Labor report on labor in Hong Kong

Hong Kong took “a “significant step forward” in July by adopting its first minimum wage legislation, but the hourly rate of US$3.60, set in November, “is still insufficient to cover basic living costs.”

So says the International Trade Union Confederation (ITUC) in a report on core labor standards in Hong Kong that the ITUC, at its own initiative, prepared, for the World Trade Organization’s General Council review of trade policies. Hong Kong, a founding member of the World Trade Organization, lost its independent status when sovereignty was transferred to the People’s Republic of China in 1997.

Here is how the ITUC summarizes the current status of fundamental worker rights in the former British colony:

" Hong Kong law allows workers to join unions, but provides little protection for those who do. The government refuses to bargain collectively with its own employees or to create a legal framework for collective bargaining in the private sector. In practice, employers have wide latitude to dismiss striking workers."

Although about 21 percent of the city-region’s wage workers are unionized, less than one percent are covered by collective bargaining agreements, and these are not legally binding, according to the ITUC’s report.

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U.S. advised to reject 'free trade.' but not the policy

Ban the label “free trade” from public discourse – that’s the advice that Pollster Bill McInturff gave Wall Street Journal’s CEO council November 16.

Recent polls, including one conducted jointly by the Journal and NBC News in late September, show that people oppose free trade deals by a margin of two to one, according to McInturff, because of a “growing sense that other countries are taking advantage of us” in free trade deals.

He did not explain why changing the label would change the mercantilism of countries like China. But a language change in U.S. legislation -- from Most Favored Nations (MFN) to Permanent Normal Trade Relations (PNTR) -- did help pave the way for China to join the World Trade Organization (WTO) ten years ago.

Still, renaming “free trade” makes sense. It is easier to do if the policy behind a new label makes sense, and if it also makes sense to U.S. trading partners.

My own formulation of such a policy is this: that it is work and worker friendly. Present trade policy is investor and investment friendly, and unfriendly to work and workers. Just look at the results: our extreme troubled global economy.

America’s bipartisan OK to China’s entry into the WTO “looks especially imprudent” now, writes Richard A. McCormack, editor of “Manufacturing & Technology News.” The results have not turned out to be what was promised by President Clinton, the country’s most ardent booster of opening trade with the People’s Republic.

In the June 25 issue of his publication, McCormack quotes Clinton ar length. At a March 29, 2000, press conference, for example, he said: “This is a hundred-to-nothing deal for America when it comes to the economic consequences,” among other things by increasing U.S. jobs and reducing our trade deficit.

See http://www.manufacturingnews.com/news/10/0615/WTO.html for a sampling of promises not kept.

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“The Global Battle For Good Jobs: Is the U.S. Even Fighting?”

-- American companies are hiring, but mostly abroad, most of all in the People’s Republic of China.

-- With more than 5,000,000 unemployed Americans for any job vacancy, employers have the leverage to skip any wage increase, and sometimes to cut wages and benefits even while enjoying record profits.

-- The gap between the fortunes of business firms and workers is widening, to the continuing decline of the middle class.

-- Companies are buying back their own stock at unprecedented levels, in large part because this is the surest way to meet the targets that will trigger higher executive compensation.

Those are highlights of trends that Dean David L. Finegold of Rutgers has identified by assembling dozens of bits of information and connecting the dots. He published his insights in the first issue of his new blog under the title “The Global Battle for Good Jobs: Is the U.S. Even Fighting? on September 15.

Two months have not made his analysis out of date. Illustrative of his prescience is that in the latest fiscal year “Paychecks for CEOs Climb,” as announced by a front page headline of the November 15 Wall Street Journal.

Finegold, who heads Rutgers’School of Management and Labor Relations, emphasizes a fundamental element in the transformation of key sectors of the 21sr century economy. It is the contrast in the very mindset of the two competing giants in the global battle:

Rather, I draw attention to the less discussed factor that firms themselves are pursuing different objectives. While US executives are focused on maximizing short-term profitability and “shareholder value,” Chinese firms are seeking to grow long-term market share and expand the amount of high-end work being performed in China.

This is particularly true of the approximately 130 large state-owned enterprises (SOEs) that dominate strategic sectors of the economy. These are not the old SOEs that existed to provide employment, with little concern for product quality or global competitiveness. Instead, these SOEs have been reinvented to work in tandem with China’s foreign policy of economic nationalism to win share in global markets. As Financial Timesreporter Richard McGregor describes in a fascinating new book, The Party, while these firms operate predominantly according to market principles, the Communist Party retains ultimate control over key decisions through selection of key executives….

In sum, it is difficult to see how the crisis facing current and future U.S. workers will be reversed so long as both US and Chinese companies can optimize their own measures of success by moving jobs to China.

For details, read Finegold’s blog, which Rutgers houses at http://core-training.rutgers.edu/schools/smlr/content/global-battle-good-jobs-us-even-fighting




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On a treadmill at $10 a week: garment workers and Bangladesh

Bangladesh is the prime example of the durability of sweatshops in a booming industry. On November 1 workers in the country’s ready- made garment industry got a raise in their minimum wage to $43 a month. As in other Asian countries, the official minimum wage generally is the actual wage paid to most workers.

Before November 1 Bangladesh’s 3,400,000 garment workers, mostly women, were the worst paid garment workers in the world. After months of struggles for a living wage, they are still the worst paid garment workers in the world.

Meanwhile, the latest annual export earnings of the industry came to $12,600,000,000. The industry is also a vehicle for capital flight, chiefly through over-invoicing,

Garment factory owners in Bangladesh claimed they could not afford a wage increase larger than finally imposed. But a new report, quoting a Dhaka-based World Bank economist, said that labor costs “typically constitute one to three percent for garments produced in the developing world,” indicating that the new minimum could be absorbed without a price increase.

The plight of the country’s garment workers is described at length in that report, the work of the International Labor Rights Forum and Sweatfree Communities. So have dozens of reports over the past two decades by the AFL-CIO, the International Trade Union Congress, the International Labor Organizations, Human Rights Watch, human rights groups in Bangladesh itself, and various other groups.

But Bangladesh remains on a treadmill. The 2010 report of the UN Development Program ranks Bangladesh low on its human development index – 129th out of 169 countries.


I’ve written countless articles about Bangladesh over the years. One, from the May 4, 2005, issue of my Website, is titled “Greed Kills, and Greed Pays” at http://www.senser.com/05-05-04.htm.

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U.S. lagging behind – way behind – in child care funding

Most nations in the developed world do very much better than the United States in funding formal childcare for boys and girls under the age of three.

According to data gathered by the Economic Policy Institute, Denmark ranked highest in such expenditures, and the United States ranked 13th\, among 14 developed nations in comparisons computed using Purchasing Power Parity.

EPI released this information on November 10 as a “preview” from its forthcoming “State of Working America” Website, which will be published online in early January. Read more!

Tax evasion by multinationals in developing countries

Poor countries lose more money to tax evasion by multinational corporations than they get from official development aid. The Business & Human Rights Center cited that fact as one reason for launching a special Website section on business and tax avoidance.

In introducing the new section, the London-based center explained:

“NGOs are increasingly reporting on companies that avoid paying a fair share of taxes and royalties to developing countries, thus depriving governments of essential revenues that they need to deliver to their people on development, health, education, housing, access to water, and other human rights.”

Christian Aid, for example, noted that “the lives of 1,000 young children a day are being lost to disease and poverty in poor countries because of illegal trade-related tax evasion.”

Also tracked are positive initiatives taken by companies and company responses and non-responses to negative reports.
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A kind word for taxes

As a reporter on a small town newspaper many years ago, l met a farmer who believed strongly in self-reliance as the way to slash taxes. Each family, he insisted, should drill its own well for water, surface the road in front of its own property, and dispose of sewage in its own outhouse or septic tank instead of depending on government.

He was angry and frustrated because his ideas didn’t become public policy. The 21st century has many people of the same mind and with same emotions. Their cause is anti-tax, and their reaction is anger, because their ideas are not implemented.

At my youngest son’s graduation ceremonies in the vast Coliseum in Richmond, I got a taste of popular feeling against taxes. Each group of black-clad graduates of Virginia Commonwealth University got our warm acclaim even when we could hardly fathom their achievement. Then, amid the successful candidates from the School of Business, a lone male stood up to receive the degree of master of taxation.

Master of taxation! The words triggered a deep and prolonged booooo. Afterward, I recounted the incident in a column that appeared in the U.S. News & World Report under the heading “A Kind Word for Taxes.” I quoted the words of Supreme Court Justice Oliver Wendell Holmes: “Taxes are what we pay for civilized society.”

“A reversal of values is in order,” I added. ‘Those of us – individuals and corporations – who have benefited much from the freedom of our land ought to be proud to pay taxes. To wipe out or huge federal deficit, we need to address a deficit of another sort – one of wisdom, unselfishness, and, yes, sacrifice.”

Nowadays, when so many believe our taxes are much too high, we should at least be open to the facts. Charles R. Philips, in a Commonweal article (October 22 issue), points to one widely unrecognized fact: we’re not as heavily taxed as are citizens of most other industrial nations belonging to the Organization for Economic Cooperation and Development (OECD).

Counting all taxes – sales, income, property, whatever, imposed by all levels of government – as a percentage of GDP, the United States ranks 27th out 30 countries in the total taxes paid by its citizens. Only the people of South Korea, Turkey, and Mexico carried a heavier burden.
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