Globalization, Changing World of Work & Challenges before the Trade Union Movement Arun Kumar, Actrav-ILO-Turin ITC-ILO/ACTRAV Course A

What is Globalization Promoting? Current 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, raise taxes &/or raise interest rates, privatize, etc

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

Personal Wealth Inequalities Richest 2% of the world’s adults own more than half of global assets – poorest half of the world’s population holds just 1%; Richest 2% of the world’s adults own more than half of global assets – poorest half of the world’s population holds just 1%; Almost 90% of the world’s wealth is held in North America, Europe, Japan & Australia (top 10% of US population holds 70% of the nation’s wealth) Almost 90% of the world’s wealth is held in North America, Europe, Japan & Australia (top 10% of US population holds 70% of the nation’s wealth) If the world’s wealth was to be evenly distributed, each person in the world would have $20,500 of assets If the world’s wealth was to be evenly distributed, each person in the world would have $20,500 of assets Source: World Institute of Development Economics Research, UN University, Wider,

Impact 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”; Equality of “access” (to international trade) does not mean equality of “opportunity”; [unequal capabilities = unequal outcomes] Adverse impact on development & employment issues – in both OECD & developing countries Adverse impact on development & employment issues – in both OECD & developing countries

Gainers under Globalization Sources of income in an economy – Profits, Rentals, Wages & Salaries Sources of income in an economy – Profits, Rentals, Wages & Salaries Profits share of GDP touching new records in recent years – in US, Japan, UK & other EU countries Profits share of GDP touching new records in recent years – in US, Japan, UK & other EU countriesWhy? Savings on labour costs; Savings on labour costs; Low interest rates (costs of corporate debts gone down); Low interest rates (costs of corporate debts gone down); Cuts in Corporate taxation. Cuts in Corporate taxation. [Sources: Goldman Sachs, HSBC, UBS research, 2006 quoted in FT, Europe July 2006 – Capitalist have never had it so good… Europe July 2006 – Capitalist have never had it so good… By Phillip Coggan ] By Phillip Coggan ]

Effects on Labour Downsizing, leading to increase workloads; Downsizing, leading to increase workloads; Outsourcing-reduction regular workforce; Outsourcing-reduction regular workforce; Preference for casual-contract labour; Preference for casual-contract 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; Growing informal economy Growing informal economy Weakening of TUs also thru new HR policies; Weakening of TUs also thru new HR policies;

Trade Union Memberships Union memberships are low and generally declining: memberships range from 3% - 19%; Union density lowest in agriculture & informal economy dominated countries & declining in most countries;

So, what are TUs saying? Answer does not lie in Protectionism  TUs are not for nationalist economic agenda BUT wish to advocate and ensure 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?  Focus on employment creation  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.

World Commission on the Social Dimension of Globalisation Global markets need « governance » i.e. a set of institutions & rules that maintain their smooth & equitable functioning: 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.

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: seeks to involve all social partners in the national economy – promote Social Dialogue;Is participatory: seeks to involve all social partners in the national economy – promote Social Dialogue; Is Dynamic – progresses as the economy changesIs Dynamic – progresses as the economy changes

ILO Declaration, 1998 Declaration is the threshold to Decent Work: 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.

Trade Union Responses Organize! Organize! 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 and other labour standards; Using Workers Capital to promote Union Rights and other labour standards; Build alliances with other social partners – both within and outside the country - links with world TU bodies, NGOs, Women’s movement, Consumer movement – role of international labour solidarity. Build alliances with other social partners – both within and outside the country - 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 and prevent further divisions of workers in the labour market –put all workers in one boat. Adopt policies that apply to all workers and prevent further divisions of workers in the labour market –put all workers in one boat. Set nationwide floor labour standards –that apply to all –organised or unorganised, small or big employer, regular, temporary or contract worker (de-link labour standards from permanency of employment); Set nationwide floor labour standards –that apply to all –organised or unorganised, small or big employer, regular, temporary or contract worker (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 Especially -  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 in so far as 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

Building TU Capacities What is it that TUs need to do ‘in-house’? Building on the strengths of the TUs – What are these? Building on the strengths of the TUs – What are these? Weaknesses of the TUs - ? Weaknesses of the TUs - ? Role of workers education and leadership training Role of workers education and leadership training What role can IT play in strengthening labour movement? What role can IT play in strengthening labour movement? Building TU Networks – Building TU Networks – What prevents ‘you’ from contributing weekly ‘news’ on behalf of your union/country? What prevents ‘you’ from contributing weekly ‘news’ on behalf of your union/country?

Activity: Computer Communications Situation and Needs of TUs in Asia & the Pacific Region What are the computer communications situation of TUs in Asia and the Pacific in terms of: What are the computer communications situation of TUs in Asia and the Pacific in terms of:  Communications between National office & regional office(s) and affiliates;  Communications between/among TUs in the region and with ICFTU-APRO.  What are the difficulties, needs &/or requirements of TUs in further improving & promoting computer communications?

Building Regional Solidarity Networks – TUs’ Strategies What are the common issues for actions of TUs in Asia & the Pacific region that can best be addressed by organizing joint actions? What are the common issues for actions of TUs in Asia & the Pacific region that can best be addressed by organizing joint actions? What could be the joint initiatives & actions to be taken by TUs in building & promoting regional solidarity networks? What could be the joint initiatives & actions to be taken by TUs in building & promoting regional solidarity networks? What role should be played by ICFTU-APRO and ILO-Actrav in supporting such network? What role should be played by ICFTU-APRO and ILO-Actrav in supporting such network?