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Is There a Declining Standard of Living for Workers in the Global Society Dr. E. Patrick McDermott Fulbright Asian Regional Lecture Program Griffith University.

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Presentation on theme: "Is There a Declining Standard of Living for Workers in the Global Society Dr. E. Patrick McDermott Fulbright Asian Regional Lecture Program Griffith University."— Presentation transcript:

1 Is There a Declining Standard of Living for Workers in the Global Society Dr. E. Patrick McDermott Fulbright Asian Regional Lecture Program Griffith University Brisbane, Australia The Race to the Bottom

2 The Race Focus on U.S. Your assistance as to how “the race” issues differ in Australia

3 Definition of the “Race to the bottom” Living Standards Labor Standards Environment Power of Workers to Influence Their Standard of Living by direct action Government – Our ability to influence our standard of living through government Other measures?

4 Definition – Who’s Vantage Point? U.S. centric view? Western centric? Organized Labor perspective? The “average Joe” What is the appropriate vantage point?

5 A “HOT” ISSUE – With or Without Buzz Words One view – Things are getting worse for the average worker: Tattoos and body piercing as a manifestation The age of the homeless in Australia Howard government and AWS – decline of the strength of organized labor Aftermath of the Brisbane dock strike - MUA Work transferred to countries such as China, Vietnam, etc.

6 Race to the Bottom Another View - Job skill centered view The Weekend Australian, March 29-30, 2008 – “New solutions in the fight for talent” _________________, April 1, 2008 – “Going global in search of scarce skills” _________________ -March 29 – 30 - “Enduring joy of temping” Quantas – “You never had it so good” – “A man no longer devotes 24% of the hours in a year to work, as was the norm in 1800”

7 Measurement - Always An Issue Tackling undeclared work in the European Union kling/search.php “Undeclared work can be defined as work which is in itself legal but is not declared to the authorities for tax, social security and/or labour law purposes.” kling/search.php

8 Measurement Use of subcontractors, licensing etc. Information about working conditions in China, Bangladesh, Vietnam, etc.

9 Measurement – Anecdotal Corporate greed is bankrupting America. When business costs go up they pass it on to the consumer with higher prices and employees laid off. Those laid off cannot purchase much and the result is more laid off. A profit does not seem good enough anymore. It must be as much profit as possible to please investors. Consumers only have a limited amount of income. When costs go up we have to adjust our priorities. It's not the lack of consumer spending, it's the lack of consumer disposable income that is causing our dilemma. As business seeks cheaper labor by not sharing the wealth, the result will be non-essential business bankruptcies resulting in more layoffs, continuing the downward spiral.

10 Will you lose your job in 2008? Measurement - The Economy – MSN Money - USA

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13 U.S. Crunch on the Middle Class CRUNCH ON THE MIDDLE CLASS: n.com/Investing/HomeMortgage Savings/WhyYouWillNeverOwn AHome_SeriesHome.aspx

14 Measurement – Anecdotal - Europe EAWOP Small Group Meeting on: “Job Insecurity in Europe: State of the Art and New Directions” 17–19 September 2008, Leuven, Belgium Call for Papers

15 Measurement – Anecdotal - Japan Conflicts between labor and management have increased sharply in recent years due to diversification in the realm of employment. In fiscal 2006, labor bureaus across the nation were consulted about 187,000 times over labor disputes, a figure 1.8 times larger than four years ago. The majority of cases, about 24 percent, were related to the dismissal of employees, followed by cases involving the downgrading of working conditions and workers being bullied or harassed.

16 Measurement - Anecdotal - Indonesia Rustam Aksam, president of the Indonesian Trades Union Congress, observed, “Every country is now competing to reduce worker rights....We’re racing to the bottom.”

17 Measurement of Worker Rights – U.S. Department of State/OECD/ILO Internationally recognized worker rights (OECD/ILO): the right of association the right to organize and bargain collectively a prohibition on the use of any form of forced or compulsory labor a minimum age for the employment of children acceptable conditions of work with respect to minimum wages, hours of work, and occupational safety and health.

18 ILO - Right of Association I. Right of Association: the right of workers and employers to establish and join organizations of their own choosing without previous authorization to draw up their own constitutions and rules, elect their representatives, and formulate their programs to join in confederations and affiliate with international organizations be protected against dissolution or suspension by administrative authority

19 Right of Association – Continued Right of workers to strike

20 Right to Organize and Bargain Collectively II. Right to Organize and Bargain Collectively: the right of workers to be represented in negotiating the prevention and settlement of disputes with employers the right to protection against interference, and the right to protection against acts of antiunion discrimination

21 Forced or Compulsory Labor Forced or compulsory labor is defined as work or service exacted under the menace of penalty and for which a person has not volunteered.

22 Child Labor Prohibition of child labor and minimum age for employment Raising the minimum age for employment to a level consistent with the fullest physical and mental development of young people. ILO Convention 182 on the "worst forms of child labor" identifies anyone under the age of 18 as a child and specifies certain types of employment as "the worst forms of child labor.“ (slavery, debt bondage, forced labor, forced recruitment into armed conflict, child prostitution and pornography, involvement in illicit activity such as drug production or trafficking, and "work which, by its nature, or the circumstances in which it is carried out, is likely to harm the health, safety or morals or children.) ILO Convention 182 permits the employment of children between the ages of 16 and 18 if adequate protective measures have been taken.

23 Acceptable Conditions of Work Acceptable conditions of work: establishment and maintenance of mechanisms, adapted to national conditions - wages that provide a decent living for workers and their families - working hours that do not exceed 48 hours per week, with a full 24-hour day of rest - a specified number of annual paid leave days - minimum conditions for the protection of the safety and health of workers.

24 U.S. - Union Membership I n 1983, the first year for which comparable union data are available, the union membership rate was 20.1 percent Union members account for 12.1 percent of employed

25 Is this a “race to the bottom” or realignment of flexible IR models? ILR Impact Brief - Workforce Alignment and Fluidity May Yield a Competitive Advantage Lee Dyer Jeff Ericksen

26 What does the Data tell us? Decline/Shift of manufacturing Some improvement in lesser developed countries Decline in organized labor

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42 Union Earnings – U.S. In 2007, among full-time wage and salary workers, union members had median usual weekly earnings of $863 while those who were not represented by unions had median weekly earnings of $663. For a discussion of the problem of differentiating between the influence of unionization status and the influence of other worker characteristics on employee earnings, see “Measuring union-nonunion earnings differences,” Monthly Labor Review, June 1990.)

43 U.S. – Union Trends Concentration - Workers in the public sector had a union membership rate nearly five times that of private sector employees. Sector - Education, training, and library occupations had the highest unionization rate among all occupations, at 37.2 percent, followed closely by protective service occupations at 35.2 percent. Age - Wage and salary workers ages 45 to 54 (15.7 percent) and ages 55 to 64 (16.1 percent) were more likely to be union members than were workers ages 16 to 24 (4.8 percent).

44 What has caused the decline of organized labor in the U.S. Exporting of jobs Aggressive management tactics (Wal-Mart, etc.) Bad leadership Cultural changes – What do the younger workers want?

45 Unions – For Longshoremen it has never been better -Container throughput up 10% -14,279 new workers -800 new longshoremen in Southern California -38 % increase in overall registered work force

46 Has the Tide Turned In the U.S.? HR 800 EH 110th CONGRESS 1st Session H. R. 800 AN ACT To amend the National Labor Relations Act to establish an efficient system to enable employees to form, join, or assist labor organizations, to provide for mandatory injunctions for unfair labor practices during organizing efforts, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE. This Act may be cited as the `Employee Free Choice Act of 2007'. SEC. 2. STREAMLINING UNION CERTIFICATION.

47 U.S. Senate S 1041 IS 110th CONGRESS 1st Session S To amend the National Labor Relations Act to establish an efficient system to enable employees to form, join, or assist labor organizations, to provide for mandatory injunctions for unfair labor practices during organizing efforts, and for other purposes. IN THE SENATE OF THE UNITED STATES SECTION 1. SHORT TITLE. This Act may be cited as the `Employee Free Choice Act of 2007'. SEC. 2. STREAMLINING UNION CERTIFICATION.

48 China and the “Race” As a prime beneficiary of globalization is China driving down labor standards? Has globalization bettered the life of Chinese workers?

49 China, Capitalist Accumulation, and Labor - A Socialist Viewpoint China’s growth has been driven by the intensified exploitation of the country’s farmers and workers, who have been systematically dispossessed through the break-up of the communes, the resultant collapse of health and education services, and massive state-enterprise layoffs, to name just the most important “reforms.”

50 China, Capitalist Accumulation, and Labor China’s gains have been organically linked to development setbacks in other countries. China’s growth has become increasingly dependent not only on foreign capital but also on the unsustainable trade deficits of the United States. Accumulation dynamics underlying China’s growth are generating serious national and international imbalances that are bound to require correction at considerable social cost for working people in China and the rest of the world.

51 China, Capitalist Accumulation, and Labor Base assembly-line wages in the Pearl River Delta - virtually frozen at about $80 per month for the past decade. Factor in inflation over roughly the same period, and average pay in real terms has declined by as much as 30%. With the price of raw materials rising and factory profit margins shrinking, blue-collar workers are at the losing end of a long chain of supply and demand.

52 China, Capitalist Accumulation, and Labor Anita Chan: “in reality the wages of the migrant industrial workers are often considerably lower than the official standards. For one thing, the minimum wage, set by the month, does not reveal the illegally long hours worked by migrant workers to attain that minimum. According to a survey I conducted in China’s footwear industry, the average workday there amounts to about 11 hours each day, often with no days off—that is, about an 80-hour work-week.”

53 China, Capitalist Accumulation, and Labor Regular formal wage employment in China’s urban sector actually declined at an annual average rate of 3 percent over the period 1990–2002. Total regular (formal and informal) wage employment remained basically unchanged over this period, registering a zero average rate of growth. Only irregular employment grew, increasing at an annual average rate of 18.5 percent. “DAGONG”

54 One recent example - Adidas “ Fair play is impossible, say Adidas workers ” (Sunday Times Investigation) $25 a week cheating on pay Forced OT with no pay Over 70 hours per week to get a living wage 5 strikes in last 12 months (unreported) Males not wanted (“boss thinks men are troublemakers”) “ Life is very hard. We work morning to night, but have no money left”

55 Pro-Globalization Perspective - Cultural Nationalism – The Last Resort of Scoundrels “Globalisation might be expected to have reduced the appeal of nationalism and the scope for intervention. But greater competition compresses the space for monopolists and rent seekers, and this is what has provoked the backlash.” Professor Eric Jones, Professorial Fellow, Melbourne Business School. Emeritus Professor La Trobe University Policy, Vol. 23,No.2,Winter 2007,

56 Classical Economics View Law of Comparative Advantage Labor is a Commodity No support for workers organizing to take “wages out of competition” No consideration of a “Social Contract”

57 “Racing to the Bottom or Climbing to the Top” Analysis of New Data set on collective labor rights Their analysis of the correlates of labor rights in 90 developing nations, from 1986 to 2002, highlights globalization's mixed impact on labor rights. As "climb to the top" accounts suggest, foreign direct investment inflows are positively and significantly related to the rights of workers. But at the same time, trade competition generates downward "race to the bottom" pressures on collective labor rights. Layna Mosely and Saika Uno, Comparative Political Studies, Aug. 2007, Vol. 40 Issue 8,

58 Is there a “Race to the Bottom” What is the appropriate vantage point? Socialist Classical economic (labor is a commodity) Industrial Relations Corporatist Darwinian Social Contract Other ?????

59 Is There a Declining Standard of Living for Workers in the Global Society Dr. E. Patrick McDermott Fulbright Lecturer East China University of Political Science and Law Shanghai, China The Race to the Bottom

60 Collective Consultation - Shenyang Regulations of Shenyang municipality on collective contract (Unofficial U.S. Embassy Translation) Article 1 In order to regulate the acts of formulating collective contracts, and to set up harmonious labor relations, these regulations are formulated based on the actual situation of Shenyang municipality in accordance with the ‘labor law of the people’s republic of China and the trade union law of the people’s republic of China’. Article 5 The United Migrant Workers' Union shall conduct collective consultation over the standards of labor remuneration, work safety and health, etc., and conclude collective contracts with the public service institutions or enterprises where the migrant workers are employed, or with relevant organizations of employers within a region or in a business sector.

61 Prohibited Conduct - Shenyang Not providing relative materials in signing a collective contract; Rejecting the request for negotiation from the other party Not submitting copies of a collective contract to the administrative division of the authority for labor and social security within the required time limit after the contract is signed or amended or not notifying the administrative division of the authority for labor and social security in a written form of the termination of a collective contract; Transferring employees' representative to a disadvantaged position or terminating the representative’s labor contract without reasonable cause; Deliberately delaying the signing of a collective contract or not completely fulfilling obligations of the collective contract;

62 Prohibited Conduct - Shenyang Forcing the other party to accept its demands by threatening, bribing, cheating and other malpractices; Obstructing or hampering the guidance from the trade union at a higher level to the trade union at a lower level in conducting collective consultation and signing a collective contract.

63 Collective Consultation - Shenyang The "United Migrant Workers' Union" is an organization unique to Liaoning Province. The first municipal level branch was set up in Shenyang by the municipal Free Trade Union in March 2006, offering free membership to migrants regardless of whether they had stable jobs or not. The union is also open to migrant construction teams, migrant home renovation workers, and those laid-off workers in the city who are in search of jobs. Press reports indicate that the union provides free job- hunting, training services and helps migrant workers who have trouble in schooling their children or shouldering medical costs. The union claims it can help migrants with legal-aid and demanding unpaid wages.

64 Right to Strike SHENYANG – Quit on Impasse SHANGHAI Article 32 Either party to the collective bargaining can apply to the competent labour and social security authorities for conciliation or settlement if one party refuses or delay the request for collective bargaining by the other party without justified reasons, or no consensus or a collective contract may be reached or concluded as a result of the collective bargaining. Meanwhile, the competent labour and social security authorities may initiate the procedure of conciliation or settlement at their discretion without application for conciliation or settlement by either party. During the process of conciliation or settlement by competent labour and social security authorities for disputes arising from collective bargaining, the competent labour and social security authorities may handle the cases jointly with the representatives from the trade union at the same level and the representatives from the enterprises. Article 33 If any disputes arise out of the performance of the collective contract, and the dispute or disputes are not settled even after consultation between the employees and the enterprises, both parties may submit the case to the competent labour and social security authorities for conciliation or settlement.

65 Collective Bargaining in China - Shanghai Regulations on Collective Labour Contracts in Shanghai Municipality (Passed on the 38 th Session of the Standing Committee of the 12th Shanghai Municipal People’s Congress on August 16, 2007) Chapter I General Provisions - Article 1 On the basis of the actual circumstances in Shanghai Municipality, these Regulations are formulated in accordance with the provisions stipulated in the “Labour Law of the People’s Republic of China”, the “Labour Contract Law of the People’s Republic of China” and the “Trade Union Law of the People’s Republic of China” and other relevant laws and regulations, to regulate collective bargaining, the establishment and fulfillment of collective contracts, and to protect workers’ legal rights and interests, for the purpose of building up and developing harmonious, stable labour relations. Article 2 These Regulations apply to labour relation issues concerning the collective bargaining, the establishment and fulfillment of collective contracts between the enterprises and the employees within the jurisdiction of the Municipality. Article 3 The “collective bargaining” mentioned in these Regulations refers to negotiations and consultations conducted by the employees of an enterprise as one party and the enterprise as the other on an equal footing over issues concerning Labour relations.


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