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Changing World of Work
Challenges before Trade Unions
in Asia
Arun Kumar
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!
Therefore -
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)
Changing role of state - poses challenges for unions
Implications of New Policies
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 3/4th of
the foreign investment and 3/4th 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;
No public regulation of business – markets Know the best,
will self regulate;
Labour flexibility & changing nature of employment
weakens labour’s bargaining power
Strain on international labour solidarity
Changing world of work
What kind of Jobs?
Changing nature of employment relationships
Implications of flexibilization for workers rights (social
security, skills, union rights, safe work, labour laws)
The new worker – young, educated, migrant, women,
Changing pressures on employers & ‘new’ decision
makers (HRM, Financialization, Private Equity )
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
JOB LOSSES: 212 mn jobless world wide in 2009 –
crisis added atleast 34 mn more since 2007
Globally pension funds lost over 5 trillion $$$
between 2007 & 2008) – higher loss in countries
where pensions were privatized (ex in Latin America)
Over 50% drop in FDI in some developing countries
(UNCTAD), drop in aid too
Wage cuts/wage freeze – real wages fell from 4.7% in
2007 to 1.5% in 2008 – situation worsened in 2009,
higher work loads, forced unpaid leave, default on SS
contributions, rise in unprotected precarious work,
violations of FoA & CBAs
Impact on Asia
Capital Outflow from Asia (>100 billion $$$ in 2008)
– its impact on Asian economies, stock markets &
Impact of recession in western markets on Asian
production, employment & economic growth
Impact of credit squeeze on domestic investments,
industry & jobs
Remittances, foreign aid, govt revenue – all go
Responding to Crisis
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
Central banks cut interest rates, expanded money
supplies & eased requirements on collateral for
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?
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
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)
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
What else???
ILO’s Response
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
What does Global Jobs Pact
No return to business as usual
Decent employment intensive growth pattern, including
promotion of green jobs
Need for Wage led recovery process (MWs, CB)
Set up / Extend Social Protection Floor (basic social
security for all)
Regulate financial & tax system to serve the interests of
real economy & people
Current Situation in Asia-Pacific
- home to about 2/3rds of global
Growth not generating adequate
employment [2001-2008]
Source: Report of the DG 15th Asia and the Pacific Regional Meeting, ILO
& Decent Work?
2006-2015: Decent Work Decade for A-P region
BUT 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 –
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%)
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
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).
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%).
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
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