The Sunday edition of the Asian Wall Street Journal and a commentary in last Friday's Financial Times take opposing views of the impact of the on-going labor unrest situation in the mainland.
Both articles focused on strikes at Foxconn and Honda subcontractors, but offered different perspectives on the long-term impact.
From the WSJ view, the real, potent issue at the current Honda subcontractor strike is not the increase in wages, but the increasing strength of non-government unions. As the push for higher wages and better working conditions continue, the central government has been relatively silent. Ultimately, if the labor unrest continues, it could destabilize the very government that is trying to ride two horses at once by being supportive but in control.
The China government does not want to be seen as "taking a side" for either labor or management, and wishes to keep the support of the average citizen, but still keep the global manufacturing engine moving.
However, the average household wages for most workers have not really improved over the explosive growth of the past 20 years. Companies have grown, and a small, but highly visible segment of working professionals have seen dramatic earnings improvements. In a population as large as China's, even a relatively small percentage of the working population can impact consumer spending. But, millions of workers still have low compensation.
FT's point was that labor represents a relatively small percentage of the overall cost of most China made products (such as computers) and that the recent wage increases would have little impact on global pricing.
But isn't the real issue the growing independence of the average worker? As this independence, and the increased awareness of the power of organized labor, becomes more common across a broad band of factories and regions, it seems highly unlikely the central government can stay out of the debate.
The take-aways: No matter which publication is right, change is happening.
More to follow...
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