India and China’s Devolution Strategy to Contain Workers and Unions

ACORN International International
Prime Minister Narendra Modi
Prime Minister Narendra Modi

New Orleans      India’s Prime Minister Narendra Modi from the conservative Bharatiya Janata Party or BJP swept into power largely due to his ability to convince Indian voters that the economic progress in his state of Gujarat was worth ignoring many other parts of his record including the communalist riots killing thousands of Muslims there that led to him being barred entry to the United States for many years.  One target of the new regime was expected to be a drastic reduction of labor rights that India’s small but sometimes militant labor movement was expected to resist.  Modi has pulled a trick from his sleeve that has been a policy preference in the West for years by using devolution as his stalking horse on this campaign.

Federally, he has reduced the powers of the already overworked and undermanned federal labor inspectors, cut down on some paperwork, allowed women to work at night, eased regulations on hiring apprentices and loosened rules on overtime.  These so-called “reforms” were mainly about getting even more work from the huge Indian working class.  The sleight of hand for more serious moves Modi and his confederates devolved down to one of the BJP politically controlled states, Rajasthan, which one analyst called “reform by stealth.”  The heart of the action here was making it easier for big companies hiring more than 300 workers to fire workers and avoid other laws designed to protect workers.  A national Labor Ministry official quoted in the Wall Street Journal was clear about the government’s intent saying, “The Rajasthan changes can be seen as a pilot.  It will create healthy competitiveness among states and will also give us a chance to study the gains of such amendments.”  Seeing the way states in the USA compete with economic incentives, right-to-work legislation, and look-the-other-way labor regulations and wage rates, we don’t need a crystal ball to follow this strategy and see the dark clouds ahead for the already beleaguered workers of India.

Almost as interesting is a similar strategy though different intention of the government in China in reaction to the doubling of strikes last year in that country and the increasing militancy of Chinese workers over stagnant wages, factory pollution, and horrid working conditions.  The province of Guangdong, the southern, coastal industrial and manufacturing powerhouse and its largest city Guangzhou, formerly known as Canton, the 3rd largest city in China, has been the hotbed for this activity.  Unions are not independent in China though they are huge, but in reacting to the increased worker militancy the Chinese government is also trying a pilot of sorts allowing new regulations there to codify the rights of workers to collectively bargain and negotiate terms and conditions of employment through their representatives.  The reforms continue to be exclusively routed through the officially approved unions, but the government seems to want to put a lid on the outbreaks and channel the anger back towards the approved unions and the bargaining table where agreements can enable the unions to better police their members.  The government seems to hope that more aggressive organizing and collective bargaining will also help push out some of the sketchier, lower tier manufacturing outfits and the pollution nightmares that are vexing in the province.  They also don’t want the workers to get out of hand and come after them of course, and there’s nothing like endless bargaining sessions to sap the strength from even the strongest.  We’ve also seen how successful and debilitating that strategy can be when used on workers in the United States as well.

We wrote the book, so I guess we shouldn’t be surprised to see huge new powers like India and China writing new supplementary chapters to the story.


One labor-friendly lawyer, Caren P. Sencer, a shareholder of the California law firm Weinberg, Roger & Rosenfeld P.C. The firm’s website offers a selection of favorite pro-union songs