bargain collectively to achieve higher wages and better working 14 n DISSENT / Summer 2004 conditions is essential for workers in developing countries to attain decent living standards and to overcome hunger and poverty...
...Death by over-working"—or guolaosi—has become a commonly used term in contemporary China, and it is not used metaphorically...
...For example, a migrant to Shenzhen in 2001 needed the following documents, each of which required payment of a substantial fee: a border region pass, a personal identity card, an unmarried status certificate, a certificate to prove birth within China's one-child policy, a work permit, and a temporary residence permit...
...Bonded Labor Bonded labor is a form of forced or compulsory labor that is well recognized in international and domestic law...
...They join an enormous submerged caste of temporary factory workers who are stripped of civil and political rights by China's system of internal passport controls...
...markets and create jobs that are not an affront to human dignity...
...Young and mostly female, they are sent by their parents in search of wages to supplement their families' income...
...It also displaces and impoverishes workers— and their families and communities—in the United States and throughout the world...
...domestic and global demand is depressed...
...Ens EACH YEAR, millions of Chinese citizens travel from impoverished inland villages to take their first industrial jobs in China's export factories...
...Yet, in the post-Mao era of economic reforms, there is still nothing resembling a free labor market in the manufacturing sector...
...Even the Washington Post editorial page, which has always been fierce in its opposition to linking trade and labor rights, stated that the petition deserved "qualified sympathy...
...Econometric analysis of cross-country data for a large sample of economies in the 1980s and 1990s confirms that the denial of labor rights reduces wages and economic growth, increases inequality, and hampers democratic development...
...Low-wage countries compete for mobile capital...
...To the extent that the Western media and public have any knowledge of these enterprises, they may be most familiar with images of large showcase factories owned by Western multinational corporations that have come under pressure from consumer and labor activists...
...Donahue had explained himself a bit more: a mistake for whom...
...But in China, neither assumption holds...
...Because exit from the workplace is so costly, the worker is subject to highly abusive working conditions...
...A Chinese citizen's place of permanent residence is therefore an inherited status...
...We are glad to reprint an edited excerpt (minus the footnotes) of the AFL-CIO's petition...
...Between 180 and 350 million are estimated to be "excessive" or in "dire poverty" and available for urban employment...
...Political scientists and economists have comprehensively mapped this fundamental fact of Chinese political economy...
...Professor Anita Chan has identified yet another way in which the hukou system suppresses the labor standards of China's manufacturing workers: Mhe Chinese hukou system and the pass system under apartheid in South Africa generated quite similar outcomes...
...commerce caused by China's violations of workers' rights, the USTR should therefore focus on the impact on employment, wages, and associational rights of U.S...
...As a consequence, the wages actually collected by workers are well below the amount negotiated at the start of their employment...
...In addition to the central government's regulations, each provincial, city, and local government has issued its own regulations concerning the fees and certificates that migrants must obtain in order to temporarily reside and work there...
...China has approximately 780 million peasants...
...So long as China is not bound to honor workers' rights, China's rivals will resist complying with those rights...
...Third, as already mentioned, migrant factory workers are denied access to better-paying skilled, technical, administrative, and managerial employment options in the permanent urban sector...
...In light of these various mechanisms for artificially suppressing workers' bargaining power, it is not surprising that Chinese factory workers live under conditions that neutral researchers (and Chinese officials themselves) describe as "bestial," "horrific," and "abominable...
...Migrants who fail to find jobs, who lose jobs, or who assert their labor rights remain subject to arrest, detention, fines, and (after processing in the aid stations) expulsion...
...New migrants' feverish effort to find jobs in order to avoid expulsion from urban areas, and their submission to employers' terms no matter how unfair, is a common sight in contemporary China...
...Managers and local officials extract fees and deposits from newly arriving migrant workers and threaten them with even more severe penalties if they quit, enmeshing workers in a system of bonded labor...
...workers against erosion by unfair competition with overseas workers who are denied those rights...
...Many threaten or commit suicide...
...Even these sad protests are met with government repression...
...16 n DISSENT / Summer 2004 First, China's manufacturing workers are not permitted to organize independent unions to defend their basic rights and raise their wages...
...Migrant workers are paid extremely low monthly sums—from 200 to 600 Rmb (approximately $24 to $72)—in return for working as many hours as employers can extract from them...
...Under section 301, those profits are ill-gotten and cannot constitute a "benefit" that offsets the burden on U.S...
...and a path of inequitable, unsustainable development is promoted...
...The existence of the sub-caste is one of the preconditions of China's superheated investment in manufacturing...
...But so long as they resist, China too will complain of competitive disadvantage...
...Those holding urban hukou, in turn, generally do not seek employment in the low-paying, abusive, and dangerous factory jobs filled by desperately poor migrants from the countryside...
...Male workers earn approximately 10 percent or 15 percent more...
...Some local governments in China are currently experimenting with systems of temporary registration that do not impose de jure fees and that require migrants to carry and show their national identification cards rather than household registration booklets and other temporary permits...
...All states must be concurrently bound by labor rights, or each state would seek competitive advantage by suppressing those rights...
...Sections 15 and 16 require that migrants register with the PSB within three days of arrival to the city and reregister after three months...
...Local governments—relying on a 1982 law of the State Council, which authorized local governments to designate jobless migrants as "vagrants and beggars"—have placed jobless migrants in detention and forceably "repatriated" them to their place of permanent residence...
...THE LANGUAGE of neoclassical economics is not entirely apposite in this context of government labor allocation...
...They are not permitted to seek betterpaying jobs reserved for privileged urban residents...
...The measures further authorize local governments to impose fees for the residence permits, require migrants to obtain such permits as a precondition to obtaining work permits, and impose fines on migrants who fail to register with the PSB and on employers who hire unregistered migrants...
...Workers arriving from the countryside must pay substantial fees to local government officials and to employers in order to obtain residence and work permits required by the hukou system...
...On top of these nationwide policies, local officials support themselves by imposing crushing taxes on rural citizens, driving peasants into factory work: The economics are simple, residents said...
...As detailed above, local officials and enterprise managers are allies in the unrestrained drive to export at lowest costs...
...Academic and human-rights researchers have detailed the mechanisms through which China's hukou system produces bonded labor...
...But literally hundreds of towns and cities throughout China have declared themselves export zones...
...Nonetheless, for purposes of explication, we can say that factory workers' supply curve is artificially shifted downward—that is, workers offer their labor for lower wages—by at least four sets of government policies that sharply curtail their bargaining power...
...Congress authorized the USTR and the president to enforce workers' rights among our trading partners, for the sake of their workers and ours...
...Enterprises frequently push beyond those limits, and workers sponPOLITICS ABROAD taneously protest by blocking roads or railways...
...The principal author of the petition is Mark Barenberg, a professor of international law at Columbia University...
...the right to bargain collectively...
...In practice, the inherited distinction between rural and urban residents produces a deeply entrenched caste system...
...They enter the factory system and often step into a nightmare of twelve-hour to eighteenhour work days with no day of rest, earnDISSENT / Summer 2004 n I I POLITICS ABROAD ing meager wages that may be withheld or unpaid altogether...
...markets...
Vol. 51 • July 2004 • No. 3
