China has announced that they are going to crack down on sweatshops in their country. The government plans for the new laws to take place as early as May of 2007. While it will be for all companies in China, the foreign owned multinational corporations are the primary target. All of the Wal-Mart stores in China have already been forced to allow unions.

According to The Economist, many US multinational corporations including Goodyear Tire and Rubber Company, Dell, Ford, General Electric, Microsoft and Nike are all opposed to the new laws, which would make their costs go up, and give them less incentive to take advantage of the cheap labor.

According to Business Week, many of the checks and balances that are currently in place are not working, because people who know the system have been hired to help corporations prepare when they are going to be audited. One thing they did, was keeping a double set of accounting books, one for actual pay, and one to show the auditors.

While this would create an increase in the cost of products from China, it would also allow consumers to know that the money was going to the worker and not to the CEO’s. Also, if these new labor laws continue to be effective, it will be good news for the Chinese and the American workers. The Chinese will have more control over wages, benefits, reasonable hours, breaks, and be able to have a better quality of life. And, if the corporations decide that it isn’t cost effective to go to China, then they will have to negotiate with their workers for fair wages and benefits here in America. This may also allow unions to have more negotiating power.

Heather Kuhn is an author that blogs at

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