How the Rising Power of Chinese Workers Will Affect You

2010 may be the year of the Tiger according to the Chinese calendar, but in China it has been the year of the worker. That's because for workers throughout China, wages and working conditions have been improving and the right to protest has been respected. And these changes are not only partially attributable to you, they will affect you in the coming years in some unique and surprising ways.

The Economist has a great article about the Chinese workforce this month, looking at the increase in the power of Chinese and migrant workers in China. For example, wages, while still a tiny fraction of those in the U.S. and Europe, rose 17% last year. A new labor law was passed in 2008 to provide workers additional protections from abuse. And recent labor strikes, which previously would have been quashed by the government or military, have been allowed to continue for weeks. Granted, working conditions are still poor for a number of Chinese workers and serious abuses like child labor and human trafficking still abound in several industries in China, but the improvements have been tangible. And they have been, in part, due to you as a consumer.

One of the reasons China has allowed strikes at companies like Honda to continue is a growing reluctance to visibly abuse workers' rights when they are associated with major global brands. And I think that reluctance stems from their fear that consumers will react by taking their business elsewhere. As consumer awareness of issues like sweatshops, slavery, child labor, and other abuses grows, people have begun to consider how their products are made. If they hear the Chinese government is cracking down on workers making this brand of car or that brand of t-shirt, they might take their business elsewhere. And when sales start dropping, the global brand in question will be pretty peeved at China. So instead of risking losing the manufacturing business of massive global brands, China is taking a gentler hand with its workforce.

More power, better conditions, and higher wages in China are also good for Western consumers as well. China has the opposite economic problem we have in the U.S. &mdash they rely too much on investment and too little on consumer spending. In part, low wages and the feelings of instability and despair which abusive work environments can harbor are responsible for low Chinese spending. When wages increase, so does the Chinese economy and eventually, the world economy. For example, a 20% increase in Chinese buying could create up to a $25 million increase in Chinese exports to the U.S. and 200,000 American jobs related to those exports. And jobs are something we Americans can use right now.

When Chinese workers win, you win. And when you consider workers when making purchase choices, Chinese workers win.

Photo credit: Robert S. Donovan