Economy

Foreigners pay

Minimum wage controversy

Pay up, or we ain’t coming back...

Workers of the world, unite! That was the plan as far as the Communist Manifesto was concerned. But last year China’s only nationally-sanctioned union, the All-China Federation of Trade Unions (ACFTU), was more than a little off-message. Despite a summer characterised by labour discontent, it failed to call a single one of the various strikes that hit firms across the country.

Instead, the stoppages at Honda, Foxconn and Toyota were all unofficial, wildcat ones.

As we wrote at the time (WiC64), there were even scuffles on the picket line, as union bosses tried to get the strikers back to work. “Please trust the union,” they pleaded. “Trust each level of Party officials and government. We will definitely uphold justice.”

Are they now coming good on their promise? The Beijing arm of the ACFTU has negotiated an agreement with 100 foreign companies to set their own minimum pay at 1.5 times the city’s statutory minimum ($177 a month) that local companies pay.

At first glance it looks a little discriminatory to focus on the foreign firms first. Not that the ACFTU is too bothered, preferring instead to talk up its negotiating achievement.

But not all are convinced of a triumph, including the National Business Daily.

“At first glance it looks like a successful example of collective bargaining,” explains the newspaper, “but a closer look reveals that wages after the so-called ‘collective bargain’ are still [quite low].”

The new agreement means a minimum wage of just $268. “The average rent for a one bedroom house is [$446] a month,” the Daily says. “What can workers do with a monthly salary of [$268]?”

Other newspapers have focused more on the fact that wages for workers with foreign companies are generally higher than the new minimum anyway. So although the ACFTU has grabbed headlines, the concession is pretty meaningless for the payrolls of the international firms who signed up.

Even the state-run Global Times, never slow to pick up on a national point of honour, isn’t taking the announcement too seriously. It points out that two companies that might actually have been affected by the agreement, Walmart and Carrefour, simply chose not to take part.

“The standard applies to companies like Nestle and Siemens, which have higher wage levels than the latest standard,” human resources consultant Zhang Hong told the newspaper. “Companies with lower wage standards didn’t join in, so it is more like a show.”

Of course, foreign firms might rue their concession if the statutory minimum rises rapidly, as this would push up their own commitment. But as Zhang also points out, the ‘agreement’ is only a guideline and doesn’t carry legal weight. Foreign employers can always have a rethink on their new generosity.


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