International Confederation of Free Trade Unions
Sixteenth World Congress of the ICFTU
The global market - trade unionism's greatest challenge
Chapter 1: A world of widening divisions
Chapter 2: Building solidarity, attacking poverty, creating jobs
Chapter 3: Strengthening the voice of working men and women through international trade union solidarity
Trade unions are one of the most important social movements underpinning democracy. Workers' right to freedom of association and thus to take collective action lies at the core of all human rights because it creates the means by which all other rights are asserted and defended. For over a century and a half, trade unions have fought for the right to decent pay and conditions for men and women at their place of work and for improved social welfare through, for example, health care, education and social security. Generations of struggle for basic democratic rights at the workplace have created in the ICFTU a free trade union organization that now embraces 127 million men and women in 136 countries in all five continents. We are the largest single international movement advocating social justice, equality and human dignity. But our movement is now under attack on a global scale and with an intensity never before experienced in its history.
Unions at national level are seeing much of what they have achieved being undermined by global financial and industrial decisions. The need for an effective national, regional and international trade union response is greater than ever before. The 1996 Congress of the ICFTU is therefore of historic importance for trade unionism as our affiliates define what policies and strategy are needed to meet this global challenge. International solidarity in the 21st century will have to be more than a rhetorical slogan. Communication barriers that in the past made the international work of trade unions a specialist activity have to be swept away. We must develop new methods of organization to give a fresh dimension to international solidarity. And it is essential that the ICFTU re-examine its own structures, including the role of its regional organizations, and its interaction with the International Trade Secretariats, the Trade Union Advisory Committee to the OECD, the European Trade Union Confederation, the World Confederation of Labour and other international union bodies. We need to change and equip ourselves to reshape the features of the emerging international economic and social order.
The world in which we and our members work is changing dramatically. Competition is global and intensifying, bringing a new level of insecurity to developed nations and increased poverty to much of the developing world. Over one-fifth of the world's population survive in conditions of abject poverty and more than 700 million working men and women are not productively employed. Social inequality within and between nations is increasing and is a root cause of the numerous conflicts that threaten to sweep away restored or newly-won democratic rights and the fragile foundations of international cooperation against unemployment and poverty. And we must never forget that many of the world's citizens are still oppressed by dictatorial and authoritarian regimes that continue to deny, often by violent means, freedom of association and other basic human and trade union rights.
This report analyses working and living conditions around the world and the impact of "globalization" on the lives of working people and their families. It also traces some of the key features of the global market economy whose power is challenging the ability of even the world's strongest nations to manage their development and improve the well-being of their citizens.
It aims to provide an objective assessment of what, in today's setting is necessary to provide a more efficient service to affiliates; and to identify the ways in which international action can help to focus the strength of our movement on the people and the issues which are driving forward the process of globalization.
The report first looks at the main issues facing workers and their trade unions. It then seeks to show the underlying causes of inequality and insecurity in the world of work, and identifies the major pressure points that unions can use to bring about progress, with particular emphasis on the international arena. In the final section, the report draws out the implications for the ICFTU and the international trade union movement of these findings, and makes recommendations to Congress.
It signals the determination of trade unionism to fight again to defend the principles that have won so much for working people. These principles are as relevant in today's world of global competition as they were at any stage of our history. Our movement was founded to fight injustice and to ensure basic human and economic rights of working men and women and their families. The report attempts to capture the widespread frustration that unions increasingly sense that globalization - for all its potential to spread prosperity - has been hijacked by the representatives of wealth and privilege in order to pursue their narrow interests.
Although it is aimed at trade unionists, we believe that the report will also provoke reflection in many other quarters. The World Social Summit in Copenhagen in March, 1995, confirmed that there is a global social crisis which must be tackled by new action within and between countries across a wide range of policy areas. Without a strong, free trade union movement able to express the aspirations of working people and negotiate with employers and governments to find solutions, social tensions will worsen with disastrous consequences for the world.
The gap between the rich and the poor is widening all over the world. In 1960, average income per capita in the least developed countries was just under 10% of that in industrialized countries. By 1990 it was down to just over 5%. The World Bank says that income levels in sub-Saharan Africa have fallen by 0.7% a year over the last twenty years while average incomes in industrialized countries grew by 2.0% a year. Over the last ten years, the highly paid within the industrialized countries have seen their incomes rise faster than the average, while a growing underclass of families who depend on insecure, low-paid jobs or social benefits has lost out.
The total number of people living below the poverty line has increased substantially, with a significantly higher proportion of women among the poor than men. The feminization of poverty is closely linked to the substantial increase in female-headed households and the feminization of low wage work, as well as lower educational levels in some regions and gender biases in the allocation of productive resources.
Our societies are becoming increasingly polarized between those who have the wealth or skill to gain from global integration and those who remain trapped in poverty without productive employment. Free-market ideologists believe that the vast numbers of low-paid jobs will gradually become better-paid through investment and productivity. However, the opposite is happening. Rationalization and restructuring are causing the disappearance of secure decently paid jobs and world unemployment is rising. There is still deeply entrenched discrimination against women in many countries, and child labour is on the increase. And ominously, world growth rates are stuck at levels which allow little or no scope for the poorest countries to expand their way out of poverty. Neither is growth in industrialized and transition countries being translated into more employment. The fundamental problem is that the over-riding objective of organizing production to meet basic human needs is not being achieved as a result of governments' infatuation with market-oriented policies.
To reverse this disastrous development, governments must actively pursue policies that create new jobs and raise the levels of health, social security, education and training in their countries. A partnership approach is required where government, employers and trade unions can agree local, national, regional and international strategies to handle the change needed to meet the pressure of competition that global trade and investment is bringing. A prerequisite for unions to take up the responsibilities of partnership is that governments and employers recognize the rights of workers to representation by their own freely chosen unions. Where dictatorships or anti-union governments and employers reject the contribution unions are ready to make to the consolidation of a civil society, partnership is impossible.
Africa is the world's abandoned continent. Of its total population of 660 million, over 300 million survive on incomes which are barely above abject poverty. Yet of the $80 billion of private foreign direct investment in the developing world in 1994, only $4.5 billion went to Africa. Despite more than a decade of structural adjustment programmes, average income per head at $520 is still below the level of 1975. Seven out of ten Africans live in rural areas and depend on small-scale farming and local supply industries for work. Six out of ten African women are illiterate, and the primary school system still reaches fewer than two thirds of African girls. Thirty per cent of African children under the age of five are below the weight they should have reached for their future healthy development.
Women make up a particularly vulnerable group in the labour market in Africa. They have been hard hit by the deteriorating economic situation and the impact of structural adjustment programmes and devaluations. The majority of women still work in subsistence agriculture, often unremunerated, working long hours with little improvement in productivity or technology. The small minority of women working in the modern sector, often in public services, have been particularly affected by layoffs following restructuring or privatization. The combination of rural and urban poverty and lack of opportunities has led to an intensification of the already existing disparities between women and men and to large numbers of women being forced to take up informal sector activities in order to survive.
African cities are expanding at 6% per year, which is the fastest urban growth rate in the world. Poor farmers, who with their families make up over 80% of the total numbers living in extreme poverty, are still moving in vast numbers to the burgeoning shanty towns which surround most cities. Many are migrating across national borders to do so. The jobs they find are almost all in the informal sector following the cut back of employment in the public sector and in the few large commercial, often state-owned, enterprises. Two-thirds of all urban workers are in the informal sector and urban unemployment has doubled since the 1970's to reach between 15 and 20%. Real wages in manufacturing have fallen sharply during the 1980's with an average annual decline of 12% recorded in 15 countries for which the International Labour Organisation has reliable data. Current structural adjustment policies are failing to meet basic human needs or reduce the burden of debt and thus have not put Africa on to a path of sustainable economic growth.
Against this bleak economic background, the newly-established democracies face enormous problems in containing the tensions that threaten their survival. The most optimistic forecasts for the recovery of the African economy suggest that the total numbers living in poverty will not start to fall until well into the next century. During that period, 60 million young African men and women will have begun the frustrating task of looking for some means of sustaining themselves. AIDS will have infected 20 million and at least four times that number will have died of preventable diseases. On top of that, the continent's food shortage is projected to more than triple by the year 2000. There is a clear danger that further progress towards building democratic institutions may be arrested amidst a slide into large scale social dislocation and a reversion to the corruption and repressive rule that has held back development for so long.
Trade unions, which for much of the time since independence faced significant interference from their governments and even, in some cases, outright control, played a key role in many countries in the move towards democratization. They now face a new crisis as their former strongholds in sectors like teaching, transport and the civil service are undermined by privatization and public sector cuts. With ICFTU help, they are fighting back and also taking on the immense challenge of recruiting members in hitherto unorganized sectors. And although some governments have made new efforts to assert control over the trade union movement in their country, trade unions remain the most organized and democratic bodies in Africa. In many cases, they have developed proposals for national action to turn around a generation of economic decline. Any examination of the national economies on this troubled continent would conclude that involvement of trade unions and respect for their rights are essential for any sustained economic and social development. In fact, Africa has given us an example of trade unionism at its very best: the role played by the South African trade union movement in the struggle against apartheid. It was the unions and their members who played the key role in bringing down the regime with the support of the ICFTU and the ILO. South African unions pursued a strategy of bringing a peaceful end to apartheid and thus making reconciliation and the establishment of democracy possible. They are showing the same commitment in the struggle to build the new South Africa, and are able to do so because the democratically-elected government is basing its labour law reforms on ILO Conventions.
Realizing Africa's potential requires a strengthening of democracy to remove the barriers which African women and men face to working their way out of poverty. International support should focus on policies targeted to increase employment and wages, raise levels of education and health and remove the burden of debt placed on the present generation by corrupt military and one-party dictatorships. The African trade union movement has a key role to play in designing and implementing policies that will command the widespread support needed to break free from past patterns of development. A narrow focus on deregulation and privatization does not address the fundamental issue of establishing confidence in the role of public authorities that for too long were the tool of self-aggrandizing elites that exploited national, tribal and international cold war rivalries to survive. Respect for human and trade union rights is central to any successful strategy for reform and recovery in Africa.
Latin America has struggled to emerge from the debt crisis of the early 1980's but it remains a region of extremes of poverty and wealth. Brazil is the world's second-largest market for private jets, while 47% of the population live in extreme poverty. Over one and a quarter million children under five are malnourished and more than three million primary-age children are not in school. Large numbers of them have been abandoned to scavenge on the streets, and become victims of murderous gangs. Yet levels of taxation on the highest incomes are according to the United Nations Development Programme and the Inter-American Development Bank the lowest in the world.
Real wages in Latin America have recently started to recover after declines of between 5 and 20% but they are still below the levels of 1980. The minimum wage level is now only three-quarters of its previous value. Official unemployment has risen to 10% and more in several countries of the region, while in the informal sector, urban employment has risen to over 18% with a comparable decline in regular work. As the devastating 1995 Mexican economic crisis showed, the region's workers are still highly vulnerable to the ebb and flow of short-term speculation. Despite the desperate need to strengthen purchasing power of the low-paid, and for social investment in education and housing, the foreign exchange markets punish any slipping in the austere budget targets set by governments and the IMF. It means that the vital measures needed to boost social stability are constrained by policies aimed at reducing financial instability. If the international financial institutions really want to help the continent find a sound basis for recovery, they should work to reduce the heavy debt burden that still hinders all efforts to sustain growth, and place more emphasis on improving the tax system rather than squeezing essential social spending.
Even though many women have higher educational levels than men, they are still concentrated in low-paid occupations. Women have been more affected by restructuring and cut-backs in the public sector than men with a large proportion of them taking up insecure jobs in the informal sector. There is also a growth of part-time work for women. Women make up the majority of workers in the maquiladora sector (for example in Mexico 77 per cent) where trade union rights are restricted and conditions of work unregulated.
Capital flight has been a persistent problem for the region and led governments to follow policies designed to bring back and keep thedollars of the wealthy elite of the region. The flight of labour to North America, Europe and the "maquiladoras" is an equally dangerous phenomena that has failed to attract similar priority. Whole families are dependent on the remittance of earnings by young women and men who perform low paid, dirty and dangerous jobs far from their homes. The twin objectives must be to protect migrants from discrimination and exploitation and to create jobs and a secure environment in their countries of origin.
The trade union movement in Latin America remains strong and is steadily overcoming a legacy of political division. However, its role in society is still questioned, despite the return to democratic government in many countries. Traditionally, and largely as a result of the long history of state involvement in the economy, governments sought to centralize industrial relations through extensive legal codes which, in theory, obliged employers to offer decent wages and conditions. Although often ignored or only implemented with the discretion of the government, the codes were in effect a form of centrally negotiated contract of employment for most formal-sector workers. With the progressive withdrawal of government intervention in the economy through privatization and deregulation, there is growing pressure to weaken the content and coverage of labour codes. This is a major cause of concern to unions, since those who push for reform are mainly hostile to unions.
Some governments have sought the cooperation of the trade unions in various types of Social Pact designed to stabilize inflation and reduce balance of payments deficits. But employers in many countries are prepared to hire thugs to kidnap and kill courageous local union representatives and the judges and lawyers who try to defend workers' and peasant farmers' basic rights.
The region is suffering from an epidemic of export processing zones or "maquiladoras" where workers' rights are abused daily by footloose enterprises that mainly supply the North American market. This "slash and burn" style of capitalism destroys stable economic and social development, and is trapping many communities and whole countries into a cycle of exploitation. Even after the restoration of democracy, government in many countries is dominated by the interests of the wealthy families and the multinational companies. Corruption is rife in the private sector although publicity is usually only thrown on abuses in the public sector by media companies that have a greater interest in what they obscure than reveal.
Reversing these trends requires a reorientation of the role of government to make the public services and political parties much more independent from narrow business interests.
Governments need to bring pressure to bear on employers to play a constructive role in the social partnership needed to ensure sustainable growth. Centralized bargaining can ensure that wage growth is consistent with overall economic and social policies aimed at securing recovery and tackling poverty and unemployment. At the same time a gradual shift to local level bargaining would help both unions and employers to agree on changes at the workplace aimed at improving working conditions and productivity. Neither is possible unless union organizers are protected from violence and victimization. Both governments and employers must recognize the essential role of unions in getting to grips with the underlying causes of social conflict which threaten the fragile recovery of the region.
The Asian region has achieved consistently faster growth than any other part of the world for ten consecutive years - yet it has more people who can be classed as absolutely poor than anywhere else. Over one and a half billion people in the Indian sub-continent, China and Indonesia survive on less than a dollar a day. With India alone having to create about 7 million jobs a year to meet the expected growth of the labour force, economic growth of over 5% per year is essential to reduce the numbers of people living in extreme poverty.
Wages have risen by an average of 5% per year during the 1980's, according to the ILO, in a number of East and South-East Asian countries as the proportion of workers engaged in agriculture falls and manufacturing and service employment rises. However, this rapid shift from rural areas to the cities is producing enormous problems including a substantial backlog of investment in the infrastructure needed to support a modern urban and industrial economy. The so-called Asian miracle has been largely built on the rapid growth of mainly light-assembly manufacturing industries producing for export, and a steady increase in agricultural productivity. Most of the region's proliferating export processing zones have been deliberately created to prevent union organization as an incentive to investors.
Young female labour has been the cornerstone of export-oriented industrialization. Foreign investors have been able to take advantage of the low pay and manual dexterity of these women workers. The share of women in manufacturing employment exceeds 80 per cent in some countries, especially those with the fastest economic growth. These industries have generated unprecedented employment opportunities for women which are an escape route from rural poverty. But working conditions are frequently long, arduous and dangerous. Few of the women keep these low paid jobs much beyond their twenties because employers fire those who marry and start a family. Many are also physically worn down by the pace of production, exposure to hazardous substances and injuries derived from the repetitive nature of their work. This "sweatshop path to development" leaves in its wake many casualties and undermines longer-term development.
In South Asian countries, the majority of women workers still rely on agricultural employment with unpaid labour on family land alternating with seasonal wage labour.
As in other regions, Asian women have been more adversely affected than men by privatization and the down-scaling of the public sector. There has also been a growth in home-based production and sub-contracting.
Trade unions in most countries in the region have had to function in a legal framework which is controlled by government. Unions representing skilled workers managed to secure a degree of security in employment and real wage increases for their members. However, organizing the unskilled has been actively discouraged through intimidation by employers who are protected by laws which fail to protect workers' right to organize.
By comparison with other developing regions, the East and South-Asia Asian business community is characterized by a generation of strong business patriarchs who have not simply exported profits to overseas banking havens, but have reinvested in expansion. But the traditional culture of deference and duty which pervades employment relations in Asia, and discourages independent trade unionism, is starting to break down. A new generation of professionally trained managers is taking control. Companies are beginning to compete for internationally mobile investment capital on the newly emerging stock markets of the region. The new generation of Asian workers is also increasingly asserting their rights to independent representation and non-discriminatory treatment by management. Governments are now confronted by the reality that a more open law-based and democratic society is essential to development.
The major exception to this pattern is China, with one fifth of the world's population. The Party and the Army know that democratization will end their authoritarian grip on the main levers of power, but to contain social tensions requires a rapid pace of growth and, for them, the encouragement of the private sector. The resultant unstable alliance of a police state with rapacious capitalism is not only an explosive social and political mixture but also means destructive competition for neighbouring countries that are trying to move along a democratic path to development. Increasing reports of industrial unrest indicate that the new Chinese government model of a so-called "socialist market economy" is being questioned by working people within China, as well as international groups like the ICFTU concerned about the abuse of human rights.
Five years after the fall of the Berlin Wall it is generally recognized that the transition from the Communist system and the process of reform and adjustment needed for Central and Eastern European countries' full integration into the world economy will be much longer and more difficult than expected. Most transition countries were compelled by the IMF and World Bank programmes conditionalities to concentrate foremost on stabilization measures coupled with privatization including of essential public services. Often even the most elementary elements of commercial law and reform of social security were left to a second phase. For workers, the bitter prize of overthrowing the old regime has too frequently been wage cuts, unemployment and attempts to marginalize trade unions. According to official statistics, unemployment in most countries is over 10%, as many as half are without a job for more than a year, older workers and women are dropping out of the labour force and an unquantifiably large number of people are going into unregistered work. At the same time there has been a sharp rise in the cost of health, education, housing, energy, transport and other essentials. On top of that the collapse of many of the old companies which previously provided large local nets of social facilities negatively influenced the social stability of families. Poverty has increased dramatically.
Alongside this poverty, there are those who have managed the transition to their advantage. The lack of an adequate legislative framework for privatization has enabled a new class to emerge and enrich themselves, often exploiting the connections and financial privileges of the old nomenclatura. They have emerged as controlling shareholders of the most profitable banks, privatization and investment funds and companies, staying however away from the official nationwide negotiation mechanisms. Multinational companies in some Central and Eastern European countries have become a strong lobby and in general have sought to avoid recognizing and bargaining with unions. Conspicuous consumption of this "new elite" has added to a pervading sense of social dislocation, frustration and mistrust. Trade unions have persistently warned of the gaps in legislation, weakness in the representativeness of the employer organizations, the disillusionment of the electorate and of growing instability. It is only now that some governments and the main international institutions and agencies are belatedly waking up to the social dimension of the transition.
Women in Central and Eastern Europe continue to have a high attachment to the labour market. However, women have been more severely affected by unemployment than men. Women tend to be concentrated in light industry and services which has been a factor in their favour, although often in low-paying sectors and jobs. Male employment has growth faster than female in some new service sector activities such as banking and tourism. Another development affecting women's labour force participation has been the closing down of child-care facilities as a result of the dismantling of state enterprises.
Trade unions in the region have in general accepted the necessity of large-scale reform, including privatization. In contrast, both domestic and international private investors have shown a generally hostile attitude towards free trade union organizing. Trade unions have all too often been excluded from any influence on the pace or scale of change and the implementation of accompanying inadequate social programmes to help those worst affected. This has created numerous clashes with governments, particularly over the effects of austerity budgets, erosion of welfare and social services, ill-thought-out plans for privatization and the failure to establish sound relations of social partnership and dialogue. The opportunity for governments to build a broad base of popular support for reform has in most cases been wasted, setting back recovery, weakening confidence in newly-won democratic constitutions and greatly undermining democratic revolutions' hopes and expectations. All this, even in more sombre colours, also expresses the situation in the new states that emerged from the collapse of the Soviet Union.
The global social crisis has now reached into the world's most advanced economies. The high levels of unemployment of the early 1980's recession have fallen at an agonizingly slow pace. In Western Europe in particular, they are still above 10%, and they are on the rise again in the USA and Japan. Average wages in the biggest economy, the USA, have been stagnant for a decade, and are actually dropping for the lowest paid and least skilled. With rising numbers dependent on social security and welfare benefits, many governments have cut back the level and the coverage of payments to the poorest. Government education and health spending in many countries have also been cut back.
In contrast, tax cuts for the wealthy and get massive pay rises for top executives have widened the gap between rich and poor for the first time in half a century. The dividends of growth have not trickled down to the bottom third of society. All these pressures have fueled the growth of racism and xenophobia, with right-wing extremists, deeply hostile to workers' and unions' interests, winning sizeable numbers of votes in local and even national elections.
For those in work, insecurity has intensified and widened its scope. It is commonplace for some of the most skilled including management to be facing redundancy and few new job prospects. Throughout manufacture and service industries short-term, part-time and sub-contracted employment are on the rise. All this has especially affected women, whose wages are an increasingly essential part of most families' income. The massive redundancies mainly hit larger manufacturing and other companies where unions negotiated good pay and conditions, whereas most new jobs are in the relatively small service-sector companies, which are harder for unions to organize and notorious for inadequate pay and conditions. The days when a public sector job offered security have also long gone. Today, governments throughout the industrialized world are privatizing or contracting out public services and applying rigorous pay disciplines to those workers who remain under their control.
While changes in industrial structure and the labour market have favoured the growth of women's employment in service activities, the bulk of the new jobs tend to be "atypical", often precarious forms of work, such as part-time, casual and home work. Men and women still have different participation patterns in the labour market and there is a gender gap in all countries in occupations, skills and pay. For example, part-time jobs are extremely segregated with between 60 and 80 per cent of these jobs being taken up by women. Different values continue to be attached to men's and women's jobs. Most female-dominated occupations are characterized by low status, poor remuneration and limited potential for skills acquisition, promotion or training.
Many right-wing governments have chosen to attack labour laws which specify the minimum conditions for employment contracts. Minimum wages, severance pay and notice of termination have been particular targets. In some countries, notably the UK and New Zealand, governments have made major changes to industrial relations laws to weaken unions and collective bargaining. Free-market politicians argue that these measures are essential if industrialized countries are to price the unemployed back to work, or obtain the labour flexibility that world competition now demands. However, after a decade in which wages have grown at a slower pace than productivity and profit rates have recovered, there is no evidence of sustained job growth and increased competitiveness in those countries where free market anti-union policies prevail.
In contrast, many other OECD countries are drawing on the strength that social partnership can bring to the difficult task of balancing economic and social policies. In more than two-thirds of the 25 member states of the OECD, governments have turned to unions for support in establishing an overall agreed framework for pay rises as a key element in policies to stabilize inflation, the exchange rate and the budget. A number of "social pacts" also contain accompanying measures to encourage employment growth, through training and other active labour market policies.
Of the 2.5 billion working men and women worldwide, 1.4 billion live in developing countries where each person has an average yearly income of less than $695. Three out of five workers in the least-developed countries work on the land, mostly on their own small farms. A further 22% work in the informal sector. Only 15%, mainly urban factory and service workers, have employment contracts. In the middle range of developing countries, nearly half of the workforce have formal wage-paying jobs in industry and the services. Fewer than a third remain in agriculture and about one in five is in the rural and urban informal sector. In the industrialized countries only 4% work in farming activities, 27% are in manufacturing industry and 60% have service sector jobs. The vast bulk have employment contracts, although in some countries self-employment is on the rise. Worldwide, unemployment totals 120 million but about 600 million more are estimated to have no regular work or income for most of the year.
Over the last three decades there has been a steady fall in the still predominant share of agriculture in total employment and a rise in the proportion of service sector jobs. Industrial employment has fallen marginally from 19 to 17% of all jobs. Over the last thirty years, it has fallen sharply from 37% to about 26% of the total in industrialized countries, and has risen in developing countries from 11 to 14%. Most of this expansion has been in East and South-East Asia where industry now accounts for 18% of total jobs compared with 9% in 1965. There are now more manufacturing workers in the developing world than in the industrialized countries, many of whom work in export processing zones.
The global labour force is projected to rise by a further 1.2 billion over the next thirty years. If poverty is to be reduced, priority must be given to increasing the productivity and incomes of the developing world's poor farmers. Liberalization of agricultural trade should help this process but only if it is accompanied by a major effort to tackle problems such as land reform, transport and discrimination against women who do the bulk of farm labour in the developing world. But the sheer scale of the developing world's unemployment problems means that hundreds of millions of jobs would need to be created to prevent a social disaster. To achieve this in a world where the industrialized countries already dominate about half of world output requires more positive international measures than currently exist to ensure a balanced and sustainable pattern of world growth.
Industrialized countries will be faced with job-creation problems. Currently they are turning their attention to trade with the faster-growing developing Asian economies, in particular, to meet the demand for capital equipment such as machine tools. For some time, nevertheless, trade between the industrialized countries will account for the bulk of their export production. However, as the Uruguay Round trade liberalization measures are put into effect, coupled with the elimination of controls on the movement of capital, the already intense competition for markets is likely to heat up. In industrial countries, unemployment is rising amongst low-skilled and relatively low-paid male workers, who have traditionally found work in the manufacturing sectors that are most exposed to increased competition. These countries face a major challenge in creating new jobs and in equipping workers with the new skills they will need. If growth falters in the industrialized world or fails to spread beyond the East and South-East Asian region in the developing countries, the industrialized nations' own jobs crisis could worsen.
Governments in those countries which have implemented free market measures, such as wage and social security reductions, claim that jobs have been created as a result of their policies. The results so far are that there is growth in jobs that are insecure, part-time or temporary and have low pay and poor conditions.
In the USA and the UK, there is additionally disturbing evidence of widening pay gaps between the unskilled and higher-income groups. This failure of the free market solution was the main issue before the 1994 Detroit Jobs Summit. The industrialized countries were confronted with the "diabolical dilemma" of mass long-term unemployment or the creation of a new large under-class of working poor. Both options are socially and politically dangerous; both create a massive waste of human resources and fertile ground for anti-democratic extremist politicians and organized crime. Of equal concern is the trend for some right-wing politicians in government to try to distract attention from the disastrous effects of their free market policies by scapegoating foreigners and the institutions of international cooperation.
A common world policy for economic growth is a necessity for the creation of more jobs and better employment outlooks for the present and next generation of wage earners. But economic growth as we know it causes problems in the field of the environment. Increased use of natural resources and further pollution of the land, water and atmosphere will not only cause problems for this generation, but will also have an impact on the outlook and possibilities for the generations to come. Governments therefore have the obligation to incorporate rules and measures in a world policy of economic growth that will secure a sustainable and ecologically sound development. These rules and measures should guarantee that wage earners at their work place will not be exposed to dangerous substances and hazardous working conditions. The same guarantee should be secured for the environment at large. Trade unions cannot and will not accept that workers around the world are exposed to inadequate environmental standards as a result of competition.
The globalization of the economy and the technology revolution has helped create a network of small and medium-sized subcontractors and outproducers (with a growing proportion of production taking place in homes) in areas that range from printing and publishing, through garments and footwear, to automobile parts and microchips. Telework and offshore data processing are also increasing (for example the transfer of Swissair reservations to India). This means that more and more workers are not covered by standard labour legislation and are not entitled to social guarantees by the state or formal employment benefits such a minimum terms and conditions of work and social security coverage. A large proportion of workers involved in sub-contracting do not know who the ultimate employer is, often a multinational corporation. These workers also remain invisible, and are not counted in labour statistics, nor recognized as workers. They are also very difficult for unions to identify and to organize. The precarious nature of these jobs is underlined by the continuous search by investors and manufacturers for lower and lower production costs. When countries improve wage levels and working conditions, manufacturers move production contracts to countries with cheaper labour and less stringent labour legislation.
Pulling back from such dangerous trends in both the developed and the developing world will require politicians to acknowledge that changes in the global division of labour cannot be left to the arbitrary forces of the market. And in order to ensure that the purchasing power of workers increases in line with the growth of productivity, particularly in developing countries, unions must have the right to organize and bargain collectively. Furthermore, there must be a global campaign to get across the message that investment in education, health, transport and other vital elements of growth must be increased by directing developed country budgets away from military expenditure and towards more and better-targeted aid policies. International support provided to countries in both the developing and transition countries must open up space for a more durable recovery less dependent on exports and international financial markets and more geared to long-term investment in creating employment opportunities for the poor. Such support should also be targeted on those countries that respect basic workers' rights and are developing systems of democratic accountability that prevent the wealthy and powerful from corruptly siphoning off scarce taxpayers' money intended to alleviate poverty.
Industrialized countries must work together to raise and sustain growth rates and avoid the danger that uncoordinated policies based mainly on preventing any increase in inflation will lock the world into a period of prolonged low growth which will condemn more of the next generation to poverty. They will also need to put more resources into helping workers displaced by changes in technology and trade to acquire new skills and jobs.
The challenge facing trade unions in the era of globalization of trade is to ensure that the need to make enormous and rapid changes in the nature of work and the labour market are achieved without compromising the goals of full employment and social justice. We have to convince governments that it is essential to act urgently to increase and spread more evenly world economic growth. The wholesale deregulation of labour markets increases the problems countries face in adapting to change. Problems are solved where governments and trade unions and employers collectively focus on the strengthening of labour market institutions so that support is offered to individuals and communities through training and job-creation schemes.
Rapid technological and commercial change is having a dramatic impact on marketplaces the world over. Old systems for the mass production of standard products are being replaced by methods that allow shorter production runs of more differentiated products. Companies are focusing on how to reduce the stocks they maintain of both components and finished products through careful planning of "just in time" delivery systems. Similarly, they are aiming to reduce costs by reducing the number of defects in final products, often by shifting responsibility for quality monitoring from supervisors to production workers through techniques such as quality circles. Specialized services are being sub-contracted to outside suppliers. This revolution in production techniques and managerial practices affects both manufacturing and service sectors and the public services, and whilst further advanced in the industrialized countries, is spreading rapidly, especially in the faster growing developing countries.
It will be at the workplace where trade unions must prove that the achievement of workers' aspirations and company success are inseparable, and at the workplace where trade unions will be able to demonstrate the value of partnership in meeting the challenge of change at company level. A major target for the ICFTU in the years ahead is to ensure that the basic human right to join a union and to negotiate collectively with one's employer is universally accepted as a cornerstone of policies for positive economic change.
These changes at the work place are having a major impact on workers who are looking to their unions to devise new methods of bargaining to deal with the new problems and opportunities they create. On the one hand, the move away from standardized, simple job tasks to processes that enable workers to take more responsibility for the products or services the company sells does open up scope for more interesting and rewarding jobs. On the other hand, such jobs tend to be relatively small in numbers and many workers are being pushed into short-term highly insecure contracts with small service suppliers. With increased pressure on government budgets, public sector workers are facing very similar issues of how to redesign jobs so that a better quality of service is provided at the same time as dealing with the insecurity provoked by contracting out and privatization.
Some unions have been able to negotiate new style collective agreements adapted to a management philosophy of employee involvement in a wide range of issues that can include the design of the working system and even customer relations. However, such agreements tend to cover an ever diminishing group of 'core' workers in a few leading companies, leaving unions with the difficult task of trying to organize and provide an increasingly individual service to large numbers of workers scattered in small service companies. In addition, the so-called "de-layering" of management has resulted in major changes in the way companies take decisions making it harder for unions to find where the appropriate managers with which to negotiate are located in a web of interconnected subsidiaries often spreading around the world.
For workers the phenomenon of globalization is changing the whole structure of their contractual relations with their employers in many different ways. It is also changing the role of the state and thus the tripartite relations between government, employers and unions. As a result unions face the challenge of finding new ways to influence and shape the now international environment that affects the labour market and new ways of bargaining with employers who are less interested in standardized collective agreements that fit into standardized systems of production.
However, one basic feature of the new global division of labour remains the same. The individual worker is still at a considerable disadvantage in his or her relations with an employer unless able to call on the collective support of other workers through a trade union. Many companies recognize that this power imbalance undermines the relationship of trust and cooperation that is essential to the new systems of work organization and strategic planning needed for success in a competitive global market. Others fear a dilution of managerial control or are unprepared to undertake the long-term investment in changing managerial practices that a genuine "team work" approach requires. Collective bargaining involves elements of conflict and cooperation. Employers and employee interests are different and while unions prefer to avoid disputes they always have to be ready for a struggle. Unions and many companies also know that the most effective forms of labour-management cooperation are those developed between a strong union and innovative management committed to the long-term success of the business. The basic human right to join a union and through the union bargain for a fair return for one's labour is thus a foundation stone for constructive competition in the world market. One of the major new challenges facing the trade union movement is to secure the role of unions at the work place in the framework of rules that governments set for the functioning of the global economy.
The world economy is growing much too slowly to create enough jobs or to make a real impact on poverty. Prospects for Africa are bleak; Russia and many countries of Central and Eastern Europe as well as the republics of the former Soviet Union are yet to emerge from a period of steep decline; the recovery in Latin America looks fragile; and the industrialized countries are stuck with high unemployment. Only in the fast-growing Asian economies are jobs being created at a rate that stems the spread of poverty; but in the rest of Asia, there are millions going hungry, millions living in squalor. A new approach to global economic policy is desperately needed _ but the world's most powerful governments seem locked in the stranglehold of the all-powerful financial markets.
In response to this global crisis, the Copenhagen World Summit for Social Development, the largest gathering of political leaders in the history of the world, committed the UN and its Member States to attacking poverty, building solidarity and creating jobs. What is now needed is an economic strategy to achieve these objectives and which translates the promises of more co-ordination of national policies into action. The Mexican financial crisis and the Barings Bank collapse, highlighted the urgency of the Summit's deliberations. The governments' promises to deal with social priorities it identified must be kept. Free market dogma, motivated by greed, is inducing a political paralysis that has to be exposed as serving only the interests of powerful elites while undermining social development.
The actions of all the big players on the world economic scene - the main industrialized countries, the IMF, the World Bank, the OECD - indicate a deep ideological commitment to market liberalization and monetary stability. Because most developing and transition countries depend on IMF programmes based on these rigid theories, they must toe the ideological line. In part this reflects the way right-wing politicians and economists have run the G7 countries since the late 1970s. But real power lies with the money markets. Governments are reduced to providing a kind of maintenance service, raising or lowering interest rates as the market demands.
The reliance on interest rates is a result of the financial deregulation during the 1980's, as well as a political decision to put priority on low inflation before low unemployment. Slashing controls on capital movements has created the world's first truly global market. About $1000 billion moves through this market every day _ far more than the combined reserves of all the major central banks. There is little Central Banks can do to keep exchange rates at levels that reflect economic reality. This means that even big companies have to play the market to make sure they don't lose money through shifts in exchange rates. Their financial strategy is skewed towards short-term speculation, rather than long-term investment.
Governments too are locked into this time- frame. Faster growth would cut unemployment and reduce deficits in the medium term, but governments are terrified of how the speculators might react to any short-term boost to the economy through tax cuts or expenditure increases. Soothing the speculators has meant deflationary policies which have held back recovery, choked off the growth in jobs, and fueled inequality all over the world. Different political parties have tried to deal with this in different ways. Some have tried to protect the most disadvantaged from the harsh effects of budget austerity. But none has broken the strait-jacket of the international finance markets.
The persistence of large amounts of external debt for many developing countries, and in particular the least developed countries, constitutes an obstacle to efforts to stabilize their economies. Every child being born in these countries is born into debt. It is utopian to try to resolve the problems of these countries, including the consequences of the globalization of the economy, without finding solutions to the problem of debt.
Unions have had to face the fact that changes of government have made little difference to macro- economic policy. Economic globalization has seen to that; one in seven share deals around the world now involves someone from outside the country, so governments can't reintroduce capital controls because it would hurt exports and investment, and cut jobs. Acting against exchange rate instability, and going for growth _ the only way to create jobs and cut poverty _ demand concerted action from the big three economic power blocs of North America, Japan and Europe. And it also needs a broad basis of support in developing countries if the social priorities defined by the Copenhagen Summit are not to be sidelined by financial pressures.
With companies now able to move capital and production at will around the world most of the key decisions about trade and investment are taken by private business. A hundred of the most powerful transnational corporations (TNCs) account for about one-third of all foreign direct investment (FDI). Both directly, and through the chains of sub-contracting and distribution which they control, they have a major impact on jobs and incomes world-wide. By the end of 1993, the sales of foreign affiliates of TNCs totaled $5.8 trillion, exceeding the $4.7 trillion of exports of goods and services. About one third of all international trade took place between affiliates of the same company (intra-firm trade). In 1993, FDI grew twice as fast as trade, and, since 1991, it has exceeded domestic investment in both transition and developing countries.
Both the accumulated stock of FDI and its annual growth are very unevenly distributed. Companies based in developed countries accounted for 97% of the total stock of FDI. Three-quarters of this is invested in developed countries. In 1993 and 1994, transnational investment in developing countries grew rapidly _ but over 80% of the increase went to China alone. Of the remainder, the vast bulk went to nine countries (Singapore, Argentina, Mexico, Malaysia, Indonesia, Thailand, Hong Kong, Taiwan and Nigeria). The 47 poorest countries in the world received only 0.7% of total world investment by TNCs.
Official development assistance fell in 1994 both in total and as a proportion of industrial countries' GNP. At just over $56 billion in 1993, it is running at about three-quarters of TNC investment in developing countries, with about half going to sub-Saharan Africa and South Asia. In addition, FDI is only about one-third of all private investment in the developing countries. Deregulation and privatization have generated a major increase in cross-border investment in stocks and shares. This investment is dramatically changing the speed and scale of private and often speculative capital flows, but it is concentrated on about a dozen mainly middle- income countries in Asia and Latin America. Although, a decade after the onset of the debt crisis, banks are still not lending any new money, a small number of countries and a larger number of developing country companies are issuing bonds on international finance markets. As the Mexican crisis of December 1994, showed, much of this type of investment can leave as rapidly as it arrives, not least because it includes a substantial component of returning flight capital.
Trade patterns also show a similar concentration on the large industrial country markets and a number of dynamic newly industrializing countries. Africa's total exports represent about 2% of the exports of industrialized countries and are estimated to grow at a paltry 2.5% in 1995. By contrast, Hong Kong, South Korea, Singapore and Taiwan, with total annual exports six times larger than the whole of Africa, are increasing their exports at 11% a year on top of two decades of double-digit expansion. Countries exporting primary commodities have failed to expand their export earnings not least due to a long running weakness in most commodity prices. Countries with high rates of saving and relatively low foreign borrowing that have expanded into manufacturing, often through attracting TNC investment, have performed much more strongly. As a result, not only have their exports to industrialized countries grown but also their imports. For example, US exports to developing countries grew by 12% each year between 1990 and 1993 but by only 2% per year to the recession-hit industrialized countries.
With both trade and investment growing faster than global output, more jobs now depend on the global market. TNCs have linked the main consumer markets in the industrialized countries to a relatively small number of rapidly expanding East and South East Asian countries. Initially, TNC investments and sub-contracting deals in this region were almost exclusively aimed at export production. Now, local consumer markets are expanding, prompting a further wave of investment and a sharp pick-up in imports. With the prospect of this boom spreading to China, India, Vietnam and Asia will rival Europe and North America as a focal point in the global market by the early part of the next century. Latin America's recovery from the debt crisis is still fragile and highly dependent on developments in North America. Like Central and Eastern Europe, it has not attracted the same scale of private investment as Asia. Despite a brief period of optimism after the Israeli/PLO peace deal, the Middle East remains marginal to all but the oil TNCs' global plans. And the poorest African countries with their large numbers of subsistence farmers are in danger of being left behind completely.
Many of these changes in the global market happened before the signing of the Uruguay Round multilateral trade agreement or independently of these negotiations. In many ways, the GATT negotiations represented an attempt by the big TNCs to secure their commercial links in the emerging markets of the developing world and make use of more open global labour markets. Even before the provisions of the Uruguay Round have been implemented, talks are underway on new agreements covering financial services and the rights of foreign investors. The business agenda is being powerfully promoted by armies of professional lobbyists and "think tanks" in the major capitals and at the new World Trade Organization (WTO). The TNCs are also pushing governments to accelerate the process of trade and investment liberalization through regional pacts such as APEC, ASEAN, the Mercosur and NAFTA, as well as through bilateral deals between the major industrialized countries and their key partners in the developing world. This TNC-driven global integration is widening social divisions within and between countries _ and damaging the very investment climate which companies are seeking to improve. Building on the ICFTU's successful effort to launch a global social agenda at the Copenhagen Summit, how can the international trade union movement make sure that workers' concerns are an integral part of the new international legal framework for trade and investment?
In the fifty years since the adoption of the UN Charter, governments seem to have forgotten what international co-operation is for. In San Francisco in 1945 when drafting that Charter, they reflected more deeply on the principles that would encourage governments to co-operate at world level to address world problems. Among the UN's central objectives as defined in its Charter are:
Within the UN system, the International Labour Organization, the only global forum with tripartite representation, has developed an international code of labour standards for Member States to use as guiding principles for their own legislation. For the ICFTU, the ILO's core standards are fundamental to ensuring that the pressure of competition in the global market does not lead to a vicious downward spiral in conditions of work and life.
The question of linking these standards to the process of further trade liberalization set in motion by the new Multilateral Trade Agreement through a social clause is among the most controversial facing the new World Trade Organization. However, up to now, the debate on the social clause has been dominated by those with a vested interest in keeping standards low. The ICFTU's job is to try and get across the real message about the social clause:
The ICFTU wants a Social Clause to be based on the seven core ILO standards:
These standards are amongst the most highly ratified of the ILO. Nearly 100 states have ratified at least five of the seven. They are not just industrialized country standards; they constitute the most accepted standards in the world for the following reasons:
Universal adherence to the seven basic ILO standards would prevent the most extreme forms of exploitation and cut-throat competition. It would not end developing countries' comparative advantage; but it would establish a process by which wages and working conditions could gradually be improved as trade increases. This would encourage the growth of consumer markets, stimulating both domestic and foreign investment and, most importantly, employment. It would help to ensure a more balanced expansion of world trade and a smoother process of adjustment to changes in the global division of labour.
The ICFTU must work to bring about the inclusion of a social clause in the WTO and similar international agreements, The text of the clause should be along the following lines:
"The contracting parties agree to take steps to ensure the observance of the minimum labour standards specified by an advisory committee to be established by the WTO and the ILO, and including those on freedom of association and the right to collective bargaining, the minimum age for employment, discrimination, equal remuneration and forced labour."
The aim of the social clause is to ensure that
the promotion of trade goes hand-in-hand with enabling workers to exercise their basic rights. It would strengthen the political authority of the WTO and break, rather than build, barriers to world trade. It would be a means of solving disputes that, if unresolved, might increase pressures for protectionism. And it would serve to promote the access of developing countries to world export markets.
The social clause directly addresses the behaviour of those TNCs that play one country against another in the search for cheap labour and low standards. The ITSs have been responding to increasing requests from trade unions in host countries in coping with these irresponsible TNCs. ITS have made a number of significant breakthroughs and have been able through negotiations with TNCs in the home country to introduce new and better ways of working, including training, better wages and industrial relations leading to increased productivity. But such companies face unfair competition from anti-union, standard-cutting TNCs. As part of its campaign for a social clause, the international trade union movement needs to develop increased co-operation with responsible TNCs in order to promote mutually acceptable standards of a kind that a social clause would embody.
A joint WTO/ILO Advisory Body could oversee the implementation of the social clause. At regular intervals, or where there was a complaint, the joint body would review how the seven core ILO standards were being applied. The report would show that either the standards were being followed or that certain changes in labour law and practice were needed. In the latter case, the report would make recommendations to the country concerned on the changes required and, if necessary, the ILO would offer to help countries reach these objectives.
There would then be a further report after the government had had enough time to take the necessary action. This second report could show that the country was now in conformity with the specified standards; or that the problem had not yet been solved but progress was being made; or that the government had failed to co-operate.
If progress was being made another report would be prepared in a year or two.
If the government concerned was clearly ignoring the ILO's recommendations, it would be warned that it had one year to co-operate.
If there was still no movement, the matter would be referred to the WTO Council for consideration of measures designed to ensure a constructive response from the government concerned.
Such a step-by-step procedure provides all the elements of transparency, predictability and objectivity that an effective multilateral system requires. It builds on the established competence of the ILO. It also provides adequate time for problems to be solved by dialogue. It avoids the danger of heavyweight trading powers trying to dictate terms for market access to small countries. And it is even-handed. All countries would be subject to equally close scrutiny by reference to universal standards. In all cases, fully transparent procedures would be used which would leave no opening for misuse for protectionist purposes. An internationally-recognized set of minimum standards enforced through the social clause would be a much more certain way of avoiding protectionism than the growing use of bilateral arrangements.
The Conventions of the ILO contain a built-in flexibility which makes them applicable to all countries whatever their level of development. The ILO does not attempt to impose a rigid global harmonization of labour laws but rather examines whether the effect of laws and practice ensure that its main principles are applied. The same would be true of the standards proposed by the ICFTU for inclusion in the social clause. There can be no compromise on the principles those standards embody; but how they are translated into law and practice will have to vary according to the institutions and customs of the country concerned. The notion that the social clause threatens national cultures is a myth created by vested interests. In fact, it is the pervasive commercialism of the free market that is the real threat. National cultures cannot survive where people have no power to control the market for their own and their community's benefit. The social clause would effectively empower the people and their communities to maintain their cultural identity.
The international community has an obligation to help poor countries escape from the poverty that forces children out to work; and to help fund the education programmes that will get them back to school. But the first step requires tough laws banning employers from using children as cheap labour. The social clause will ensure that those countries genuinely embarked on a path of reform aimed at protecting their children from exploitation and abuse are not undercut by countries that are less scrupulous.
The ICFTU position - and that of all independent and democratic trade unions - is that the lowering of standards and the denial of rights and exploitation at the workplace should not be allowed, and that this principle reflects the interests of workers in developed and developing countries.
We believe that the ultimate strength of an internationally accepted social clause is that it would protect those developing countries that seek to improve workers' living standards, against competition from countries that continue to allow exploitation of workers.
Industrial countries would benefit from a social clause too. A more balanced development of consumer markets around the world would generate further growth but would not end the need for labour market adjustments. These adjustments would be easier to justify against the background of a common set of core principles for the treatment of workers. Further growth of world trade would also open up new employment opportunities both in industrialized and developing countries.
There is a major debate going on about the international financial system. The second Mexican debt crisis; the persistence of adjustment problems in Africa; the need to support the countries of Central and Eastern Europe as well as the republics of the former USSR; the increased risk of major bank failures and the threat that exchange rate volatility will weaken sustained recovery in the industrialized world _ all these point to the clear need for drastic reform. So far, the G7 finance ministries have resisted calls for change but with the danger of more big shocks looming, the pressures are mounting.
The ICFTU's aim is to seek to influence the IMF and the World Bank to introduce:
Failure to co-ordinate has locked all countries into a pattern of restraint despite the fact that there is no global shortage of capacity or resurgence of inflation. The ICFTU's proposals are meant firstly to stop national governments exporting their problems by relying on other countries to lead a recovery in growth. Co-operation and co-ordination between countries is essential to ensure that a broadly-based expansion is achieved which prevents large and unsustainable payments imbalances and exchange rate fluctuations.
A second aim is to dampen speculation by making it more costly to the financial traders and to reduce the risk of large-scale financial collapse.
Thirdly, the ICFTU package would encourage governments and the international agencies to tackle the underlying social problems which are usually at the root of financial tension. It would support democratic governments who aim at structural adjustment with social justice and the creation of viable jobs.
Democratic governments cannot shirk their responsibility and surrender their citizens to the arbitrary forces of the free market. In a much more open world economy and a labour market which is also global, governments need to establish a new institutional framework for public policies to ensure that market outcomes are socially just. Such a new approach must be based on much closer international co-ordination, and the recognition that the strengthening and expansion of democracy is essential for sustainable development.
The UN Social Summit demonstrated that trade unions are not alone in questioning the direction in which global market forces are leading the world. At a time when many industrialized country governments, and their electorates, are preoccupied with their own social problems, it is vital to show that global solidarity is a necessary part of the measures required to create jobs and eliminate poverty at home as well as in the developing world. The market solution for the well-off to the growth of poverty is to offer them private security guards and put up high fences around their property. A similar isolationist solution to the world's global social crisis would be disastrous.
The fundamental battle is to ensure that the principles of democratic government are not undermined by the market and that working men and women are able to influence their own futures. Nowhere is this more acute than at the workplace. Trade unionists live out the reality of the global market. They see its tensions and its dangers, as well as the potential it holds for enlarging the opportunities of the millions who live on the margins, struggling for the basic essentials of a decent life. A global economy driven solely by unrestrained market forces must be rejected in favour of economic co-operation and social solidarity.
Our experience shows that laws are needed to prevent the powerful and wealthy from exploiting the less advantaged. Private investment does not remedy the failure of markets to provide basic necessities to the bulk of society. People are not commodities to be bought and sold. They demand a say in their lives and the future of their communities. Markets have to operate in an institutional framework established mainly by governments but also by civic organization like trade unions which balance a broad range of social aspirations with the commercial interests of business. The rapid pace of globalization and the dominance of the free-market dogma has opened up a huge gap between the ability of national governments to deal with the adverse effects of the market and at the same time to adjust to fierce competition for investment.
The ICFTU's response to the increasing tensions caused by this imbalance between social and economic policy is our programme for building global solidarity. Its key elements are:
Chapter 3: Strengthening the voice of working men and women through international trade union solidarity
The political map of the world has changed dramatically in the last ten years, and trade unions have played a significant role in that change. In many countries, through the years under totalitarian rule, the international solidarity organized through the ICFTU provided vital support that helped trade unionists fighting for freedom. ICFTU affiliates can be proud of the work they did. The scale of the change we helped to bring about is enormous: about a quarter of the world's workers now live in countries which ten years ago were governed by military dictators or were totalitarian one-party states.
While the independent and democratic union movement fought to bring the tyrants down, free marketeers queued up to do deals with them that delayed the breakthrough of democracy. Now they hail the fall of the Communist system and its imitators in the developing countries as a victory for the free market, when, in reality, it was a triumph of democracy's ability to give a freedom that could cope with a rapidly changing world over a totalitarian rigidity that could not. The free marketeers try to persuade new governments desperate for foreign investment that efficient social protection and strong trade unions are a threat to development. As a direct result of this pressure many trade unions are facing legal obstacles, harassment, and intimidation in the very democracies they helped to establish, and are anxious to protect _ and, at the same time, the struggle against dictatorship itself is by no means over. Economic and social uncertainty feeds authoritarian trends. The number one priority for the ICFTU therefore has to remain the promotion and defence of trade union rights.
Our vision of society is fundamentally different to that of the free market idealogues. Our objective is to help organize the use of the world's main resource - its people - to improve the general welfare of society and especially its weakest members. Market-based systems of production, exchange and distribution can help to achieve this objective, but only where they operate within a framework of laws and government policies that ensure that societies' goals are not damaged by powerful private interests. In recent years a resurgent philosophy of narrow individualism has exercised a strong influence over political debate not least as a result of the efforts of the business community to reduce the role of government policies and legislation in restraining the divisive effects of the pursuit of private profit. Trade unions believe this philosophy to be fundamentally flawed. An individual's sense of identity and self-esteem is determined by how they interact with others in society, and crucially through the work they do, not simply by how much wealth they can acquire. Material prosperity is important, especially to those who do not have the means to live a decent life, but people have a broader conception of values that can only be realized by working together for the betterment of their community and indeed for humanity as a whole.
Trade unions are people working together. Social organization based on a shared work experience is a natural response to an individual's desire to improve their own and their fellow workers' contribution to a better society. At the heart of our movement is the goal of human dignity - the sense of being a valued member of society because work is recognized as important, is fairly rewarded, safe and secure, and people are treated with respect at work. Mass unemployment and poverty are an intolerable waste of resources and a dangerous threat to social cohesion and, indeed, peaceful international relations.
When the pursuit of private profit through the unrestrained mechanisms of the market is elevated to the primary goal of public policy, the aims of improving the general welfare of society and especially its weakest members is inevitably compromised. Human dignity and social justice are sacrificed to the benefit of elites of the wealthy and powerful. And basic democratic rights, especially workers' rights, to form and join trade unions of their own choosing are undermined.
Our advocacy of trade union rights is therefore part and parcel of a wider debate over identifying the failures of the market and remedying them through the action of democratically accountable public authorities. We believe that many other social organizations share our values and concerns, including some sections of the business community that recognize the importance of balancing the innovative dynamism of private enterprise with the wider objectives of fairness, justice and democracy. With the advent of a global market economy this debate is now also global. The ICFTU is a focal point for unions in seeking to ensure that an alternative vision is forcefully argued of how the international community should organize itself to ensure that human endeavour is harnessed to the needs of the many and not the few.
Strengthening the system for the implementation of ILO standards therefore remains central to the ICFTU's work to defend union rights. 1995 proved to be a year when the value of sustained trade union effort brought results. Our campaign for an international social clause has helped to focus attention on the scandal of the persistent abuse of workers' rights. As a result of pressure from its Workers' Group, the ILO launched a campaign for the universal ratification of the core Conventions on human rights at the workplace as the centrepiece of the ILO's contribution to the UN Social Summit. The work the ICFTU put in contributed to the winning of a commitment from the world leaders at the Summit to promote respect for ILO Conventions. The World Bank, often seen as symbolizing the free market world order, shocked some of its supporters and critics when its 1995 report said that the right to join a trade union is a cornerstone of democracy, and that collective bargaining produces positive results for workers and employers. And at a meeting at the highest level, the UN has clearly stated that respect for basic workers' rights is an essential element for successful social development. The task facing the ICFTU and its affiliates is to build on this progress to make sure that the ratifying of ILO standards and the honouring of international commitments are delivered.
The ICFTU must and will continue to develop its network of contacts, and mechanisms with the ILO, other UN agencies, and the UN itself, so that it spreads to embrace and influence the ideas and actions of the IMF, the World Bank, and the World Trade Organization. In part this can be achieved by ensuring that trade union views are inserted at an early stage of the preparation of key policy initiatives. The receptiveness of international organizations to such views is improving as a result of the ICFTU's work at, and in the preparation for the World Social Summit, and its persistent lobbying of the IMF and the World Bank. Ultimately our influence at international level is a reflection of national affiliates' relations with governments and, in particular, those of the leading economic powers that form the Group of Seven. There is a direct link between the strength of unions at the work place and nationally, and the influence that the ICFTU can bring to bear at the international level. How unions develop and adapt to the new bargaining environment globalization has created, and the ability of their international organization - the ICFTU - to shape the framework of policies and rules that govern the functioning of the global market, are closely interconnected.
Every union has constantly to keep up to date its organizing strategies to meet the changing needs and aspirations of workers and the rapid pace of change in the labour market. There is no single model for success but some of the key elements identified by the ICFTU's affiliates are:-
Grassroots Organizing with a Focus on Women and Youth
The strength and credibility of a union is founded on its ability to recruit and retain a significant proportion of a national, industry, or company workforce, and through representation and organization, obtain good pay and conditions from employers and a strong framework of social protection from governments. But the structure of industry, the structure of work, and the aspirations and attitudes of workers are changing. Unions have to modernize to keep up with these developments. This means looking at the way they prepare for collective bargaining, encourage participation in union activities, communicate with their members, and improve services to the members. It also means more inter-union co-operation to organize the unorganized, and looking for new levers of influence to supplement the more traditional roles of collective bargaining and lobbying. Two key groups of special importance to the future of our movement are women and youth.
Women in all countries are the largest group of marginalized citizens and workers, and, while there has been a steady growth in women's membership, unions are not recruiting them on anything like the scale they should be. Because the workplace is a key factor in improving the life chances of women, trade unions have a major role to play. Ending discrimination at work is an essential step in making the principle of equal opportunity a reality. Concerns such as equal pay for work of equal value, sexual harassment, provision of child care and parental leave are increasingly being treated as mainstream trade union issues. In some countries, unions have secured a significant number of improvements in women's employment and working conditions.
The need to harmonize work with family responsibilities is a key issue facing both women and men. Dual earner and single parent families are increasingly common. Most parents are forced to juggle household and family responsibilities with involvement in paid work based on male employment patterns. There is a need for a redistribution of household and family tasks to match the reallocation of employment responsibilities to both women and men. There is also a need to develop worker friendly flexible working patterns which are attractive to both men and women. Part-time work has done little to meet women's aspirations for employment nor to modify gender roles. New employment models need to be implemented which allow women and men to combine a career with family commitments while maintaining their quality of life, including career breaks and parental leave.
At workplace level, unions must strengthen their efforts to recruit women workers. Innovative methods of recruitment must be reinforced by organizational changes within unions to show women members that they are guaranteed the opportunity to participate in union activities, and to be elected to serve as union representatives, on policy-making bodies, and at executive level. The ICFTU has developed a whole range of positive action policies to improve the representation of women in policy and decision-making positions, for example, the ICFTU Executive Board now has five reserved seats for representatives of the Women's Committee.
The growth in youth unemployment across the world is a criminal waste of young ambitions, talents and hope, and one of the most serious indictments against the free-market system. In Latin America, five million of the fifty million young people in the workforce cannot find a job. By the year 2000 the ILO expects this figure will have risen to 6.5 million. In Africa, most young people do not find formal employment until they are 25. In most OECD countries, youth unemployment is higher than 15%.
The trade union movement must lead the fightback against this scourge, and to do so, it must redouble its efforts to recruit and retain young people. Trade unions are now having to compete for young peoples' attention against a wide range of activities. But there is plenty of evidence that the young are still prepared to commit themselves to a cause. And trade unions have the advantage of meeting and getting to understand the aspirations of the new generation of young women and men at the work place. The movement must build up a cadre of young activists who can speak the language of modern youth, and win them for the cause of trade unionism.
Most union members are workers who have an employment contract. And a large part of what unions do is aimed at establishing and improving the rules that govern such contracts either by agreement with the employer or through the law. But hundreds of millions of workers, mainly in the developing countries are working in the so-called "informal sector" where neither legally-binding private contracts nor statute law is enforced. For such workers the security of a contract which guarantees them payment for the work they do is a far distant dream. Landless agricultural labourers or building workers or domestic servants or the millions who toil in unregistered sweatshops are totally at the mercy of their employers or the gang-bosses who control this law-less labour market jungle. What they are paid, when they are paid, whether they keep the job, how long they work, is beyond their control.
A few courageous unions have managed to begin to organize in the informal sector and establish a limited degree of security and support for such workers, often through small cooperatives. They face the most difficult and dangerous problems in organizing and need the support of union members in the formal sector, both within their own countries and internationally. Most important of all they need the backing of local and national government to oblige employers to become legally registered and thus begin a step-by-step process of securing basic minimum conditions of work for the world's poorest people.
International development agencies, like the World Bank, must also decisively reject the advice of those economists who believe the informal sector is some sort of miracle cure for unemployment and the adverse consequences of structural adjustment. It is a poverty trap from which few small businesses let alone their workers ever escape. The absence of any legal framework for markets to function creates a climate of insecurity in which corruption, intimidation and a gangster form of business culture breeds. There is now a widespread agreement that good governance is a key to successful development. The informal sector will be a constant brake on efforts to reform and modernize the role of the state in developing countries until the immense challenge of establishing basic legal rights for workers and enforcing them is addressed. Creating conditions for unions to organize in the informal sector is one of the key steps in such a strategy.
Ignoring the problems of workers in the informal sector in the drive to create a global market economy will exacerbate the problems of growing inequality within and between nations. International businesses must therefore also work with governments and trade unions to extend basic labour standards to the workers in the millions of subcontractors who are at the end of often long and international production chains that supply the major consumer markets in industrialized countries. A number of responsible TNCs are now adopting codes of conduct which specify basic minimum employment conditions. The ICFTU, ITS and their affiliates are increasingly active in negotiating and implementing such codes. This is a welcome development which has considerable potential not least because it links the growing concerns of consumers about the exploitation of workers to practical action to extend the benefits of world trade to developing countries' poorest citizens. Such codes are an innovative approach to organizing in the wild frontier of the global economy.
The ILO has ensured that labour conditions and social policy are promoted as a bulwark against repression, discrimination and exploitation. Now it is under fierce attack from the advocates of free market neo-liberalism. Its international standards and the systems developed to promote their implementation were painstakingly negotiated through a unique tripartite constitution involving employers, trade unions and governments. It is the global parliament where economic and social problems can be thoroughly debated and solutions worked out to meet the different goals of its constituents.
The ICFTU has consistently argued that the ILO's role in the family of international institutions must be enhanced to meet the increasing tensions within and between nations that intensified global competition is provoking. The core of its work is the international labour code that its Conventions and Recommendations represent. They constitute a strong set of principles which all governments should use to guide their laws and practices in the social and labour field. Time and again the ILO has proved its value as a place where the international community can help governments, trade unions and employers find a basis for resolving disputes which at their most extreme can threaten social stability and have damaging effects on a country's international relations. The ILO's role in Poland and South Africa, to name only two cases, demonstrated its enduring relevance to the international community and especially to working people. The ICFTU will fight vigorously to defend the ILO and its international labour standards.
Most developing and transition countries face major obstacles on the path to development. Labour forces, especially in the developing world, are growing as more young people join the job market only to end up in the informal sector. Many countries are falling further and further behind in a world economy based on knowledge and skills because high foreign debt and stagnant levels of aid have caused reductions of investment in education and training. The IMF's and the World Bank's influence over economic policies leads to immense and immediate social costs, but uncertain and long delayed returns. In many cases, dictatorships and elites monopolize the benefits of any economic growth and maintain their privileged position through corruption and by repressing unions, even to the point of violence and murder.
Workers in developing countries constitute an ever-increasing share of the world's workforce, and, potentially, of union membership. The ICFTU must continue to work with trade unions in developing and transition countries to evolve further their independent structures, democratic decision-making procedures and build up an effective membership base with adherence to the criteria set out in the ICFTU Constitution. We must work with affiliates in industrialized countries to campaign for more and better-targeted international aid by convincing people that poverty anywhere is a threat to prosperity everywhere. And we must lobby to humanize the policies of the IMF and the World Bank, and campaign for an open world trading system based on respect for fundamental labour standards.
The development of trade union relations with TNCs, including at the level of the global corporation, is an important element of new union strategies to promote workers' interests.
Unions and TNCs are beginning to develop international systems for information exchange and consultation. An increasing number now meet regularly with ITS, mostly at a European level, but also on a world basis. This is a logical development for both unions and companies which should be encouraged. TNCs often play a leading role in the labour market which other employers subsequently follow. Building an international dimension to union relations with such companies is a vital element in securing the trade unions' role in a changing global market. The ICFTU will therefore need to be able to respond to the ITS in their efforts to establish international information and consultative councils and to strengthen union representation within TNCs. As leading actors in global integration TNCs too have wider social responsibilities. International rules to clarify and harmonize the commercial rules concerning TNCs, such as the OECD's initiative to develop a Multilateral Agreement on Investment and possible similar moves within the WTO, must be accompanied by a strengthening of the ILO Declaration and the OECD guidelines.
In a global market, all countries have to become skilful in managing change, especially in adapting work processes and the structure of employment. We know, but must convince others, that sound industrial relations and well-functioning tripartite systems for consultation are the best method:
Trade unions must work to prove that an approach built on independent and democratic union involvement is infinitely more productive and profitable than an anti-union, conflict-based approach.
The major factors that will influence the ability of trade unions in the 21st century to defend workers' rights and living standards effectively are:
These are the key priorities for unions in the 21st century which the ICFTU must target in its work as the voice of labour at the world level and as the leading trade union organization for the mobilization of international solidarity within our movement. Our XVIth World Congress will need to focus on how to reshape our activities and methods of work to address these issues.
The major role for the ICFTU in helping unions to recruit and retain members, is to work at the international level to change the climate of hostility to unions that has emerged in the last two decades. This report has argued that collective representation of workers from the work place to the international conference chambers is essential if the divisive effects of unrestrained free markets are to be stopped from destroying the social fabric of our nations and the democratic principles upon which good governance and peaceful international relations are founded.
The ICFTU will therefore have to continue to oppose those remaining anti-democratic regimes which outlaw the practice of free trade unionism. We will have to step up assistance to trade unions that are having to try to function under laws that inhibit freedom of association and the right to collective bargaining. We will have to focus attention on protecting union organizers and members from victimization.
Trade union education is a vital component in building up the strength of unions. A large part of the international solidarity assistance offered by ICFTU members is channeled to helping emerging unions develop their own education service. Most of this assistance is done through direct union to union contacts, with a significant amount organized through the ICFTU and the ITS. We must set up mechanisms to constantly review the effectiveness of such solidarity to ensure that successful techniques are spread and adapted to the specific needs of unions in different countries and sectors.
An important part of the ICFTU's and affiliates' solidarity work is focused on adapting union policy to meet the needs of women workers. This is already producing successful results in terms of broadening union organization and helping affiliates to bring the benefits of union representation to women. Well focused international activities are an important means of enhancing the work of unions for women workers and thus of extending our membership base.
In order to maintain our strength in the 21st. century unions must ensure that young workers are brought into our membership now. Organizing young workers highlights the importance of unions moving with the times to make their methods relevant to the new issues at work and in society. Again international cooperation and solidarity is an important means for unions to spread and adapt the most successful techniques for organizing young workers and learn from each other about new policy responses to the global problem of youth unemployment.
International labour standards are an essential point of reference for trade unions the world over as they seek to change the social and political environment in which they work. Strengthening the ILO, and defeating the attacks which threaten its very existence, are therefore central to all the ICFTU's work. We must help unions to use the ILO's standards and create new mechanisms for pressurizing governments to observe them. The ICFTU's social clause campaign is a major element in this work alongside our efforts to keep governments to the commitments made at the UN Social Summit and ensuring that aid, and IMF and World Bank programmes encourage governments to base their development strategies on sound industrial relations' systems founded on ILO standards.
A three-pronged union strategy is needed to increase the ability of unions to organize and help workers in the informal sector. The elements are:
The ICFTU will promote this strategy with the international development agencies and help affiliates to win the support of governments. The strategy also underlies our child labour campaign which addresses one of the worst aspects of the informal sector poverty trap.
The strong message to the ICFTU from affiliates all over the world is that workers feel increasingly insecure and concerned about whether they will keep their job and what pay they will get. They see rapid and continuing change all around them and are looking for help to find a way forward for themselves, their families and their communities. They often want to see change because it holds the prospect of a better life, but they also want to have a say in the process. And they are looking to unions to provide them with the security of having a voice to express their fears, aspirations and ensure that change leads to improved conditions of work and life.
Unions are responding to this message and are looking to the ICFTU to help them get a say in a process which is clearly driven by international pressures. In many countries the focus of concern about the direction of change is the programme of structural adjustment and reform inspired by the IMF and World Bank. The ICFTU and its regional organizations have therefore organized with affiliates a series of major conferences around the theme of the social dimensions of structural adjustment and regional integration. Their main purpose has been to create a platform for unions to debate with government and the international agencies the direction of national development strategy and the need for stronger social policies. They have proved to be a successful example of unions taking the lead in expressing widespread popular concern about the effects of national and international policies and the need for new policies to address the social consequences of change. These high profile public events have also helped unions to develop new strategies to increase their relevance to workers and attract new members and supporters. The ICFTU will now therefore need to review systematically with affiliates and our regional organizations how to link the services we can offer to the national strategies unions are developing to modernize and reposition their organizations to meet the challenges of globalization.
A similar exercise of review is also needed to increase union influence over the corporate strategies of the TNC. In recent years ITS have considerably increased their ability to bring together unions from different subsidiaries of key TNCs for discussion amongst themselves and sometimes with management of how companies are changing and the effects on workers. Unions are also increasingly aware of the value of well-prepared international solidarity support for organizing and collective bargaining. In some cases new methods of influence such as shareholder and consumer campaigns have been developed to support union objectives. The breakthrough in Europe of establishing a legal right to information and consultation with TNCs through European Works Councils will be a further catalyst for change. Together with the ITSs, their European industry committees, and the ETUC, the ICFTU will be examining how to build on this progress and establish a new countervailing union influence on the world of international business.
Both in terms of a union's role in national strategies for economic development and at the work place and within companies, unions are putting forward constructive proposals to show how union representation and collective bargaining is a key element in balancing the forces of competition with wider social objectives.
Unions are demanding a say in the management of change. Where this is refused, of course, with unions will have to be ready to use their strength to mobilize opposition to change that does not address and deal with the problems it can cause for workers. Nevertheless, a new role for the ICFTU, together with ITSs, is emerging of bringing together unions to exchange views and develop common policies on how to shape the way in which new technologies and new management techniques are applied and, in particular, how unions can organize themselves to promote employee involvement in companies. The starting point for such work is, of course, the recognition of basic union rights, but there is scope for the ICFTU to work with affiliates and the ITS to promote a positive message of the value and relevance of strong and independent unions to meeting the challenge of the global market.
After more than a decade that has seen the avarice of unrestrained market ideas sweep across the world, years that have seen deregulation and privatization penetrate the policies of every government, no-one questions that the job we have to do is vast. Affiliates at the sharp end, who are increasingly aware that their problems are such they need to work with other unions in other countries know also that resources are limited. The incomes of many of them have been squeezed by recession at a time when new services had to be developed.
Logic and experience tells unions that affiliation fees needed to be increased to take account of inflation. These increases have had to be matched with a well thought out reorganization that both ensured careful control of costs, and radically improved the effectiveness of union work.
The ICFTU operates in the same tough and demanding climate.
It too must undergo a rigorous examination of every aspect of its structure. But it is essential that this be done against a policy mandate that gives the ICFTU a clear sense of direction.
The ICFTU's present stated objectives, together with the policy ambitions of the 1996 Congress, must be set out in the form of a focused set of targets for achievement, with progress being monitored by the Executive Board, and the next Congress.
The reorganization and re-equipping of the ICFTU must itself be a target of achievement that must be concluded over an affordable time-span. The aim would be to make sure that the ICFTU could deliver policy and campaign objectives through better co-ordination of information and effort within and between all levels of the international trade union movement.
Any reorganization would begin with an examination of the procedures that link the work of the Brussels headquarters with national centres, the regional organizations, the ITSs, TUAC, the WCL and the ETUC.
The strengthening of these contacts, essential as they are, will not of itself achieve our policy objectives.
National centres and individual trade unions have shown that it requires strongly focused campaigning to win union battles in today's harsh climate.
It is imperative that the role of the ICFTU's regional organizations be strengthened in a way that:
To be successful, ICFTU international campaigns would need to harness the expertise and experience of the ITSs, TUAC, the WCL and the ETUC.
One modern development that trade unions should not ignore is the rise of non-governmental organizations (NGOs) to become powerful lobbyists internationally and nationally. The ICFTU should be ready to build relationships and alliances with those NGOs whose principles and practice do not conflict with trade unionism.
If our campaigns are to succeed, the ICFTU must become the communications hub of an international trade union network. To do this effectively, we must all use to the full the power of new information technology.
In addition, with the potential this technology now offers, the ICFTU can promote the sharing of successful organizational and campaigning ideas and practices of union organizations.
Again, this approach would be focused on those areas of most concern to today's trade unions, such as recruitment, and how to get more women and young workers involved in the movement.
Whatever shape our campaigns may take, whatever targets become our priority, at the heart of all we do, lie the fundamental objectives of the trade union movement:
The ideals of trade unionism are timeless and more than a century has passed without ever diminishing the dedication of trade union activists. But there have been periods when all that we stand for and work for has come under threat. We are now in such a period. And the forces of greed that over the centuries have tried to stamp out the spirit of trade unionism are now more powerful that at any time in history. They have global ambitions that do not include trade unions. This is the greatest challenge that trade unionism has faced.