Transcript Giacomo Turin 2012

ILO Global Employment Trends 2012
• Global unemployment estimated at 200 m
• + 27 m since the crisis started
• 400 m new jobs would be needed on top of
those 200 m to provide productive jobs for all
• = 600 m jobs missing
• 900 m workers below the US$ 2 a day poverty
line
ILO Global Employment Trends 2012
• Unemployment predicted to rise to 206/209
m 2016
• Global unemployment rate 6%
• 29 m fewer people working in 2011 than
expected
• In OECD countries if we add to unemployed
those who have stopped seeking employment
we go from 8.5 to 9.6%
Young workers (15-24)
• 2011 – 74.8 m unemployed (+ 4 m since 2007)
• Unemployment for young people 3 times
higher than adults
• 6,4% young people given up the hope to find a
job (number of those who withdraw from
labour market in constant rising)
• Youth disproportionally high among working
poor
ILO Global Employment Trends 2012
• Employment-to-population ratio declined
sharply during crisis: from 61,2% (2007) to
60,2% in 2010 (the largest since data have
been collected from 1991)
• 900 m working poor
• Extreme poverty: 456 m below the US$ 1,25 a
day.
This is the only data where improvement was
found until 2008 due to East Asia/China growth
(reduction of 158 m since 2000), but slowdown
Implications of ‘neo-liberal’ policies
•
Shift from development cooperation to free trade - Open markets for
trade, investment & capital flows: one decision maker = Capital;
•
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.
But also within countries: 99% vs. 1 % (USA)
•
Equality of “access”
unequal capabilities
•
equality of “opportunity”

unequal outcomes
Withdrawal of ‘State’ from its economic & regulatory role;
(markets Know the best, will self regulate )
Consequences for the world of work
• Labour flexibility & changing nature of employment
relationships – precarious work for youth & women
• Implications of flexibilization for workers rights (right to
organize, union formation, collective bargaining, social
security, skills acquisition, wages , safe work, labour laws)
_________________
•
Redistribution of income towards the rich (privatization, tax
policies) – on the theory that rich invest, will promote growth
led to Growth yes but widening inequalities - decline in
labour’s share of GDP
Population & Wealth Shares by Region (2000)
•
the richest 10% own 85% of the global assets (2000).
•
50% of the world population owns less than 1% of the global assets.
Source: UNU-WIDER
Global Economic Crisis:
few lessons for developing countries
• Over dependence on exports & western markets
• For economic & social stability - countries also need domestic
markets – how to develop & expand domestic & regional markets?
• Reduce widening inequalities: need for wages & incomes policy in
the country to ensure equitable sharing in growth/productivity
• Labour standards & development: role of right to organize,
collective bargaining & social security
Main causes of the crisis
• Financialisation of the economy which has made investments in
productive capacities unattractive, which has made the real economy
vulnerable to shocks in the financial markets and which has made the real
economy pay for the financial market distress
• Strong focus on an export-led growth as opposed to growth of
domestic markets, which has led to vulnerabilities (including dependence
on a few products or a few markets)
• Growing income inequality which has impacted aggregate demand,
growth and sustainability of growth
• The lack of quality of growth, caused by a lack of attention for
industrialization, higher value added production and the need to create
vibrant and diversified domestic production and demand
9
ILO responses to the crisis
• the Global Jobs Pact, based on an integrated
approach across the four decent work pillars:
Employment and social protection
measures, underpinned by International
Labour Standards and based on social
dialogue
10
Decent Work to be achieved thru
actions on 4 pillars
productive employment &
sustainable enterprises
social protection/
social security for all
Standards &
basic rights at work
Promotion of Social dialogue,
Collective bargaining key
+ Gender and non-discrimination as crosscutting issues
So, what is Decent Work?
Work that is productive,
gives fair income,
security in the workplace & social protection for the family,
equal opportunities & treatment,
better prospects for - personal devt & social integration,
freedom to organize & participate in decision making
---------------------------------------------------------concept of decent work encompasses both
individual and collective dimensions (C 87 & 98)
GJP
Employment creation:
•Measures to maintain jobs and avoid dismissals such as shorter
work hours (worksharing) and work/training initiatives
•Boost demand and maintain wage levels
•Macro-economic policies that stimulate productive investment
and aggregate demand through fiscal and monetary policies
•Investment in infrastructure, promote green production and
industrial policies for the creation of productive employment
across sectors
•Promotion of public investment and employment schemes
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GJP
Social protection:
• Social protection softens downturns because it reduces the negative
effects of a recession on aggregate demand
• Social protection floors especially in developing countries
• Horizontal and vertical extension of social security
• Extending duration and coverage of uneployment benefits
• Adequate coverage for temporary and non-regular workers
• Minimum benefit guarantees and cash transfers
• Avoid deflationary wage spirals
• Minimum wages (statutory or through collective bargaining)
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GJP
International Labour Standards:
•Basis for decent work: respect for fundamental principles and
rights at work;
•Enabling rights: Freedom of Association and Collective
Bargaining
•Standards are relevant in times of crisis:
Employment policy; wages, social security; the employment
relationship; termination of employment; labour administration
and inspection; migrant workers; labour conditions in public
contracts; occupational safety and health; working hours; social
dialogue mechanisms
•Promotion of the ILO MNE Declaration
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GJP
Social dialogue:
•Establish and use social dialogue mechanisms especially in
times of crisis at all levels
•Consultations on economic and social policies
•Promote (extension of) collective bargaining
•Strengthen labour administration and labour inspection
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GJP
• All four areas are interrelated and should be jointly
implemented
• In addition, root causes to the crisis need to be
addressed to prevent another crisis or prolonged
recession
• In particular addressing growing inequality, pushing
back precarious work, regulating the financial sector,
stimulating domestic markets and innovation and
shifting to a low carbon economy
17
What is needed? A Workers’ view
Stimulate aggregate demand:
•Public investments in infrastructure, education, services and
productive capacities which creates demand and jobs
•Fiscal policy to stimulate demand and investment (progressive
taxation, financial transaction tax))
•Monetary policy to stimulate demand (low interest rates)
•Social protection floors
•Promote collective bargaining and extension of collective
bargaining
18
What is needed?
Regulate the financial sector:
• Regulate/prohibit/eliminate risky investment and
systemic risks
• Tax financial transactions: promotion of financial
transactions tax (FTT)
• Limits on bonuses
• Change incentives system in finance
• Capital controls to avoid impacts on vulnerable
economies
19
What is needed?
Restore workers’ rights and workers’ power:
• Promote organising
• Promote collective bargaining and extension
of collective bargaining
• Promote secure employment
• Reduce precarious and triangular employment
relationships
20
What is needed?
Rebalancing of international trade:
•Promote domestic markets and demand
especially in big exporters
•Promote local production in big importers
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What is needed?
Investment in productive capacities:
• New role for the state to stimulate investment
and production
• Develop industrial policies with horizontal and
vertical approaches
• Promote innovation and green economies as
part of industrial policies
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What is industrial policy?
A range of policies aimed at inducing structural change/industrial
development. These are necessary for take-off and long term
growth, and include:
• Policies affecting « infant industry » support of various kinds
• Trade policies
• Science and technology policies
• Public procurement
• Policies affecting foreign direct investments
• Intellectual property rights
• The allocation of financial resources
What are some of the successful elements of industrial
policy?
• The role of the state is key in driving the industrialization
process
• Focus on high quality activities (increasing returns)
characterized by dynamic imperfect competition and not on
low quality activities characterized by perfect competition
• Risks have to be taken to be successful
• The need for investments in education and innovation (public
research centers)
• Selective-targeted policies need to have some sort of control
mechanism (such as export targets, local content
requirements)
What are some of the successful elements of industrial
policy?
•
•
•
•
Experimentation and innovation are essential
Comparative advantages can be created
Access to cheap (domestic) finance for infant industries
National ownership of the industrialization strategy is
important
• Trade liberalization can lead to deindustrialization
• Tariff policy is not the only industrial policy instrument but
can be a determining one when it comes to protecting a
sector or industry
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Some experiences
• Peru: “the inefficient industrial sector in Peru nonetheless created a wage
level that was about twice as high as what today’s globalized economy is
able to deliver in Peru”.
• Mongolia:“Half a century of industry building in Mongolia was virtually
annihilated over a period of only 4 years, from 1991-1995. since the
country had opened up to the rest of the world, almost overnight, in
1991.”
• Mexico: “Mexican real wages dropped drastically as the NAFTA agreement
slowly decimated traditional “complete industries” while increasing the
simple assembly (maquila) activities. The increasing return industries died
out in order to give birth to constant return activities, thus primitivizing
the national production system.”
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Work should lift you out of poverty,
Not keep you there
what changes are needed in development &
labour policies for promoting decent work?
ILO/IILS research
Warnings:
•Labour market deregulation leads to more redundancies without supporting
job creation
•Weakening of collective bargaining is likely to provoke a downward spiral of
wages thus prolonging recession
•Job instability: human tragedy and waste of productive capacity
•Investment deficit: high un-invested cash amounts and more volatile
investment which has increased precarious jobs
•Social unrest index increased in 57 out of 106 countries especially in Europe,
Middle East, North Africa and Sub-Saharan Africa
•No clear link between labour market reforms and employment levels
•Actually, adequate employment regulations tend to be positively associated
with employment within the range where the majority of countries lie
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ILO/IILS Research
Alternative approach:
• Socially responsible approach to fiscal consolidation is needed
• Strengthen labour market institutions so that wages grow in
line with productivity
• Increase minimum wages
• Implement core labour standards
• Access to credit for enterprises plus possibly lower taxation
for firms that emphasize investment and job creation
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ILO/IILS research
• Social observatory to forecast employment trends and calculate
employment impacts of proposed policies
• Global governance to be improved to provide stable level of global
demand
• Boost investment and jobs (activation policies for youth, social dialogue
for consensus and confidence building)
• Strong well-designed labour market institutions:collective bargaining; well
designed employment protection; training
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Lessons from the ‘crisis’
• for economic & social stability at home - countries need
development & expansion of domestic & regional
markets/domestic consumption - how to do this?
• Wages - main source of domestic consumption - but wages
lagging behind productivity & wage share in GDP declining - plus
no social protection for the majority
 need for wage policy & social protection floor aimed at
reducing inequalities, keeping wages in line with
productivity, to increase disposable incomes, avoid
debt financed consumption & promote sustainable growth
Wages & labour Standards led
growth
• Are labour standards only a question of ‘rights’ of
workers?
• What role does Wage policy, FoA, CB & Social
Security/social protection play in economic
development?
Business is our business!
• Reclaiming democratic and transparent
decision making and rules:
- Financial markets: stop to the shareholders
mantra, regulation, FTT, redistribution
including for public sector needs
- - Multinationals: regulation, CBAs and GFAs,
value chains for development (ex. EPZ, Zara)=
ILO MNE Declaration
- Markets need to be socially embedded
(national and local communities, workers,
Some issues to reflect upon
• Has the global economic crisis affected employment & wage developments in
your country? Any examples? How has government responded?
• Is there a system of minimum wages in your country? What are the factors
taken into account while setting it?
• List out the main problems you see in the Employers behavior in regard to
collective bargaining with the union?
• What are the ‘means’ available to unions to enforce workers rights?
• What are the factors that prevent unions from playing more effective role in
dispute resolution & collective bargaining? (focus on drawbacks in law,
capacity of unions, role of authorities) – give specific examples
• Which is the government response to TU claims?
• Which alliances your union is making for progress in workers’ rights?
-----------------------------------------------• Data on your country: 1) Minimum wage 2) Wage share in GDP – trends, 3)
median wages in your country