Today’s New York Times put forth the following explanation for why China, once notorious for countenancing dreadful labor conditions, is supporting a movement toward unionization: “Having grown increasingly concerned about the nation’s widening income gap and fearing social unrest, officials in Beijing now seem determined to improve worker protection. In recent years, more and more factory workers have gone to court or taken to the streets to protest poor working conditions and overdue pay.”

A number of American companies are very unhappy about this growth of government support for the union movement, and the American Chamber of Commerce, which represents the interests of General Electric, Nike, Ford, and Dell among others invested in China, has been intimating that American companies might not continue to build factories in China if the new laws supporting unionization are passed.

This determined anti-union stance ignores the fact that Chinese trade unions do not resemble the unions that are powerful supporters of workers in Western nations. Indeed, China’s unions are heavily controlled by the Communist party, which limits their power, and obedient to it. According to Guo Wencai, who is in charge of forming grassroots unions for China’s official All China Federation of Trade Unions (ACFTU), the “unions are not simply about workers’ economic interests, they also have to do with political, cultural and democratic rights.” The major activities of China’s unions today can be described more as providing entertainment and social events.

At the same time, the unhappiness and desire for change of so many of China’s workers is clear enough that the government is willing to at least try to provide some support for workers’ rights and encouraging the growth of well-controlled unions is one way to do that. As a result, the “ACFTU now has more than 1.17 million grassroots trade unions across the country. An ACFTU official disclosed that in the first six months of this year, about 9 million workers had joined unions, and more than 80,000 new trade unions have been set up.”

The strong reaction of American companies to the very idea of unions is a result of their adamant anti-unionism: they consider the word union an anathema. It goes against their desire to achieve ever greater profits, and so they ignore sweatshop conditions in the factories producing their products and the appallingly low salaries paid their workers—when they are paid.

Why should we expect such conditions in China to bother them when they exhibit no concern about the increasing income inequality in the United States, where, according to economist Bernard Wasow, changes in income distribution “make it stand out among the rich countries of the world (Western Europe, Japan, Australia, Canada and the United States). Only here has income inequality increased significantly from an already high level. . . . The growing gap between the middle class and the rich in the United States is taking us further and further away from Europe and Japan. The top is peeling off, with the rich becoming more isolated, avaricious, and out of touch with the rest of society. . . . Over the past quarter century, most of the benefits of U.S. economic growth have gone to those who already were well off.”

The numbers reveal a staggering growth in inequality. According to the Center on Budget and Policy Priorities, “in the first half of 2006, the share of national income that went to wages and salaries was at the lowest level on record” since such records began being kept in 1929, while the “share of national income going to corporate profits . . . was at its highest level since 1950.” Specifically, for the first time since 2001, “wages and salaries have grown at a 2.0 percent average annual rate, after adjusting for inflation.” This at the same time that “corporate profits have grown at a 13.7 percent average annual rate, after adjustment for inflation.”

It is interesting that the Chinese Communist government, which does not follow the precepts of democracy and has never hesitated to stamp down rebellion, understands that allowing the social fabric of a nation to fall apart can have dire consequences.

American companies need to wake up to the simple truth that at some point a nation comprised of only haves and have nots falls in the face of the growing anger of its citizens. A little knowledge of history instead of blinders that allow a view of nothing but the bottom line is more likely to ensure future stability. Remember the French Revolution?

Beverly Goldberg, a Senior Fellow and Editor-at-Large at The Century Foundation, is the author of Age Works: What Corporate America Must Do to Survive the Graying of the Workforce (Free Press) and coauthor of Corporation on a Tightrope (Oxford University Press).