Is There a Declining Standard of Living for Workers in the Global

Society Dr. E. Patrick McDermott

Fulbright Asian Regional Lecture Program

Griffith University Brisbane, Australia

The Race to the Bottom

The RaceFocus on U.S.

Your assistance as to how “the race” issues differ in Australia

Definition of the “Race to the bottom”Living Standards

Labor Standards

Environment

Power of Workers to Influence Their Standard of Living by direct action

Government – Our ability to influence our standard of living through government

Other measures?

Definition – Who’s Vantage Point?U.S. centric view?

Western centric?

Organized Labor perspective?

The “average Joe”

What is the appropriate vantage point?

A “HOT” ISSUE – With or Without Buzz WordsOne view – Things are getting

worse for the average worker:

Tattoos and body piercing as a manifestation

The age of the homeless in Australia

Howard government and AWS – decline of the strength of organized labor

Aftermath of the Brisbane dock strike - MUA

Work transferred to countries such as China, Vietnam, etc.

Race to the BottomAnother View - Job skill centered

viewThe Weekend Australian, March 29-30, 2008

– “New solutions in the fight for talent”_________________, April 1, 2008 – “Going

global in search of scarce skills”_________________ -March 29 – 30 - “Enduring

joy of temping” Quantas – “You never had it so good” – “A

man no longer devotes 24% of the hours in a year to work, as was the norm in 1800”

Measurement - Always An IssueTackling undeclared work in the

European Unionhttp://www.eurofound.europa.eu/areas/labourmarket/tackling/search.php“Undeclared work can be defined as work which is in itself legal but is not declared to the authorities for tax, social security and/or labour law purposes.”

Measurement

Use of subcontractors, licensing etc.

Information about working conditions in China, Bangladesh, Vietnam, etc.

Measurement – Anecdotal Corporate greed is bankrupting America. When business costs go up they pass it on to the consumer with higher prices and employees laid off. Those laid off cannot purchase much and the result is more laid off. A profit does not seem good enough anymore. It must be as much profit as possible to please investors. Consumers only have a limited amount of income. When costs go up we have to adjust our priorities. It's not the lack of consumer spending, it's the lack of consumer disposable income that is causing our dilemma. As business seeks cheaper labor by not sharing the wealth, the result will be non-essential business bankruptcies resulting in more layoffs, continuing the downward spiral.                  

Will you lose your job in 2008?

Measurement - The Economy – MSN Money - USA

U.S. Crunch on the Middle Class

CRUNCH ON THE MIDDLE CLASS:http://articles.moneycentral.msn.com/Investing/HomeMortgageSavings/WhyYouWillNeverOwnAHome_SeriesHome.aspx

Measurement – Anecdotal - Europe

EAWOP Small Group Meeting on:“Job Insecurity in Europe: State of the

Art and New Directions”

17–19 September 2008, Leuven, Belgium

Call for Papers

Measurement – Anecdotal - Japan

Conflicts between labor and management have increased sharply in recent years due to diversification in the realm of employment. In fiscal 2006, labor bureaus across the nation were consulted about 187,000 times over labor disputes, a figure 1.8 times larger than four years ago.

The majority of cases, about 24 percent, were related to the dismissal of employees, followed by cases involving the downgrading of working conditions and workers being bullied or harassed.

Measurement - Anecdotal - Indonesia

Rustam Aksam, president of the Indonesian Trades Union Congress, observed, “Every country is now competing to reduce worker rights....We’re racing to the bottom.”

Measurement of Worker Rights – U.S. Department of State/OECD/ILO Internationally recognized worker rights

(OECD/ILO): the right of associationthe right to organize and bargain collectivelya prohibition on the use of any form of forced

or compulsory labor a minimum age for the employment of

childrenacceptable conditions of work with respect to

minimum wages, hours of work, and occupational safety and health.

ILO - Right of AssociationI. Right of Association: the right of workers and employers to

establish and join organizations of their own choosing without previous authorization

to draw up their own constitutions and rules, elect their representatives, and formulate their programs

to join in confederations and affiliate with international organizations

be protected against dissolution or suspension by administrative authority

Right of Association – Continued

Right of workers to strike

Right to Organize and Bargain Collectively II. Right to Organize and Bargain Collectively:

the right of workers to be represented in negotiating the prevention and settlement of disputes with employers

the right to protection against interference, and the right to protection against acts of antiunion discrimination

Forced or Compulsory Labor Forced or compulsory labor is defined as

work or service exacted under the menace of penalty and for which a person has not volunteered.

Child Labor Prohibition of child labor and minimum age for employment Raising the minimum age for employment to a level consistent with the

fullest physical and mental development of young people.

ILO Convention 182 on the "worst forms of child labor" identifies anyone under the age of 18 as a child and specifies certain types of employment as "the worst forms of child labor.“ (slavery, debt bondage, forced labor, forced recruitment into armed conflict, child prostitution and pornography, involvement in illicit activity such as drug production or trafficking, and "work which, by its nature, or the circumstances in which it is carried out, is likely to harm the health, safety or morals or children.)

ILO Convention 182 permits the employment of children between the ages of 16 and 18 if adequate protective measures have been taken.

Acceptable Conditions of WorkAcceptable conditions of work:establishment and maintenance of

mechanisms, adapted to national conditions- wages that provide a decent living for

workers and their families- working hours that do not exceed 48 hours

per week, with a full 24-hour day of rest- a specified number of annual paid leave

days- minimum conditions for the protection of the

safety and health of workers.

U.S. - Union Membership - 2007

• In 1983, the first year for which comparable union

data are available, the union membership rate was 20.1 percent

• Union members account for 12.1 percent of employed

Is this a “race to the bottom” or realignment of flexible IR models?

ILR Impact Brief - Workforce Alignmentand Fluidity May Yield a CompetitiveAdvantage

Lee Dyer Jeff Ericksen

What does the Data tell us?Decline/Shift of manufacturing

Some improvement in lesser developed countries

Decline in organized labor

Union Earnings – U.S. In 2007, among full-time wage and salary workers, union members had median usual weekly earnings of $863 while those who were not represented by unions had median weekly earnings of $663.

For a discussion of the problem of differentiating between the influence of unionization status and the influence of other worker characteristics on employee earnings, see “Measuringunion-nonunion earnings differences,” Monthly Labor Review, June 1990.)

U.S. – Union Trends - 2007

Concentration - Workers in the public sector had a union membership rate nearly five times that of private sector employees.

Sector - Education, training, and library occupations had the highest unionization rate among all occupations, at 37.2 percent, followed closely by protective service occupations at 35.2 percent.

Age - Wage and salary workers ages 45 to 54 (15.7 percent) and ages 55 to 64 (16.1 percent) were more likely to be union members than were workers ages 16 to 24 (4.8 percent).

What has caused the decline of organized labor in the U.S.Exporting of jobs

Aggressive management tactics (Wal-Mart, etc.)

Bad leadership

Cultural changes – What do the younger workers want?

Unions – For Longshoremen it has never been better

-Container throughput up 10%

-14,279 new workers

-800 new longshoremen in Southern California

-38 % increase in overall registered work force

Has the Tide Turned In the U.S.?

HR 800 EH110th CONGRESS1st SessionH. R. 800AN ACTTo amend the National Labor Relations Act to establish an efficient system toenable employees to form, join, or assist labor organizations, to provide formandatory injunctions for unfair labor practices during organizing efforts, and forother purposes.Be it enacted by the Senate and House of Representatives of the UnitedStates of America in Congress assembled,SECTION 1. SHORT TITLE.This Act may be cited as the `Employee Free Choice Act of 2007'.SEC. 2. STREAMLINING UNION CERTIFICATION.

U.S. SenateS 1041 IS110th CONGRESS1st SessionS. 1041To amend the National Labor Relations Act to establish an efficient system toenable employees to form, join, or assist labor organizations, to provide formandatory injunctions for unfair labor practices during organizing efforts, and for other purposes.IN THE SENATE OF THE UNITED STATESSECTION 1. SHORT TITLE.This Act may be cited as the `Employee Free Choice Act of 2007'.SEC. 2. STREAMLINING UNION CERTIFICATION.

China and the “Race”

As a prime beneficiary of globalization is China driving down labor standards?

Has globalization bettered the life of

Chinese workers?

China, Capitalist Accumulation, and Labor - A Socialist Viewpoint

China’s growth has been driven by the intensified exploitation of the country’s farmers and workers, who have been systematically dispossessed through the break-up of the communes, the resultant collapse of health and education services, and massive state-enterprise layoffs, to name just the most important “reforms.”

China, Capitalist Accumulation, and Labor China’s gains have been organically linked to

development setbacks in other countries.China’s growth has become increasingly

dependent not only on foreign capital but also on the unsustainable trade deficits of the United States.

Accumulation dynamics underlying China’s growth are generating serious national and international imbalances that are bound to require correction at considerable social cost for working people in China and the rest of the world.

China, Capitalist Accumulation, and Labor

Base assembly-line wages in the Pearl River Delta - virtually frozen at about $80 per month for the past decade. Factor in inflation over roughly the same period, and average pay in real terms has declined by as much as 30%.

With the price of raw materials rising and factory profit margins shrinking, blue-collar workers are at the losing end of a long chain of supply and demand.

China, Capitalist Accumulation, and Labor

Anita Chan:“in reality the wages of the migrant industrial workers are often considerably lower than the official standards. For one thing, the minimum wage, set by the month, does not reveal the illegally long hours worked by migrant workers to attain that minimum. According to a survey I conducted in China’s footwear industry, the average workday there amounts to about 11 hours each day, often with no days off—that is, about an 80-hour work-week.”

China, Capitalist Accumulation, and Labor

Regular formal wage employment in China’s urban sector actually declined at an annual average rate of 3 percent over the period 1990–2002.

Total regular (formal and informal) wage employmentremained basically unchanged over this period, registering a zero average rate of growth. Only irregular employment grew, increasing at an annualaverage rate of 18.5 percent.

“DAGONG”

One recent example - Adidas “Fair play is impossible, say Adidas

workers” (Sunday Times Investigation)$25 a week cheating on payForced OT with no payOver 70 hours per week to get a living wage5 strikes in last 12 months (unreported)Males not wanted (“boss thinks men are

troublemakers”)

“Life is very hard. We work morning to night, but have no money left”

Pro-Globalization Perspective - Cultural Nationalism – The Last Resort of Scoundrels

“Globalisation might be expected to havereduced the appeal of nationalism and the scope forintervention. But greater competition compressesthe space for monopolists and rent seekers, and thisis what has provoked the backlash.”

Professor Eric Jones, Professorial Fellow, Melbourne Business School. Emeritus Professor La Trobe UniversityPolicy, Vol. 23,No.2,Winter 2007,

Classical Economics View

Law of Comparative Advantage

Labor is a Commodity

No support for workers organizing to take “wages out of competition”

No consideration of a “Social Contract”

“Racing to the Bottom or Climbing to the Top”

Analysis of New Data set on collective labor rightsTheir analysis of the correlates of labor rights in 90 developing nations, from 1986 to 2002, highlights globalization's mixed impact on labor rights. As "climb to the top" accounts suggest, foreign direct investment inflows are positively and significantly related to the rights of workers. But at the same time, trade competition generates downward "race to the bottom" pressures on collective labor rights.

Layna Mosely and Saika Uno, Comparative Political Studies, Aug. 2007, Vol. 40 Issue 8, 923-948.

Is there a “Race to the Bottom”What is the appropriate vantage point?

Socialist

Classical economic (labor is a commodity)

Industrial Relations

Corporatist

Darwinian

Social Contract

Other ?????

Is There a Declining Standard of Living for Workers in the

Global SocietyDr. E. Patrick McDermott

Fulbright LecturerEast China University of Political Science and Law

Shanghai, Chinaepmcdermott@salisbury.edu

The Race to the Bottom

Collective Consultation - Shenyang

Regulations of Shenyang municipality on collective contract(Unofficial U.S. Embassy Translation)　　Article 1In order to regulate the acts of formulating collective contracts, and to set up harmonious labor relations, these regulations are formulated based on the actual situation of Shenyang municipality in accordance with the ‘labor law of the people’s republic of China and the trade union law of the people’s republic of China’.

Article 5The United Migrant Workers' Union shall conduct collective consultation over the standards of labor remuneration, work safety and health, etc., and conclude collective contracts with the public service institutions or enterprises where the migrant workers are employed, or with relevant organizations of employers within a region or in a business sector.

Prohibited Conduct - Shenyang

•Not providing relative materials in signing a collective contract;

•Rejecting the request for negotiation from the other party

•Not submitting copies of a collective contract to the administrative division of the authority for labor and social security within the required time limit after the contract is signed or amended or not notifying the administrative division of the authority for labor and social security in a written form of the termination of a collective contract;

•Transferring employees' representative to a disadvantaged position or terminating the representative’s labor contract without reasonable cause;

•Deliberately delaying the signing of a collective contract or not completely fulfilling obligations of the collective contract;

Prohibited Conduct - Shenyang

•Forcing the other party to accept its demands by threatening, bribing, cheating and other malpractices;

•Obstructing or hampering the guidance from the trade union at a higher level to the trade union at a lower level in conducting collective consultation and signing a collective contract.

Collective Consultation - Shenyang

The "United Migrant Workers' Union" is an organization unique to Liaoning Province. The first municipal level branch was set up in Shenyang by the municipal Free Trade Union in March 2006, offering free membership to migrants regardless of whether they had stable jobs or not.  The union is also open to migrant construction teams, migrant home renovation workers, and those laid-off workers in the city who are in search of jobs.  Press reports indicate that the union provides free job-hunting, training services and helps migrant workers who have trouble in schooling their children or shouldering medical costs.  The union claims it can help migrants with legal-aid and demanding unpaid wages. 

Right to Strike SHENYANG – Quit on Impasse

SHANGHAI Article 32

Either party to the collective bargaining can apply to the competent labour and social security authorities for conciliation or settlement if one party refuses or delay the request for collective bargaining by the other party without justified reasons, or no consensus or a collective contract may be reached or concluded as a result of the collective bargaining. Meanwhile, the competent labour and social security authorities may initiate the procedure of conciliation or settlement at their discretion without application for conciliation or settlement by either party.

During the process of conciliation or settlement by competent labour and social security authorities for disputes arising from collective bargaining, the competent labour and social security authorities may handle the cases jointly with the representatives from the trade union at the same level and the representatives from the enterprises.

Article 33

If any disputes arise out of the performance of the collective contract, and the dispute or disputes are not settled even after consultation between the employees and the enterprises, both parties may submit the case to the competent labour and social security authorities for conciliation or settlement.

Collective Bargaining in China - Shanghai

Regulations on Collective Labour Contracts in Shanghai Municipality (Passed on the 38th Session of the Standing Committee of the 12th Shanghai Municipal People’s Congress on August 16, 2007)

Chapter I General Provisions - Article 1 On the basis of the actual circumstances in Shanghai Municipality, these Regulations are formulated in accordance with the provisions stipulated in the “Labour Law of the People’s Republic of China”, the “Labour Contract Law of the People’s Republic of China” and the “Trade Union Law of the People’s Republic of China” and other relevant laws and regulations, to regulate collective bargaining, the establishment and fulfillment of collective contracts, and to protect workers’ legal rights and interests, for the purpose of building up and developing harmonious, stable labour relations.

Article 2 These Regulations apply to labour relation issues concerning the collective bargaining, the establishment and fulfillment of collective contracts between the enterprises and the employees within the jurisdiction of the Municipality. Article 3 The “collective bargaining” mentioned in these Regulations refers to negotiations and consultations conducted by the employees of an enterprise as one party and the enterprise as the other on an equal footing over issues concerning Labour relations.