Changing World of Work & Challenges before Trade Unions in Asia Arun Kumar

Globalization How is it changing the world? Participants views… Picture Source: Kate Raworth, Oxfam presentation on Trade & Human Development

What is Globalization Promoting? New Economic Orthodoxy Supremacy of markets, the Government - a problem! Supremacy of markets, the Government - a problem! Therefore - Internationally: Open markets for trade, investment & capital flows, Internationally: Open markets for trade, investment & capital flows, Domestically - Privatize, focus on FDI rather than Foreign Aid (but no performance requirements on FDI), cut govt deficit & balance budgets, reform labour laws & business regulations (deregulate) Domestically - Privatize, focus on FDI rather than Foreign Aid (but no performance requirements on FDI), cut govt deficit & balance budgets, reform labour laws & business regulations (deregulate) Changing role of state - poses challenges for unions Changing role of state - poses challenges for unions

Implications of New Policies Shift from development cooperation to free trade; Shift from development cooperation to free trade; More competition between Unequals - High income countries have more than 80% of the world incomes, receive more than 3/4 th of the foreign investment and 3/4 th of the world trade is between them. More competition between Unequals - High income countries have more than 80% of the world incomes, receive more than 3/4 th of the foreign investment and 3/4 th of the world trade is between them. Equality of “access” (to international trade) does not mean equality of “opportunity” - unequal capabilities lead to unequal outcomes Withdrawal of ‘State’ from its economic role; Withdrawal of ‘State’ from its economic role; No public regulation of business – markets Know the best, will self regulate; No public regulation of business – markets Know the best, will self regulate; Labour flexibility & changing nature of employment weakens labour’s bargaining power Labour flexibility & changing nature of employment weakens labour’s bargaining power Strain on international labour solidarity Strain on international labour solidarity

Changing world of work What kind of Jobs? What kind of Jobs? Changing nature of employment relationships Changing nature of employment relationships Implications of flexibilization for workers rights (social security, skills, union rights, safe work, labour laws) Implications of flexibilization for workers rights (social security, skills, union rights, safe work, labour laws) The new worker – young, educated, migrant, women, precarious The new worker – young, educated, migrant, women, precarious Changing pressures on employers & ‘new’ decision makers (HRM, Financialization, Private Equity ) Changing pressures on employers & ‘new’ decision makers (HRM, Financialization, Private Equity ) Sources of trade union power? Sources of trade union power?

Global Economic Crisis - Result of ‘liberalization’, speculation, greed & ‘markets know the best’ philosophy - Who is paying the price for it? - What can we learn from it? What needs to be done?

Impact of Crisis Wage cuts/wage freeze – real wages fell from 4.7% in 2007 to 1.5% in 2008 – situation worsened in 2009, JOB LOSSES: 212 mn jobless world wide in 2009 – crisis added atleast 34 mn more since 2007 Globally pension funds lost over 5 trillion $$$ between 2007 & 2008) – higher loss in countries where pensions were privatized (ex in Latin America) Over 50% drop in FDI in some developing countries (UNCTAD), drop in aid too higher work loads, forced unpaid leave, default on SS contributions, rise in unprotected precarious work, violations of FoA & CBAs

Impact on Asia Capital Outflow from Asia (>100 billion $$$ in 2008) – its impact on Asian economies, stock markets & currencies? Capital Outflow from Asia (>100 billion $$$ in 2008) – its impact on Asian economies, stock markets & currencies? Impact of recession in western markets on Asian production, employment & economic growth Impact of recession in western markets on Asian production, employment & economic growth Impact of credit squeeze on domestic investments, industry & jobs Impact of credit squeeze on domestic investments, industry & jobs Remittances, foreign aid, govt revenue – all go Remittances, foreign aid, govt revenue – all godown

Responding to Crisis Governments’ fiscal stimulus packages - spending to offset the reduction in private sector demand Governments’ fiscal stimulus packages - spending to offset the reduction in private sector demand Bailing out Banks & firms thru loans, asset purchases, guarantees, and direct spending Bailing out Banks & firms thru loans, asset purchases, guarantees, and direct spending Central banks cut interest rates, expanded money supplies & eased requirements on collateral for refinancing Central banks cut interest rates, expanded money supplies & eased requirements on collateral for refinancing Banks & financial sector rescued BUT so far no effective measure taken to regulate financial sector or prosecute those responsible

Union view What should be the objectives of International financial markets & regulations? expand the casino in more orderly fashion OR regulate financial markets so that these serve the objectives of real economy? What should be the objectives of International financial markets & regulations? expand the casino in more orderly fashion OR regulate financial markets so that these serve the objectives of real economy? Regulate Global Finance - such as hedge funds & private equity funds; Close down tax havens Regulate Global Finance - such as hedge funds & private equity funds; Close down tax havens Create a financial transaction tax – to dampen speculation & raise funds for development – Ex: 0.005% tax on just currency exchanges & derivatives trading would raise $150 billion a year globally Create a financial transaction tax – to dampen speculation & raise funds for development – Ex: 0.005% tax on just currency exchanges & derivatives trading would raise $150 billion a year globally Regulate executive & shareholder bonus & remuneration – to discourage short term view of financial investments; Regulate executive & shareholder bonus & remuneration – to discourage short term view of financial investments;

Union view End deregulation of employment market & ensure respect for fundamental rights of workers (FoA & CB rights) End deregulation of employment market & ensure respect for fundamental rights of workers (FoA & CB rights) Ensure basic social security for all (effective social protection measures would have minimized ‘impact of economic crisis’ and assisted in improving effectiveness of stimulus/recovery packages) Ensure basic social security for all (effective social protection measures would have minimized ‘impact of economic crisis’ and assisted in improving effectiveness of stimulus/recovery packages) Role of State – in providing social security to all – State is the ultimate financial guarantor - social security should be seen as human right and not as a savings account of individual contributors Role of State – in providing social security to all – State is the ultimate financial guarantor - social security should be seen as human right and not as a savings account of individual contributors What else??? What else???

ILO’s Response Global Jobs Pact adopted in June 2009 – Global Jobs Pact adopted in June 2009 – a framework for Decent Work led policies aimed at economic recovery with job creation and the provision of social protection to working people and their families at its core; Process: Tripartite dialogue with social partners for addressing the crisis & developing national policy response. Process: Tripartite dialogue with social partners for addressing the crisis & developing national policy response.

What does Global Jobs Pact signify? No return to business as usual No return to business as usual Decent employment intensive growth pattern, including promotion of green jobs Decent employment intensive growth pattern, including promotion of green jobs Need for Wage led recovery process (MWs, CB) Need for Wage led recovery process (MWs, CB) Set up / Extend Social Protection Floor (basic social security for all) Set up / Extend Social Protection Floor (basic social security for all) Regulate financial & tax system to serve the interests of real economy & people Regulate financial & tax system to serve the interests of real economy & people

Current Situation in Asia-Pacific - home to about 2/3 rds of global workforce

Growth not generating adequate employment [ ] Source: Report of the DG 15th Asia and the Pacific Regional Meeting, ILO

& Decent Work? : Decent Work Decade for A-P region BUT - BUT - About 1.1 billion workers, or 60% of the region’s workers, are in vulnerable employment; About 1.1 billion workers, or 60% of the region’s workers, are in vulnerable employment; {South Asia: 77%, South-East Asia: 62% & East Asia:51%}. in terms of gender: 63% of women & 58% of men are in vulnerable employment. While extreme poverty has reduced, still about 73% of the world’s working poor are in Asia – While extreme poverty has reduced, still about 73% of the world’s working poor are in Asia –

Percentage of workers living in poverty and extreme poverty, 2000 and 2009

Wages lag behind productivity Output per worker in Asia grew on average by 4.1% p.a. between 2000 & 2009, much higher than in the rest of the world 0.4%) Output per worker in Asia grew on average by 4.1% p.a. between 2000 & 2009, much higher than in the rest of the world 0.4%) East Asia: averaged 8.3% p.a., followed by South Asia at 3.9% & South-East Asia at 3.0%. BUT average real wages grew by only 1.9% per year BUT average real wages grew by only 1.9% per year Leading to decline in labour’s share of national income and contributing to rising inequality & restricted domestic markets. Leading to decline in labour’s share of national income and contributing to rising inequality & restricted domestic markets.

FoA & Collective Bargaining Asia has the lowest ratification of the Convention 87 (19) and Convention 98 (25). Asia has the lowest ratification of the Convention 87 (19) and Convention 98 (25). Important countries like China, India, Iran, Korea, Burma, Thailand, Vietnam, etc have not ratified these conventions although FoA & Right to collective bargaining exists in some form or the other. Important countries like China, India, Iran, Korea, Burma, Thailand, Vietnam, etc have not ratified these conventions although FoA & Right to collective bargaining exists in some form or the other. In practice, little or no respect for workers right to form unions, to union recognition & to negotiate collective agreements - (TU density & CB coverage range between 1-19%). In practice, little or no respect for workers right to form unions, to union recognition & to negotiate collective agreements - (TU density & CB coverage range between 1-19%).

How do working people share in benefits of economic growth?

Economic growth is necessary But not sufficient condition. What is also needed is policies that promote ‘decent work’. Decent Employment is the critical link between economic growth and poverty

Country Situation Review: Group Work 1 How did global economic crisis affect your country? What impact has it had on workers & trade unions? Any example of union response? Are there any minimum rights/standards guaranteed to all workers in your country? What are the main shortcomings of the social security schemes and system in your country? What are the ‘means’ available to unions to enforce workers rights (especially rights to organize & collective bargaining)? What are three main priorities of Trade Unions in your region?