Wednesday, 14 May 2008

The Consequences of Globalisation for Labour.

Stoik Musah,

This essay critically examine the effect of internationalisation of economic activity for employees and labour movement. It considers the contribution of Multinational Corporations in the subject and trace the origin by linking it to the neo liberal structural economic reforms by powerful western countries. It also highlight how globalisation has accelerated trade union movement in the international level. In the end, it argues the inability of an international code of workers right to manage the impact of globalisation on labour worldwide and introduce possible solution for labour to build international working class power.

Literature abounds with various definitions of globalisation. Perhaps this may arise as a result of the fact that the concept has achieved a huge degree of popularity in recent years. This is evident judging by the number of publications on the subject in various social and humanities disciplines. According to Giddens (1990), globalisation is the intensification of world wide social relations which links distant localities in such a way that local happenings are shaped by events occurring many miles away and vice versa. This involves a change in the way we understand geography and experience localness. In a sense globalisation implies a borderless world. Under this perspective, the speed of communication and exchange, the complexity and size of the network involved, the volume of trade that is carried out within short time frame has all given this phenomenon a peculiar force that attract attention(Yaw 1999 ).

From industrial relations perspective, this phenomenon is transforming events in the workplace. It is also changing the nature of the entire world labour markets and employment practices (Dolvik 2001). For example there is evidence( Chaykowski and Giles 1998) suggesting that the transformation of working life in some European Union countries have been greatly affected by this phenomenon. For instance, the emergence of the service economy in developed countries, changes in work systems in developed countries(i.e. the rise of contingent workers, and flexible work practice), rapid technological innovations worldwide(i.e. digitalization), cultural and ideological changes around the globe, the rise of education and business schools, the evolution of gender relations in the workplace etc.(Dolvik 2001)

Equally important is the separation of work from home. Organisation has adopted new technologies that involve people in less face to face interaction. Today most organisations engage in outsourcing some aspect of their operations to enable them concentrate on those activities in which it can establish distinct core competences (Hamel and Prahalad 1994). These development has been brought about by the frequent pressure from organisations stakeholder groups on management to constantly streamline the way business operates. Under this consideration, it becomes interesting to know that outsourcing has become one option on a larger menu of strategies required for efficient business processes. This is because other strategies as corporate restructuring, downsizing, the use of child labour, redundancy and plant closure are sometimes utilized as credible alternative to effect improve business performance (Laabs 1993 )

Within the parameters of these manifestations, tension and pressure emerge in the contractual relationship between capital owners, management and employees (Willmot, 1997). Employees are therefore disciplined by a variety of audits and performance monitoring processes which are intended to secure their cooperation and trust (willmot, 1997). The employer- employee relationship becomes essentially a cost- profit relationship which is governed by a tight financial framework involving penalty for failing to meet performance criteria (Cook, 2006). Employees are sometimes subjected to accept frequent wage cuts and reduction of pension benefits in exchange for job security- since in most cases companies threaten to shut down plants and move to areas where the cost of production is less- which in some cases has resulted in competition between workers from different countries who possess thesame knowledge skill and ability. Like for instance Studies(Heery 2002) on this subject reveals that from the 1980s through the 1990s changes in the UK domestic market exposure to globalisation has frustrated the capacity for trade unions to either block via collective bargaining the transfer abroad an organisation’s operations or block changes in staffing levels using immigrant workers(Heery 2002). This form of unionism based on bargaining is becoming unsustainable as organisation employ the use of sophisticated human resource management practices as selective recruitment, the use of contigent workers and contract workers to promote lean workforce management and greated levels of commitment among employees in the organisation. In consequence, rendering trade union activities less effective among employees (Kochan and Lansbury 1997).

However these actions on the part of multinational corporations can be traced to the benefit accrued from the neo liberal policies of powerful economies after the cold war((Brien 2000 ).This is because at the end of the cold war, the variety of policy responses that have been initiated to deal with structural economic transformation and challenges of increased competition across different nation states was geared towards the promotion of labour market flexibility. This was also carried out as an remedy to allow these countries competitive among other nation states. As a rsult policies as deregulation and privatisation of government managed institutions were introduced to facilitate increased competition between private actors(Brien 2000). Automatically the continue support given to these structural economic transformation by the state simultaneously challenge the power of organised workers. For instance, the extent of independent workers organisation activities interfering in the market was reduced(Brien 2000). Legislation backing these activities- that was required for workplace union participation was also removed and market forces were allowed freedom to dominate the scene(Brien 2000).

Within this broad legal paradigm, scholars(Dolvik 2001) of industrial relation will argue that when such legislative provisions that supports unionisation purpose is removed Trade Union hardly possess strong legal backing to effectively utilize their core power resources of national unionism, which is the legal backing to mobilise membership, engage in collective bargaining, take industrial action, channel voice at the workplace, and use these sources and its weight in elections to gain societal influence through various institutionalised modes of interest representation and political exchange with the state. For example in the UK the neo-liberal policies of the conservative government was bent on weakening trade union influence in the work place and to create circumstances within which management could re assert authority among employees (Waddington 2003).

In the same way the labour constitutional reform of the 1990 which was accompanied by a parallel initiative to diversify sources of funding to the union also contributed to the weakening of the scope of unionisation mobilization in the United Kingdom(Bach 2002; Waddington 2003). This was the main point of conflict between the unions and the party in Tony Blairs second term. The aftermath of this conflict of interest was the questioning of the source of financing the labour party, the eventual expulsion of the rail, marine and transport union for supporting non union labour candidates, the withdrawal of the fire brigade union and the success in union election of anti-Blair candidate to name just a few (Bach 2002).
All these restriction on the legal possibility for Trade Unions to mobilise gave multinational companies more influence to benefit from these neo- liberal policies. And with the help of transnational institutions, as the World Trade Organisation (WTO) and the International Monetary Fund (IMF), other countries that were seeking structural adjustment policy help from the IMF and its sister institutions i.e World Bank- were convinced of these recipes to economic recovery(Brien 2000). It is for this reason that studies on comparative industrial relation assert that multinational corporations and transnational institutions are the key driving force of internationalization of economic activities (Brien 2000).
Consequently, the effect of this evolutional process implies that labour will have to seek new ways to make its existence relevant in the new world order. A movement in this direction is seen in trade union alliance with company’s management in most European Union Member state multinational corporations. This is facilitated by the European Union (EU) workers council directive, which in recent years has lead to the setting up of six hundred and seventy European Workers council in multinational companies operating in European Union states(Dolvik 2001). In the United Kingdom this is reflected in the activities of state institutions as The Department of Trade and Industries- Partnership Funds, which has provided support and knowledge resources to locate new management-union relations(Rainbird 2004).One advantage of such approach to labour policy is that it sometimes serves as a buffer for home company’s - against the power of global market force and also afford unions an opportunity to deepen their institutional roles at various levels at the workplace(particularly strategic areas)(Arkers and Payne 1998). On the other hand, such policy can restrain trade union core power resources of national unionism and even force Trade Union to legitimate workplace change programme that trade off employment security with greater work intensification (Taylor and Ramsey 1998).
Other recent development as the above is the manner at which Multinational companies have now become more dependent in public reputation and credibility. This has made companies more sensitive to campaigns and boycott instigated by Non Governmental Organisations, sometimes in cooperation with Unions to disclose dubious social, environmental and labour practices. In a way this increasing campaign for ethical trade and labour practices has lead to the increasing concern for corporate social responsibilities- an avenue which trade union has exploited greatly to their advantage.
Other recent development for Trade Union as the above is the gradual development of an international trade union structure. This attempt to stimulate renewed labour has led to an inter- relationship with other social movements globally(Brien2000). For instance a grass root mobilisation with focus on women, youth and immigrant workers (since these group of individuals consist of a large part of the working population) (Global Labour Institute 1999). This broad outlook has forced unions to expand its activity in international trade unionism.
A recent development in this direction in Europe is associated with the build up of viable systems of industrial relations, unionism and social protection in some Eastern European Countries and some loosely Trade Union network in other part of the world (Global Labour Institute 1999).This is aimed at making sure that multinational companies do not exploit these countries as havens for socially unprotected, low cost production.(Dolvik 2001). It is however interesting to also include here that the key drivers of global unionism have observed that building trade union strength internationally depend on the organization of the informal sector. This is because a vast majority of the world’s workers, including the poorest - who most need self-defense through organization - are in the informal sector (Global Labour Institute 1999). For instance in Africa, Asia, Latin America, Central and Eastern Europe evidence indicates that the informal sector is rapidly growing as State enterprises are privatized and unemployment increases (the same applies to China).(Global Labour Institute 1999).
Amidst this development a report by the Global Labour Institute (1999) reveals that these informal sectors workers are already organizing partly- into associations which are sometimes unknowingly referred to as Non Governmental Organizations which often have international networks. Unions on their part have observe this trend, that activities and organizations created this way are valuable resources and point of leverage for the entire trade union movement at the international level( Global Labour Institute 1999). In other words if we consider the amount of employees that has been dispersed away from the formal sectors into informal enterprises due to excessively contracting out of various organizational business processes- which eventually has lead to the decline in TU membership in the workplace/formal sector. It is common sensical that by organizing this loosely held workers base, trade union can acquire the critical mass in terms of membership and representativity it lost in the formal sector. For this reason Union has taken this bold step by specifically tailoring programmes to recruit and organize informal sector workers.
An example has been the Self Employed Women’s Association (SEWA) in India, which started twenty-five years ago with a few hundred members and now numbers over 210,000 members in four Indian federal states (Global Labour Institute1999). SEWA organizes home workers, street vendors, paper pickers and refuse collectors, etc. In return the association has created an infrastructure of flanking services for these workers i.e a bank providing microcredit, a vocational and trade union training program at different levels, producers’ cooperatives (artisans, agricultural producers), service cooperatives (health, housing) etc. Also in the UK, are many informal enterprises local projects (NGOs or local authority schemes), and other similar campaigning organization called the National Group on Home Working. This group has led the campaign for home workers to be included in the national minimum wage and has been a major influence on government policy, public awareness and trade union policy on home working (Global Labour Institute1999).

However, in as much as this developments by unions is praised in some quarters, critics condemn the lack of coherence and integration of Trade Unions structures globally unlike their European case, which historically in many aspects remains the backbone of any international union movement worldwide(Dolvik 2001). For instance the present International Trade Union bodies lack strong links with other Trade Union bodies in developing countries and other emerging economies that is playing host to many multinational corporations off shoring operations (Dolvik 2001). The reason for this has been their limited ability to secure political influence through institutionalised representation, and political channels across these areas (regions). For this reason the Trade Union movement in most cases rely on indirect mode of representation using these nation states national affiliate to reach out to members (Dolvik 2001).
Another implication of these recent development for Trade Union is in the various internal problems generated between key International Trade Union Bodies, as they move to revitalise the movement amidst the increasing effect of powerful globalisations forces(Brien 2000, Dolvik 2001). The various International Trade Union bodies has been confronted with magnitude of political reinterpretations of individual objectives and divergent positions on various issues on how to reposition the movement internationally. This has lead to the rift between the ICFTU and the WCL- the two global trade union bodies that should be in the forefront of driving global trade union change agenda and international diplomacy(Crouch 1993, Visser 1995). These obstacles has been compounded by the international absence of adequate political third parties and institutions with rule making power, which historically played a crucial role in the evolution of unionism in Europe(Crouch 1993,Visser 1995).
Furthermore the internet has also contributed to the changing Trade Unions too. For instance the global transnational trade union networks discussed above is being made possible as a result of the internet. This is because new communication technologies create new possibilities for trade unions. Therefore by increasing investment on cyber unionism, to develop transnational union information networks and new ways of mobilisation, unions can now communicate with their entire membership on a daily basis, using email and the web (waterman, 1998). Historically information sharing among members was limited by tight budget discipline on the number of printed newsletters and mail to be distributed to members- which sometimes do not get to their destinations(Centre for Economic Performance 2002). Today the internet has played a big role in strengthening unions by helping to share information across continents to union members. It has also facilitated new ways of mobilisation and recruitment strategies i.e. the emergence of cyber unionism.On the other hand the Internet is a disruptive, even a threatening, technology for those who currently run the trade union movement through traditional, centralised, hierarchical power structures (Centre for Economic Performance 2002). Like for instance, when an individual member obtain full details of an agreement any time of the day or night from the union's Web site, the power of the head office official to control and interpret this information is challenged (Centre for Economic Performance 2002). For this reason, progressive officials will see this new technology as opportunities to democratise the union and empower members, but many of them will feel challenged by technologies that they do not understand and cannot control and they will endeavour to limit its use and development. (Centre For Economic Performance2002)
Another topic for discussion is the increasing literature on the issue of setting a “fair labour standard” globally. This is aimed at reducing the burden of capital flight on labour. In this context, the key issue of concern is on the question of universality of the standards sort, and the appropriateness of the legal enforcement of such standard. Under this consideration, scholars (Hanami 1997, Luce 2005) of industrial relations will argue that many people in the world consider workers right -as presented in various types of legal documents, have their roots in the west and do not belong to them, i.e. secular Middle East and Chinese societies. In other words, these values that are most important in the west are less important in these societies. This is seen in politics and other literature studies where writers and politicians strongly criticize the effort of the west in inducing other people to adopt their ideas concerning democracy and human rights.
For instance Luce (2005), argues that if some of the international labour organisation conventions are ratified universally, it can result in putting workers and employers of poorer countries at a competitive disadvantage. This is as a result of the changing picture of industrial relations and labour market in different parts of the world (i.e. countries where majority of employment is home base production or micro enterprise which has nothing to do with trade union).
Second, is the issue of enforcement of these international standards, which- in some poorer countries can come at a high economic cost(Hanami 1997). For example, the argument for enforcing a universal labour standard will lack strong popularity in poor countries where families only survive through child labour or other labour abuse to children i.e unpaid work in a family business or other informal enterprise. Under these consideration, the only reasonable proposition for setting up a fair international code of workers right can only arise if such provisions allows for varying its strictness or allowing for temporary exceptions in some less competitive countries(Hanami 1997).

Consequently, from the above analysis and discussion so far on the above subject issue, one will argue that the debate on globalisation vis a vis capital- labour relationship is a zero sum game. Taken a holistic perspective on the dynamics of the entire phenomenon discussed one is left with little doubt that, as the influence of big capital grows the influence of labour recedes . At the same time the reverse will be the case if labour influence in the new world order grows, as it will be seen that the influence of capital will recede. The reality is that most of the agenda behind the origin of globalisation has been about expanding the influence of capital and protecting multinational companies investments in other countries (disguised under the economic power tussle between the western bloc and the rest of the world) – renewed labour internationalism is labours response to this.
Given that labour is on the defensive at this point, the challenge for labour is to find any possible leverage to increase its power relative to that of capital. In the end, the best alternative for labour is to make the most of any opportunity available, to aid in further organising to increase its influence in the new world order and not so much agitating changes in employment relationship, or agitating changes in labour market reforms, or critiquing fairness in labour standard or otherwise. The best alternative for labour is to call for union strategies that combine mobilisation through political and industrial channels with construction of transnational structures with capacity to link together trade union and civil society efforts at the grass root, national, regional, and global levels. In such a situation the interaction with public interlocutors with political authority to regulate the relevant markets for capital and labour is a crucial prerequisite for the construction of viable structures of industrial relations and trade unionism (Crouch 1993, Hyman 2001). In this way Trade Union can build organisational structures and links that can pool resources to equip their global network with the necessary clout and mandates to coordinate and influence industrial policies across different regions around the world.

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