Thomas P.M. Barnett

ARTICLE: McDonald's raising China pay after controversy, Reuters, August 7, 2007; 8:57 AM

Historically, multinationals tend to pay--on average--40 percent higher wages than the local economy can provide. Naturally, whenever possible, those same MNCs try to keep their margins as low as possible. That's why they're there in the first place.

But to stay there is not just to provide jobs or goods. It's also to keep the locals happy. Given enough opportunity to vent, the locals can have real impact, which is why trade unionism may well be dead or at least OBE in the Old Core but still a potentially huge force in the New Core.

So why does McD's cave in? Just read the last line in the piece ... 800 restaurants currently and planning another 100 each year.

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