Publications / Policy Report

How Standing Up For Chinese Workers Helps America’s Economy

By / 2.23.2012

China may look like an unstoppable economic juggernaut, but it is increasingly beset at home by worker protests and strikes. Last June, for example, security officials in Zengcheng, a manufacturing city in southern China, fired tear gas at hundreds of migrant workers who smashed windows and overturned police cars after hearing the rumor that authorities had pushed a pregnant migrant street vendor to the ground.

Spreading labor unrest in China has large economic as well as political implications for Sino-American relations. Put simply, stronger rights for Chinese workers is good for America’s bottom line. By explaining our economic interest in empowering China’s workers, U.S. leaders could galvanize broad public support behind a more insistent push for individual and civil liberties in China. Too often, however, they fail to make that connection. They may deplore the way China arbitrarily limits speech and imprisons lawyers,
human rights watchdogs, religious leaders, and worker advocates. But they rarely note that empowering China’s workers would likely lead to higher wages and benefits, and therefore a shrinking labor cost advantage over U.S. competitors.

In this paper, I explore the vital link between the rights of Chinese workers and the competitive health of the American economy. If a nation has lax labor laws, or has good ones but doesn’t enforce them, local employers can keep wages down and produce goods at much cheaper cost. Moreover, if workers are unable to strike or effectively petition their employers because the legal system doesn’t guarantee freedom of speech and association, then their country is essentially subsidizing its companies, giving them an unfair advantage in the global economy.

Indeed, inconsistent labor law enforcement, inattention to workplace safety, and violations of binding legal contracts (such as wage agreements) have enabled Chinese manufacturers to hold down the price of Chinese labor. The labor cost differential, of course, is the main reason Chinese goods are significantly cheaper, even after they have been shipped to the United States. Raising labor standards in China will inevitably lead to raising the price of Chinese-produced goods, making goods produced by U.S. workers more competitive. That’s why strong U.S. support for the rights of China’s workers should be an integral part of Washington’s strategy of constructive engagement with Beijing. Not only is it the right thing to do from a human rights standpoint, it is also clearly in America’s economic interests as we seek a more balanced commercial relationship
with China.

More specifically, let me offer seven recommendations for U.S. policymakers:

  1. Put human and worker rights at the center of U.S. diplomacy toward China.
  2. Raise public awareness of the link between workers’ rights in China, and economic benefits for Americans.
  3. Work closely with other liberal democracies to demand China’s adherence to its own labor laws and international standards.
  4. Expand bilateral working groups on labor rights, so that these issues come up routinely in Sino-American relations.
  5. Fund civil society groups that promote and defend workers’ rights.
  6. Use trade as leverage to achieve progress on workers’ rights.
  7. Ratify two key International Labour Organization protocols: the Freedom of Association and Protection of the Right to Organise Convention (1948), and the Right to Organise and Collective Bargaining Convention (1949). In advocating rights and liberties around the world, the U.S. must also lead by example.

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