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Chinese lawmakers look to give workers more rest

The Chinese Ministry of Human Resources and Social Security is trying to push increased regulations limiting the number of consecutive hours worked by laborers.Their goal is to force employers to allow workers to rest for a minimum of 20 minutes for each period of 4 hours on the clock.Further, they are looking to restrict non salaried employees from working in excess of 11 hours per day.  

Critics say that these new policies are not only ineffective but that they will be impossible to enforce.In the first place, they claim most of the abuse is imposed on low level managers that are considered "salaried" employees thus insulating them from this limitation. Secondly, the major abusers of the current labor laws are the small private companies which operate under a shroud of secrecy.  

Larger companies, within close proximity to major metro areas and serving international customers, tend to be more compliant to government regulations.But in remote areas of the country it is not uncommon for workers to be on the job for 12 or more hours.Many of these are allowed no more than a few days off per month.   Government officials are optimistic in their hopes of getting this new legislation passed and enforced.They feel that the supply of workers has now surpassed the demand which will result in employers being forced to offer better working conditions in order to keep employees.

Categories: Labor


Why the U.S. is becomingly noncompetitive...CEO pay ratio versus the average worker

The trade deficit between the U.S. and the rest of the civilized world continues to grow. While there is no simple answer as to why, there are many factors that need to be considered. Of course the obvious ones are the devalued U.S. dollar compared to most other industrial countries' currency, rising labor costs, and higher corporate taxes. But there is a new study which highlights another previously unaddressed aspect.

The ratio of CEO pay versus the average worker of the company has surfaced. CEOs of Fortune 500 companies make an average of 475 times that of their corporate median wage. This startling figure has come to light as a result of the "Occupy Wall Street" movement. This ratio is put into staggering perspective when compared to nine other industrial nations.

While the actual ratios have been debated the big picture comes into focus very quickly. The millions of dollars that are paid to CEOs, and the top executives of corporate

America, have to come from somewhere. In most cases this cost is recouped from the sale of the goods or services provided. So just as a pro sport team recaptures the cost of its highly compensated franchise players by charging $8 for a hot dog, the American manufacturer needs to do the same thing to cover their payroll. So is the American consumer willing to pay more for products made in the United States? It does not appear so.

Categories: Labor


Last week the Chinese government announced that it will move closer to allowing its currency, the yuan or renminbi, to float in the world economy. This move will slowly break it away from being pegged to the weak U.S. dollar. A practice which U.S. politicians, and the International Monetary Fund, claim is undervaluing China exports by as much as 40%.

Washington's hope is that the appreciation of the yuan would make Chinese imports less attractive versus domestically manufactured goods. This would then create more U.S. manufacturing jobs and help stimulate an otherwise stagnate economy. In addition, many experts feel this higher valued yuan would also help slow the increasing U.S. trade deficit with China. The deficit hit a record $273 billion in 2011, making up almost 43 percent of the entire U.S. gap.

Congress has threatened to impose higher tariffs on Chinese manufactured imports if Beijing does not take more aggressive action to properly value its currency. But the Obama administration feels that diplomacy is a better approach so that we do not start a trade war.

Keep in mind though, while the strengthening of the yuan will lead to many benefits here stateside, it will ultimately lead to price increases for our customers.

Categories: Currency