US puts squeeze on Vietnamese labor
By Brendan Smith, Tim Costello
and Jeremy Brecher
Surely the American
Chamber of Commerce (AmCham) and the corporations
they represent - including Nike, Coca-Cola, FedEx,
Pfizer and Exxon - have been living up to their
promises to the US Congress and the American
people to raise labor standards and wages in
Vietnam.
Well, not quite.
In
September 2005, the Vietnamese government called
on foreign companies to increase workers' minimum
wages, with the largest
increases targeted toward the
poorest workers in semi-rural areas and small
cities.
According to Michael Karadjis,
writing for the Association of Southeast Asian
Nations Focus Group based at the Australian
National University, "This government decision had
come about due to a demand for a minimum 40%
increase by the Vietnam General Confederation of
Labor, the country's main trade-union body.
"Many foreign investors asked the
government to defer the wage rise until after the
Tet [Lunar New Year] holiday, which began on
January 28, because they 'couldn't afford' to pay
the wage rise and also pay the Tet bonus. The Tet
bonus is the equivalent of a 13th-month salary
that Vietnamese workers are legally entitled to,"
he wrote.
"The government thus left it up
to the bosses and workers to bargain over when it
would be implemented before Tet. Feeling they had
waited long enough, workers downed tools with the
full knowledge that they had the law, the open
sympathy of most Vietnamese, the discreet sympathy
of the government and the active support of the
official trade-union leadership on their side."
As a result, from late 2005 through early
January 2006, foreign enterprises in the southern
industrial zones around Ho Chi Minh City were
crippled by the largest wave of strikes in the
country's recent history. (There have been some
900 reported strikes in Vietnam since 1995.)
During this same period, the AmCham sent a
letter to the chairman of the People's Committee
in Hanoi titled "Re: Minimum wage, and illegal
strikes involving violence, January 11, 2006." The
letter opens:
We are writing to seek your urgent
attention to help resolve a critical issue, one
that we believe is vital to Vietnam's continued
economic and social development. As you know,
one of the major attractions for manufacturing
industry to come to Vietnam is the labor force.
This is both the quality of the labor force,
which is well educated and hard-working, and
importantly, in the past, the discipline of the
labor force, which rarely had taken any illegal
industrial actions. However, recent mob actions
in the core of the Southern Focal Economic Zone
have quickly shattered this perspective.
We would like to seek your immediate
assistance to restore quickly the law-abiding
quality of [the] Vietnam labor force, so we can
continue to cooperate with you in attracting
more manufacturing foreign direct investors to
Vietnam.
AmCham goes on to describe a
"number of illegal strikes involving violence,
destruction of property, and bodily harm in dozens
of large foreign-invested factories in the
Southern Focal Economic Zone", claiming to have
"no idea" why their specific factories were
targeted. Quickly shifting the blame to the
Vietnamese government, AmCham insists:
We believe that one cause of these
disturbances is the sudden and confusing manner
in which the authorities have introduced
proposed changes to the minimum-wage rules. None
of our member companies were consulted before
announcements started appearing in the press
that workers were entitled to a 40% increase in
the minimum wage.
According to
Karadjis, the European Chamber of Commerce also
wrote to the then prime minister, Phan Van Khai,
to warn him that investors initially chose to move
to Vietnam because, they imagined, "the workforce
is not prone to industrial action".
Now,
AmCham is using US President George W Bush's
recent visit to Hanoi as an opportunity to
continue its lobby campaign. Timed to be released
as Bush met with Vietnamese leaders, the US
Chamber of Commerce and American Chamber of
Commerce issued a 26-page report titled "Southeast
Asia: Dynamic Opportunities for US
Competitiveness".
The report is stocked
with recommendations for how Vietnam and its
neighbors can remain in the good graces of US
corporations. One of the suggestions is for the
government to "ensure appropriate public
discussion of draft commercial legislation before
passing laws, to create a transparent and stable
investment climate".
On the heels of the
January strike wave, this might be code for "Don't
raise the minimum wage again without our prior
approval and maintain 'stability' in the
export-processing zones by aggressively stamping
out strikes."
AmCham Vietnam is composed
of some of the most profitable and well-respected
US corporations, including Nike, Federal Express,
Coca-Cola, and Time-Warner. (For a complete list
of AmCham Vietnam corporations, click here.)
These are
the very companies that have promised to raise
working conditions for desperate workers around
the world. Yet they've once again been caught
saying one thing to the American people while
actively doing the opposite overseas. A letter
recently sent to Bush signed by 27 members of the
US Congress concerning AmCham's opposition to
China's new draft labor law is apropos to AmCham's
efforts in Vietnam:
This shameful American corporate
lobbying campaign is inconsistent with our
country's commitment to promote respect for
fundamental worker rights everywhere ... It also
discredits the long-professed claims of many US
corporate leaders that US companies and
investors in China de facto are leading by
example, to respect the basic human rights of
all Chinese workers and improve their working
conditions and living standards.
US
and European corporations are constantly bullying
countries such as Vietnam with the threat of
moving to China unless they clamp down on the
labor force. But these very same corporations are
using identical scare tactics in China by
threatening to move to countries such as Vietnam
if the government raises wages or improves working
conditions.
This year, when China released
the draft of its new labor law extending modest
new rights to workers, Keyong Wu, an expert for
the British Chambers of Commerce, told a
newspaper, "Business is attracted to China not
only because of its labor costs but also because
of its efficiency. If regulation starts to affect
that and flexibility, then companies could turn to
India, Pakistan and Southeast Asia."
In
short, the strategy of the global employers is to
drive down labor costs in each country and then
tell other countries they must drive down their
labor costs even further or their jobs will leave.
AmCham's opposition to raising wages in Vietnam
and the fundamental right of workers to strike to
improve their working conditions is of concern to
workers in the US and throughout the world.
Indeed, as US wages stagnate, Americans
increasingly worry that low wages and labor
standards in Asia are driving down those in their
own country. According to Congresswoman Lynn
Woolsey, "It is challenging enough for
hard-working Americans to compete in the new
global economy without having US corporate leaders
seeking to play them off against the
least-protected and lowest-wage workers in the
world."
Brendan Smith, Tim
Costello and Jeremy Brecher are the
co-founders of Global Labor Strategies, a resource
center providing research and analysis on
globalization, trade and labor issues. They have
also written and produced the Emmy-nominated
Public Broadcasting Service documentary Global
Village or Global Pillage? For more on GLS
visit www.laborstrategies.blogs.com or e-mail
info@laborstrategies.org.
