ITUC: GLOBALISATION AND INFORMALISATION (part 2)

Informal trade along the road en Mexico, Villahermosa 2010

Bieler (Trouble in the international labour movement: is the ITUC ready for the challenges ahead?) believes that it is not possible to transform the ITUC into an organisation that will be more oriented to the trade unions in the poor countries. Therefore he proposes to organize a Global South: “The main emphasis should be placed on organising the Global South instead and developing a South-South strategy in the interest of Southern workers through new institutions such as the Southern Initiative on Globalisation and Trade Union Rights.” 

Such a proposal is a denial of the ability of mankind to develop a spirit of solidarity between rich and poor, be it on individual level, international trade union level or countries. Mankind has shown through his history that he is more than his socio-economic interests. The human being is also a spiritual being which it makes possible to transcend his own socio-economic interests based on values, visions and beliefs on how society and state should be organised.

Therefore it is very well possible to unite trade unions of rich and poor countries in a spirit of solidarity in one Global Union like the ITUC. But then immediately comes the question of values, visions and beliefs. Because of supposed workers solidarity the ITUC was from the outset against institutionalization of the differences in values, visions and beliefs within the new Global Trade Union. 

Maybe this was for former ICFTU members a normal state of affairs, however, for the WCL members this was not the case. On the contrary, for WCL members the spirit of solidarity goes not only beyond the socio-economic interests but includes also values, visions and beliefs. Why WCL leadership gave away this dimension of solidarity at the merger is a mystery that will probably be solved in the future.

Informal trade in gasoline along the road to Cotonou, capital of Benin in West Africa. For the merchant along the way there is no hour or time (2014)

The second challenge Bieler is writing about, the growing informalization of the global economy is probably a more complicated affaire. “This re-organisation of the production process around transnational outsourcing and centralisation of decision-making as part of globalisation, together with a huge influx into urban areas particularly in the Global South, has led to an increasing casualisation and informalisation of the global economy, in which permanent, full-time employment contracts have to a large extent become a feature of the past. In a way, ‘it is no longer accurate today’, Dan Gallin argued already in 2001, ‘to describe the informal sector as “atypical”’ (Gallin, 2001: 228). It has increasingly become the norm. This is especially the case in developing countries, which had never been in a position to establish a large industrial sector with permanent and secure employment (Bieler, Lindberg and Pillay, 2008: 266). Nevertheless, informalisation more and more also affects developed countries in the North, where employers are on the offensive and demand a flexibilisation of the labour market with the argument that this would be necessary in order to retain competitiveness. Peter Waterman (2012: 3) estimates that the traditional working class makes up only 15 per cent of the global workforce, with the remaining 85 per cent being part of the informal economy. As the traditional relationship between employer and employee ‘is being replaced by a variety of more diffuse and indirect but nonetheless dependent relationships in the process of production, trade union organising can no longer focus primarily on the employment relationship’ (Gallin, 2001: 233).”

Bieler believes that the ITUC is not prepared to attack the problem of growing informalization of the global economy, despite the fact that the Indian Self Employed Women’s Association was accepted as affiliate by the ITUC. 

Street vendors posing together with Maritza Chireno (on the right), President of the Latin American Federation FETRALCOS, in Santo Domingo, the capital of the Dominican Republic, 2010. FETRALCOS organizes  workers in the Informal Sectors already the nineties in the past century.

Labour Informalization is not an easy challenge, not in the south, not in the north. In the southern part of the world there is a lack of investments to create formal productive jobs and there is no real industrial and agricultural policy. There are many causes for this: unequal and unjust distribution of income, no respect for labor laws, underdeveloped trade unions, poor tax collection, lack of political stability or even worse like (civil) wars, unclear rules on ownership and conflict regulation, corruption, lack of capital, lack of local entrepreneurs and so on. In many of these countries no balance has yet been found between political and economic development together with social justice.

In the northern countries the entrance of China on the world market has put pressure on the production costs and therefore also wages. Besides, in countries like China wages are low because there is to little or no freedom of trade union organisation and to negotiate wages. As an answer on this pressure on the production costs, employers in the north respond with outsourcing of work, flexibilisation and automatisation (industrial robots) as ways to lower costs of production. Thanks to the social welfare state, that is the institutionalization of solidarity through social funds, the informal sectors are relatively still small in the north. 

But undoubtedly because of these trends, institutionalized solidarity (social security) is under pressure because of high unemployment rates, high labor costs and lately the aging of the population which makes pension systems more costly. How to lower the cost of labor and at the same time maintain the social security systems? At the moment there are two main solutions that are debated. A tax shift from labor to assets to make labor cheaper for employers without affecting the wages. To respond to the aging of the population, the retirement age is moved to 67 years and early retirement possibilities limited.

As we see, there is no global answer to all these problems. The differences between countries are too large, even between the countries of the European Union like for example between Germany and Greece, and even more between the regions in the world. For these reasons it is not easy to manage this in a Global Trade Union. What can be a good economic policy for one country or region, can be bad policy for another country. This makes solidarity on Global level and even on European level difficult and then we have not yet talked about differences in values, visions and beliefs about how society, government and state should be organized to respond effectively to all these problems.

To be continued