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The global market - trade unionism's greatest challengeSixteenth World Congress of the ICFTU International Confederation of Free Trade Unions 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
ForewordTrade 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.
Chapter 1: A world of widening divisionsIntroductionThe 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: A Rich Continent Living in PovertyAfrica 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: The Legacy of the Debt CrisisLatin 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. The battle to survive in Brazil's urban jungle Brazil has the world's biggest income gap between rich and poor, soaring unemployment (Sao Paulo alone has 1.14 million unemployed) and a complete absence of any welfare system. The minimum wage halved over the 1980s and now stands at 64 dollars a month, which incredibly is 33% lower than it was fifty years ago. Infant mortality in Brazil stands at 58 children per thousand, which is more than ten times the level in industrialized countries. For many of the children who make it through the perilous first years of life all that awaits them is a constant battle to survive on the streets where every night organized gangs of killers try to hunt them down. Brazilian streets are, for some, paved with gold. A recent study found that the informal economy, including prostitution, drugs and illegal gambling moves around $490 billion a year - more than the country's entire gross domestic product. A nationwide phenomenon, the underground economy is most visible in Rio de Janeiro, which has up to 200,000 stalls (or camelbs as both stalls and stallholders are known) and Sao Paulo, which has an estimated 160,000 - five times the number of shops. Camelbs are just a fraction of the informal economy. Nearly 40 per cent of the workforce of Rio is involved in "non-regulated activities", whether transport, repairs or running illegal lotteries. While some people make their fortunes from the informal sector, the condition of the overwhelming majority of workers was well summed-up in a report by the ILO Director-General: "Informal sector producers and workers are generally unorganized (although informal local associations of those engaged in specific activities may exist) and in most cases beyond the scope of action by trade unions and employers' organizations. Being unorganized, beyond the protection of the law and working at very low levels of productivity and income, they generally live and work in appalling, often dangerous and unhealthy conditions, even without basic sanitary facilities, in the shanty-towns of urban areas." The ICFTU believes that governments must accept their responsibility to implement policies to improve conditions in the informal sector. To this end government should provide training, small-scale credits and infrastructure such as electricity, water and buildings at the same time as promoting the application of labour standards and social protection. In this way, they can succeed in the long-term objective of incorporating this sector into the formal economy - in other words, "formalizing" the informal sector. (Source: ORIT and ILO) 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. Maquiladoras: new concentration camps of Central America The "new concentration camps" is how one trade unionist described Central America's "maquiladoras" or Export Processing Zones (EPZs) where over 200,000 mostly women workers are employed making clothing and other consumer goods for markets in the United States and Europe. In Guatemala maquiladora workers are paid between $1 and $2 per day for 9-10 hour days. Sometimes they are forced to work as long as 18 hours. At the Lucasan factory in Guatemala, workers are locked in the factory from 8.00 a.m. to 8.00 p.m. six days a week. At other factories workers required to work until midnight have been locked in the factory until they begin to work again early in the morning. When large orders come in, workers are given amphetamines so that they can work 60 hours without stopping. Threats and verbal abuse are common and plant supervisors beat women workers for simple mistakes, for lateness or even for talking with co-workers. Sexual abuse by their bosses is one price many women pay to keep their jobs. The factories have few windows or ventilation fans and no protection against chemicals or dust. Exits are usually locked. The factories are often located in sheet-metal structures which are easy to dismantle and transport. They can be moved from one free trade zone to another or even from one country to another. That is exactly what happens when the owners want to avoid obligations to creditors, to the government and to their workers. Changing the officially-registered name of the company is frequently done for the same reasons. Even thinking about a union can cost a worker his or her job. Taking steps to form a union can have more serious consequences. Workers seeking are followed, transferred, dismissed, harassed, beaten, and are even threatened with death. Sometimes they just disappear - murdered for wanting a union. The following cases were reported to the ICFTU during the course of a few months last year. February 28, 1995: Deborah Guzman, a trade union leader at the maquiladora factory where she worked was abducted, blindfolded, bound, drugged, beaten and held until March 5. During her captivity she was forced to make telephone calls to her husband, another trade union leader, with the warning unless he resigned from the union she wouldn't be coming back. March 19, 1995: The body of Maquiladora union leader Victor Alexander Gomez Virula was found in a ravine three days after he was reported as missing by his union. The authorities refused to act. After the body was found other leaders of the same union, including its General Secretary were followed by vehicles with darkened windows and no license plates. March 29, 1995: Adela Agustin, member of the executive committee of another maquiladora union was attacked, beaten and left on the ground. This followed death threats from company management where she worked. May 17, 1995: Florde Maria Salguero de Kaparra, a union organizer for the Guatemala food workers' union, who had testified before the US Congress on worker rights violations in Guatemala's maquiladoras, was forcibly abducted, drugged, raped and beaten. Since then she has received anonymous phone calls by someone asking if she liked "her little present". Source: ORIT 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 Underside of the Asian MiracleThe 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. Child labour: rescue operations "People refuse to talk. Someone's getting there before us. When we arrive at a factory, they always seem to have been tipped off, and any children there may have been, have disappeared" complains Mercedes, a journalist for a private television station in Manila, working on a documentary on child labour. There are between three and five million child workers in the Philippines estimates Alejandro Apit, director of the Kamalajan Development Centre, the KDC. Created in 1992 with the support of UNICEF and the International Labour Organisation, the centre was initially supposed to concentrate on research into child labour and promoting "awareness" (or Kamalajan in Tagalog, the official language of the Philippines) of the problem. Very quickly, the organization turned into an action group, even winning the support of the Labour Minister, and the national bureau of investigation, the NBI. It was the discovery of ten child slaves in the country's largest sardine factory, Highlands Sardines, that triggered the process. "We had heard there were children in the factory. We knew they were isolated from the others and that they could not leave" reports Alejandro Apit. The KDC decided to send three young adults to get themselves hired by the firm. After a week they established contact with the children. "They were under 13, and we could hardly believe what they told us" recalls the director of KDC. The story of the children at Highlands Sardines seems to have been taken straight from the pages of Charles Dickens' blackest novels. Hunted down by recruiters in the south of the country, in Mindanao, the children are taken to Manila or Quezon City. The recruiter gets a commission and is reimbursed the cost of transporting and feeding the children. The money paid to the middleman becomes the debt owed by the young recruits to their future employers. The debt continues to grow and will probably be passed on to their children. "At first they were promised 23 pesos per day (barely one dollar) but 25 pesos were deducted for food. They never saw a single peso while they were at Highlands. Their skin was yellowed, they had to sleep on sheets of cardboard, seven to a tiny room that led onto a narrow corridor. If there had been a fire, they would have burnt to death." Employed as fillers, they had to cut the sardines and put them in tins. By the end of the day their hands were covered in blood. Apit contacted the Labour Ministry and set up the first rescue operation. A reluctant Highlands doorkeeper opened the gate when the NBI officer showed his card. Half an hour later all the children were out. "Some of the adult workers begged us to take them too" commented Alejandro. The KDC has carried out another ten rescue operations since then, releasing hundreds of children. They are taken to rehabilitation centres and gradually sent home, with a little money and assurances that they will go back to school. But the KDC first helps them get damages from their slave drivers, defending their case in the courts. "Later these children swore they would help us save others" assured Alejandro. Thanks to a meeting organized in Manila by the ICFTU and its affiliate the TUCP, Mercedes the journalist and Alejandro Apit the organizer will get help for the children to carry on breaking down the wall of silence. Source: Free Labour World Central and Eastern Europe - After the RevolutionFive 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. Chronic unemployment and growing inequality in industrialized countriesThe 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. Poverty in the land of plenty The gap between rich and poor is vast in the United States - and recent studies show it growing faster there than anywhere else. Three-quarters of the income gains during the 1980s went to the top 20 per cent of the families, who now control more than 55 per cent of all wealth. The rest - 80 per cent of all American households - get to split the rest. The richest one per cent of the households in the United States now control about 40 per cent of the nation's wealth - twice as much as the figure in Britain, which has the greatest inequality in Western Europe. In Germany, high wage families earn about 2.5 times as much as low wage workers; the number has been falling. In America the figure is above four times, and rising. The standard of living of the average American worker continues to decline. The real wages of American production workers have dropped by 20 per cent during the past 20 years, as millions of decent, well-paying jobs have disappeared. Between 1947 and 1973 the median paychecks of American workers more than doubled - and the bottom 20 per cent enjoyed the biggest gains. But since 1973, median earnings have fallen by about 15 per cent, and the bottom 20 per cent have fallen the furthest behind. More than 40 per cent of all earnings gains have gone to the richest 1 per cent. In the United Kingdom, almost seventeen years of Conservative government have produced a society in which poverty and inequality is rising and standards of education and health care are getting progressively worse. The share of wealth owned by the top 10 per cent of the population rose from 50 per cent to 53 per cent between 1976 and 1989. This reversed the previous fifty-year trend for wealth distribution to become more equal. The top 1 per cent of the population (about 600,000 people) each owned more than £250,000 ($450,000) in 1989. The income earned by the top 10 per cent rose by 62 per cent between 1971 and 1992 while the income of the poorest 10 per cent fell by 17 per cent. An international comparison of share in consumption by the top 20 per cent over the bottom 20 per cent in the developing countries shows that in India the rich consume 4.5 times as much as the poor, compared with 4.9 times as much in Indonesia, 7.3 times in Jordan, 13.6 times in Mexico, 15.6 times in Zimbabwe, 26.1 times in Tanzania and an incredible 32.1 times in Brazil. Source: AFL-CIO, UNDP, New York Times, Independent 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. The Global Division of Labour: The Changes - The ConsequencesOf 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. Wages around the world Net hourly wages in US dollars Tokyo: 15.3 New York: 12.8 Frankfurt: 11.3 Montreal: 10.1 Stockholm: 8.6 Paris: 8.5 Milan: 7.3 London: 7.1 Seoul: 5.0 Singapore: 5.0 Johannesburg: 3.8 Panama: 3.1 Sâo Paulo: 2.7 Mexico City: 2.6 Budapest: 1.2 Manila: 1.1 Caracas: 1.0 Bombay: 0.8 Lagos: 0.5 Nairobi: 0.4 Average of 12 occupations, weighted according to occupational distribution. Source: Union Bank of Switzerland, Prices and Earnings Around the Globe. 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. Learning the lessons of the Bhopal tragedy How many people died in the Bhopal gas leak and its aftermath? How many were injured? What are the long-term medical consequences of the worst industrial disaster in history? What are its lessons for the trade union movement as it prepares for action on environmental protection in the post-Rio era? These are questions that deeply concern trade unions. On December 3, 1984 a cloud of methyl isocyanate gas (MIC) escaped from the Union Carbide pesticide plant in Bhopal (India) killing at least 2,500 and injuring 200,000 people. There are now reports from Bhopal that 25,000 may since have died as a result of the leak. Large-scale illnesses caused by the gas leak are continuing. For many of those poor slum dwellers who survived the night when the 40 tonnes of MIC and other toxic gases escaped from the storage tank, life has become hell - completely debilitated and ravaged by the long-term inimical effects of the noxious gas. Bhopal is synonymous with the absence of concern for the welfare and safety of workers and people in the surrounding community. It also underlines operations of unregulated multinational companies who are indifferent to the inadequate protection they provide for the most vulnerable people in the developing world. From the Kader fire in a toy factory in Thailand to the many industrial disasters in China, it has been the workers who have paid the price of globalization with their lives. The large multinational companies (MNCs) with an aggregate sales of over US $5 trillion must, like all employers, recognize their responsibility to provide adequate safety and health systems for the protection of their workers. The ICFTU and ICEF investigated and published a report on the Bhopal disaster. The ICFTU also published a report entitled "Is there a Bhopal near you?" which elaborated 14 trade union principles for the prevention of chemical disasters worldwide. One of the most important and widely accepted principles identifies the meaningful participation of workers and their representatives as a prerequisite to proper management of occupational health, safety and the environment. This, together with the involvement of the community - an "Open Door" policy - could have prevented the Bhopal tragedy. Subsequent work by the ILO included the Convention and Recommendation on Safety in the use of Chemicals at Work, adopted in 1990. In June 1993, the ILO adopted a further important instrument, the Convention on Prevention of Industrial Disasters. In addition, the OECD countries have reached agreement on new international guidelines for chemical accident prevention, preparedness and response. These were developed with the participation of trade unions. In India itself, pressure from INTUC, HMS and other trade unions led the government to revise the laws governing occupational health, safety and the environment. All National Joint Committees of unions and employers for industries such as steel, coal, chemicals and petroleum now take binding decisions over occupational health, safety and environment issues and all national wage agreements have this as a major component. Source: ICFTU 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 Changing World of WorkThe 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. Commitments of the UN World Summit for Social Development Commitment 1: We commit ourselves to create an economic, political, social, cultural and legal environment that will enable people to achieve social development... Commitment 2: We commit ourselves to the goal of eradicating poverty in the world, through decisive national actions and international cooperation, as an ethical, social, political and economic imperative of humankind... Commitment 3: We commit ourselves to promoting the goal of full employment as a basic priority of our economic and social policies... Commitment 4: We commit ourselves to promoting social integration by fostering societies that are stable, safe and just and based on the promotion and protection of all human rights, and on non-discrimination, tolerance, respect for diversity, equality of opportunity, solidarity, security and participation of all people, including disadvantaged and vulnerable groups and persons... Commitment 5: We commit ourselves to promoting full respect for human dignity and to achieving equality and equity between women and men... Commitment 6: We commit ourselves to promoting and attaining the goals of universal and equitable access to quality education, the highest attainable standard of physical and mental health and the access of all to primary health care... Commitment 7: We commit ourselves to accelerating the economic, social and human resource development of Africa and the least developed countries... Commitment 8: We commit ourselves to ensuring that when structural adjustment programmes are agreed to, they include social development goals, in particular eradicating poverty, promoting full and productive employment and enhancing social integration... Commitment 9: We commit ourselves to increase significantly and/or utilize more efficiently the resources allocated to social development... Commitment 10: We commit ourselves to an improved and strengthened framework for international, regional and subregional cooperation for social development... Source: United Nations
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