Thanks McDonald's and KFC

McDonald's has approved a pay raise for more than 95 percent of its employees in China, a move that may redeem the fastfood giant's reputation in the wake of being accused of underpaying its staff.

The payment adjustment, the first ever initiated by the hamburger king since it came to China 17 years ago, was launched on Saturday, the company sources said.

The move was in response to extensive public outcries that the company, along with KFC and Pizza Hut, has been underpaying their part-time staff in the southern city of Guangzhou by up to 40 percent below the local statutory minimum wage of nearly 1 U.S. dollars an hour, he said.

I'm not privity to the circumstances behind this incident. When Wal-Mart slit its wrists with the unions in China not long ago, its excuse was "we were told we didn't have to follow the laws." Not quite adequate. Western companies should stand out as virtue outlets. Most do. Most Chinese would work for a western manufacturer over a Chinese, Korean, Japanese or Indian manufacturer on any given day. Working conditions are better. Pay is better. If these particular companies acted in bad faith, they should be taken to task.

Having said all that, how about this quote from a future Harvard professor:

The salary incident was a result of the development of China's social supervision system and the growth of people's consciousness of social injustice, said Wang Lingyi, professor with Shanghai Academy of Social Sciences, pointing out that "many foreign firms are forced to rebuild corporate image".

"Just depending on PR activities to build up corporate image is no longer adequate in China, where the legal system is being updated and industrial criteria are catching up with the world's level," he said.

That's a bit of a stretch. The legal system still sucks, and the only place industrial criteria is catching up with the world's level is in American and European factories.

Peng Xizhe, professor of social sciences with Shanghai-based Fudan University, said that "transnational companies were once considered business examples, but many have been found of attempting to test the limit of Chinese laws and ethical principles,"

That sentence needs to read: "Transnational companies are considered business examples, but these behaviors threaten to tarnish that image.