m a r k a n d e y a

Bad News Day

Posted by Brian on July 2, 2007

The lousy news continue to rain down on me…

Korean firms show their true colors:

An alarm is ringing for Korean firms operating in China after Beijing passed a stronger labor law aimed at protecting workers’ right last week.

When the new law goes into effect in January 2008, it will reduce labor flexibility and increase operational risks for Korean firms while improving the basic rights of local workers, experts say.

The impact is expected to be heavier on small independent firms that account for 98 percent of Korean businesses operating in China, while conglomerates and other big firms are better prepared for the change.

“The Chinese government has passed the Contract Labor Law that has a heavy focus on workers’ rights. There is a high possibility that labor costs will go up for foreign firms,” said Kim Kyung-yong, a senior manager of the Asian team at the Korea International Trade Association (KITA), an interest group representing some 65,000 companies. “Firms have to cope with the changes while they still have the time to do so.”

The new law passed the Chinese legislature with strong support from the public after a series of reports were published on poor working conditions and compensation at workplaces. Most foreign firms have welcomed the law, at least on the surface.

The law has some provisions that can be considered too rigid to the eyes of Korean employers, who generally anticipate lower wages and less stringent labor regulations in China than here.

For example, the law will ensure people who have worked more than 15 years or ones within five years of retirement will not be fired in any eventuality. Also, interns and other probationary workers must be paid more than 80 percent of regular wages.

Workers can get a lifetime contract from their employers when they complete two short-term contracts. It also gives greater power to labor unions for collective bargaining and the implementation of new employment regulations.

China has the temerity to improve the working conditions of their lower working class and, rather than celebrate and eagerly support this move, Korean companies gripe. I guess it might be a challenge for them to treat Chinese workers with the slightest amount of dignity.

I’m reminded of a student I had a few years ago who owned a company that utilized a factory in China for production. One day, I asked him if he was concerned about the working conditions and wages of the Chinese employees there; he looked at me like I was asking him if he was concerned about the mildew stains in the bathroom of room 7 at the Spokane Quality Inn.

And in other news, Hanhwa chairman Kim Seung-youn was sentenced to 18 months in prison for assualting bar workers in a revenge attacks on behalf of his son. If you’re dumb enough to believe that he’ll serve even a third of that time you’re dumb enough to believe that Scooter Libby might have had the chance of doing jail time of his own.

Let the Kim Seung-yeon Pardon Watch begin. 1, 2, 3, 4…


One Response to “Bad News Day”

  1. scott said

    Maybe the T-shirt you refer to in the next post should have read, “My Chinaman works for less than your Chinaman.”

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