Discuss the key elements of globalization and how they affect the employment relationship and labor relations.

“Globalization”

Understanding how labor relations works in other countries is critical for managers and union leaders who have professional activities involving other countries. Describing the broad outlines of the traditional workings of labor relations systems of a number of representative developing countries is therefore the primary objective of this chapter.

Several Asian developing countries are experiencing significant economic or political transitions similar to the situation in Eastern Europe. The Republic of Korea (South Korea) became a democracy in 1987. This political democratization loosened the government’s grip on labor relations—unions were given greater freedoms to strike, and collective bargaining became more important. However, a second labor federation that challenged the longtime government-recognized federation was not legalized until 1999. Korean labor relations are therefore still in transition—made more difficult by the Asian financial crisis of the late 1990s and the resulting job losses.

In China, change has been driven by economic rather than political change. While the economic system is moving from socialism to a mixed economy (sometimes called market socialism) as in eastern Europe, there is little loosening of the Communist Party’s control over the political system. Before the start of this economic transition in the 1980s, labor relations were similar to the eastern European Stalinist model, and unions served as transmission belts for the Communist Party. The weakening of the party’s control over economic activities and the growth of private ownership and market mechanisms mean that the transmission function is probably less important; but organized labor is not yet completely free, and as in many other countries, economic development trumps labor rights.

New labor laws in 1994 ostensibly promote collective bargaining, but close relationships between union leaders and the Communist Party remain, there is only one legal union federation (the All-China Federation of Trade Unions or ACFTU), and strikes are still restricted. Independent union representation is also undermined by the emphasis in Chinese labor law on regulating outcomes rather than promoting processes, such as collective bargaining, that require the Communist Party to give up some control. On paper, unions are mandatory in foreign-owned businesses, but this is not universally enforced by local authorities fearful of losing foreign investment. Moreover, in workplaces where unions are present, they are generally dependent on and integrated with management.

As both of these countries are major trading partners with the U.S., these changes can affect you are as an American consumer and worker.

After reading this chapter, you should be able to:

Discuss the key elements of globalization and how they affect the employment relationship and labor relations.

Outline alternative institutional arrangements for governing the global workplace and the implications of each for labor relations.

Explain various strategies for representing workers in a global economy.

Understand the labor relations challenges

What happens to labor in China will impact all of us as American consumers.

discuss the following questions:

Despite the current push in labor activism, do you believe that the Chinese government is really open to the criticisms of worker’s rights or do you believe that they would continue to restrict the flow of information and Internet and disrupt the labor movement?

Manufacturers are leaving China since the workforce turnover rates are high and wage rates are beginning to climb. What do you believe the factories in China can do to achieve greater workplace retention and increase employee job satisfaction? How can they compete with countries like Viet Nam?To get full credit you need to give supported well-thought-out answers to the initial question.

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