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    Showing posts with label Trade Unions. Show all posts
    Showing posts with label Trade Unions. Show all posts

    28 May 2012

    From Financial Crisis to Stagnation: The Destruction of Shared Prosperity and the Role of Economics

    Thomas L Palley
    Marshall McLuhan, the famed philosopher of media, wrote “We shape our tools and they in turn shape us”. His insight also applies to the economy which is shaped by economic policy derived from economic ideas, and it is the theme of my recent book which argues the global economic crisis is the product of flawed policies derived from flawed ideas.
    Broadly speaking, there exist three different perspectives on the crisis. Perspective 1 is the hard-core neoliberal position, which can be labelled the “government failure hypothesis”. In the U.S. it is identified with the Republican Party and the Chicago school of economics.

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    4 April 2012

    Lack of Rain in the Rainforest

    Nora Rathzel
    From work or nature to work and nature: another kind of unionism
    On a one-week tour organised by João Paulo Cândia Veiga from the University of São Paulo and Manoel Edivaldo Santos Matos from the Union of Rural workers (Sindicato dos Trabalhadores y Trabalhadoras Rurais de Santarém, STTR) in Pará, a region of the Brazilian Amazonas, we visited eight communities along the Rivers Arapiuns, Maró and Amazonas. These are small communities of between 90 and 300 people. They are of mixed indigenous and Portuguese origin, some groups defining themselves as indigenous.

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    27 February 2012

    International Framework Agreements: Possibilities for a new Instrument

    Siglinde Hessler
    A new instrument of international labour regulation
    International Framework Agreements (IFA) are important in international labour regulation. As the globalization of production and markets is increasing, an international regulation of labour is strongly needed. Existing instruments such as the OECD Guidelines for Multinational Enterprises, the ILO Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy and the great number of ILO conventions among others have set important marks in the debate, but still lack recognizable success as they lack the power of sanctions. Furthermore, the growing number of voluntary and unilateral declarations on social standards, which are part of the Corporate Social Responsibility strategy of companies, have not attained concrete results as they lack binding force.

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    20 February 2012

    The Crisis: the Response of the European Trade Unions

    Bernadette Ségol
    The unanimous political response to the crisis across Europe today is that of austerity and budgetary discipline. Cutting pay and social welfare, attacking bargaining mechanisms and making employment contracts ultra-flexible: that is the current paradigm, the Berlin/Brussels consensus, offered as the only way forward.
    This solution is not working and will not work. It stifles growth and blocks the way to job creation. We can no longer ignore its disastrous social consequences and the rise of nationalism in many European countries bringing into question our essential values based on solidarity.
    We need to change the narrative.

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    6 February 2012

    Minimum Wages in Europe: a Strategy against Wage-Dumping Policies?

    Lars Vande Keybus
    In numerous countries such as Ireland, Greece, Portugal, Hungary, and others, the European Commission (EC) - in cooperation with the International Monetary Fund (IMF) and European Central Bank (ECB) - has imposed a dramatic policy mix that consists of blind austerity, privatisation and wage cuts. Following the adoption of the notorious ‘six-pack’ in December 2011, it is clear that such policies will become a general rule all over Europe. The ‘six-pack’ sets up a structure in which the EC is granted a role as budgetary supervisor and punisher. The commission has the opportunity to almost automatically punish European Union (EU) members who do not follow recommendations to correct

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    10 January 2012

    Global Labour Online Campaigns: The next 10 Years

    Eric Lee
    In November 2011, the military dictatorship in Fiji jailed two of the country’s most prominent trade union leaders. Following the launch of an online campaign sponsored by the International Trade Union Confederation (ITUC) and run on the LabourStart website, some 4,000 messages of protest were sent in less than 24 hours. The government relented, the union leaders were freed, and the campaign suspended. A month earlier, Suzuki workers locked out in India waged a successful online campaign through the International Metalworkers Federation (IMF) and LabourStart. Almost 7,000 messages flooded the company’s inboxes, and after only a few days, a compromise was reached.

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    28 November 2011

    Working for a Social Protection Floor

    Ellen Ehmke
    Andreas Bodemer
    Worldwide, 75% of the population have no or insufficient access to social security provision. Despite the long record of social security as a human right, which is enshrined in the Universal Declaration of Human Rights (Art. 22, 25) and the International Covenant on Economic Social and Cultural Rights (Art. 9), its implementation has been widely disregarded.
    Many pretexts have been given to excuse this severe injustice. Prominently, the competitiveness of a globalised economy has allegedly caused a scarcity of financial resources available for social policies. On the one hand, the assumed negative effects of social security on economic growth have served as reason to cut back globally.

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    21 November 2011

    Supporting Dissent versus Being Dissent

    Steven Toff
    Jamie McCallum
    When the Occupy Wall Street movement (OWS) began on September 17th 2011, few could have predicted the wave of occupations that would soon sweep the rest of the country and indeed much of the world in what has been referred to as the American Fall. While it remains to be seen how this inchoate movement will mature, it has so far exceeded everyone’s calculations - it is the first time since the 1999 anti-WTO demonstrations in Seattle that tens of thousands in the US are taking to the street for economic reasons. Average Americans, many of whom have long understood the moral and economic turpitude at the root of Wall Street, are now expanding that stance to make a wholesale critique of neoliberalism and questioning some of the most foundational principles of capitalism.

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    31 October 2011

    Contesting a ‘just transition to a low carbon economy’

    Jacklyn Cock
    Introduction
    Recently, the South African labour federation, the Congress of South African Trade Unions (Cosatu), has expressed its commitment to a ‘just transition to a low carbon economy.’ However, at this moment the content of that commitment is unclear. Members of Cosatu affiliates could have very different understandings of the scale and nature of the changes involved. A ‘just transition’ could involve demands for shallow change focused on protecting vulnerable workers, or it could involve deep change rooted in a vision of dramatically different forms of production and consumption. In this sense, the ecological crisis represents an opportunity to not only address the unemployment crisis in our society, but to demand the redistribution of power and resources, to challenge the conventional understanding of economic growth and to mobilise for an alternative development path.

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    19 September 2011

    Argentina’s ‘Year of Decent Work’, a critical assessment

    Bruno Dobrusin
    The centre-left government of Cristina Kirchner declared 2011 as the ‘Year of Decent Work’ in Argentina, following consultations with the ILO and other international institutions regarding government programmes during the current global economic crisis. The Kirchner administration has indeed promoted several counter-cyclical measures to fight against the global recession and maintain levels of employment in the country. The relative success of these policies, together with the continuous economic growth that Argentina has witnessed since 2003, led the government to tour the international forums such as the G20 meetings and claim that Argentina is an example of a successful response to the crisis. Despite the improvements in the overall economy and the high levels of employment that the country is witnessing, the so-called ‘model’ is far from ideal, and has to be questioned on its main claims. This article discusses the recent improvements as presented by the government and the counter-facts suggested by a recent study carried on by the Workers’ Confederation of Argentina (CTA)[i].
    The Decent Work Agenda proposed by the ILO is based on four pillars: employment creation, rights at work, extending social protection and promoting social dialogue. The main focus here is on employment creation in Argentina over the past few years, and on the quality of employment created. Since 2003 Argentina has had a remarkable economic recovery, with an average eight percent annual growth. The devaluation of the currency in late 2002 led to the protection of an important part of industrial production, which explains the generation of employment in the time period. Between 2002 and 2007, the rate of employment increased to levels unseen since 1974, creating approximately 3.7 million new jobs out of which half are in the formal sector[ii], with the industrial sector as the main participant. It has to be recognised that the success of the industry is the reduction of the labour cost in dollars of an important industrial sector, which, due to the low technological component, can compete with imported products through the lowering of salaries in dollars. The leading sectors in the period, the automobile and the iron and steel industries, do not need the exchange rate protection nor did they contribute to employment recovery. Towards 2009, with higher production, employment in the automobile companies was lower than that registered in the middle of the 1990s. The reason is that it is an enclave industry, with small participation of production from Argentina
    In the period 2003-2010 social protection was improved, with a current 86 percent of the population receiving benefits from social security systems (both private and public), up from 60 percent in 2003[iii]. In addition to this, the government has also produced a recovery in the minimum wage negotiations by bringing back the Minimum Wage Council, with participation by unions, the state and the employers. This has produced a consistent increase in the minimum wage, at an average rate of 20 percent a year. This set of achievements is being presented by the Kirchner administration to the G20 as an example for other countries to follow. The ILO has supported the government in its promotion of a firm decent work agenda. However, behind this policy, there is a harsh reality that is not being heard about Argentina and the labour policies of the current administration.
    There are a number of reasons that justify the assessment that Argentina is not indeed the paradise of decent work. According to two different studies made by alternative trade unions, the employment situation in the country is actually grimmer than that presented by the government. The main difference in the evaluation of these studies is the statistics used. The government has consistently denied the inflation levels and has intervened in the National Institute of Statistics, through appointing a new director and changing the figures of inflation on a monthly basis. This arbitrary decision has been consistently criticised by the workers’ representatives in the Institute. When we take the statistics produced by other public non-intervened institutes, employment figures remain virtually the same since 2007, without improvements in the 8 percent unemployment figure[iv]. If we look at employment creation, it was significant in the period between 2003-2006 that an average of 750,000 jobs was created per year, but it declined in the period between 2007 and 2010 to an average of only 200,000 jobs annually[v]. Moreover, the government claims that informality has decreased over the past decade, when it actually remains at historically high levels. Out of the 3,7 million jobs created, more than half are in the informal sector, which remains at an overall level of 40 percent of the employed population[vi]. Among the youth, informality is even higher, reaching 60 percent of the employed[vii], and with worse working conditions. These factors are closely related to the still relevant 30 percent poverty levels, and just over 5 million people below the level of extreme poverty[viii]. Argentina is not then a good example of a country overcoming the decent work deficit and there remains a need for significant change in the working conditions of the majority of Argentinian citizens.
    In reality, informal and precarious working conditions continue in Argentina. Only the salary of the formal workers compensates for the increases in prices, leaving a minority that can sustain their living standards. The current real wage is similar to that of low earners in 2001 at the moment of the economic crisis. The unemployment rate continues to be greater than the same rate in the early 1990s, and it is still much higher than in the 1970s and 1980s. In addition, the stages of ‘social dialogue’ promoted by the government only include the main trade union confederation (CGT), a key ally of the government. There is no intention in the Kirchner administration to recognise any of the alternative trade union confederations, countering the demands made consistently by the ILO in its Freedom of Association reports.
    At the September G20 meeting of Labour Ministers, the Argentine government will present their response as the example for other G20 governments to follow, especially those undergoing economic crisis. However, Argentina is still far from an ideal place for labour policies and labour rights. As presented here, the country still has to discuss the productive and developmental model that currently produces immense wealth and a GDP growth of 8 percent a year, but it provides these high profits for a small group of heavily concentrated business groups, mostly foreign, and keeps workers in precarious working conditions.
    [i] IDEF-CTA. “Sobre el trabajo decente. Contexto general, informalidad laboral y políticas publicas”, July 2011.
    [ii] Labour Ministry of Argentina. “Trabajo, Empleo y Ocupacion. Una Mirada a sectores económicos desde las relaciones laborales y la innovación”, June 2010, p. 43
    [iii] Labour Ministry of Argentina. “Trabajo y Empleo en el Bicentenario. Cambio en la dinámica del empleo y la protección social para la inclusión social. Periodo 2003-2010”, September 2010., p.49.
    [iv] IDEF-CTA, p.2.
    [v] IDEF-CTA, p.4
    [vi] Ibid, p.21.
    [vii] Ibid, p.27.
    [viii] Ibid,p.14

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    Bruno Dobrusin is MA candidate at the Tata Institute of Social Sciences, Global Labour University. He is also advisor to the International Relations Secretariat of the Argentine Workers' Confederation (CTA) and research scholar at the Institute of Studies of State and Participation, belonging to the State Employees' Union of Argentina. He is currently involved in the follow-up of the process of regional integration within South America for CTA.

    12 September 2011

    The euro crisis and the European trade union movement

    Vasco Pedrina
    After successfully bailing out banks and adopting a first wave of economic recovery measures, the authorities of the European Union (EU) and its member states began to impose draconian, anti-social austerity plans from the beginning of spring 2010. These plans stem from an increasingly coordinated policy at the EU level, which is entering a new phase with the “Euro-Plus Pact” and the “enlarged bailout plan”. Dressed up as part of a fight against “macroeconomic imbalances”, new mechanisms are to be put in place. These will provide EU authorities with the means to step up the pressure for general social dismantling. Concretely, this amounts to a “wages straitjacket” that calls into question the autonomy of social partners (one of the pillars of the “European social model”), raises the retirement age across European countries and introduces legislation to curb national debt. This policy is not only having dramatic social repercussions. It is also heading up an economic blind alley that is putting the euro at risk.
    At its Congress in Athens in May 2011, the European Trade Union Confederation (ETUC) reaffirmed its opposition to the currently prevailing neoliberal economic policies and once again demanded a change of course. The only conceivable way of pulling the eurozone out of crisis is a combination of measures aimed both at boosting economic growth and at a gradual reduction of debt levels and macroeconomic imbalances. The ETUC is calling for a “New Social and Green Deal” consisting of a large investment plan, the issuing of eurobonds, low-interest liquidity provision by the European Central Bank (ECB) and a low-carbon industrial policy underpinned by fiscal reforms, which should include a tax on financial transactions. As far as Greece is concerned, it is now clear that it will not be able to break out of the present vicious circle without a really substantial recovery plan financed by the EU within the framework of a sort of Marshall Plan for countries in distress. The ETUC is also demanding a thorough overhaul of the “Euro Pact” – particularly the part on wage and retirement measures.
    Mobilising against social suffocation
    To back this alternative economic programme, the ETUC has held four European action days in the past two years. Demonstrations and strikes spread across many European countries, but they did not build enough pressure to halt the neoliberal steamroller. Back in the days of the “social democratic compromise” under the presidency of Jacques Delors, protests of that size would have been seen as a good reason for getting down to negotiations. Today, that is no longer so. Neither the EU authorities nor those of the member states were swayed by the protest action. True, the European trade union movement has, in the meantime, managed to get the most reactionary legal provisions expunged from the Euro Pact, but its antisocial thrust remains, as do the national austerity plans. At the same time, some pillars of the “European social model” are under relentless attack. Symptomatic of this is the EU political authorities’ refusal to correct the precedent created by the European Court of Justice (ECJ) in the Laval, Viking, Rüffert and Luxembourg cases of 2007/08. Through these rulings, the ECJ called into question the basic principles of social Europe, such as the precedence of basic social rights over the economic freedoms of the internal market, the principle of “equal pay for equal work in the same place”, the right to strike in order to combat wage dumping, and the autonomy of the social partners.
    European trade unionism at a crossroads
    “Social Europe” is under pressure. Clearly, there will be no change of course unless pressure from strikes and political action coordinated at the European level builds up on a scale quite different to anything that has been achieved up to now. And yet, in the wake of the crisis, unions are falling back to defensive struggle positions within national frameworks. Evidently, the unions have put too little energy into European mobilising. Even 80,000 people on the march in Brussels no longer have such a great impact.
    The time has come to re-examine our strategy if we do not want to look on helplessly as the European trade union movement slides into irremediable decline. The current debate on this issue within the political left and the trade union movement is seeing the emergence of two currents of thought. One of them advocates a strategy of “renationalising policy”. Those supporting this “fallback strategy” argue that, as the EU is on the road to neoliberal damnation, the only realistic response would be to set up resistance networks to defend the social State within the national framework. The left-wing supporters of this position are, de facto, putting themselves in the same camp as the conservatives within the trade union movement who, like quite a lot of Nordic confederations, believe that the “lone road” is the best way of defending their “Nordic social model”, even though that model is more and more threatened by new developments within the EU.
    The other school of thought advocates an “offensive strategy” of Europeanising social struggles. Their argument is that the only positive alternative is a quantitative and qualitative leap forward in joint political action and mobilising across Europe. But the days in which such a leap might still be made successfully are numbered. There is a serious risk that the Euro Pact, together with the whole series of austerity plans, will cause such an increase in the imbalances between and within countries that the social and political tensions will become unbearable, due to the rise of populist forces. The already growing tensions among trade union confederations in Europe and among confederations within individual countries (such as Italy) give some idea of where such developments could lead, namely to a catastrophic paralysis of the labour movement.
    Levers for Europeanising social struggles
    The strikes and mobilisations over the past two years in various European countries have led to the emergence of new demands, new forms of action and new alliances from which useful lessons can be drawn for the Europeanisation of trade union resistance networks. At the same time, other routes may lead to the qualitative leap described above. At the ETUC congress, two proposals were discussed for campaigns with the potential to launch a real, coordinated counter-offensive.
    One of these proposals concerns the response to the currently prevailing neoliberal economic policies. It is based on the alternative ETUC economic programme mentioned above, on reinforced coordination of bargaining policy and on an offensive for a European minimum wage policy and against the precarisation of jobs. Workplace strike capacities in support of European demands need to be strengthened in order to achieve these objectives. Granted, the ETUC congress did adopt a proposal from the Spanish confederations CCOO and UGT, calling for serious examination of the feasibility of coordinated strikes or a European general strike, but it did so without conviction. Clearly, the political will is still lacking, but this state of mind could change if the pressure of suffering continues to mount, which it probably will.
    The second proposal, entitled “Equal Pay, Equal Rights”, aims to give new impetus to the struggle for workers’ rights, which are under attack almost everywhere, as well as the struggle against wage dumping. To support this campaign, the Swiss Federation of Trade Unions has proposed the launching of a European Citizens’ Initiative (ECI) entitled “For a Europe without wage dumping – Priority for basic social rights over economic freedoms”. Under the new Lisbon treaty, citizens can petition EU authorities on new policies and legislations with one million signatures. An ECI of this kind would be aimed at giving the EU a mandate for the legislative measures needed to ensure that precedence for basic social rights over economic freedoms becomes generally applicable throughout the European Union.
    Launching such an ECI would enable broad awareness-raising (and mobilisation) in workplaces and among the union rank-and-file right across Europe – something that has not been possible so far. Other social movements and political forces that share our concerns about the future of social Europe could be associated with the ECI. The ETUC congress accepted this second proposal, which a working group is to put into concrete form by the end of this year. But it did not give a clear green light to the decisive lever for such a campaign, namely the ECI. The reservations come from countries such as France, the UK and Italy, whose union confederations say they have no tradition of collecting signatures for this kind of instrument. They are underestimating the potential of a citizens’ initiative as an instrument of decentralised awareness-raising and political pressure for a common objective throughout Europe.
    The ETUC congress could have sent out a strong signal for a large-scale political and trade union European counter-offensive. The lack of energy to go down that road is probably due to the way that unions in quite a few countries have been hit and weakened. Nonetheless, it may well be that a response on a scale to match the current challenges will become possible once the pressure of suffering rises even further, and people will be forced to realise that a social and political turning-point cannot be reached without strengthened trade union policy coordination beyond national borders. This will require an alliance with all interested social movements and political forces. The future of social Europe and of the European integration process is at stake.

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    Vasco Pedrina is the National Secretary of the Swiss inter-professional trade union Unia and Vice-President of the Building and Wood Workers’ International (BWI). He represents the Swiss Federation of Trade Unions (SGB/USS) on the ETUC Executive Committee.

    5 July 2011

    Building Progressive Alliances

    Asbjørn Wahl
    The social conflict in Europe has intensified strongly over the past couple of years, in the wake of the financial crisis. The labour and trade union movement has been on the defensive ever since the neoliberal offensive started around 1980. The balance of power in our societies has thus shifted enormously over the past 30 years - from labour to capital, from democracy to market forces. Time is ripe, therefore, to fight back, to build broad social alliances and to reassess our strategies and tactics.
    In this article I will take a closer look at the current situation, address the question of alliance building and particularly summarise some of the experiences we have had in building alliances in Norway. My point of departure is that social development is a question of power, social power, and strength. If we are not able to mobilise sufficient social power behind our many excellent demands, they will only end up as wishful thinking.
    The current situation
    The situation in Europe is going from bad to worse. Subsequent to the financial crisis, we are now facing a crisis of state financing, which is gradually turning into a deep social and political crisis. Add to this the environmental and climate crisis, and the future looks rather dramatic.
    Perhaps we should have expected the financial crisis to be followed by strict regulation of financial capital and an end to the neoliberal experiments which contributed so strongly to it. However, quite the opposite has happened, neoliberals are still running the business, both politically and financially. They have even been able to win hegemony for their interpretation of the crisis. It is no longer the capitalist crisis which has led to the mess, but ordinary people who have been living beyond their means. Workers and pensioners have to foot the bill, after the financial institutions and speculators were rescued by governments. This has led to reactionary and anti-social austerity policies across Europe, including fierce attacks on trade unions as well as on wages, pensions and welfare services.
    One of the reasons for this development is the weak resistance from trade unions and social forces in Europe. As long as we are not able to shift the balance of forces in society, the neoliberals will continue their silent revolution (as EU Commission President José Manuel Barroso has characterised the current attempts to further de-democratise and take control over economic government in the EU). Already in eight of the EU member states public sector wages have been cut and collective agreements set aside through political decrees – without negotiations with trade unions concerned. While employers and governments are thus breaking completely with post-war consensus policies, many trade unions are still clinging to the illusion of a working social partnership, in which reasonable employers will be convinced by our arguments. However, this consensus was based on a particular balance of power which has shifted enormously during the neoliberal era of the past 30 years. What is going on now is therefore a fierce interest-based struggle, and every sign tells us that the confrontations will increase in strength. We are under attack, and it is a matter of urgency to fight back.
    Build alliances
    In order to confront the attacks, we have to reorient our unions, and to build broad social alliances to increase our strength. This is a struggle for power, and the struggle has to be political (not party political, but political in terms of addressing social development in the broad sense). The aim is to widen the social basis of our struggle. To that end, we will have to broaden the perspective of our policies and demands.
    Alliances can change according to the situation and the aim of our struggle. In the current situation, in which the very foundation of our social achievements is being attacked, it is the broad social alliances which are decisive. In other words, we have to identify common interests with other groups in society. Thus, our alliance policy has to be built on class analyses and practice, not on empty rhetoric and lip service.
    Firstly, we have to strengthen our unity within the trade union movement, i.e. in the working class itself, across the divides between public and private, blue collar and white collar, skilled and unskilled, workers and professionals, employed and unemployed, male and female, immigrants and domestically based, as well as formal and informal workers. Secondly, we should build alliances between social classes and strata, like with important parts of the middle class, of peasants, of youth and of women who can be mobilised in favour of social protection and progress. Thirdly, progressive academics and researchers, NGOs and organisations and campaigns which have an understanding of the broader social context are important social allies. Fourthly, and finally, due to the alarming climate crisis, we should seek alliances with those parts of the environmental movement which have an understanding of the social conflict and social justice.
    Norwegian experiences
    In Norway we have been building alliances between trade unions and other organisations and movements for many years. The one I have been in charge of, the Campaign for the Welfare State, was initiated in 1999, by six trade unions in the public sector. Gradually we grew, firstly inside the trade union movement, but then also among other organisations, such as of retired people, peasants, socially excluded people, users of welfare services, women and students. All in all we gathered organisations with more than one million members, which is not bad in a country with only approximately five million inhabitants. Of course there are different levels of participation among these organisations, but even the support from the more passive ones has given us a lot in terms of legitimacy in the social struggle.
    During the general election in 2005 this alliance, in cooperation with other organisations and the broad trade union movement, succeeded in changing the political situation in Norway. It was a favourable climate for change because the existing centre-right government was highly unpopular due to its policies of privatisation and deregulation. Further, the Labour Party had been strongly punished by the voters four years earlier, when it achieved the lowest support in an election since 1924, because of its move to the right. This gave us an opportunity to push the Labour Party to the left and into a coalition with the Socialist Left Party and the Centre Party. Due to this pressure, all the three parties campaigned on an anti-privatisation platform, won the election, and formed a government based on the most progressive political platform in Europe.
    More independent – more political
    We can identify four main pillars which contributed to this success:
    • Focus on alternative analyses – a system critical view of current developments.
    • The building of new, broad and untraditional alliances.
    • The development of concrete alternatives to privatisation and marketisation.
    • The development of trade unions as independent political actors.
    These steps contributed to polarising the struggle between the Right and the Left, something which gave people clear political alternatives and helped mobilise them for progressive change.
    The 2005 red-green government in Norway started off by carrying through a number of progressive policies. However, as time went by, and the pressure from the movement declined, the government began to slide back to old political positions. Even if great parts of the trade union movement politically had become more independent from the Labour Party, other parts were still too loyal to oppose and to keep up the pressure when welfare provisions were weakened and undermined by ‘their own’ government. It is exactly the move to the right of the traditional Social Democratic/Socialist Parties which has made it necessary for trade unions in the current situation to become more independent politically and to take on a wider political responsibility and, not least, to keep up the pressure on the government after it has won the election and taken power.
    So far we have only seen the beginning of the social and political crisis in Europe. In other words, it is time for trade unions which are old-fashioned, afraid of new alliances, afraid of losing control, more or less married to social democratic/socialist parties and locked in by an uninhibited belief in social partnership, to reassess their position. Social resistance to the austerity policies is increasing across Europe, but there is a lack of European coordination and leadership. We have to support those who struggle and follow their example. We have to turn the defensive into an offensive. It is all about power, not only addressing power, but taking power, if we are to stop the current development towards an ever more authoritarian and anti-social Europe.

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    Asbjørn Wahl is Director of the broad Campaign for the Welfare State in Norway and Adviser to the Norwegian Union of Municipal and General Employees. He is also Vice Chair of the Road Transport Workers’ Section of the International Transport Workers’ Federation.

    8 June 2011

    Bringing Politics Back In

    Nicolas Pons-Vignon
    Many progressive economists and trade unionists have sought to engage in dialogue and negotiations with capital and governments during the global financial crisis, hoping they could achieve the adoption of reasonable and balanced policies. They may have done so because such an approach used to work in the past, especially in social-democratic contexts, or because, in the early days of the crisis, they were listened to as respectfully as during the high time of the “Keynesian compromise” in economics. They may be convinced that governments should “see” what is happening and want to adopt more inclusive policies. But as the General Secretary of the International Trade Union Confederation (ITUC) Sharan Burrow puts it in a Global Labour Column, “If during the crisis workers’ organizations could have anticipated that a new era of dialogue had begun, the moment has clearly passed”. Governments are indeed not seeing anything; in fact, the way in which they have responded to the crisis indicates that relying on strong arguments is insufficient. Are neoliberal policies, and the huge increases in inequality they have caused, responsible for the crisis? Well, the policies adopted in the wake of the crisis amount to more of the same – from the absence of any meaningful regulation (or rather, curtailment) of financial “innovation”, to the public bailing out of banks by states who then in turn reduce their spending, thus passing the costs of the crisis on to ordinary workers and unemployed people. Trade unions have been using their organizational and institutional power to resist relentless attacks on social and labour rights. Nevertheless, after decades of retreat, the financial crisis is rapidly weakening further their traditional pillars of power and influence. What is to be done?
    Labour faces the urgent need to overcome the dilemma that it cannot let its influence slip further, while a more oppositional strategy carries the risk of further marginalization if it fails. This may be what will happen in France, even if, despite its failure to thwart the pension reform, the strength of the movement which took place in autumn 2010 breeds optimism. Trade unions have recognized the need to fight precarious employment, to build new alliances (for instance to defend the rights of domestic workers), to make efforts to organize workers, and to regain democratic control over markets. But achieving a meaningful reduction in inequality (and in the power of finance) will require both the formulation of convincing policy alternatives and a determination to fight for them. This requires more than good ideas and determined cadres, however, it demands imagination, will and the confidence of people in the possibility of change.
    While it is important to recognise the positive dimensions of recent mobilizations, it is also apparent that on balance they lack political inspiration and momentum. There are four areas where the fight against neoliberalism must be waged in order to be successful – and to allow a coherent project to emerge. These four areas are, in increasing order of importance, academia, ideology, policy and politics.
    On the academic front, the dominance of neoclassical economics ought to be contested vigorously – at least as vigorously as it has contested the right to exist of any so-called “heterodoxy” in its heart while “colonizing” other social sciences (Fine and Milonakis, 2009). It can hardly be doubted that today’s policy-makers’ inability to take decisive action to leverage state power in order to protect workers is linked to the hegemonic neoclassical discourse of the last decades. If one sees labour as a mere cost and unemployment as voluntary, it would be hard to believe that higher wages would improve a derelict situation. The struggle for plurality in economics will first have to be national – and initiatives such as the newly formed French association of political economy (AFEP, see www.assoeconomiepolitique.org) are to be commended – but will also have to draw its strength from international alliances. Indeed, only a concerted international initiative will succeed in affecting the self-reproducing hierarchy of economics journals – none of which, in most classifications, include a single non-exclusively neoclassical review in the highest category!
    On the ideological front, the time has come to contest the hegemony of the market. Simplistic notions such as “the private sector is more efficient” must be boldly challenged in the public debate, along with calls for the systematic inclusion of the private sector in public investment, as in public-private partnerships, or for the commercialization of the operation of state functions, whether utilities or other areas such as healthcare. The arguments used to support such claims are often grounded in lies (as in the case for pension reform in France), or in collections of one-sided anecdotes, such as the article on industrial policy published by The Economist in August 2010[1] which lists the failures of publically supported companies – as if all private companies were successful! Biased use of words is also at the heart of neoliberal ideology, as for example in the case of “liberalization”: it is not “liberty” which is at stake here, but increased involvement of (and profits for) private capital. At the heart of this agenda lie institutions such as the European Commission, which is persistently pushing for the “opening to competition” of sometimes very well-run public entities. In countries such as the United Kingdom, and in many of the transition countries subjected to “shock therapy”, the drawbacks of privatization and liberalization are crystal-clear. As for the workers and unions, the defence of their rights (except when it is narrowly defined) should make them proud rather than ashamed. I remember seeing a Trades Union Congress (TUC) leader almost apologizing to a BBC journalist for contesting the massive public sector cuts the Government was proposing. The journalist was scornfully saying that “Irish workers are proving much more responsible (sic) and willing to share the costs”. Workers’ rights are not at odds with economic growth, or with a country’s national interests, despite Fiat CEO Sergio Marchionne’s relentless claims to the contrary in Italy. At the heart of the ideological fight back, a decisive policy to curb the influence of corporate-funded lobbies is necessary.
    On the policy front, the one where most Global Labour Column discussions have focused, it is time to call for bold policies which will thoroughly break with the financial and privatizing frenzy of the last 30 years. Macroeconomic policies should be refocused to support employment creation, to play a counter-cyclical role and to support real stability – an objective hardly compatible, for many countries, with full-blown liberalization. Microeconomic policies, in particular industrial and competition policies, should be rehabilitated, as they are the key instrument that governments can use to stimulate and orient growth. In developing countries in particular, the possibility of using trade policy to support development objectives is absolutely essential. In a world where climate change is becoming an ever-more looming threat, strong policies aimed at processing minerals (creating local employment and reducing transport costs), developing alternative energy sources and ensuring minimal consumption in industry, transport networks and private and commercial dwellings would be hardly possible without state intervention. Competition policies aimed at regulating the private sector are, in a world of increasing corporate power, one of the tools most necessary for countering the influence of companies on consumers and workers alike. Likewise, the governance of corporations cannot be conceived narrowly as the accountability of managers to shareholders; workers and their representatives must be at the heart of our understanding of corporate governance.
    But none of the above fields of struggle is as important as the political one – which is itself highly dependent on the previous three. The most impressive achievement of neoliberalism has undoubtedly been its dramatic weakening of the political power of workers, unions and the parties aligned with them. In many cases, the politics of the latter have been dramatically altered, with many “labour” parties now having programmes that could hardly be distinguished from their right-wing counterparts. Unions have lost many workers, especially outside the public sector, and the growing “precariat” described by Guy Standing (2011) is often either disillusioned with unions or afraid to join them because of explicit or implicit threats by employers. Restoring the power of workers and unions, starting with the workplace, is more than ever a priority: a strong and mobilized base is the necessary blood of any successful political movement. It is very encouraging to see strikes in the public (for instance in South Africa) as well as in the private sector that are increasingly articulating broader political demands. In the United States, the recent movement against the curtailment of public sector workers’ collective bargaining rights in Wisconsin (and the threat of similar campaigns in other US states) may signal both the political awakening of unions and the end of “Reagan’s spell”, under which many working- and middle-class Americans supported policies that harmed them[2]. Linking workplace and other progressive movements in order to promote a new political project, however, will require overcoming the “third way” impasse which so many parties have embraced in order to secure electoral success.
    The Global Labour Column has established itself as a forum of debate on the nature of the crisis and on the policies which should be adopted to defend the interests of workers worldwide. In so doing, it serves as an intellectual and policy toolbox which does not shy away from asking tough questions, such as: Why did a policy change not happen despite the failure of the current economic regime? How should unions change, and what must they change in order to weigh in more strongly on the policy choices that confront the working class? After issuing a (largely unheeded) call not to “waste the crisis” in the first Global Labour Column anthology, the second yearbook, There Is An Alternative: Economic Policies and Labour Strategies Beyond the Mainstream (Geneva: ILO, 2011), confronts the policies that have been implemented in the wake of this great depression – as well the resistance they have met. As one of the continents hit hardest by the crisis, Europe is extensively discussed, with an unambiguous call to reinvent it to avoid its collapse. The neoliberal Europe, focused on defending the interests of large corporations, must give way to a progressive entity that seeks to reduce inequality between and within its Member States. The impact of neoliberal globalization on development policy is also discussed, together with possible alternatives. The increased openness and fiscal “discipline” imposed on developing countries following the debt crisis of the 1980s contrasts with the readiness to extend new borrowing facilities to the banks and financial operators that brought the global economy to the brink of collapse[3]. The massive drop in demand by rich countries has shown the crucial importance of building domestic demand (isn’t development about this?) rather than focusing solely on cutting labour and other costs in the hope of being competitive in export markets. The book also addresses the central issue of inequality, which was at the root of the current crisis and serves to reveal the class interests which have been the engine of neoliberalism. Finally, the defence of workers’ rights and wages is shown to be absolutely necessary to ensure sustainable growth in the world, with ILO Director-General Juan Somavia calling for “decent work for all everywhere”. It is an ambitious programme, as it will imply reversing deep trends such as the exclusion of many workers from wage negotiations or growing casualization and wage inequality. But such ambition is necessary if we want to believe that there is an alternative; it will require a broad and vigorous mobilization to succeed. It is high time to bring politics back in.
    [1] ”The global revival of industrial policy. Picking winners, saving losers”, The Economist, 5 August 2010, http://www.economist.com/node/16741043. Interestingly, the online debate on The Economist’s website yielded an  overwhelmingly “pro” industrial policy result, with 72 per cent of voters disagreeing with the motion that “industrial policy always fails”.
    [2] On Wisconsin, see C. Feingold, ”The march to protect workers’ rights and the  middle class”, Global Labour Column, 28 March 2011, as well as R. Fantasia, ”Could Wisconsin break Reagan’s spell?”, Le Monde diplomatique, April 2011.
    [3] On financialization, see as Frédéric Lordon’s brilliant essay (in French) on the financial crisis (2008), as well as the publications of the London-based ‘Research on Money and Finance’ group –
    www.researchonmoneyandfinance.org/.

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    Nicolas Pons-Vignon is the editor of the Global Labour Column and a Senior Research Fellow with the Corporate Strategy and Industrial Development (CSID) research programme, University of the Witwatersrand, South Africa. He is also the founder and director of the African Programme for Rethinking Development Economics (APORDE).

    References:
    Fine, B.; Milonakis, D. (2009), From Economics Imperialism to Freakonomics: The Shifting Boundaries Between Economics and Other Social Sciences, London and New York: Routledge.
    Lordon, F. (2008), Jusqu'à quand ? Pour en finir avec les crises financières, Paris: Raisons d’agir.
    Standing, G. (2011), The Precariat: The New Dangerous Class, London and New York: Bloomsbury Academic.

    9 May 2011

    Where is the Trade Union Reform and Labour Legislation in China heading to?

    An interview with two labour and trade union activists
    A wave of workers’ resistance swept China in 2010, with suicides by some Foxconn workers, and a large workers’ strike at Honda drawing immense social attention, local and global alike. This has compelled the Chinese government to come up with some new policy initiatives to contain the labour unrest, including trade union reform and collective bargaining legislation. Given these labour reforms a few questions arise:
    • Where is this labour reform heading to?
    • What are the crucial factors that can make workers benefit from this reform?
    • Can the party-led state trade unions be transformed to serve workers’ interest?
    In an interview conducted on 10th March 2011, Monina Wong, the Director of the International Trade Union Confederation/Global Union Federation Hong Liaison Office[1] (IHLO) and Mr. Parry Leung, the Chairperson of Students and Scholars Against Corporate Misbehavior[2] (SACOM), shared their viewpoint on these issues.
    Elaine Sio-ieng Hui [E]: What kinds of labour issues have been raised by the series of workers’ suicides in Foxconn in 2010?
    Parry Leung [P]: Although it hardly violates any laws, Foxconn, a supplier to many global electronic brands, has a highly oppressive production regime under which workers have no means at all to voice out their discontent. They felt so desperate that they resorted to suicide as a silent demonstration of their defiance. My observation is that no matter how much internal migrant workers from the rural areas have been exploited in urban factories, in general they still have room, however little it is, to show their resistance, for example, by means of strikes, road blockades and so forth. But in Foxconn this is not possible. It does not only strictly control the production process in factories, but also the private life of workers. For instance, all workers must stay in the dormitory provided by the company, but those coming from the same home province or working in the same production line are not allowed to share a dormitory room; this is a tactic to prevent the building up of rapport and support among workers. Another example of Foxconn’s infringements on workers’ private lives is that all calls from the dormitory to the police hotline in the city will be automatically diverted to the security station in the dormitory; Foxconn has formed a small kingdom of its own which is basically not subjected to outside interference.
    E: The Honda workers’ strike in 2010, which lasted for 17 days and involved over 1800 workers to demand a wage increase, is seen as starting on a new stage of labour resistance in China. What are its implications for labour relations in China?
    Monina Wong [M]: This strike ended with a 32.4% wage increase for the Honda workers, who have demonstrated a high level of consciousness concerning their positions in production and are aware of the serious impact of their strike on the overall production of the enterprise. They have also manifested a clear consciousness regarding the proper function of trade unions; they were exasperated when they found that the enterprise trade union was on the side of the management, instead of supporting the strikers. In the past decades, we used to treat Chinese migrant workers as exploited objects that needed outside help to protect them. But now we see that they are active agents who have the labour consciousness needed for advancing their interests with collective means. And so far, the Honda workers’ strike is the most effective and powerful strike launched by migrant workers that is capable of upsetting the regional production of a transnational company.
    The physical confrontation between trade union officials (who leaned towards management) and workers during the strike has triggered immense social discussion on the proper role of the Chinese trade unions. After the strike, the official party-led All China Federation of Trade Unions (ACFTU) and the government tried to alleviate labour discontent by speeding up the pace of trade union reform and by introducing collective bargaining legislation. It is good that these two issues have become the agenda of the ACFTU. However, at present most trade union education, if there is any, is solely conducted by the ACFTU while other relatively independent agents (e.g. international trade unions, labour NGOs) have no role to play in the process. The degree of democracy and accountability available to members inside trade unions and the ACFTU at the moment is still at a low level. Therefore, we need relatively independent trade union education among trade union officers so as to ensure the effective and genuine implementation of trade union reform and the collective bargaining mechanism.
    E: Recently the Chinese government and the ACFTU were promoting legislation on collective bargaining. In your opinion, what are the driving forces for that?
    M: In 2004, the government attempted to build up a workplace collective bargaining mechanism by means of ministerial regulations issued by the Labour and Social Security Bureau, but it was not very effective as not many enterprises followed the instructions. In 2005, the ACFTU started to unionize the Fortune 500 corporations in China. Subsequently, trade unions were established in Wal-Mart and many other foreign enterprises, but many people know that they are paper unions only and that the collective contracts they signed with the enterprises remain a formality.
    After the world economic crisis broke out in 2008, many enterprises in the Pearl River Delta have been shut down. The central government and many local governments realized that the country’s economy could no longer depend entirely on export-oriented industries and that it had to develop a consumption-based economy. It is in this context that the ACFTU and the government have again picked up momentum to push forward collective bargaining legislation, which they hope will lead to better wages, and thus to higher consumption by workers. It is also hoped that such measures can help reduce labour unrest and maintain political stability.
    P: The legislation on collective bargaining is related to the waves of labour resistance occurring in the country, especially in South China, in the past decades. The government is aware of the increasingly intense labour discontent, which it has been trying to alleviate with an individualized legal approach; this explains why the Labour Contract Law and the Labour Dispute Mediation and Arbitration Law focusing on individual legal rights were passed in 2008. However, after the breaking out of the world economic crisis in 2008, it is evident that this individualized legal approach no longer works. On the one hand, the number of labour disputes increased dramatically at the time, and the fact that so many workers went for arbitration led to the overburdening of courts; workers had to wait, on average, for 9 months to have their claims dealt with. On the other hand, many of the labour disputes are beyond the scope of existing laws, and thus could not be effectively settled by the court. Since the individualized legal approach cannot properly handle workers’ grievances, many workers resort to collective means, such as strikes and road blockades, to defend their interests. In order to pre-empt labour unrest and prevent it from erupting into social rebellion, the government is trying to absorb workers’ discontent through the use of collective bargaining.
    Although the proposed collective bargaining legislation has given some room for the collective organizations of workers, it remains constraining in some areas. For example, the proposed legislation only allows workers to negotiate certain items (such as wages, working hours, welfare etc.) with employers. Besides, collective bargaining can only be carried out by the trade unions, despite the fact that many trade union officers are appointed by the enterprises or by higher-level trade unions; workers are not allowed to elect their own representatives for bargaining. The government is trying to eradicate factors that can cause social unrest through developing collective bargaining legislation; it tries to divert aggrieved workers from open resistance to the bargaining procedures. And, most importantly, it has delegated the party-led trade unions to take charge of the bargaining so as to ensure everything is within its control.
    E: What is the role of party-led trade unions in promoting the collective bargaining mechanism?
    M: A genuine collective bargaining system should include the process of consulting their members before trade unions negotiate with employers. However, in China, a top-down approach has been used by the ACFTU. It is a common practice for it to send invitations for collective negotiations to employers and to reach agreements without informing or consulting its members. Democratic participation is a process to educate workers about true unionism. But “negotiation” in China is usually ends- oriented and the ends (e.g. the wage increment) should not contradict the conditions of the “larger context”. Priority to the “larger context”, according to the Party and the government’s definition, results in “negotiations” led by the administration, not workers. In view of this, in order to build up a genuine collective bargaining system in China, trade unions should initiate a proper reform first, enabling democratic and grassroots participation, so that they could truly represent workers’ interests. At the moment, there are many “fake” trade unions at the enterprise level; to tackle this problem, it is very crucial that workers’ trade union consciousness be cultivated properly, so that they understand the importance of having their trade union representatives being able to represent their interests and accountable to them. A very critical foundation for achieving this is to make trade unions financially independent from the companies or the government. In the past, most enterprise trade union officials are paid by the enterprises, while the current trend is that the government is paying their salaries. Neither of these practices is ideal; they will either make the enterprise trade unions a management-union or a party-union.
    [1] The IHLO is the Hong Kong Liaison Office of the international trade union move ment, which has a mandate to support and represent the international trade  union movement in Hong Kong and to monitor trade union and workers' rights  and political and social developments in China. Readers can learn more about it  from its website http://www.ihlo.org/
    [2]  SACOM aims at bringing concerned students, scholars, labor activists, and con sumers together to monitor corporate behavior and to advocate for workers’  rights. It teams up with labor NGOs to provide in-factory training to workers in South China. Readers can learn more about it from its website http://sacom.hk/mission

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    Elaine Sio-ieng Hui is a PhD candidate at Kassel University, Germany, and she also works as a research assistant in the City University of Hong Kong.
    Monina Won is currently the Director of the International Trade Union Confederation/Global Union Federation, Hong Kong Liaison Office.
    Parry Leung is the Chairperson of Students and Scholars Against Corporate Misbehavior and a researcher on labour issues in China.

    19 April 2011

    Fiat is at War, says Sergio Marchionne




    Francesco Garibaldo
    Pomigliano, situated in the economically depressed region of Campania, is the second largest Fiat plant in Italy. An experiment aimed at redefining the Italian system of industrial relations is taking place at this plant. It started with an agreement designed out of the Italian labour relations law. According to Sergio Marchionne, Fiat’s CEO, this is a necessary step to fight the war posed by global competition.
    The Pomigliano agreement, signed by three of the four metalworkers’ unions (FIM, UILM and FISMIC), with the exclusion of the most representative (FIOM), gave a strong impetus to the process, started in 2009, of the deconstruction of the social pact set up in July 1993.[1] The pact, similar to the European tripartite incomes negotiation system, was based on a dual system of bargaining: on one hand, a national contract for each sector with an upper limit to wage increases, defined by the government and dependent on national macroeconomic conditions; and on the other, the possibility of the bargaining company’s agreements to redistribute the firm’s specific productivity gain. The core of the system was the national collective agreement regulating the main features of the employment relation. The company-level bargaining was only designed to fine-tune secondary aspects, not to allow local actors to depart from the national contract’s clauses. The system was ineffective in defending wages from inflation; as a result, in the past 10 years, there has been a shift of five points in the ratio of wages to profits in GDP.
    Another negotiating system, replacing the 1993 system, was implemented in April 2009. Signed by three of the four union federations and Confindustria (the Italian employers’ federation), it paved the way to a separate collective agreement in the metalworking sector, which signed in October 2009. The new sectoral agreement increased the role of company-level bargaining, at the expenses of the national sector contract. Moreover it introduced a three-year term for all aspects of sectoral collective agreement, whereas previously pay terms applied for two years and non-pay terms for four years.
    In between, the government launched a white paper introducing a new concept for social policies. The new metal sector agreement and the white paper framed a general shift in the Italian system of industrial relations and of the welfare state from a two-level system centred on the national contract to a new system centred at the company level, allowing concessions bargaining through derogation on specific features. Alongside this, a new welfare system emerged, based on the devolution of many public prerogatives to the private sector.
    Cgil, the main Italian trade union, did not sign the April 2009 agreement and continued to support the centrality of the national contract, particularly relevant in Italy where almost 90 per cent of employees work in companies with fewer than 20 employees (and where bargaining at the company level would therefore produce uneven and unpredictable consequences). FIOM-CGIL, the metalworkers’ union, did not sign the sectoral agreement of October 2009. Instead, FIOM asked for a referendum to ratify the new agreement, but FIM and UILM refused to do so. As a result, employees could not express their opinions on the new contract, signed by two of the three main unions – but not the biggest one.
    From class conflict to workplace cohesion?
    In the midst of a very difficult situation for most European car producers, mainly due to overcapacity of the automotive industry, Mr. Marchionne depicted the new fierce global competition in the sector as a “war” between people working in the same company and those working in other areas of the world. From this perspective, the difference of interests between workers and managers/capitalists, not to mention the class conflict, is irrelevant. Capitalists, managers and employees of a specific company have to fight, side by side, against all the other companies to survive. Of course, during “war”, some rights cannot be guaranteed and multinationals must try to standardize employment relations. When a system such as the Italian one is less prepared for the war because it is too rigid and protective, it must be changed.
    The problem is, therefore, not only to reach agreements with trade unions on flexibility and cost control, but also to change the nature of industrial relations; managers must be allowed to reshape the employment relation. Marchionne asked the workers to undergo a dramatic worsening of working conditions: the increase of the working week to 48 hours; the reduction of the breaks from two 20-minute to three 10-minute breaks; and the lunch break moved to the end of the shift. On top of these new conditions, aimed at increasing productivity, Marchionne has also requested a collective and individual liability clause over all contract terms; virtually every employee and union must accept all contract terms under penalty of exclusion from the company. This particular clause firstly seeks an ultimate disciplining of the workforce and secondly the ousting of the most representative and combative metalworkers union from the plant and ostensibly from the whole sector: if FIOM were to refuse the new conditions of the contract, it would be automatically deprived of trade union rights. Moreover, from an individual point of view, the agreement forbids any strike against the new regulations. This new approach to industrial relations represented a shock for the Italian system for many reasons.
    Labour rights under attack
    The main formal issue raised against Marchionne’s new approach is that, according to the Italian constitution, the right to strike is not a trade union right but an individual right. For instance, a group of employees, even if they are a minority, can strike against an agreement signed by the trade union. A union, on the other hand, must be legitimated by the employees it claims to represent, meaning they cannot impose a dramatic worsening of workers’ rights without consulting them. The right to strike can be limited by the law for the sake of the public interest, as happens in certain areas of the public sector (e.g. hospitals and transport), but this discipline does not change the constitutional nature of the right: trade unions cannot sign an agreement limiting the right to strike without the explicit consent of members.
    A second issue is the nature of the national contract and its relation with company-level bargaining. In its original form, the contract used to allow minor derogation at the company level. The possibilities for derogation increase in the revised form of the contract; nevertheless, what is reached in a specific company cannot be applied to the sector as a whole. To achieve such a sector-wide derogation is clearly what Fiat seeks to do.
    The third issue is that the separate contract for the metalworkers did not legally replace the previous contract, which included FIOM, and will be formally valid until the end of 2011. It follows from the fact that the FIOM has not agreed to replace the old contract. This is important for all social actors, as in Italy contracts have a continuation clause, so if a new contract is not signed by all the signatories, the old one remains in force.
    However, Fiat decided to press ahead with the new contract for the Pomigliano plant. Commenting on the possible result of the referendum among the workers, Fiat’s CEO stated openly that in case of a negative vote, the investment of Fiat to relaunch the plant would be cancelled.
    The Pomigliano agreement was signed against the background of this threat, and the workers were asked to ratify it in a referendum. FIOM did not refuse to bargain on flexibility but it refused to sign the agreement and to endorse the use of a referendum in this case because the agreement altered the conditions under which an individual right – the right to strike – could be exercised. Such an alteration cannot be decided by trade unions, let alone employers, because this right is not theirs. The positive vote in the referendum was, however, fully endorsed by the other unions because they feared that employees would be made redundant by Fiat. While all the unions and the press were convinced that the referendum would be a landslide victory for Marchionne, nearly 40 per cent of employees – and the majority on the assembly lines – refused the agreement. Marchionne reacted very angrily because, although Fiat technically won the referendum, it found itself in the uneasy situation of having to operate a factory facing serious opposition and collective action from a large part of its workforce.
    It was because of this result that Marchionne decided to “up the stakes” and to condition further investment in Pomigliano to an alignment of the national branch contract for metalworkers to the one adopted in Pomigliano. This would require changing the national branch contract with the agreement of Confindustria (the employers association) as well as FIM and UILM. Only if this condition were fulfilled would Fiat implement its commitment to invest. This would extend some of the most shocking concessions made in Pomigliano to all Italian metalworkers, starting with the curtailment of the right to strike, with the threat of monetary and disciplinary retaliations for each employee and for trade unions should a strike nonetheless take place.
    This goal was achieved in September 2010 with an alteration of the separate collective agreement in the metalworking sector signed in October 2009, extending the clauses valid for Pomigliano to the sector as a whole. To add insult to injury, Fiat decided to shift the production of higher value added products from Pomigliano to Tychy in Poland, while transferring a product with lower added value from Tychy to Pomigliano (namely the new Panda). However, should the management not feel certain that it can exercise strict control over the plant, Fiat decided to create a new company from scratch, firing all the employees and rehiring only those who fully accept the new collective agreement.
    The result is that investment in Pomigliano is still uncertain, but metalworkers have surely seen their rights shrinking dramatically and their solidarity becoming fragmented.
    [1] See http://www.eurofound.europa.eu/eiro/1998/03/feature/it9803223f.htm

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    Francesco Garibaldo is an industrial sociologist and the former director of the Institute for Labour (IPL) and of the Institute for Economic and Social Research (IRES-CGIL) at CGIL, Italy’s largest trade union confederation.

    11 April 2011

    Economic Democracy: An Idea whose Time has come, again?

    Richard Hyman
    “There can be no return to business as usual”: this was the unanimous trade union response to the global crisis. For a time in early 2009, the legitimacy of capitalism was itself questioned in unexpected quarters. In May 2009 the German union confederation, the Deutscher Gewerkschaftsbund, organised a ‘Capitalism Congress’ – using language which for decades would have been taboo – and its president warned of unrest on the streets unless jobs were more effectively safeguarded. One of its leaders, Claus Matecki, insisted that it was important to talk of capitalism rather than using the conventional but bland term soziale Marktwirtschaft (social market economy), since only thus could trade unionists make clear that the existing economic order was historically contingent and founded on a fundamental inequality between workers and employers.[1] Yet there was no follow-up.
    Two familiar and intersecting contradictions of union action were evident across Europe. One was the dilemma of short-term imperatives versus long-term objectives. Was the aim to negotiate with those wielding political and economic power for damage limitation, and perhaps a tighter regulatory architecture for financialised capitalism; or to lead an oppositional movement for an alternative socio-economic order?
    According to one Belgian socialist union leader, “The situation really is not simple for trade union organisations. The analysis of the crisis is not complicated: neoliberalism cannot deliver. The difficulty is that today, discourse is not enough. It is easy to say: we need to change the balance of forces. But that does not tell us how to proceed.... Our members expect us to look after their immediate interests.”
    The second contradiction was between a global economic crisis and trade union action which is essentially national or indeed sub-national in character. The international trade union organisations produced powerful analyses and progressive demands, but their impact on day-to-day trade union practice on the ground was non-existent. Indeed the dominant response has been to defend and enhance competitiveness, meaning a struggle of country against country, workplace against workplace, intensifying the downwards pressure on wages and conditions.
    To these two contradictions must be added the loss of a vision of an alternative socio-economic order. Actually, ‘existing socialism’ had discredited the idea of communism long before the fall of the Berlin Wall. Social democracy likewise abandoned the struggle for a new social order in the face of economic adversity, engaging in concession bargaining with multinational capital and the international financial institutions. Centre-left trade unionists came to object to the ‘new, overmighty capitalism’ of hedge funds, asset-stripping, financial speculation and astronomical bonuses. The solution, it appeared, was to seek to restore the old capitalism: the trade union movement should ‘become a champion of good business practices, of decent relations with decent employers while ruthlessly fighting the speculators’.[2]
    So has the crisis indeed been wasted? Perhaps one means of connecting short-term (and probably ineffectual) defence to a struggle for another world of work could be renewed attention to the idea of economic democracy. In the past two years, there has been much discussion of the deficiencies in existing systems of corporate governance, particularly as the liberalisation of global financial transactions has made ‘shareholder value’ the overriding corporate goal even in ‘coordinated’ market economies.[3] The solution, however, cannot simply be a technocratic regulatory fix; what is required is democratic control of capital. With the shock of crisis, some union policymakers have come to recognise that the overriding challenge is to build a movement for greater democratisation of the economy and to create new links between different levels of regulation and different issues on the regulatory agenda.
    Systems of ‘codetermination’ are institutionalised in much of Europe, involving rights of collective representation through works councils, and in some countries employee board-level representation. Such provisions reflect an insistence that companies are not merely the private property of the shareholders, because employees are themselves ‘stakeholders’ with a legitimate interest in shaping corporate goals and policies. Even the strongest systems of works councils, however, have primary jurisdiction over employment issues which arise only after key decisions on investment and product strategy have already been taken: as a German trade union expert noted two decades ago, the more strategic the issue for management, the weaker the powers of the councils.[4] This becomes particularly problematic in times of economic adversity, as primarily enterprise- or establishment-based mechanisms of codetermination are forced to accommodate to the externally imposed imperatives of intensified global competition, and may be unable to do more than underwrite managerial priorities. Though formally intact, the machinery of codetermination no longer provides an effective mechanism for asserting and defending workers’ interests.[5] To address this erosion of effectiveness, ‘industrial democracy’ must be extended to encompass corporate strategy as a whole: in other words, it must be enlarged into economic democracy.
    Elements of such a strategy can be found in the ideas developed by Fritz Naphtali for the German trade unions in the 1920s,[6] which proved influential in the German and Austrian trade union movements in the early post-war years. Socialisation of the economy was an essential goal, but it should be achieved, not necessarily and not exclusively through state ownership but through more diverse forms of popular control. Such ideas helped inspire the demands of Swedish unions in the 1970s for ‘wage-earner funds’, drafted by Rudolf Meidner (a socialist of German origin).[7] The essence of the policy was to establish collective employee ownership of part of the profits of corporate success, in the form of shares held in a fund under trade union control. This, it was envisaged, could provide increasing control over strategic decisions in the dominant private companies. As Meidner himself later conceded, a more flexible set of proposals would have been politically prudent; certainly in countries with far lower trade union density than in Sweden, tying control of collective funds to trade unions alone is not a viable strategy (particularly given past scandals involving union-owned enterprises in Germany and Austria). Nor could the Meidner plan easily function in an era of global financial markets. Nevertheless, some of its themes are particularly apposite at a time when the banking sector has been rescued by a vast transfer of public funds; democratisation of ownership should be a logical corollary. Moreover, while the trade union movement has embraced the demand for a financial transactions tax, the question of its implementation has been little discussed. Why not use the revenue, not simply to plug the hole in national budgets, but to create investment funds under popular control, linked to a democratisation of pension funds (which are in effect, workers’ deferred wages)? These are questions with which trade unionists should surely engage.
    This theme leads to a broader question: what are the possibilities for economic democratisation in the space between state and market? The labour movement has a long tradition of cooperative production and distribution, though in many countries such cooperatives mutated long ago into simple commercial ventures. But smaller-scale, cooperative economic activity has often been able to provide some counter-power to the commodification of social life, particularly in the global South. In a notable recognition of this role, the Self-Employed Women’s Association (SEWA) in India was accepted as a founding member of the ITUC.[8] Do such movements offer lessons for trade unions in the developed economies? In the French-speaking world at least, the notion of a ‘social economy’ has received growing attention on the left.[9] An imaginative response to the crisis ought to draw on such ideas.
    Can economic democracy and capitalism coexist? If the central dynamic of twenty-first century capitalism involves vast concentrations of unaccountable private economic power – and this may well be the case – the answer is clearly no. You can peel an onion layer by layer, but you can't skin a tiger claw by claw... But a simple anti-capitalist response to the crisis is not on the current political agenda. To capture hearts and minds, the labour movement has to commence a campaign against global casino capitalism which is linked to a credible set of alternatives for socially accountable economic life. In the short term, perhaps, a campaign for ‘good capitalism’ may be the only politically feasible [10] For the present, what is needed, in Gramsci’s terms, is a ‘war of position’. The idea of economic democracy offers a vision of popular empowerment which could reinvigorate trade unionism as a social movement and help launch a struggle for a genuinely alternative economy - one in which, incidentally, unions themselves would be more likely to thrive.

    1 Claus Matecki, ‘Warum wir vom Kapitalismus reden’, der Freitag: 26 June 2009.
    2 John Monks, The Challenge of the New Capitalism, Bevan Memorial lecture, 14 November 2006.
    3 See John Peters, ‘The Rise of Finance and the Decline of Organised Labour in the Advanced Capitalist Countries’, New Political Economy 16(1), 2011.
    4 Ulrich Briefs, ‘Codetermination in the Federal Republic of Germany: An Appraisal of a Secular Experience’, in György Széll, Paul Blyton and Chris Cornforth (eds) The State, Trade Unions and Self-Management. Berlin: de Gruyter, 1989.
    5 See Wolfgang Streeck, Re-Forming Capitalism, Oxford, OUP, 2009; Hans-Jürgen Urban, ‘Arbeitspolitik unter (Nach-)Krisenbedingungen: Gute Arbeit als Strategie’, Arbeits- und Industriesoziologische Studien 4(1), 2011.
    6 Fritz Naphtali, Wirtschaftsdemokratie: Ihr Wesen, Weg und Ziel. Berlin: ADGB, 1928.
    7 Rudolf Meidner, Employee Investment Funds, an Approach to Collective Capital Formation. London: Allen & Unwin, 1978.
    8 SEWA defines itself as both an organisation and a movement for women workers on the margins of the formal economy. It has many of the characteristics of a trade union, an NGO and a cooperative. See
    http://www.sewa.org/About_Us.asp
    9 Jean-François Draperi, Comprendre l'économie sociale: Fondements et enjeux. Paris: Dunod, 2007; Jean-Louis Laville, ed., L’économie solidaire: Une perspective internationale. Paris: Hachette, 2007.
    10. Sebastian Dullien, Hansjörg Herr and Christian Kellermann, Der gute Kapitalismus... und was sich dafür nach der Krise ändern müsste. Bielefeld: transcript Verlag, 2009.


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    Richard Hyman is Emeritus Professor of Industrial Relations at the LSE and founding editor of the European Journal of Industrial Relations. He has written extensively on the themes of industrial relations, collective bargaining, trade unionism, industrial conflict and labour market policy. He is currently working on a book comparing trade union strategies in ten European countries.

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