The last year or so has seen a general awakening of the labor union all over the world and for the most predictable of reasons. Companies have been firing people at a rapid rate and the remaining workers are doing far more than they ever have before. They are getting paid less for working longer hours and their benefits are eroding at the same time.
The timing for labor action is not great as there is far less for the employers to work with but that is not the point. The employees have reached a breaking point and unfortunately many of their employers have as well. The confrontations that started to surface last year will accelerate in the coming year and China may well become the epicenter of that unrest. There have been massive strikes all over the country as workers have objected to meager year-end bonus payments and the promise of even more cutbacks in the months ahead.
Armada Intelligence Analysis: The reputation that China built its manufacturing sector on is coming under serious attack. If the strikes are successful the wage structure in China will alter and it will be ever more expensive for companies to work in China. There has already been an erosion of the country’s position as the low cost production center and these actions will take more of the wind out of the sails.
At the same time that China experiences more worker unrest, their rivals will be seeing it as well. India reports more unrest and lately so has Indonesia. The Europeans and the Americans will have their hands full with resurgent labor unions and by the end of 2012 the landscape of work may have changed considerably.
Courtesy Dr. Chris Kuehl, Armada Corporate Intelligence
