Yesterday, the AFL-CIO unveiled a new legal challenge to the Chinese labor system that is at the heart of a vexing problem for workers here and in other countries: how do you compete against workers who make bottom-of-the-barrel wages thanks to a government policy to artificially suppress wages? I don’t know if this challenge has a a prayer to be accepted by the Administration but it is really worth reading, particularly the introduction, because it lays out in very clear language what’s happening in China–and how that effects every American.

The AFL-CIO filed a Section 301 petition–a section of trade legislation put in place to challenge unfair trading advantages. Among the criteria used to determine whether actions by another country constitute unfair trading:

Section 301(d)(3)(B)(iii) of the Trade Act provides that acts, policies, or practices
of a trading partner are unreasonable if they constitute “a persistent pattern of conduct”
that –
(I) denies workers the right of association,
(II) denies workers the right to organize and bargain collectively,
(III) permits any form of forced or compulsory labor,
(IV) fails to provide a minimum age for the employment of children, or
(V) fails to provide standards for minimum wages, hours of work, and
occupational safety and health of workers.

Well, you can pretty much chalk up all those things to conditions you would find in China, as the document lays out (it was researched and written by Mark Barenberg,
Professor of Law at
Columbia University who also did the fine work on the previous Section 301 petition on China in 2004).

Here are some nuggets from the petition that are worth committing to memory:

Although they are half a world apart, factory workers in China and the United
States face some surprisingly common problems. In both countries the real wages of
most manufacturing workers have stagnated and job security has diminished in the last
decade, even while manufacturing productivity has increased rapidly. The problems are
not only similar. They are linked. Global corporations from Wal-Mart to Proctor &
Gamble to Delphi to Dell relentlessly squeeze labor costs in their Chinese affiliates and
suppliers and use the threat of low-wage competition to roll back decades of hard-won
gains in wages, benefits, and dignified treatment for workers in the United States. The
severe exploitation of China’s factory workers and the contraction of the American
middle class are two sides of a coin.

This, I think, is particularly important because it underscores a point I have made and urge us all to make: this isn’t about Chinese workers versus workers in the U.S. (or, for that matter, in other countries). It’s a story of two governments, working in collusion, aiding and abetting the global corporate system.

And what are those conditions in China?

…when migrants enter the
factory system they often step into a nightmare of twelve-hour to eighteen-hour work
days with no day of rest, earning meager wages that may be withheld or unpaid altogether.
The factories are often sweltering, dusty, and damp. Workers are widely exposed to
chemical toxins and hazardous machines, and suffer sickness, disfiguration, and death at
the highest rates in world history. They live in cramped cement-block dormitories, up to
twenty to a room, with each worker’s space limited to a bed in a two-tiered bunk –
comparable in space, discomfort, and privacy to prison cells in the United States. They
typically face militaristic regimentation, surveillance, and physical abuse by supervisors
during their long day of work and by private police forces during their short night of
recuperation in the dormitories.Ten to twenty million workers in China are children.
No one knows the precise number, because statistics of that kind are state secrets, and
anyone disseminating such data is subject to criminal punishment. Another one to six
million are detained without fair trial and forced to labor in China’s prison system, under
threat of violence and torture.

You’ve probably read some stories in the media that have created a sense that wages are rising in China. The story is far more complicated:

Recent, optimistic journalistic reports that minimum wage standards have risen in
China’s big cities in the last two years ignore at least four fundamental facts: (1) real
wages have risen for certain categories of skilled, technical, and managerial workers, but
not for the majority of ordinary factory workers; (2) the actual pay of most factory
workers remains below minimum wage standards set by local governments, (3) local
minimum wage standards themselves are below central government directives, and (4) in any event, the majority of China’s factory workers are located outside the big cities
where local minimum wage standards have risen, and factories are increasingly moving
to the lower wage areas outside those big cities.

The purported labor shortage faced by some big-city factories has not led to
predicted, large increases in wages for the vast majority of factory workers — precisely
because global corporations continue to squeeze China-based suppliers to reduce costs,
and workers lack the basic rights to bargain for substantial increases. The (locally
confined) labor shortages are the result of poor labor conditions, not the cause of
improved conditions.

Equally important, even accepting the rosy assumption that actual factory wages
have risen 10 percent a year for the last two years, the percentage wage reduction caused
by the denial of basic workers’ rights remains as large in 2006 as it was in 2004.

And how does that effect jobs here?

Highly conservative methodologies show that China’s labor repression displaces
approximately 1,235,000 jobs in the United States alone, and perhaps many more.23 This
remains true, even assuming that China’s factory wages have risen 10 percent in each of
the last two years.

The petition seeks trade sanctions against China that are all focused on improving the rights of Chinese workers–which, in theory, would boost wages significantly enough to reduce, if not eliminate, the wage cost advantage that acts as a magnet for marauding global corporations like Wal-Mart. The Administration rejected a similar petition in 2004, on the grounds that its strategy would use other “efforts” to coax the Chinese government into change.

Well, that was a crock then because, let’s be honest, this Administration–and, also, let’s be honest, the Clinton Administration (which negotiated the deal with China that led to China’s entry into the World Trade Organization–a deal that did not include a SINGLE serious provision for labor rights)–has no interest in challenging China…and, thereby, challenging the interests of large global corporations.

So, again, I’m skeptical that this trade challenge has any chance of going anywhere–but it’s a very strong document and a very strong political statement.

Read it all here.