More security for Chinese laborers

Scott Tong Dec 31, 2007
HTML EMBED:
COPY

More security for Chinese laborers

Scott Tong Dec 31, 2007
HTML EMBED:
COPY

TEXT OF STORY

Doug Krizner: China has a big advantage when in comes to manufacturing things. Labor is cheap. As Scott Tong reports from Shanghai, that’ll change tomorrow, when a new law kicks in.


Scott Tong: The law says employers in China have to give workers written contracts or face big penalties. Bosses will have to give severance pay, and they won’t be able to fire folks as easily.

Supporters say it’s about job security for workers who have long gone without it. But opponents see European-style inflexibility and new costs.

Attorney Steve Dickenson of Harris and Moure says labor costs are already rising in China — this is just the latest straw.

Steve Dickenson: The people who are involved in very high-volume, low-margin manufacturing are going to see a lot of problems over the next couple of years. That business is going to be very, very difficult in China.

In recent weeks, multinationals like Wal-Mart and France’s Carrefoure have been accused of trying to get around the law — for instance, firing and then rehiring workers so that they’re “new” on paper, which means fewer protections.

Those firms deny their actions are linked to the new labor law.

In Shanghai, I’m Scott Tong for Marketplace.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.