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November 12, 2005
China and Trade: Applying Pressure for Labor Rights
It's really all about China these days-- and the assumption that we shouldn't or can't do anything about its terrible labor conditions.James Galbraith thinks "[t]he notion that China is a low-wage, slave-labor economy is constantly repeated in these debates, and it betrays ignorance of the actual conditions of the place" since Galbraith describes a benign government providing low cost housing and other goods to make those pathetic Chinese wages go further.
Now, this isn't theoretically incompatible with Matt Yglesias saying it's an "authoritarian one-party state" which won't change its policies no matter how much pressure is applied.
Except this ignores that the Chinese Communists ability to maintain that authoritarian state is dependent on delivering the material goodies Galbraith describes. And so the proceeds from global trade is therefore the lynchpin of the present Communist regime's legitimacy.
Which implies a hell of a lot more leverage for social change in China than Matt Yglesias admits. Authoritarian regimes that are economically autarchiv-- think Burma -- are very resistant to outside pressure, but as China is increasingly dependent on global trade, it becomes MORE subject to pressure.
Let's talk about how big a problem that could be for China. Just in the first ten months of 2005, Chinese trade with the United States was $176.3 billion. With an average wage of roughly $1500 per worker in urban export zones, if we assume that half of that export revenue goes to wages, that's over 100 million Chinese dependent on the United States for their jobs. (Which also undermines the idea that Chinese exports are a minor issue for the US economy.)
If 100 million Chinese suddenly see their jobs at risk, do you really think the Chinese government could keep the lid on social rebellion?
I wouldn't argue for an embargo on China but a more nuanced policy where we enacted a rule that legal challenges could be made to the importation of any goods where plaintiffs could demonstrate that labor rights had been violated. This approach has multiple advantages:
- Since many companies in China are not controlled directly by the government these days but my multinationals, the lawsuits could be brought against those companies to bar their specific goods. This would apply pressure to China without applying an embargo against the whole country.
- It would give a venue for labor rights activists to highlight labor abuses in specific cases, allowing maximum leverage for those workers in China increasingly willing to challenge their treatment in the workplace and creating a situation where their imprisonment would become international news far more easily, since they would be potential plaintiffs in US court.
- It would encourage US unions to work closely with available Chinese partners in building campaigns and lawsuits, encouraging mutual cooperation rather than potential antagonism between US and Chinese labor activists.
China may be an authoritarian state, but they have tied their economy increasingly to that of the United States-- which means we have far more power to effect their actions, especially if we do so creatively in alliance with Chinese workers themselves.
Posted by Nathan at November 12, 2005 12:58 PM
