AFX European Focus | March 30, 2004
US companies are condoning workers' rights abuses in China, giving manufacturers in that country an illegitimate cost advantage and fueling job losses in the US, a former International Labor Organisation (ILO) expert said Monday.
Mark Barenberg told an opposition Democratic party hearing in the Senate that managers of major US multinational corporations in China had told him on condition of anonymity that 80 pct of their contractors flouted labor laws.
The contractors "keep double or triple books" to hide the fact that they're not paying minimum wages, overtime and breaking China's maximum-hour laws," Barenberg quoted the managers as saying.
"In their official statements, however, these same US corporate managers say they're paying minimum wages, and the media and think-tank researchers often take these official statements at face value," he charged.
Barenberg last year served as an independent expert for the ILO which gave him opportunities to interview many managers who monitored working conditions of factories that produced footwear, textiles, toys and other retail goods in China.
"The managers were speaking under a pledge of anonymity, so I got a rare inside story about factory operations in China," he said.
Barenberg, now a professor of law at Columbia University, is the architect of a study on alleged Chinese labor abuses that forms the basis for an unprecedented petition filed against the government by the top trade union group in the US.
The American Federation of Labor and Congress of Industrial Organisation (AFL-CIO) is demanding that President George W. Bush impose trade sanctions against China for alleged workers rights abuses that had lowered China's wages and production costs and forced massive job losses in the US.
Bush has up to April 30 to decide whether to accept the petition and launch an investigation into the charges.
If the president denies it, he must publicly state that China does not persistently violate its workers' rights or that China persistently violates its workers rights but that this has no effect on US jobs.
The US has lost 2.8 mln manufacturing jobs since President Bush took office and the US' largest trade deficit -- 124 bln usd -- is with China, which has become a top global exporter of manufactured goods.
Barenberg said he also learned during his stint in China that workers of a US corporation-run factory in China that made sealants for shoes were exposed to open vats of toxic chemicals that overflow onto factory floors where they worked in bare feet.
"When the workers in China became severely ill and complained, they were simply fired and sent back to the countryside, and Chinese authorities did nothing," he said.
At another US-owned factory, he said he saw workers making magnetic devices who were exposed to moving machine parts without machine guards.
"US corporations and other factories often say that they pay minimum wages in China. But when you calculate ... you find that factory workers in China typically make significantly less than China's own minimum wage," he said.
Senator Dorgan said he was sure the Bush administration would be hearing "from some pretty unhappy companies."
"Because unquestionably, China's labour practices have fattened the bottom line of some large corporations."
Speaking against the AFL-CIO petition, Nicholas Lardy from the Institute for International Economics, a Washington-based think tank, told the hearing it gave an impression that Chinese labour costs were so low that foreign goods could not be competitive in China's market.
But over the past decade, he said, Chinese imports have quadrupled -- to 413 bln usd last year.
He said China's import growth had fuelled economic growth in Japan, South Korea, Taiwan and Southeast Asia and that China was also the fastest growing among the large export markets of US firms.AFX European Focus:
