trade unions in china’s labor market: confrontational or cooperative
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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. - PowerPoint PPT PresentationTRANSCRIPT
TRADE UNIONS IN CHINA’S LABOR MARKET:
Confrontational or Cooperative
Cheng WangInstitute 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
Ld
Ls
Ls (TU)
W (TU)
W
L
W0
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 materialsnew adjustment of
business organizationmanufacture of new
productsexpansion 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 only for firm's profitability
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 only for firm's 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
Gov. & Firms Preferences
TUMoreCooperative
MoreConfront-ational
MoreRule-of-GovernorsNon-core Employment
MoreRule-of-LawCore Employment
D1
D2
Figure 1. Trade Unions Attitude vs. Government and Firm Decisions
E1
E2
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
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 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.
