Collective bargaining can bring better wages

• Source: Global Times
• [02:56 December 04 2009]
• Comments

By Wu Huaiting

It's official – the severity of China's income inequality.

Thursday, the People's Daily reported that China's wage increase lags behind rising corporate revenue. Many Chinese workers aren't paid enough to support themselves and their families.

China has long relied on low labor cost in global competition. A certain level of income inequality may be necessary to lure capital investment, but excessive disparity often leads to low efficiency, economic insecurity and social injustice.

A reasonable level of pay corresponding to Gross National Income is crucial for the sustainable development of China's economy.

But, wage increase is easier said than done. Few employers are willing to raise wages, because it pushes up labor cost and brings down profits. The worsening of the global economy and shrinking job opportunities put further pressure on wage increase.

Collective bargaining is one way forward. When workers organize, their power to negotiate better wages is greater.

In the West, labor unions play an active role in wresting better pay and benefits. There are many ways of organizing for collective bargaining. In European countries, like Sweden and Austria that have a social market economy, unions negotiate wages at the national level: between federations of labor unions and employers' organizations. Both parties strive to balance the interests of different regions and trades from their respective standpoints.

The US has a different pattern. Collective bargaining is done on a workplace basis.