China Answers Global Crisis with New Labor Market Policies

Many countries have adopted plans designed to help their economies recover from the global financial crisis. Unfortunately, those have mostly concentrated on saving banks and companies on the one hand, and on stimulating consumption on the other. Amazingly, there has been relatively little emphasis on the labor market policies needed to save jobs and protect wages. One wonders who is meant to do all the consuming if unemployment keeps rising and wages keep falling (at least in real terms)?

The FLA has been drawn to the impact the crisis is having at the bottom-end of the global supply chain, far from the banks and brokerage houses where the crisis first erupted. The countries that make the consumer goods that our consumption-driven economic bubble fed on have experienced a tsunami of factory closures and layoffs. In an attempt to help buyers, suppliers and worker representatives deal with that tsunami, the FLA has been on the ground in a few locations convening meetings to see how governments, employers and trade unions can work together to handle retrenchments in a socially responsible way.

Recently, the FLA was in Guanzhou, China, where we conducted a meeting that brought together a major brand-name buyer, its local suppliers and representatives from the Ministry of Commerce, Ministry of Human Resources and Social Security and the All China Federation of Trade Unions (ACFTU) for this purpose. Read the rest of this entry »