Saturday, January 12, 2008
P u've gone 2 far hm slices...
The song is hard.
But the video takes a sad turn.
U gotta draw the line somewhere.
Monday, January 7, 2008
China Law Could Raise Labor Costs
China Law Could Raise Labor Costs
WAYNE NIEMI
Already plagued by increasing labor costs, footwear firms could see further pricing pressures in 2008 with the introduction of a new Chinese labor law.
The 98-article law, which went into effect on Jan. 1, features a slate of new workplace regulations, such as limits on overtime, holiday pay, insurance benefits, advance notification of layoffs, and full disclosure of employee contracts and rights.
“This transparency is new,” said Peter Mangione, president of the Footwear Distributors and Retailers of America. “In the past, a labor contract was signed with the factory but it didn’t have to be disclosed to the employees and posted in the workplace. This will now empower employees to see if they are being treated fairly.”
Severance pay is another provision of the law that is new to the Chinese workplace. According to Mangione, one of the ways that Chinese factories minimized costs in the past was by laying off employees without notice when work slowed. “One of the great strengths of the Chinese system is that if the factories don’t need workers for a week or a month, they just send them home,” he said. “They could do this at no cost to them. Now, there is going to be a cost, especially for employees with 10 years or more [tenure]. The severance is very, very steep.”
That concept has already triggered strong reactions from worried workers and executives. In November, 7,000 workers and executives at Huawei, China’s largest privately held telecom company, resigned their positions, only to immediately be rehired, thereby restarting the clock on their tenure. Clearly designed to sidestep the severance provision in the contract, the move was later nullified by the central government.
And that is an indication that the Chinese authorities mean to enforce the new statutes. “The factory owners are worried that the provisions of the law will be enforced,” said Mangione. “The problem hasn’t been that China doesn’t have good laws — they do. The problem is that the government has put economic growth ahead of enforcement of those laws.”
Just how these changes will affect the Chinese labor market is uncertain. Signs from Beijing and the State Council show a desire among the country’s leaders to let the workers share in the massive economic prosperity in the nation. At the same time, it’s unlikely that they’ll do so at the risk of further economic development in the country, Mangione said.
Regardless of what change might look like, it will undoubtedly come with a higher price tag. “What we do know is that there will be an increase in labor costs at the factories,” said Pat Devaney, SVP of production and development at Deckers Outdoor Corp.
Still, Devaney said Deckers, as well as most major footwear companies, have seen similar scenarios play out when footwear manufacturing was centered in Korea and, later, Taiwan.
“We’ve planned for it and we’ve certainly talked about it internally here,” he said. Anytime there is uncertainty, there is a possibility that it could hurt your margin, and that causes concern. But [change] is not new to us.”
WAYNE NIEMI
Already plagued by increasing labor costs, footwear firms could see further pricing pressures in 2008 with the introduction of a new Chinese labor law.
The 98-article law, which went into effect on Jan. 1, features a slate of new workplace regulations, such as limits on overtime, holiday pay, insurance benefits, advance notification of layoffs, and full disclosure of employee contracts and rights.
“This transparency is new,” said Peter Mangione, president of the Footwear Distributors and Retailers of America. “In the past, a labor contract was signed with the factory but it didn’t have to be disclosed to the employees and posted in the workplace. This will now empower employees to see if they are being treated fairly.”
Severance pay is another provision of the law that is new to the Chinese workplace. According to Mangione, one of the ways that Chinese factories minimized costs in the past was by laying off employees without notice when work slowed. “One of the great strengths of the Chinese system is that if the factories don’t need workers for a week or a month, they just send them home,” he said. “They could do this at no cost to them. Now, there is going to be a cost, especially for employees with 10 years or more [tenure]. The severance is very, very steep.”
That concept has already triggered strong reactions from worried workers and executives. In November, 7,000 workers and executives at Huawei, China’s largest privately held telecom company, resigned their positions, only to immediately be rehired, thereby restarting the clock on their tenure. Clearly designed to sidestep the severance provision in the contract, the move was later nullified by the central government.
And that is an indication that the Chinese authorities mean to enforce the new statutes. “The factory owners are worried that the provisions of the law will be enforced,” said Mangione. “The problem hasn’t been that China doesn’t have good laws — they do. The problem is that the government has put economic growth ahead of enforcement of those laws.”
Just how these changes will affect the Chinese labor market is uncertain. Signs from Beijing and the State Council show a desire among the country’s leaders to let the workers share in the massive economic prosperity in the nation. At the same time, it’s unlikely that they’ll do so at the risk of further economic development in the country, Mangione said.
Regardless of what change might look like, it will undoubtedly come with a higher price tag. “What we do know is that there will be an increase in labor costs at the factories,” said Pat Devaney, SVP of production and development at Deckers Outdoor Corp.
Still, Devaney said Deckers, as well as most major footwear companies, have seen similar scenarios play out when footwear manufacturing was centered in Korea and, later, Taiwan.
“We’ve planned for it and we’ve certainly talked about it internally here,” he said. Anytime there is uncertainty, there is a possibility that it could hurt your margin, and that causes concern. But [change] is not new to us.”
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