Tag Archives: Fair Trade

China's 2008 Labor Law: Does It Work, or Is It Just a Financial Burden?

Our friend Lyle Morris has a well-reported piece at YaleGlobal on China’s new labor law, which went to effect at the beginning of this year.

Under the law, which affects both domestic and foreign companies operating in China, workers will see increased protection from labor unions and significant overhauls in policy ranging from contract formation to severance packages and job training. Arguably the most influential — and controversial — change centers on an open-term clause for long-term employees. The clause states that workers with 10 consecutive years, or having signed two consecutive fixed-term contracts with a company, are entitled to a contract without a fixed end date – essentially giving them lifetime employment. …

Many foreign enterprises voiced discontent with the law. Among them was Serge Janssens de Varebeke, then-president of the European Union Chamber of Commerce in China, who warned in a 2006 letter to the National People’s Congress that the “strict regulations” could raise production costs and “force foreign companies to reconsider new investments or continuing their activities in China.” …

Karen Lin, a senior fund manager at Paradigm Asset Management Co. in Taipei, predicts the law will add roughly 25 percent to the cost of labor in China, which typically accounts for 10 percent of total manufacturing costs. Companies that fail to adjust will start to feel major pressure on their profits within “five to six years,” Lin said.

It strikes me as a little bit duplicitous on the part of some foreigners to have their governments and citizens’ groups insisting on new regulations to improve human rights in China while business groups complain that such regulations cost too much money.

No matter which side of the debate you may stand on, it’s hard not to be a consumer of products created under these regulatory conditions. As Lyle writes, however, better laws on the books doesn’t necessarily mean better work conditions.

In the long run, whether or not the law is successful in curbing worker abuse is another matter. Critics point out that the while the law will add much needed rights for workers, its goal of reducing worker-abuse cases might be difficult.

“The impact it will have on migrant workers’ working conditions will be limited,” says Lauffs. “Simply passing a new law will not guarantee that the local labor bureaus will become more active in enforcing employees’ rights or companies will be more accommodating in coming into compliance.”

A fundamental question is whether Chinese workers will actually make use of their newfound power. “I think many workers will be hesitant to use their full rights under the law” says Zhangjian, secretary at a small electronics manufacturing company in Beijing. “Bringing too much attention to yourself could cost you your job.”

The 100-Mile Closet: Dress Locally, or Get Real?

Nate at Carrotrope introduces the 100-mile wardrobe ideal: If green-minded foodies can eat only food products from within 100 miles of their dinner table, why can’t green fasionistas wear locally-grown (organic) fiber?

This seems like a nice idea. Wearing local clothes, as with eating local food, radically reduces shipping-related emissions. As much as you may like Egyptian cotton, unless you’re in North Africa, the stuff carries a serious carbon footprint. But local textiles are going to get complicated if they get popular. Where Nate and I grew up, for instance, there is little or no fiber grown within 100 miles, unless you are especially good with yucca or grass weaving. Or we Coloradans would have to be forgiven for wearing leather: no cotton was grown in the state last year, but there were 2.7 million head of cattle in January. Now that doesn’t mean it’s ideal or ecological for us to ship in all our clothes from thousands of miles a way, but just like a 100-mile food radius, this works better in bountiful agricultural zones—say, California.

If we were to imagine widespread adoption of the locally-grown clothing concept, there would need to be some changes in the global economy. For one thing, subsidies and/or consumer choice would have to make it cost-effective to pay locals to work in textile factories. Textile industries that are key to the employment of large numbers of people in a variety of Asian countries would need to be replaced by other business.

Looking at ways to make clothing more environmentally friendly is a valuable pursuit. Since we can pretty much guarantee no huge number of U.S. consumers is going to jump on the train right away, this effort will likely help raise awareness and serve as a model that could pressure other clothing manufacturers to reduce shipping-based emissions. All the same, if this is too successful, it could have vexing (and fascinating) global repercussions.

What Exactly Is Fair Trade? I Interview an Expert.

Today my newly-former employer publishes my interview with Fair Trade and international economics expert Jonathan Jacoby of the Center for American Progress. I always found myself wondering how exactly Fair Trade is put together, especially when confronting such things as a favorite coffee roaster Intelligentsia’s “Direct Trade” program, which claims to pay farmers even more than Fair Trade-certified sellers. About a month ago I interrogated Jonathan about how all this works, and here’s the product, after the jump.

Continue reading