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A Comparative Study of Labor Conditions Between Bangladesh & China: Legal Rules vs Reality

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10 December, 2012

Shakil Huda
Professor
Institute of Business Administration
University of Dhaka

Subject: Submission of LEB Term Paper.

Dear Sir,
Take my humble gratitude for your guidance in preparing my term paper. I have completed my law
term paper named A comparative study of Labor conditions between Bangladesh & China: Legal
Rules Vs Reality which I have been assigned as a part of LEB course requirement. Working on this
report was very beneficial for me. I had a paltry knowledge regarding labor law and its implications
before started working on this report. I thank you for giving me the scope of developing a deep
insight on this important topic related with the labor force. I am delighted to do the assignment.
I hope this report will be able to meet the requirement of the course & should also be able to satisfy
your expectations.

Sincerely yours,


Mahnoor Sattar
Roll: 48, MBA, Batch 48 D
Institute of Business Administration
University of Dhaka




A Comparative Study of Labor Conditions Between Bangladesh & China: Legal Rules vs Reality
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EXECUTIVE SUMMERY

The most valuable capital for Bangladesh where almost all the manufacturing industries are labor
intensive is labor itself. Having one of the highest populations in the world Bangladesh is highly
dependent on labors. Nevertheless, the rights of labors are often most neglected and exploitation of
labors is a common phenomenon. Even though there is a growing concern about labor rights among
workers now a days, labor code is still widely violated in many aspect such as Health, Safety &
Welfare measures, Maternity Benefit and Working hours etc. Meanwhile, Chinese factory workers
face striking similarities in labor conditions in terms of violation of their respective labor law. Their
list of violation includes excessive work hours, grueling working condition, severe discrimination,
verbal and physical abuse, child labor, lack of safety measures and many more. Furthermore, their
labor dissatisfaction frequently culminates in extreme ending like mass suicide.
This report is going to unearth the gap between labor code 2006 and the labor practice in
Bangladesh. How rules and reality diverges from one another is my primary focus. Also I have
compared and contrast the discrepancy of labor conditions between Bangladesh and China. For
this, I have selected RMG sector and Electronic sector for Bangladesh and China respectively to
represent their labor conditions. Last but not the least I have shown a graphical presentation of the
probable future effect in labor supply with respect to execution of labor law.









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OBJECTIVE
To distinguish and analyze the difference between the legal rules and reality.
To compare between Chinese labor condition and Bangladeshi labor condition
To evaluate the probable future outcome or compliance and non compliance of labor law with
respect to labor supply and salary.

SCOPE
The report will cover only some basic aspects of the labor rights and its violation in Bangladesh and China
in the light of respective countrys labor law.


METHODOLOGY
The study will be descriptive in nature. We will mainly collect data from secondary resources and analyze
the data using qualitative approach. The secondary data will be collected from consulting various
documents, reports, articles, case studies, books, journals, newspapers, survey, and various web-sites.
Both Labor Contract Law of the People's Republic of China (2008) and Bangladesh Labor Code 2006
have been used as references.

LIMITATIONS
Due to limited time and resources, all the sections of labor act could not be analyzed. Besides, using
secondary data instead of primary might decrease the fairness of the report and reduce effectiveness at
some places. Furthermore, due to lack of appropriate information, case references could not be provided
as evidence.


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Contents

Introduction 1
Bangladesh economy & RMG sector 2
Chinese economy & Electronics sector 2
Labor law & fundamental features 2
Labor mistreatment in bangladesh 3
Poor safety measures and disaster management 3
Inadequate and irregular payment 4
Exhausting working ambience 4
Child labor 4
Work place abuse 4
Lack of Grievance procedure 5
Discrimination based on unrelated factors to work 5
Labor Mistreatment in china 5
Excessive overtime 5
Wage payment 6
Grueling working condition 6
Forced work without pay 6
Verbal and physical abuse 6
Child labor 7
Severe discrimination based on unrelated factors to work 7
Lack of safety measures 7
Unfair and unreasonable rules 7
Lack of grievance channel 7
Comparison and contrast 8
Advantages of compliance in RMG 8
Long Run effect of implementing and not implementing Labor Law effectively 9
Conclusion 10
Bibliography 11
Appendix 12


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INTRODUCTION
Scorching heat and thick smoke surrounded Laila Banu from everywhere. Her lungs
finally gave up the desperate battle for a grasp of air. Like her 112 colleagues, she was
consumed by the devastating fire that broke out in November 24, 2012 at Tajrin
Fashions. Meanwhile, Li Yue feels trapped in her mundane job at i-phone factory in
China. Paltry salary, harsh job environment, verbal and physical abuse, inhumane
working hours and lack of social life all became a heavy burden in her heart. Since no
other job option is available for her, she decided to quit not only form the job but also
from her life. Laila Banu and Li Yue though separated by a thousand miles, but one
thing they had in common. That is they both paid with their lives for the failure to
conserve labor rights.
angladesh is a country with the highest population density where labors are the
builders of the economy. Most of the manufacturing sectors are highly labor intensive.
For many years, our manufacturing industries have suffered labor exploitation,
ineffective and unfair labor unions which has created impediment in our growth. Bangladesh Labor
Code 2006 was introduced in order to preserve all the basic rights for the benefit of both employer
and worker. Even though there is a growing concern about labor rights among workers now a days,
labor code is still widely violated in many aspect such as Health, Safety & Welfare measures,
Maternity Benefit and Working hours etc. This is a common phenomenon in more or less all our
factories and is highly condemn by media along with our foreign buyers. Meanwhile our nearest
competitor (in terms of exporting RMG) China has many labor issues in spite of being a much
developed country than us. Furthermore, their labor dissatisfaction frequently culminates in
extreme ending like mass suicide.
This report is going to distinguish the gap between labor code 2006 and the labor practice in
Bangladesh. Also it will compare and contrast the discrepancy of labor conditions between
Bangladesh and China. For this, I would do an intra industry comparative study between
B

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Bangladeshi RMG sector and Chinese Electronics sector. Last but not the least I have shown a
graphical presentation of effect in labor supply with respect to execution of labor law.
BANGLADESH ECONOMY & RMG SECTOR
Bangladesh is a major RMG exporter of the world after China and Vietnam. This sector plays a
pivotal role in our economy by contributing 76% of the total export earning which is around 10% of
the GDP. (A. K. M. Ezazul Haque, 2010) This sector works as a bloodline in our economy. We have
around 4000 RMG factories. Annual earnings from this sector alone are about $20 billion. (Alam,
2012). However, almost all the factories are fueled by manual labors. Nevertheless, labor conditions
in these factories are not as lucrative as the profit from this sector.
CHINESE ECONOMY & ELECTRONICS SECTOR
China is one of the economic super powers in the world and their electronic information industry
has grown three times faster than the national GDP growth rate. The added-value base of the
Chinese electronic information industry is about 900 billion yuan (approximately US$112 billion).
The value added ratio is (amount of value added / total sales x 100%) only 23.4%, compared to the
whole national average of 27.1%. (Economic Operation Report Of China Electronic Information
Industry, 2006) Having abundant human resource China utilizes manual labors in many of its
factories. Despite their outstanding economic performance, labor condition in China is the very
poor as labor rights are widely ignored.
LABOR LAW & FUNDAMENTAL FEATURES
Labor law is introduced to establish harmonious relationship between employer and employee. It
aims to accelerate growth while maintaining order and equity. Both Labor Contract Law of the
People's Republic of China (2008) and Bangladesh Labor Code 2006 recognizes fundamental rights

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like prohibition of forced labor, freedom of association, discrimination of religion, sex or race etc.
However, these rights although conserved on paper, reality diverge widely from the rules.
LABOR MISTREATMENT I N BANGLADESH
Our labor law promised to benet workers by guaranteeing rights that were being violated on a
regular basis by employers. Industries which uses manual labors i.e. RMG, pharmaceuticals, steel
mills, cement factories, Cigarette factories etc. widely deviate from the labor law. But for the time
and scope limitation I am presenting some of the labor issues commonly seen in RMG factories:
POOR SAFETY MEASURES AND DISASTER MANAGEMENT
Under section 61, 62, 63, 64, 72, 73, 74 our labor law has directed to specifically take proper
measures which can be hazardous or life threatening in the work place. But it is highly unfortunate
to find that most of the employers are oblivious to these rules. Fire alone has taken hundreds of life
and injured thousands since the emergence of the RMG industry. These deaths and injuries were
the result of violation of fire safety and building codes. The cause of death is usually not the fire
directly. Rather people have died due to stampede, locked exits, inadequate number of stairs,
deliberately blocked pathways, smoke and suffocation; in short, their inability to escape. Very few
of the Garments factories have Alternative escape in compliance with the labor code 2006. Even the
ones which have alternative escape are not functional. Buildings that are used as factory are not
designed as commercial facility. Exposed operating machines, crude and unsafe electrical
connections, few or no fire extinguishers, lack of or ineffective fire and smoke alarm systems, either
no or paltry fire drill practice, unawareness of managers and workers of health and safety issues
etc. are liable for this situation.


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INADEQUATE AND IRREGULAR PAYMENT
The wages of a labor must be paid to him before the sweat dries upon his body.
This is the way a famous hadith has directed employers about payment. Bangladesh, being a Muslim
country does not abide by this hadith. Many of the RMG factories are accused of irregular and late
payment to their workers. Agitation for arrears and bonuses before Eid is not a common
phenomenon in Bangladesh. Moreover our minimum wage is lower compare to the world market.
This has in turns created a lot of labor unrest and vandalism in this sector.

EXHAUSTING WORKING AMBIENCE
Section 12 to 20 of the labor code deals with the working environment of the workers. Most of the
garments contain overly crowded working areas without proper ventilation and temperature
control. Moreover workers are at the mercy of their employer for leaves and holidays. Section 10
and 11 outlined the application of holidays for workers. Although rights are conserved in the labor
code but maternity leave of 6 months, annual leave, casual leave and sick leave is not properly
exercised in many of the workplace.
CHILD LABOR
Bangladesh has been excluded by the US Department of Labor from the list of sectors suspected of
producing goods with child labor. RMG sector mainly requires adult with working skills.
Notwithstanding this fact many factories in other industries still employ child labors.
WORK PLACE ABUSE
Most of the workers in our RMG sector are female. They often face a lot of harassment by their male
counterpart in the work place. Harsh working environment and less empathy for the workers are
prevalent in our RMG sector.

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LACK OF GRIEVANCE PROCEDURE
Section 33 has specifies grievance procedure in case workers has any complaint. But in most of the
RMG factories, this is absent. Employees are too powerless to come up to employer with their
problems and complaints.
DISCRIMINATION BASED ON UNRELATED FACTORS TO WORK
Most of the labors face discrimination based on their age, sex, religion etc. In addition to that,
nepotism although not supported by our labor law is a common factor in our work place
LABOR MISTREATMENT I N CHINA
Labor rights are poorly enforced in Chinas maximum factories. Almost all the factories show
similar types of labor exploitation. Some of the important issues that are prevalent in their
electronics industry are discussed below:
EXCESSIVE OVERTIME
Amended in 1995, PRC Labor Law [2] article 36 requires laborers to work no more than 8 hours
per day and 40 hours per week. With regards to allowable overtime hours, PRC Labor Law [2]
article 41 & 42 restricts overtime hours to a maximum of 36 per month and/or 3 per day. However,
Chinese labors are often forced to do inhuman overtime. According to a study, Some of the factories
even impose 186 hours per month overtime on workers. Even if workers are not forced, sometimes
they have no other option but to work overtime as their basic pay is too inadequate to support
themselves and their families. Here overtime payment is not a supplementary but a necessity.
Therefore, many workers voluntarily want to work overtime and inability to do so is seen as a
punishment.


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WAGE PAYMENT
China has no national minimum wage. The labor law allows each province to set their own
minimum wage according to standards promulgated by The Ministry of Labor and Social Security
(MOLSS). (Level Works Limited, Nov 27, 2006) However, in reality many workers wage is too poor
to bear the minimum cost of living for workers and their families. The most common wage payment
issue in China is the illegal withholding of workers wages prior to the Chinese Lunar New Year.
Because the majority of workers return home for up to a month during this part of the year,
factories use this method to force workers back to the factory by fear of loss. To make situation
worse, illegal deductions and/or fines, and illegal wage calculation methods are prevalent in China.
GRUELING WORKING CONDITION
Almost all the factories require their workers to stand on their foot while working. It may take 10 to
12 hours at a stretch without sitting. This is prevalent in many cases where standing is not even
necessary. Here working environment is such that every labor has to forgo their human needs and
work like a machine with maximum productivity.
FORCED WORK WITHOUT PAY
In many cases Chinese labors are forced to work overtime without any payment. Nevertheless,
sometimes they are allowed extra vacation for these unpaid works.
VERBAL AND PHYSICAL ABUSE
Workers are bound to digest many verbal and physical abuses in the workplace. Investigators
discovered regular crude treatment of workers if they fail to achieve target. (China Labor Watch,
September 4, 2012) Harsh working environment leaves no room for sympathy or softness.


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CHILD LABOR
Underage workers are abundant in all the factories. Even though these child workers are below 18
years age, they are forced to do same amount of work as their adult counterpart without adequate
protection. Many factories hire underage student workers directly from vocational schools where
they dont even receive a legitimate labor contract. Many of these students must accept this work
as a part of their graduation requirement. (China Labor Watch, September 4, 2012)
SEVERE DISCRIMINATION BASED ON UNRELATED FACTORS TO WORK
Most of the factories prefer young workers of 16 to 20 years age since young people are docile and
less defensive. Sometimes female workers are preferred for their co-operative nature. Moreover
strict discrimination is existent based on disability, race etc.
LACK OF SAFETY MEASURES
In many electronics factory, safety training is near to zero. Adequate safety measures are hardly
important to the employers which cause a lot of health hazards and accidents.
UNFAIR AND UNREASONABLE RULES
In terms of wage, working hours, vacation, employee benefits, promotion etc. employers always
take decision at their favor. Abstinence is highly discouraged in spite of having severe problem.
LACK OF GRIEVANCE CHANNEL
Even when they suffered unfair treatment, workers at almost factory lacked any effective channel
by which to express grievances to management. Even if there is a suggestion box, management
usually dont contemplate these complaints. Furthermore, most workers at every factory had heard
nothing about a union, and even if there was a union, it did not act as a voice for the workers
interests.

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COMPARISON AND CONTRAST
Bangladesh and China though thousand miles apart, have many similarities in labor issues. Both
countries have proper rules to protect labor rights but the reality is a far cry from the rules. In fact,
both the countries failed to abide by their respective labor laws. In terms of safety measures,
working condition, wage payment, working hours, job discrimination both China and Bangladesh
more less deviate from the standard. Employers are oblivious to labor welfare. They treat labors as
only lifeless business input in their profit making venture.
However, reality speaks otherwise. A study on 10 RMG factories among which 5 compliant and 5
non-compliant shows that compliant labor factories are more profitable than nonprofit ones.
(Baral, 2011) The advantages of the compliant factories are:
ADVANTAGES OF COMPLIANCE IN RMG
o Gets higher price of products
o Free from labor unrest.
o Reduce worker turnover rate.
o Increased worker morality.
o Increased productivity.
o Increased product quality.
o Have global image and global
recognition for their performance.
o Good public or community relation.
o Improved government-industry
relation.
o Satisfaction of the buyer requirement.
o Can work directly with reputed
buyers.
o Have consistency in order.

Most of the employers do not comply with the labor law with a view to minimize cost and maximize
profit. However, they miss the foresight of the bigger picture. Complying with labor law is not only
beneficial for the employees but also for the employers. It can be treated as a long term investment.


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LONG RUN EFFECT OF NOT IMPLEMENTING OR NOT IMPLEMENTING LABOR LAW EFFECTIVELY









Given the current condition RMG sector has become unattractive for many employees and they
have an inclination to change industry. If this persists then we might see a labor shortage in this
profitable sector. This sector will face lack of skilled and dedicated people. According to the
demand and supply theory salary will these labor will increase other things remaining same. On the
contrary, if labor code is strictly enforced then working condition will improve and labors will be
more motivate to join this sector. Young generation will be more inclined to join this sector. This
might escalate labor supply in this sector in future. Moreover, it will increase employee moral
which will in turns increase productivity and profitability.



Quantity of Labor
Supply
L2
Salary
S2
S1
Supply 1
Quantity of Labor
Supply
Salary
Supply 2
Demand
L1
Supply 1
Supply 2
S2
S1
L1
L2
Figure: Long Run effect of implementing or not implementing labor Law
Effectively

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CONCLUSION

Perfect law and order is practically nonexistent in the world. But deviation from the standard
should be within tolerable range. Both Bangladesh and china has depicted outrageous violation of
their labor laws. Only rules are never enough to make equity in the society. It is often seen that
workers are not aware of the existing laws and standards which are formulated to protect their
interests. Even if they are aware, it is sometimes not financially feasible for them to sue an
employer and carry the legal cost of doing so. In addition, the fact that those legal cases commonly
drag on for months, or years, discourages many workers from entering such processes. Local
organizations such as unions or worker- oriented NGOs could play an important role in helping to
confront some of these barriers.
In a nutshell it can be said that employers from both the countries yet to realize the long term
indirect cost associated with violating labor law. Social awareness along with accountability among
both the employer and employee can create a more productive and profitable business
environment.


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BIBLIOGRAPHY
(2006). Economic Operation Report Of China Electronic Information Industry.
A. K. M. Ezazul Haque, L. A. (2010). Contribution of the Ready-Made Garments (RMG) Sector tothe
Bangladesh Economy. Dhaka.
Alam, J. (2012, November 25). International. Retrieved from The Daily Star, Lebanon:
http://www.dailystar.com.lb/News/International/2012/Nov-25/196085-112-killed-in-
fire-at-bangladesh-garment-factory.ashx#ixzz2Doll7J9I
Baral, L. M. (2011). Comparative Study of Compliant & Non- Compliant RMG Factories in Bangladesh.
Dhaka.
China Labor Watch. (September 4, 2012). An Investigation of Eight Samsung Factories in China: Is
Samsung infringing upon Apple's patent to bully workers?
Level Works Limited. (Nov 27, 2006). Wages, Benefits & Work.
Mahfuza, M. (2011, May 10). Chairperson, 3rd Labour Court. (N. Rashida, Interviewer)



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APPENDI X











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THE BANGLADESH LABOUR ACT, 2006(XLII OF 2006)
An Act to consolidate and amend the laws relating to employment of labour, relations between workers
and employers, determination of minimum wage, payment of wages and compensation for injuries to
workers, formation of trade unions, raising and settlement of industrial disputes, health, safety, welfare
and working conditions of workers, and apprenticeship and matters ancillary thereto. Whereas it is
expedient to consolidate and amend the laws relating to employment of labour, relations between
workers and employers, determination of minimum wages, payment of wages and compensation for
injuries to workers, formation of trade unions, raising and settlement of industrial disputes, health, safety,
welfare and working conditions of workers, apprenticeship and matters connected therewith;

1. Short title, commencement and application: (1) This Act may be called the Bangladesh labour
Act, 2006
(2) It shall come into force at once.
(3) Save as otherwise specified elsewhere in this Act, it extends to the whole of Bangladesh.
(4) Notwithstanding anything contained in sub-section (3), this Act shall not apply to-
(a) Offices of or under the Government;
(b) Security printing press;
(c) Ordnance factories;
(d) Establishments for the treatment or care of the sick, infirm, aged, destitute, mentally disabled,
Orphan, abandoned child, widow or deserted women, which are not run for profit or gains;
(e) Shops or stalls in any public exhibition or show which deal in retail trade and which is subsidiary or to
the purpose of such exhibition or show;
(f) Shops or stalls in any public fair or bazaar for religious or charitable purpose;
(g) Educational, training and research institutions;
(h) Hostels and messes not maintained for profit or gains;
(i) In respect of chapter, ii, any shop, commercial establishment or industrial establishment owned and
directly managed by the government where the workers are governed by conduct rules applicable to
government servants;
(j) Workers whose recruitments and terms and conditions of service are governed by laws or rules made
under article 62, 79, 113, or 133 of the constitution, except, for the purposes of chapters XII,
XIII and XIV workers employed by the-

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(i) Railway Department
(ii) Posts, Telegraph and Telephone Departments,
(iii) Roads and highways Department, (iv) Public works Department, (v) Public Health Engineering
Department,
Definitions: In this Act, unless there is anything repugnant in the subject or context,-
(i) Retirement Means normal termination of employment of a worker on attaining certain age under
section 28 of the Act.
Provided that retirement shall also include voluntary retirement from service on completion of 25
years of service in any establishment.
(ia) partial disablement means, where the disablement is of temporary nature, such disablement as
reduces the earning capacity of a worker in any employment in which he was engaged at the time of the
accident resulting in the disablement, and, where the disablement is of a permanent nature, such
disablement as reduces his earning capacity in every employment which he was capable of undertaking at
that time:
Provided that every injury specified in the First Schedule shall be deemed to result in permanent
Partial disablement;

I. factory means any premises including the precincts thereof whereon five or more workers
ordinarily work on any day of the year and in part of which a manufacturing process is being
carried on, but does not include a mine;
II. adolescent means a person who has completed his fourteenth year but has not completed
eighteenth year of age;
III. mine means any excavation where any operation for the purpose of searching for or obtaining
minerals has been or is being carried on, and includes all works, machinery, tram-ways and
sidings, whether above or below ground, in or adjacent to or belonging to a mine;
IV. provided that it shall not include any part of such premises on which a manufacturing process is
being carried on unless such process is a process for pulp making or the dressing of minerals;
V. gratuity means wages payable on termination of employment of a worker which shall be
equivalent to not less than thirty days wages for every completed year of service or for any part
thereof in excess of six months;
It shall be in addition to any payment of compensation or payment in lieu of notice due to termination of
services of a worker on different grounds.

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Wages, Benefits & Work
Hours in the Peoples
Republic of China


Background of China
Chinas economic restructuring and the resulting efficiency gains have resulted in a more than tenfold increase in
GDP since 1978. Measured on a purchasing power parity (PPP) basis, China in 2005 was the second-largest economy
in the world after the US, although in per capita terms the country still has close to 150 million living below the
international poverty line (CIA, 2006). Economic development has generally been more rapid in coastal provinces,
which has led to a large gap in per capita income with the interior. The government has struggled to: a) sustain
adequate job growth for tens of millions of workers laid off from state-owned enterprises, migrants, and new
entrants to the work force; b) reduce corruption and other economic crimes; and c) contain environmental damage
and social strife related to the economy's rapid transformation. Its estimated that between 100 and 150 million
rural workers are floating between their villages and the cities, most subsisting on part-time and/or low paying jobs
(CIA, 2006). Due to the "one child" policy, China is also one of the most rapidly aging countries in the world.
Legal System
Under Chinas iron rice bowl system of the 1950s and 60s, all workers were protected by the government or by
state-owned companies, which often supplied housing and local health coverage. But by the 1980s, when the old
Maoist model had given way to economic restructuring and the beginning of an emphasis on market forces, China
began eliminating many of those protections giving rise to mass layoffs, unemployment, huge gaps in income and
pervasive labor abuse. In 1994 and in 2001 The National People's Congress enacted labor laws that many people in
China and abroad saw as positive steps for Chinese workers. Although the enactment of such laws may be
considered positive, continual improvement of the laws and better implementation are clearly needed.
Minimum Wage
There is no national minimum wage. The labor law allows each province to set their own minimum wage according
to standards promulgated by The Ministry of Labor and Social Security (MOLSS), currently headed by Tian Chengping
(U.S.S.D, 2005). These standards include the minimum cost of living for workers and their families, levels of
economic development and employment in the area, as well as the level of social insurance and other benefits
contributions paid by the employees themselves. Minimum wages are set as monthly amounts which must then be
broken down into weekly, daily, and hourly rates based on set calculation methods. The calculation method
required for all five provinces is shown below.

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20.92 = 365 (number of days in a year) - 10 (Public holidays) - 52*2 (number of Sundays and Saturdays in a year) / 12
months
Example: If the monthly minimum wage is $690RMB, then 690 /20.92 = Daily rate of $32.98 RMB / 8 = Hourly rate of
$4.12 RMB
The main legal variance that exists can be found in Shenzhen city (Guangdong province) which requires that the 10
public holidays not be subtracted from number of days in the year thus creating a lower hourly rate. The method for
minimum wage calculation is shown below.
21.75 = 365 (number of days in a year) - 52*2 (number of Sundays and Saturdays in a year) / 12 months
Example: If the monthly minimum wage is $690RMB, then 690 /21.75 = Daily rate of
$31.72 RMB / 8 = Hourly rate of $3.97 RMB
Hours of Work
Amended in 1995, PRC Labor Law [2] article 36 requires laborers to work no more than 8 hours per day and 40
hours per week. This law is applicable without exception to all five provinces. With regards to allowable overtime
hours, PRC Labor Law [2] article 41 & 42 restricts overtime hours to a maximum of 36 per month and/or 3 per day.
This requirement is also applicable to all five provinces. Thus, the maximum total working hours in a week would be
66 per law based on the following calculation:
66 total hours = 40 hours + 26 OT hours = (5 normal work days X 8 hours = 40) + (5 normal days + 3 OT hours) + (11
OT hours on a rest day)
It should be noted, that if a factory works 66 hours in a week it would require them use up 26 of the 36 monthly
allocated legal OT hours. Therefore, during the following weeks in the same month OT hours must be severely
limited in order to stay in compliance with local law.
Worker turnover
The rising inability of factories to recruit, train, and maintain their work force has quickly become one of the leading
concerns of factories operating in Guangdong, Jiangsu, Zhejiang, Shandong, and throughout China. According to the
Institute of Contemporary Observation, a Shenzhen labor research group, worker turnover in some low-tech
industries such as apparel, electronics, and toys is approaching 50% per annum (Business week, 2006, March 7).
Although the total labor force is estimated to be around 800 million, the number of workers that meet the profile
and have the qualifications employers want is relatively low (French, 2004). In turn, this has intensified competition
between factories, industrial clusters, and even provinces to attract the necessary amount of qualified workers.
Naturally, in response to this market wages for some workers, especially women from 18-to-25 years old or people
with experience operating machinery, has increased quickly.