From today's Wall Street Journal, we learn some more about the tensions building in China over working conditions and labor rights.
Yum on PayBy GORDON FAIRCLOUGH
April 11, 2007; Page A7
SHANGHAI -- Provincial authorities in China cleared U.S. fast-food-restaurant companies McDonald's Corp. and Yum Brands Inc. of allegations they underpaid student workers, but the officials called for changes in the nation's laws to improve wages and working conditions under all employers.
Officials in southern China's Guangdong province started an investigation into pay practices at the McDonald's chain and at Yum's KFC and Pizza Hut chains last month after a newspaper in Guangzhou, the provincial capital, reported that the companies were illegally undercompensating student workers.
The Guangdong Labor and Social Security Bureau said in a statement that it had cleared the companies because, under national law, students are exempt from minimum-wage and other labor regulations. The bureau said it was continuing to look into whether nonstudent part-time workers in Guangdong had proper contracts and working hours. If laws were violated, "it will be dealt with in a serious manner," the bureau said.
There is more of the article at the Journal website (which is subscription only). I discussed this last week. Yesterday, The New York Times reported that McDonald's had actually agreed to allow unions in its stores in China. Here are some of the most interesting points:
While unions have been around here for a long time, mostly in state-owned companies, experts say that they have traditionally been weak in China. In many cases, they work in tandem with management, particularly in state-run companies. They have not been known to challenge management or to bargain for higher pay. More often than not, experts say, the unions have been used by management to coordinate employee activities.
But recently, union leaders have promised to fight for workers. And last year, the country’s biggest union won a significant victory by forcing Wal-Mart to allow unions in all 62 of its stores here.
Now, the All-China Federation of Trade Unions says its goal by the end of this year is to have unions active in 70 percent of the foreign-invested companies operating here.
One indication of the union’s growing power in China is its role in helping prepare a new draft labor law, which is expected to pass this year. The labor law could give unions greater power.
That prospect is creating tension between American and European multinationals and the country’s labor leaders and labor rights activists.
All this bears watching. There is tremendous tension within the Chinese worker community over the growing divide between rich and poor as China's growth continues to soar. And it is ironic, to put it mildly, to see companies like Wal-Mart and McDonald's accept unions in China, while fighting them tooth-and-nail here. Shows you what a little government intervention can do.