xii
The problem is that nobody knows just how volatile capital investment is in IK and those who are forced to live cut their lives here might be reluctant to put the issue to test. Although employers are not exposed to the pressure of strong organized labour and are to varying degree insulated from the rigours of a free labour market, they are acutely aware of the political Sword of Damocles which hangs over K's head and of the colony's vulnerability to trade union pressure overseas. They are not going to risk upsetting such a good thing as 's privileged situation by hammering down on wages until they stimulate social unrest. This awareness manifests itself in a number of ways in support, through their representation in the legislature, for an extensive programme of labour reform laws (however reluctantly that support may have been given, in:public). It is also manifested in the long-term upward trend in real wages, which has not arisen as a result of pressure from labour. To summarise the argument, then: Since demand is largely external, there is no reason for 's capitalists to raise wages for the sake of expanding domestic consumption and thereby levels of production Pomestic consumer demand can never be a serious factor for HK's firms, particularly since China has assumed responsibility for supplying the bulk of mass consumption goods at prices lower than local costs (and profit levels) could probably justify. The upward trend in real wages, although partly stimulated by high levels of employment, must be attributed therefore to the voluntary redistribution policies of employers who have primarily political and social factors in mind. In this situation it is nonsense to conceive of wage determination as shaped by the market model of free competition.
12. Policy conclusions:
The basic question (albeit an elitist one) is whether this paternalistic system, supported by the collusion of both British and Chinese governments and reinforced by the political apathy of the population, could be improved for the mass of the people by legislating for collective representation of workers in the market place. Certainly, many employers are extremely hostile to the notion of collective bargaining, even in the diluted form of wage negotiations conducted through some such form as a joint consultative committee. The political division of the unions suits them very well and they won't volunteer to set up effective negotiating instruments which by pass the unions. I doubt whether legislation to that effect would seriously alter the balance of forces between capital and labour so as to affect materially the determination of wage levels; nor would foreign trade unions lock on it with much favour, so its cosmetic appeal is limited. Equally, it is clear that the social and political conditions for the development of effective unions in the western sence simply do not exist in K, and no amount of pressure from the top will change that. The employers seem perfectly capable of looking after themselves, and that part of our terms of reference which talks about "effective employers organizations" is obviously irrelevant.
The study of employers' associations was thus of academic interest only.
So the question of improving the condition of HK's work-force without damaging the colony's productive base is not really contained within the sphere of industrial relations as such. broader issues are involved than it was in our terms of reference to invertig.te: the adequacy of social security mechanisms (public and private), the influence of rente as apposed to wages on industry's cart structure and profitability in the long run, possible reforms of the education system, and to our. The lit could be expanded infinitely. In the second half of the study, it may be worth.i.ile concentrating on the impact of existing and future labour legislation end en social security/social services, rather thu ca the pattern of industri› 1 relations und labour market conditions, abent which very little can be said that is both constructive and well-informed (as long as the majority of unionists in Ill. have no interest in talking to people like curselves).