Globalization, Youth & Decent Work Arun Kumar. What is Globalization? Participants views…

Globalization, Youth & Globalization, Youth & Decent Work Decent Work

Arun KumarArun Kumar

What is Globalization?What is Globalization?

Participants views…Participants views…

EEconomic Globalisation - constitutes integration of national conomic Globalisation - constitutes integration of national economies into the international economy through trade, economies into the international economy through trade, direct foreign investment (by corporations and MNCs), direct foreign investment (by corporations and MNCs), short term capital flows, international flows of workers and short term capital flows, international flows of workers and humanity in general and flows of technology humanity in general and flows of technology

- Jagdish Bhagwati, In Defense of Globalisation, 2004.- Jagdish Bhagwati, In Defense of Globalisation, 2004.

Closer integration of the countries and people of the world, brought about by enormous reduction of costs of transportation and communication, and the breaking down of artificial barriers to the flows of goods, services, capital, knowledge and (to a lesser extent) people across borders

- Joseph Stiglitz in Globalization and its discontents, 2002.

Why Globalisation?Why Globalisation? Capital Needs Markets…new markets for Capital Needs Markets…new markets for

profits; Also natural resourcesprofits; Also natural resources

Developing countries need to grow, need Developing countries need to grow, need capital, access to new technology, goods & capital, access to new technology, goods & services;services;

Investors need free trade, minimum or no Investors need free trade, minimum or no regulations on capital & safe guarding of their regulations on capital & safe guarding of their investments;investments;

Economic reforms, free trade & Economic reforms, free trade & Globalization!Globalization!

Forces behind GlobalizationForces behind Globalization G7 Countries (reflecting Business/Financial G7 Countries (reflecting Business/Financial

Capital Interests) - US Treasury Dept major Capital Interests) - US Treasury Dept major player player

IMFIMF World BankWorld Bank WTO – Estd on 1WTO – Estd on 1stst Jan 1995 Jan 1995

---------------------------------------------- Regional Banks like ADB and Private Banks,Regional Banks like ADB and Private Banks,

Global based Investment Funds, TNCs, UN Global based Investment Funds, TNCs, UN Organizations,Organizations,

Domestic business interests…Domestic business interests…

Estd after 2nd WW in 1944

Global Background (2002, in %)Global Background (2002, in %)

Share in World Share in World Income/GDP Income/GDP

Share in World Share in World TradeTrade

Share in FDIShare in FDI

Share in Portfolio Share in Portfolio InvestmentsInvestments

HIC (80.5), MIC (11.5), LIC (2), HIC (80.5), MIC (11.5), LIC (2), China & India (6)China & India (6)

HIC (72.9), MIC (15.6), LIC (2.7), HIC (72.9), MIC (15.6), LIC (2.7), China & India (8.7)China & India (8.7)



Source: ILR, 2004/1-2, Vol 143, ILO, Geneva

What is Globalization Promoting?What is Globalization Promoting? Economic Orthodoxy – Washington Economic Orthodoxy – Washington ConsensusConsensus

Supremacy of markets, Government - a Supremacy of markets, Government - a problem! problem!

One size fits all kind of policies:One size fits all kind of policies:Open markets for trade, investment & capital Open markets for trade, investment & capital flows, flows, FDI rather than foreign aid, no FDI rather than foreign aid, no performance requirements on FDI, performance requirements on FDI, employment flexibility,employment flexibility, c cut govt deficit, ut govt deficit, privatize, etc privatize, etc

Employment flexibilityEmployment flexibility

Implications of New PoliciesImplications of New Policies Shift from development cooperation to free Shift from development cooperation to free

trade;trade; More competition between More competition between unequalsunequals;;

Equality of “access” (to international trade) Equality of “access” (to international trade) does not mean equality of “opportunity”;does not mean equality of “opportunity”;

[unequal capabilities lead to unequal [unequal capabilities lead to unequal outcomes]outcomes]

Adverse impact on development & Adverse impact on development & employment – in both OECD & developing employment – in both OECD & developing countries;countries;

Gainers under GlobalizationGainers under GlobalizationSources of income in an economy – Profits, Sources of income in an economy – Profits, Rentals, Wages & SalariesRentals, Wages & Salaries

Profits share of GDP gone up – in US, Japan, Profits share of GDP gone up – in US, Japan, UK & other EU countriesUK & other EU countries

Why?Why? Savings on labour costs;Savings on labour costs; Low interest rates (costs of corporate debts Low interest rates (costs of corporate debts

down);down); Cuts in Corporate taxation.Cuts in Corporate taxation.

[Source: Goldman Sachs, HSBC, UBS research, 2006 quoted in FT, [Source: Goldman Sachs, HSBC, UBS research, 2006 quoted in FT, Europe 29-30 July 2006 by Phillip Coggan]Europe 29-30 July 2006 by Phillip Coggan]

Effects on LabourEffects on Labour Downsizing, increasing workloads & job Downsizing, increasing workloads & job

insecurity insecurity

Outsourcing & preference for casual labourOutsourcing & preference for casual labour

Deterioration of labour standards & social Deterioration of labour standards & social protection provisions;protection provisions;

Weakening of public transport, health care Weakening of public transport, health care systems, primary education, etc as public systems, primary education, etc as public expenditure and role of Govt in these expenditure and role of Govt in these sectors declines;sectors declines;

Effects on LabourEffects on Labour Weakening of TUs also thru new HR policies;Weakening of TUs also thru new HR policies;

Growing informal economy – rural-urban Growing informal economy – rural-urban migrationmigration

Trade Union memberships are decliningTrade Union memberships are declining

memberships range from 3% - 19%; memberships range from 3% - 19%;

Union density lowest in agriculture & Union density lowest in agriculture & informal economy dominated countries & informal economy dominated countries & declining in most countries;declining in most countries;

What else? Participants experiencesWhat else? Participants experiences

Global Labour Market Scenario, 2006Global Labour Market Scenario, 2006

Global workforce: Over 3 billion (another 430 Global workforce: Over 3 billion (another 430 million will be added by 2015 majority of who million will be added by 2015 majority of who will be from developing countries) will be from developing countries)

Women constitute 40% of the labour force Women constitute 40% of the labour force (1.22b) (1.22b)

About 1.37 billion working people earn less About 1.37 billion working people earn less than $2/day (working poor); 522 m live on than $2/day (working poor); 522 m live on less than 1 $less than 1 $ a day – 2/3rds of world’s poor a day – 2/3rds of world’s poor are in Asia. are in Asia.

Global Labour Market Scenario, 2006Global Labour Market Scenario, 2006

No. of unemployed globally: 195.2 m; No. of unemployed globally: 195.2 m;

Women comprise about 42% of global Women comprise about 42% of global unemployed (about 82 m);unemployed (about 82 m);

44% of world’s unemployed are youth (86.3 44% of world’s unemployed are youth (86.3 million) [over 48% of these are in A-P region]; million) [over 48% of these are in A-P region];

Over 43 m new jobs to be created each year Over 43 m new jobs to be created each year in order to reduce global unemployment, says in order to reduce global unemployment, says ILO ILO

Situation in Asia-PacificSituation in Asia-Pacific Asia accounts for about 2/3Asia accounts for about 2/3rdsrds of global of global

workforce & economically – it is fastest workforce & economically – it is fastest growing region [growing region [except Pacific Island countriesexcept Pacific Island countries]; ];

Since 1995, labour productivity in Asia Since 1995, labour productivity in Asia increased by 41%, compared to 14% in the increased by 41%, compared to 14% in the ROW, BUT performance on employment front ROW, BUT performance on employment front quite poor; (in 2005, 6.2% economic growth in quite poor; (in 2005, 6.2% economic growth in Asia increased employment by only 1.4% - 24 Asia increased employment by only 1.4% - 24 m additional jobs)m additional jobs)

Informal economy – without social protection Informal economy – without social protection – main source of sustenance for majority. – main source of sustenance for majority. Atleast 20% of the workforce survives on less Atleast 20% of the workforce survives on less than $ a day per family member; situation in than $ a day per family member; situation in some countries much worse.some countries much worse.

Situation in Asia-PacificSituation in Asia-Pacific SE Asia & Pacific, South Asia & East Asia SE Asia & Pacific, South Asia & East Asia

account for: account for:

-- 54% of the global youth population 54% of the global youth population (which was over a billion in 2005); (which was over a billion in 2005);

-- Over 48% of world’s unemployed young Over 48% of world’s unemployed young people;people;

About 1 m workers die every year in Asia due About 1 m workers die every year in Asia due to work related accidents & diseases;to work related accidents & diseases;

A-P has lowest ratification of the 2 A-P has lowest ratification of the 2 fundamental labour standards – freedom of fundamental labour standards – freedom of association & right to collective bargaining;association & right to collective bargaining;

Situation in Asia-PacificSituation in Asia-Pacific Youth Unemployment (in millions)Youth Unemployment (in millions)

1995 2005 Unemployment rate 1995 2005 Unemployment rate (%) (%)

Global:Global: 74 74 85 85SE Asia & Pacific: 5.2SE Asia & Pacific: 5.2 9.7 9.7 15.8%15.8%South Asia:South Asia: 13.7 13.7 10%10%East Asia:East Asia: 13.1 12.0 13.1 12.0 7.8%7.8% Women’s unemployment rate higherWomen’s unemployment rate higher

Youth as percentage of workforce (2005)Youth as percentage of workforce (2005)Global:Global: 2525East Asia:East Asia: 20.920.9SE Asia & Pacific:SE Asia & Pacific: 27.527.5South Asia:South Asia: 29.329.3

Youth population expected to go up in a number of Asia Youth population expected to go up in a number of Asia countries in coming years (Except East Asia)countries in coming years (Except East Asia)

Trade Union ConcernsTrade Union Concerns Where are the jobs? Has ‘Globalization’ Where are the jobs? Has ‘Globalization’

process delivered on jobs front?process delivered on jobs front? Issues–Not only unemployment but Issues–Not only unemployment but alsoalso, ,

underemployment, low paid, exploitative & underemployment, low paid, exploitative & hazardous working conditions; hazardous working conditions;

Youth (15-24 yrs) unemployment serious; for Youth (15-24 yrs) unemployment serious; for every unemployed adult, there are about 3-5 every unemployed adult, there are about 3-5 unemployed youth;unemployed youth;

Jobs without rights – call centres, private Jobs without rights – call centres, private services sector, EPZs and so on.services sector, EPZs and so on.

Workers Rights to organize? to bargain Workers Rights to organize? to bargain collectively?collectively?

So, what are TUs saying?So, what are TUs saying?Answer does not lie in ProtectionismAnswer does not lie in Protectionism

TUs are advocating for ensuring values of TUs are advocating for ensuring values of Justice, Equity and Democracy on the new Justice, Equity and Democracy on the new global order;global order;

Need for role of State and public regulation Need for role of State and public regulation of business and international trade; of business and international trade;

Need for review of FTAs – to re-focus on the Need for review of FTAs – to re-focus on the objectives of Devt, Empl. & Poverty objectives of Devt, Empl. & Poverty reduction – multilateralism rather than reduction – multilateralism rather than bilateralism.bilateralism.

……ContdContd

So, what are TUs saying?So, what are TUs saying? Respect for basic International Labour Respect for basic International Labour

Standards for promotion of Decent Work;Standards for promotion of Decent Work;

Representation & Participation of TUs in Representation & Participation of TUs in economic and social policy;economic and social policy;

Comprehensive employer-employee Comprehensive employer-employee relationship law that sets the basic labour relationship law that sets the basic labour standards and which standards and which apply to allapply to all the workers the workers in the economy at national level. in the economy at national level.

What is ILO saying?What is ILO saying?

ILO’s ILO’s World Commission on the Social World Commission on the Social Dimension of Globalization says – Dimension of Globalization says – Global markets need ‘governance’ i.e. a set of Global markets need ‘governance’ i.e. a set of institutions & rules for equitable functioning institutions & rules for equitable functioning to:to:

• Avoid market failures (e.g., economic Avoid market failures (e.g., economic crises);crises);

• Redress vast inequalities between & within Redress vast inequalities between & within countries;countries;

• Strengthen mechanisms for delivering Strengthen mechanisms for delivering social protection - manage change.social protection - manage change.

TUs support to Decent WorkTUs support to Decent Work

TUs support the integrated approachTUs support the integrated approach of ILO of ILO to address the social impacts of to address the social impacts of globalization:globalization:

Because the concept of Decent Work -Because the concept of Decent Work -

• Focuses on core rights, addresses all Focuses on core rights, addresses all workers, in all economic sectors (formal, workers, in all economic sectors (formal, informal);informal);

• Is participatory, promotes Social Dialogue Is participatory, promotes Social Dialogue & seeks to involve all social partners& seeks to involve all social partners

• Is Dynamic – progresses as the economy Is Dynamic – progresses as the economy changeschanges

Trade Union ResponsesTrade Union Responses

Mergers of trade unions – GUFs;Mergers of trade unions – GUFs;

ITUC – merger of ICFTU, WCL & some other ITUC – merger of ICFTU, WCL & some other unions – on 1 Nov 2006, Vienna;unions – on 1 Nov 2006, Vienna;

ITUC represents 306 affiliated national trade ITUC represents 306 affiliated national trade union centres of 154 countries & territories union centres of 154 countries & territories representing some 168 million members.representing some 168 million members.

Organize! Organize!

Trade Union ResponsesTrade Union Responses Campaign for core ILO labour standards, particularly Campaign for core ILO labour standards, particularly

– C 87 & 98;– C 87 & 98;

Global Collective Bargaining (IFAs);Global Collective Bargaining (IFAs);

Using Workers Capital to promote Union Rights & Using Workers Capital to promote Union Rights & other labour standards;other labour standards;

Build alliances with other social partners – links with Build alliances with other social partners – links with world TU bodies, NGOs, Women’s movement, world TU bodies, NGOs, Women’s movement, Consumer movement – role of international labour Consumer movement – role of international labour solidarity.solidarity.

Negotiating Change at National Negotiating Change at National level …level …

Adopt policies Adopt policies that apply to all workersthat apply to all workers & prevent & prevent further divisions of workers in the labour market –put further divisions of workers in the labour market –put all workers in one boat. all workers in one boat.

Set nationwide Set nationwide floorfloor labour standards –that apply to labour standards –that apply to

all workers & employers (de-link labour standards all workers & employers (de-link labour standards from permanency of employment); from permanency of employment);

RoofRoof to be attained thru Collective Bargaining – the to be attained thru Collective Bargaining – the right to which should be ensured.right to which should be ensured.

Negotiating Change…Negotiating Change… What is the floor that employers should respect?What is the floor that employers should respect?

Core labour standards of the ILOCore labour standards of the ILO

Freedom of Association –the right to form unions, the Freedom of Association –the right to form unions, the right to recognitionright to recognition

Right to Collective BargainingRight to Collective Bargaining

Basic social security contributionBasic social security contribution

Access to skills trainingAccess to skills training

No discrimination, No child labourNo discrimination, No child labour

Why Labour Standards?Why Labour Standards?

Labour Standards are Labour Standards are not just a question not just a question of workers rightsof workers rights BUT are BUT are also means to also means to promote economic growth!promote economic growth!

Labour standards create conditions for Labour standards create conditions for growth of domestic markets since they growth of domestic markets since they enable sharing in gains of growth & spread enable sharing in gains of growth & spread of purchasing powers – this makes domestic of purchasing powers – this makes domestic economic growth more sustainable.economic growth more sustainable.

Getting back to basicsGetting back to basics 　　Trade unions must strengthen

their organizing and bargaining power.

HOW?

Challenge 1:

Creating an“Enabling Environment”

for Trade UnionActivities

Challenge 2:

Building Capacity ofUnions in Organizing

and CollectiveBargaining

Group WorkGroup Work How has Globalisation affected workers & trade How has Globalisation affected workers & trade

unions in your country? unions in your country? [List the major changes in economic & labour [List the major changes in economic & labour policies that have affected (positively or negatively) policies that have affected (positively or negatively) the employment & Trade Unions]the employment & Trade Unions]

What actions has your trade union taken or can take What actions has your trade union taken or can take to meet challenges of Globalization?to meet challenges of Globalization?

What role can the International Trade Union What role can the International Trade Union Movement play in assisting national unions to meet Movement play in assisting national unions to meet the challenges of Globalization?the challenges of Globalization?

Documents

Globalization, Youth & Decent Work Arun Kumar. What is Globalization? Participants views…