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　　A collective negotiating system enables workers to bargain wages with their employers on an equal basis, leading to better labor-management relations
　　
　　While workers at Wal-Mart China, a subsidiary of the U.S. retailing giant, struggled to set up their first trade union, employees of many companies in Nanjing have been able to negotiate salary increases with their bosses for the past several years.
　　The workers at Kumho Tire Co., for example, have seen their average salary nearly double to more than 31,000 yuan in 2006 from 16,000 yuan in 1999 “after arduous salary negotiations year after year,” said Wu Songping, head of the trade union at the Korean company.
　　In the past, nearly all state-owned enterprises in China had a trade union-involving all employees-which was in charge of workers’ welfare and appeals. The union’s administrative body, however, was typically appointed by the enterprise’s management. On holidays, the union would send gifts of daily necessities or supermarket coupons to its members; when an employee was sick, union representatives would visit him/her on behalf of the whole company; or, on special occasions, the union would organize small shows or activities for the employees.
　　“The old-fashioned concept of a trade union must be changed,” said Chen Siming, Chairman of the Nanjing Trade Union. “A trade union is much more than [a sponsor of] activities; it should be bound tightly with the workers’ real interest-salary.”
　　Nanjing, the capital of Jiangsu Province, was one of the first cities to initiate a collective salary negotiation mechanism. Under a trial regulation on the system for determining employee wages passed by the Ministry of Labor and Social Security in 2000, workers’ representatives and management representatives negotiate the salary distribution system and salary level on an equal basis and sign an agreement.
　　“Normally, we have five or six negotiators from each side,” said Zhang Niannian, a veteran salary negotiation instructor from the Nanjing union.
　　Li Yuanguo, President of Nanjing Plastic Industry Co. Ltd. (NPIC), a private company, sounded relieved when asked about the functioning of the trade union in his company. “In the past, when employees were not satisfied with their salary and when they were not able to afford to go to the hospital, they would come to my office and argue with me,” Li said. “But after the trade union was established, the employees would rather turn to the trade union for help. It leaves me more time and energy to think about the development of the whole company instead of every trivial thing involving the workers.”
　　Discussing his rivals in salary negotiations, Li smiled and said, “The workers are very smart and they pick the most talented negotiators, which is very unusual compared with the past.”
　　Li said that before 2004, NPIC was a state-owned enterprise, and all the administrative positions in the trade union were taken by the “goody-goodies”. They practically did nothing except send gifts on holidays and organize some activities. “Society changes, and the workers’ awareness of self-interest improves,” said Li.
　　
　　Making bargaining successful
　　
　　Chang Kai, labor professor at Renmin University of China, pointed out two requirements for a successful collective bargaining mechanism. “First, both sides in the negotiation should be independent; second, the negotiations should involve fair play.” Chang noted that for a long time, the directors of the majority of Chinese trade unions were appointed by the management and the trade union followed management’s decrees.
　　According to a random survey of enterprises in Nanjing conducted by the government involving 1,000 workers from 100 enterprises, about 20.8 percent of the employees surveyed received a salary of 600 yuan or less per month; 36.9 percent reported a monthly salary of 600 yuan to 1,000 yuan; 25.8 percent got a salary ranging from 1,000 yuan to 1,500 yuan; and only 16.5 percent of the respondents enjoyed a salary over 1,500 yuan.
　　Chen Jiabao, Vice Mayor of Nanjing, noted that, “The per capita GDP of Nanjing City reached $4,000 in 2005, which is in sharp contrast to the average salary of ordinary employees.”
　　“Our survey showed that the major shareholders’ year-end bonus was as much as 24 times that of the average workers, and the monthly salary of the management was six or seven times more than that of the ordinary workers,” he continued.
　　“This kind of sharp gap is unacceptable for ordinary workers,” said Chen. “Workers are the major productive force and it is they who create value for companies and should not be treated unfairly.”
　　One of the major reasons companies are reluctant to increase workers’ salaries is that they fear this will result in higher production costs and cause them to lose the competitive edge in pricing to their rivals.
　　However, Song Zheng, Vice Chairman of the Trade Union of Nanjing City and a veteran economist, pointed out, “The increase in workers’ salary will enhance their purchasing power, which means they are able to buy more commodities. Therefore, from the perspective of the whole society, the increase in workers’ wages is conducive to the economy, in turn benefiting the company itself.”
　　Explaining further, Song said, “For instance, if a pair of Nike shoes is sold at 600 yuan with a cost of 200 yuan, a mere increase of 20 yuan-10 percent-in workers’ salaries is just a drop in the bucket.” But he said this “drop” can boost workers’ enthusiasm as well as their productivity. In return for management’s goodwill, workers will do their best to use innovative technology and reduce the cost of production.
　　As China’s economic reform deepens, the government has been reducing its role in corporate management and has switched its efforts to macro-control. Taking advantage of the loosened control, some companies tend to restrict workers’ salaries in order to achieve the maximum profit.
　　Considering the problem, the labor and social security department of Nanjing will consider the collective bargaining mechanism an important part of its investigation and registration of a company labor contract.
　　At present, Nanjing runs a “harmonious enterprise” campaign on a yearly basis, involving foreign companies, domestic companies and joint ventures.
　　An Erkang, a senior researcher at the China Management Academy of Sciences, noted that salary distribution is one of the core areas of the “game theory” strategy between employees and employers. But, An said, “Workers are generally disadvantaged and have no competitive edge in this game theory practice.”
　　
　　Foreign-domestic dichotomy
　　
　　In a world where the supply of talent far outpaces the demand, people hold firm in their jobs. Despite being eager to see a salary increase, employees dare not have a direct confrontation with their bosses. “Therefore, the government should guide them and enact favorable policies to guarantee the workers’ rights,” said An.
　　Qian Guanghao, an employee at Deltak Power Equipment (China) Co., has been involved in salary negotiations in the company. Asked why he dared to take the job and whether he feared being fired, he said, “Actually, after a worker is elected as a negotiator, he or she signs a three- or four-year contract with the company. In these three or four years, the company has no right to fire the negotiator.” In this way, negotiators can feel secure even amid a strong confrontation with the management. “If the negotiator does a good job, he or she can be re-elected for another term without being afraid of losing his job,” said Qian.
　　Fu Xiaojun, Assistant Director with the Public Relations Department of the Nanjing Trade Union, agreed. “The negotiators’ interest is fully protected by the trade union and relevant government departments.”
　　In the meantime, the government must devote itself to promoting the quality of both employees and employers, and make both sides realize that their interests are bound together, experts say.
　　A labor contract draft law, aimed at thoroughly protecting workers’ interests, is now being deliberated by the government and is expected to take effect soon, despite harsh criticism from employers.
　　“It has been easy to set up trade unions in state-owned enterprises-just issue an administrative order. It has always been difficult to set up trade unions in foreign companies,” said Xia Yinchun, Secretary General of the Nanjing Trade Union.
　　From the perspective of foreign companies such as Wal-Mart, however, trade unions are viewed negatively. A Wal-Mart public relations manager who requested anonymity said, “Our bosses from the United States have felt there is no need to set up a trade union, which seems like a divisive force in the whole company.”
　　In Western countries, trade unions are sometimes a headache for management. Song of the Nanjing Trade Union said, “Workers care about their own interests without considering the overall performance of the company.” In Nanjing, however, workers are aware that “if I want to have my salary increased, I have to work hard,” he added.
　　At Kumho Tire, one of the first companies to adopt collective bargaining, the workers’ annual salary jumped to over 35,000 yuan in 2005 from a mere 16,000 yuan in 1999. “Our workers have the habit of seeing their income grow every year. If the salary remained the same as in the previous year, their enthusiasm for work would be hurt,” said Wu, the company union head.
　　Currently, the company faces enormous pressure from the workers’ call for salary increases and rising costs. Wu noted that the price of rubber has jumped to about 24,000 yuan per ton this year from 13,000 yuan several years ago. The company’s profitability is not as strong as it was before.
　　Maintaining sound and sustained growth while not posing an unbearable burden on the company’s daily operations has become a nerve-racking problem for both the trade union and management.
　　
　　A Hard-Won 12 Percent
　　
　　Yang Yongsheng: Chairman of the Workers’ Union of Deltak Power Equipment (China) Co. Ltd
　　Deltak is a Sino-U.S. joint venture established in August 2004. We didn’t discuss the salary issue with the management in 2004 and 2005 as the company was just founded. In the past two years, Deltak has made a profit but workers’ salaries remain the same as two years ago. On noticing the profit increase and the unchanged salary, the workers’ union believed it was time to ask for a salary increase, because all the employees have strived to contribute to the productivity of the company. Therefore, we decided to initiate salary negotiations in June this year with our American boss, which was rather sensational at that time.
　　Of course he was very surprised at our requirement, as we had never done this before. We had made a comprehensive analysis and explanation of why and how salaries should be increased and proposed it to the boss in the middle of June. The boss said he needed a translation.
　　
　　Then, a month passed.
　　
　　Another three months passed, as the boss had to go on numerous business trips.
　　At that point, when workers felt insecure, they threatened to go on strike.
　　But, taking the whole situation into consideration, we must be patient. The workers’ union persuaded workers to remain in their posts and avoid acting indiscreetly.
　　During that time, we sought legal assistance from the All Workers’ Union of Nanjing, and got lots of useful information.
　　For instance, the government reported a 12-18 percent increase in profits of the mechanical manufacturing industry, which suggested we could set our expectation on this base.
　　There are four major factors we can count on in seeking a salary increase: the increase in profitability, the increase in productivity, the government guideline on workers’ salaries as well as the increase in the consumer price index. One single abovementioned factor could constitute our reason for a salary increase. Apparently, we meet all four requirements.
　　And we set the requested increase at 18 percent, leaving room to bargain.
　　November 6 was a day to remember. After several formal and tough negotiations with the management, our boss finally agreed to raise our salary by 12 percent, which was acceptable.
　　I believe the workers will be pleased to see an average increase of 130 yuan in their bank account each month beginning January 2007.
　　We learned two things from this negotiation. First, we shouldn’t intensify conflicts with management but should talk peacefully. Second, I personally believe that the Americans are law-oriented. When I referred to relevant Chinese laws and regulations on this matter, the boss showed great respect for the laws.
　　Some workers suggested a strike, which we did not support. The reason is that the company does not just belong to the boss, but also to the ordinary workers.
　　

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