Negotiating Salary in America

According to recent reports, more than 200 migrant workers from Xinyang in Henan Province have been owed more than 6 million yuan of salary for over a year, and when 30 of them went to discuss their salaries, their real estate developer boss had them beaten. In order to help their fellow workers to scrape together enough money for medical fees, another 26 migrant workers have had no choice but to take to the streets of downtown Zhengzhou with their begging bowls.

The developer had handed over the project to a construction company, which then employed the workers. When the developer and the construction company ended up in a dispute, and the construction firm walked out, the developer simply refused to pay up, and the workers had no protection against losing the money they had earned with their sweat and blood. Similar stories pour in all year round, and yet, I have never seen a single case resolved, and local authorities rarely seem keen to protect the interests of migrant workers. Therefore, it is not enough just to blame the developer.

People negotiate salaries all across the world, although with varying results. For example, in the U.S., State Attorney Generals must be democratically chosen in an election which is usually held in conjunction with the runoffs for congressman or state governor. Having the support of the people, the State Attorney General must then serve the people. In many ways, the office of the Attorney General is one which “protects the people.”

I may as well give you an example — this one from six months ago. The high and mighty Wal-Mart chain has always had a bad reputation for owing wages; not in the brazen fashion seen in China, but through managerial staff being hard on hourly workers. For example, they have a set amount of time for lunch, in accordance with the laws of their respective states. However, low-level managers have workers labor through their lunch breaks without extra pay. They also dock workers pay using the clocking-in system or require workers to do overtime at the last minute, then only pay part of the overtime rate, and so on. Hourly workers have already openly aired their grievances about this state of affairs, but Wal-Mart has consistently denied any wrongdoing; the dispute eventually evolved into a lawsuit. At the end of last year, the state court in Massachusetts, where I live, ruled against Wal-Mart, which agreed to pay its 87,500 employees and former employees in Massachusetts a total of $40 million in compensation, with each employee receiving varying amounts between $400 and $2500 — an average of $734 per employee.

Tiny Massachusetts has a total population of just 6.5 million, which by Chinese standards is a mid-size settlement. And yet, their local court can, with one judgment, force the hand of Wal-Mart, the world’s largest retailer. This is not the first time that Wal-Mart has conceded defeat to the State of Massachusetts. A few months before the settlement of the case mentioned above, Wal-Mart agreed to pay an average of $300 per employee for infringing on their workers’ right to a lunch break. By December last year, Wal-Mart had had 67 lawsuits brought against it in both federal and state courts over its violation of workers’ lunch-break rights and had agreed to pay $640 million in compensation! In addition, in 2008 another retailer in Massachusetts, Canyon Ranch, was ordered by the courts to pay $14.5 million in compensation to its hourly workers.

The status of America’s hourly workers is very similar to that of China’s migrant workers. However, their interests are strongly protected by their government. Some of the employees affected by the lawsuit in Massachusetts are workers who left Wal-Mart as early as 1995 and whose whereabouts are now unknown. However, the relevant organizations are maximizing the efforts to find these people and give them their money. Within such an institutional framework, if an employer withholds pay and their employees’ complaints fall on deaf ears, then it is often the case that they will not need to deal with their boss again, since the District Attorney will act on their behalf. A few years ago, a Chinese colleague asked me whether or not it is possible to appeal to higher authorities in America. Of course it is. You go to the District Attorney’s office, fill out a form, and after five minutes someone comes out to see you. If the gravity of your situation merits it, then the District Attorney will personally intervene. A society in which people do not have this high level of systematic protection cannot be very stable.

In order for this kind of travesty over wages not to happen again, China must progressively build an independent judicial system in the long term and come down hard on cases of withheld pay. Otherwise, unscrupulous businesses will take even less heed of the law.