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.
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