A “Race to the Bottom”

Topics: Minimum wage, Wage, Employment Pages: 4 (1303 words) Published: February 12, 2012
1The Chinese government rejoiced on the occasion of gaining World Trade Organisation membership in November 2001. There was an expectation in Peking that once the country became integrated into the world economy, it would be on the right track to attain economic prosperity. There might be some bumps along the way: some industries and agriculture would suffer, affecting employment, but as a whole, it was predicted, China would gain. Employment has been a major concern in China, and the government’s best sell was that foreign investment would increase and the labour-intensive manufacturing sector would gain: according to one estimate, 2.8 million additional jobs in textiles and 2.6 million jobs in the garment trade, as the constraints of quotas for garments and textiles end 1.

2 George Wehrfritz and Mahlon Meyer, with Hideko Takayama, “Trapped in a Chinese Box”, Newsweek, Febr (...) 3 William Greider, “A New Giant Sucking Sound”, The Nation, December 31st 2001.

2As predicted, foreign investment has been flowing into China in the past year at the expense of its South-East Asian neighbours and the tiger economies of Hong Kong, Taiwan, Korea and even Japan. Hong Kong and Taiwan have been the nurturers of Chinese export industries for more than a decade, only to discover now that some of their own industries are being “hollowed out” 2. As one observer, William Greider, describes it, China is “sucking away” jobs. “Globalisation”, he writes, “is entering a fateful new stage, in which the competitive perils intensify for the low-wage developing countries. … In the ‘race to the bottom’, China is defining the bottom” 3.

4 Labour standards, a term that was once used almost exclusively within labour and government circles (...)

3In other words, though employment in the low-wage industries in China may be expanding, the wages of the workers in these industries are not rising, and for many of them have been falling. What within the Chinese system allows it to...
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