China's Labor Unions - New Tendrils

John Tepper Marlin: Mike, I thought the ACFTU was supposed to be the only union in China. It's the one that Wal-Mart's workers belong to. Why do you think the Chinese government has allowed the Honda union -- and similar ad hoc worker groups in other factories -- to continue?

Mike Lee: It was a puzzle at first. The theory now is that the government is using the existence of the bottom-up worker representation to put pressure on the national union to be more responsive to worker concerns. The government knows that Honda and other big brands can establish factories anywhere they want. Another reason is that although Wal-Mart had established many ACFTU branch unions inside their companies, actually it does not work as expected. The union seemed to be not functioning where there was a mass layoff in Wal-Mart last year.

JTM: A striking Honda worker who was afraid to identify himself is reported as saying: "The trade union is not representing our views; we want our own union that will represent us." What might the do-it-yourself unions have that the official union does not?

LEE: Actually, workers in the Honda strike asked their local government to re-organize the ACFTU local union in Honda's factory. After a series of negotiations, finally, the members of the Honda union were elected by workers directly, but the previous union leader is still there. The new re-organized union in Honda's factory cannot be viewed as a completely independent labor union but worker representation was enforced. Perhaps the Chinese government is trying to find out what works. It wants to make the national union better. Probably the most important task is to improve communication between plant managers and workers and to increase the representation of workers in ACFTU local unions.

JTM: How can a union improve representation of workers?

LEE: SAI has been thinking about this for a long time and has ideas on how to create systematic channels of effective communication between the factory manager and the workforce, and how to encourage workers and unions to become more involved.

JTM: Can you give me an example?

LEE: An example is to establish a mechanism inside factories to handle disputes. SAI's approach in its Social Fingerprint® Program is to establish "Internal Social Performance Teams."

JTM: Doesn't every factory have something like this?

LEE: Apparently not. The Chinese government may be seeking to ensure that the ACFTU is bringing workers' representatives and management to the table together when necessary.

JTM: It sounds like President Kennedy's idea of a three-way negotiation, with the government bringing management and labor together. Of course, he was interested in the national unions and the major steel companies, whereas these issues are strictly local initiatives. What is the outlook for pop-up unions in China?

LEE: Yes, this is quite similar to President Kennedy's idea of a three-way negotiation. No one knows the outlook of pop-up unions in China, but the government's letting them continue informally at Honda and elsewhere is a good sign. Think of them as pilot projects under observation, and perhaps showing the way for the AFCTU, encouraging them to have a closer relationship with workers in every factory. The latest interesting news in China is that in May 2012, a pilot project of electing union leaders by workers directly at factory level in Shenzhen was successfully implemented. And the ACFTU branch in Shenzhen has announced they will involve more factories this year. This program of pilot elections may be considered a response by the local government and the ACFTU branches to the Honda strikes. This is a first step toward greater independence of the labor unions.

JTM: How does the Honda union operate?

LEE: Once a year, in February or March, or both, the union engages in collective bargaining with management for a wage increment and some assurances on other matters, such as that excessive overtime will be reduced.

JTM: Is the leadership among workers at the Honda plants, and the governments allowing them to continue, having any effect nationally?

LEE: I think so, if workers' requests are mainly focused on increasing their wage level, reducing excessive overtime working hours, and health and safety issues. It is seen as a signal that having workers' representation in the factories is considered healthy by the government. It is good for the worker committees and the workers because it creates confidence that management will be responsive.

JTM: There were strikes in other cities outside Guangdong and the targets are often Japanese-owned and Taiwanese-owned factories. And in India the factory where there was violence was owned by Suzuki, a Japanese firm. Is there any significance to the fact that these factories are foreign-owned?

LEE: People are perhaps more willing to believe that there is a lack of communication when the factory is foreign-owned. Also, perhaps the British and American-owned brands became aware of the problems earlier, because of consumer sentiment. Some U.S. brands have been early users of SAI's Social Fingerprint® Program and the SA8000 certification program.

Read the original article on Huffington Post Business @huff.to/Q0bKzj. To read more of Dr. Tepper Marlin's work, visit his blog at cityeconomist.blogspot.com or follow him on twitter @cityeconomist.