ILO: Up in smoke: what future for tobacco jobs?

Some 100 million people are employed worldwide in the tobacco sector. As the risks associated with smoking and the forces of economic modernization continue to pressure the industry, the ILO has been looking at the future employment prospects for tobacco workers worldwide.

Article | 18 September 2003

GENEVA - Of the 100 million people working in the tobacco industry, only about 1.2 million are employed in manufacturing. Some 40 million work in growing and leaf processing, 20 million more in home industries such as hand-rolling "bidi" or "kretek" cigarettes in India and Indonesia, and the rest in tobacco-related processes and industries ranging through distribution, sales and promotion of tobacco use. There is also considerable employment in organizations fighting against tobacco consumption.

About 6 million tons of tobacco are produced each year in some 120 counties, with 80 per cent of production coming from the developing world and 70 per cent from six countries: Brazil, China, India, Indonesia, the United States and Zimbabwe.

A recent ILO report, Employment trends in the tobacco sector: Challenges and prospects * , says that the overall figure for employment in the tobacco sector has stabilized in the past five years.

In the industrialized countries, employment had declined steadily over the past three decades, largely due to improved manufacturing, farming techniques and consolidation of tobacco interests.

But is the anti-smoking lobby to blame for the lost of jobs? No, says the report, adding "no correlation has been established between the decline in (tobacco) consumption and the decreasing rates of employment."

"Tobacco has never been more controversial than it is today. For many who work in the tobacco sector the world over, stagnating or declining employment is a burning workplace and social issue - especially among the most vulnerable such as migrants, women and children, ethnic minorities and castes or tribes who depend on tobacco for a livelihood. Their future must also be considered."
-ILO Director-General Juan Somavia

So where are the job losses coming from? The report expresses concern, that as tobacco manufacturers continue to seek new markets and adopt new technologies, they may be heading toward a new era in which tobacco manufacturing may involve few, if any workers.

In the United Kingdom, for example, 3 per cent more cigarettes were being produced in 1998 than in 1990, with 75 per cent less labour, the report says.

The most vulnerable members of tobacco-growing societies are of primary concern.
These include millions of workers such as members of castes, tribes and religious minorities in India; impoverished farmers in Malawi; women workers in India and Indonesia; migrant workers in the United States; child labourers in tobacco plantations in Africa, Asia and Latin America; poverty-stricken workers in Brazil who may be caught in debt-bondage; and victims of conflict in some tobacco-growing countries.

"These workers and their families, in thrall to the tobacco sector for their livelihoods, are faced with the prospect of an uncertain future for their sector," the report says.

"If tobacco manufacturing workers are among the best paid in industry around the world, tobacco farmers in developing and some transition countries cannot be said to benefit from the high added value of the product; unorganized, they cannot avail themselves of bargaining mechanisms to negotiate wages and working conditions."

Concern extends not only to the developing world. The increasing clamour over the health risks associated with smoking, coupled with new agricultural policies and legislation, have battered the US tobacco industry into economic decline and wiped out thousands of jobs in the tobacco manufacturing industry.

America's Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) says it has lost more than 30,000 members, once employed in cigarette-making factories, in the past 20 years. Less than 10,000 tobacco workers remain in the BCTGM today.

"The United States is a model of how not to go about suppressing the demand for tobacco products," says BCTGM spokesman Ray Scannell.

"There has been no help for those skilled factory workers who provided the bulk of the community in some towns. Tobacco workers who once made around US$50,000 have been reduced to working at McDonalds."

The outlook for tobacco farmers is equally gloomy. In its latest industry review, the Economic Research Service (ERS) of the US Department of Agriculture forecast tobacco production for the 2002/03 season would be 889.6 million pounds - about 102 million pounds lower than in 2001. Exports in 2002 slipped from 134 billion cigarettes to 127 billion, 5 per cent below figures for the previous year.
Imports, however, increased by 53 per cent during the first six months of 2002, reaching 8.9 billion pieces. The imported tobacco, mainly from Brazil, is used in the cheaper, discounted brands of cigarettes. This, the BCTGM says, is what is crippling the demand for the top-tier US brands like Marlboro.

Factors contributing to the employment decline:

A number of factors have combined to sculpt the tobacco industry into a new shape and to whittle away the employment market while, paradoxically, there has been a gigantic increase in consumption in developing countries and countries in transition, leading to an increase in cigarette production in the United States, the Netherlands, the United Kingdom and Turkey.

Automation is, without a shadow of doubt, the main responsible factor: at the beginning of the century, workers rolled cigarettes by hand at the rate of four a minute; in the year 2000, machines were producing 16,000 a minute.

The Philip Morris factory in Bergen op Zoom (Netherlands) employs only 1,900 people to produce 9 billion cigarettes annually.

However, that is not the only reason: privatization, mergers and acquisitions, factory closures and the contraction of certain markets, particularly within the OECD, have led to a large number of layoffs.

Delocalization towards low-wage countries often goes hand in hand with reduced employment. This is particularly noticeable in the western hemisphere, with significant employment drops in the United Kingdom (75 per cent less) and in Germany (one third less). But there have also been major decreases in a number of other countries, such as Turkey, Hungary or the Republic of Korea.

The all-powerful state monopolies are beginning to show signs of wear and tear in certain places.
A number of markets have been privatized over the past fifteen years (Japan, Korea, Thailand and most of the Central and Eastern European countries), sometimes causing tricky social and political problems.
Turkey is a case in point. Between 7 and 8 million Turks are involved in this sector.

On mergers and acquisitions, the report points out that "a shrinking domestic market, maturation of the industry and acquisitions of smaller companies" have led to a quasi-oligopoly, with three companies controlling almost two-thirds of world production: China National Tobacco Corporation (CNTC) with 30 per cent, Philip Morris with 17 per cent and BAT with 16 per cent.

A burning issue: ILO tackles tobacco jobs

The first ILO first tripartite meeting on the tobacco sector, held 24-28 February in Geneva, examined employment and working conditions in the tobacco industry.
The meeting looked at how social dialogue and actions taken by governments, employers' and workers' organizations at the national level, and by the ILO, can head off negative effects on workers.
Following discussions, the meeting unanimously adopted five resolutions on:

  • The strengthening of institutional links and cooperation between international organizations working on issues relevant to the tobacco sector;
  • The employment of women in the tobacco sector;
  • Future activities of the ILO in the tobacco sector;
  • Fundamental principles and rights at work in the tobacco sector;
  • Child labour in the tobacco sector.

Whatever the constraints on the tobacco sector today, the meeting concluded that steps should be taken to ensure that all jobs in the tobacco sector, as well as the quality of new jobs being created in the host countries, reflect the principles and rights enshrined in the ILO Declaration on Fundamental Principles and Rights at Work.

The ILO has identified priority areas for action: research on employment trends and occupational health in the sector, capacity building to enable social partners to assist in dealing with social dialogue issues, the facilitation of international information exchange and studies on the impact of tobacco control policies on employment.