Globalization, Youth & Decent Work Arun Kumar

What is Globalization? Participants views…

Economic Globalisation - constitutes integration of national economies into the international economy through trade, direct foreign investment (by corporations and MNCs), short term capital flows, international flows of workers and humanity in general and flows of technology - Jagdish Bhagwati, In Defense of Globalisation, Closer integration of the countries and people of the world, brought about by enormous reduction of costs of transportation and communication, and the breaking down of artificial barriers to the flows of goods, services, capital, knowledge and (to a lesser extent) people across borders - Joseph Stiglitz in Globalization and its discontents, 2002.

Why Globalisation? Capital Needs Markets…new markets for profits; Also natural resources Capital Needs Markets…new markets for profits; Also natural resources Developing countries need to grow, need capital, access to new technology, goods & services; Developing countries need to grow, need capital, access to new technology, goods & services; Investors need free trade, minimum or no regulations on capital & safe guarding of their investments; Investors need free trade, minimum or no regulations on capital & safe guarding of their investments;  Economic reforms, free trade & Globalization!

Forces behind Globalization G7 Countries (reflecting Business/Financial Capital Interests) - US Treasury Dept major player G7 Countries (reflecting Business/Financial Capital Interests) - US Treasury Dept major player IMF IMF World Bank World Bank WTO – Estd on 1 st Jan 1995 WTO – Estd on 1 st Jan Regional Banks like ADB and Private Banks, Regional Banks like ADB and Private Banks, Global based Investment Funds, TNCs, UN Organizations, Domestic business interests… Domestic business interests… Estd after 2 nd WW in 1944

Global Background (2002, in %) Share in World Income/GDP Share in World Income/GDP Share in World Trade Share in World Trade Share in FDI Share in FDI Share in Portfolio Investments Share in Portfolio Investments  HIC (80.5), MIC (11.5), LIC (2), China & India (6)  HIC (72.9), MIC (15.6), LIC (2.7), China & India (8.7)  HIC (76.6), MIC (12.5), LIC (1.1), China & India (9.8) Source: ILR, 2004/1-2, Vol 143, ILO, Geneva

What is Globalization Promoting? Economic Orthodoxy – Washington Consensus Supremacy of markets, Government - a problem! Supremacy of markets, Government - a problem! One size fits all kind of policies: One size fits all kind of policies: Open markets for trade, investment & capital flows, FDI rather than foreign aid, no performance requirements on FDI, employment flexibility, cut govt deficit, privatize, etc Employment flexibility Employment flexibility

Implications of New Policies Shift from development cooperation to free trade; Shift from development cooperation to free trade; More competition between unequals; More competition between unequals; Equality of “access” (to international trade) does not mean equality of “opportunity”; [unequal capabilities lead to unequal outcomes] Adverse impact on development & employment – in both OECD & developing countries; Adverse impact on development & employment – in both OECD & developing countries;

Gainers under Globalization Sources of income in an economy – Profits, Rentals, Wages & Salaries Profits share of GDP gone up – in US, Japan, UK & other EU countries Profits share of GDP gone up – in US, Japan, UK & other EU countriesWhy? Savings on labour costs; Savings on labour costs; Low interest rates (costs of corporate debts down); Low interest rates (costs of corporate debts down); Cuts in Corporate taxation. Cuts in Corporate taxation. [Source: Goldman Sachs, HSBC, UBS research, 2006 quoted in FT, Europe July 2006 by Phillip Coggan] Europe July 2006 by Phillip Coggan]

Effects on Labour Downsizing, increasing workloads & job insecurity Downsizing, increasing workloads & job insecurity Outsourcing & preference for casual labour Outsourcing & preference for casual labour Deterioration of labour standards & social protection provisions; Deterioration of labour standards & social protection provisions; Weakening of public transport, health care systems, primary education, etc as public expenditure and role of Govt in these sectors declines; Weakening of public transport, health care systems, primary education, etc as public expenditure and role of Govt in these sectors declines;

Effects on Labour Weakening of TUs also thru new HR policies; Weakening of TUs also thru new HR policies; Growing informal economy – rural-urban migration Growing informal economy – rural-urban migration Trade Union memberships are declining Trade Union memberships are declining memberships range from 3% - 19%; Union density lowest in agriculture & informal economy dominated countries & declining in most countries; What else? Participants experiences What else? Participants experiences

Global Labour Market Scenario, 2006 Global workforce: Over 3 billion (another 430 million will be added by 2015 majority of who will be from developing countries) Global workforce: Over 3 billion (another 430 million will be added by 2015 majority of who will be from developing countries) Women constitute 40% of the labour force (1.22b) Women constitute 40% of the labour force (1.22b) About 1.37 billion working people earn less than $2/day (working poor); 522 m live on less than 1 $ a day – 2/3rds of world’s poor are in Asia. About 1.37 billion working people earn less than $2/day (working poor); 522 m live on less than 1 $ a day – 2/3rds of world’s poor are in Asia.

Global Labour Market Scenario, 2006 No. of unemployed globally: m; No. of unemployed globally: m; Women comprise about 42% of global unemployed (about 82 m); Women comprise about 42% of global unemployed (about 82 m); 44% of world’s unemployed are youth (86.3 million) [over 48% of these are in A-P region]; 44% of world’s unemployed are youth (86.3 million) [over 48% of these are in A-P region]; Over 43 m new jobs to be created each year in order to reduce global unemployment, says ILO Over 43 m new jobs to be created each year in order to reduce global unemployment, says ILO

Situation in Asia-Pacific Asia accounts for about 2/3 rds of global workforce & economically – it is fastest growing region [ except Pacific Island countries ]; Asia accounts for about 2/3 rds of global workforce & economically – it is fastest growing region [ except Pacific Island countries ]; Since 1995, labour productivity in Asia increased by 41%, compared to 14% in the ROW, BUT performance on employment front quite poor; (in 2005, 6.2% economic growth in Asia increased employment by only 1.4% - 24 m additional jobs) Since 1995, labour productivity in Asia increased by 41%, compared to 14% in the ROW, BUT performance on employment front quite poor; (in 2005, 6.2% economic growth in Asia increased employment by only 1.4% - 24 m additional jobs) Informal economy – without social protection – main source of sustenance for majority. Atleast 20% of the workforce survives on less than $ a day per family member; situation in some countries much worse. Informal economy – without social protection – main source of sustenance for majority. Atleast 20% of the workforce survives on less than $ a day per family member; situation in some countries much worse.

Situation in Asia-Pacific SE Asia & Pacific, South Asia & East Asia account for: SE Asia & Pacific, South Asia & East Asia account for: -54% of the global youth population (which was over a billion in 2005); -Over 48% of world’s unemployed young people; About 1 m workers die every year in Asia due to work related accidents & diseases; About 1 m workers die every year in Asia due to work related accidents & diseases; A-P has lowest ratification of the 2 fundamental labour standards – freedom of association & right to collective bargaining; A-P has lowest ratification of the 2 fundamental labour standards – freedom of association & right to collective bargaining;

Situation in Asia-Pacific Youth Unemployment (in millions) Youth Unemployment (in millions) Unemployment rate (%) Unemployment rate (%) Global: SE Asia & Pacific: % South Asia: % East Asia: % Women’s unemployment rate higher Women’s unemployment rate higher Youth as percentage of workforce (2005) Youth as percentage of workforce (2005) Global:25 East Asia:20.9 SE Asia & Pacific:27.5 South Asia:29.3 Youth population expected to go up in a number of Asia countries in coming years (Except East Asia) Youth population expected to go up in a number of Asia countries in coming years (Except East Asia)

Trade Union Concerns Where are the jobs? Has ‘Globalization’ process delivered on jobs front? Where are the jobs? Has ‘Globalization’ process delivered on jobs front? Issues–Not only unemployment but also, underemployment, low paid, exploitative & hazardous working conditions; Issues–Not only unemployment but also, underemployment, low paid, exploitative & hazardous working conditions; Youth (15-24 yrs) unemployment serious; for every unemployed adult, there are about 3-5 unemployed youth; Youth (15-24 yrs) unemployment serious; for every unemployed adult, there are about 3-5 unemployed youth; Jobs without rights – call centres, private services sector, EPZs and so on. Jobs without rights – call centres, private services sector, EPZs and so on. Workers Rights to organize? to bargain collectively? Workers Rights to organize? to bargain collectively?

So, what are TUs saying? Answer does not lie in Protectionism  TUs are advocating for ensuring values of Justice, Equity and Democracy on the new global order;  Need for role of State and public regulation of business and international trade;  Need for review of FTAs – to re-focus on the objectives of Devt, Empl. & Poverty reduction – multilateralism rather than bilateralism. …Contd

So, what are TUs saying?  Respect for basic International Labour Standards for promotion of Decent Work;  Representation & Participation of TUs in economic and social policy;  Comprehensive employer-employee relationship law that sets the basic labour standards and which apply to all the workers in the economy at national level.

What is ILO saying? ILO’s World Commission on the Social Dimension of Globalization says – Global markets need ‘governance’ i.e. a set of institutions & rules for equitable functioning to: Avoid market failures (e.g., economic crises);Avoid market failures (e.g., economic crises); Redress vast inequalities between & within countries;Redress vast inequalities between & within countries; Strengthen mechanisms for delivering social protection - manage change.Strengthen mechanisms for delivering social protection - manage change.

TUs support to Decent Work TUs support the integrated approach of ILO to address the social impacts of globalization: Because the concept of Decent Work - Focuses on core rights, addresses all workers, in all economic sectors (formal, informal);Focuses on core rights, addresses all workers, in all economic sectors (formal, informal); Is participatory, promotes Social Dialogue & seeks to involve all social partnersIs participatory, promotes Social Dialogue & seeks to involve all social partners Is Dynamic – progresses as the economy changesIs Dynamic – progresses as the economy changes

ILO Declaration, 1998 Declaration is the threshold to Decent Work: a minimum social platform for the global economya minimum social platform for the global economy a promotional instrument for universal rights and the development agendaa promotional instrument for universal rights and the development agenda a common objective for the international communitya common objective for the international community

Trade Union Responses Mergers of trade unions – GUFs; Mergers of trade unions – GUFs; ITUC – merger of ICFTU, WCL & some other unions – on 1 Nov 2006, Vienna; ITUC – merger of ICFTU, WCL & some other unions – on 1 Nov 2006, Vienna; ITUC represents 306 affiliated national trade union centres of 154 countries & territories representing some 168 million members. Organize! Organize!

Trade Union Responses Campaign for core ILO labour standards, particularly – C 87 & 98; Campaign for core ILO labour standards, particularly – C 87 & 98; Global Collective Bargaining (IFAs); Global Collective Bargaining (IFAs); Using Workers Capital to promote Union Rights & other labour standards; Using Workers Capital to promote Union Rights & other labour standards; Build alliances with other social partners – links with world TU bodies, NGOs, Women’s movement, Consumer movement – role of international labour solidarity. Build alliances with other social partners – links with world TU bodies, NGOs, Women’s movement, Consumer movement – role of international labour solidarity.

Negotiating Change at National level … Adopt policies that apply to all workers & prevent further divisions of workers in the labour market – put all workers in one boat. Adopt policies that apply to all workers & prevent further divisions of workers in the labour market – put all workers in one boat. Set nationwide floor labour standards –that apply to all workers & employers (de-link labour standards from permanency of employment); Set nationwide floor labour standards –that apply to all workers & employers (de-link labour standards from permanency of employment); Roof to be attained thru Collective Bargaining – the right to which should be ensured. Roof to be attained thru Collective Bargaining – the right to which should be ensured.

Negotiating Change … What is the floor that employers should respect? What is the floor that employers should respect? Core labour standards of the ILO Core labour standards of the ILO  Freedom of Association –the right to form unions, the right to recognition  Right to Collective Bargaining  Basic social security contribution  Access to skills training  No discrimination, No child labour

Why Labour Standards? Labour Standards are not just a question of workers rights BUT are also means to promote economic growth! Labour standards create conditions for growth of domestic markets since they enable sharing in gains of growth & spread of purchasing powers – this makes domestic economic growth more sustainable.

Getting back to basics Getting back to basics Trade unions must strengthen their organizing and bargaining power. HOW? Challenge 1: Creating an “Enabling Environment” for Trade Union Activities Challenge 2: Building Capacity of Unions in Organizing and Collective Bargaining

Group Work How has Globalisation affected workers & trade unions in your country? How has Globalisation affected workers & trade unions in your country? [List the major changes in economic & labour policies that have affected (positively or negatively) the employment & Trade Unions] What actions has your trade union taken or can take to meet challenges of Globalization? What actions has your trade union taken or can take to meet challenges of Globalization? What role can the International Trade Union Movement play in assisting national unions to meet the challenges of Globalization? What role can the International Trade Union Movement play in assisting national unions to meet the challenges of Globalization?