The global economy today has grown to a scale unprecedented in history. Aided by new technologies, people, capital and goods are moving between countries with an ease and at a speed that have created an interdependent global economic network affecting virtually every person on the planet.
Globalization has created opportunities and benefits for many, yet at the same time millions of workers and employers worldwide have had to face new challenges. The globalized economy has displaced workers and enterprises to new locations, resulted in the sudden accumulation or flight of capital, and caused financial instability in certain regions. Despite initial optimism, globalization has not ushered in an era of prosperity for all. In 2001 it was estimated that virtually half of the world's population survived on US$2 or less per day, while some 1.1 billion people, or 21% of the world's population, were living on US$1 or less per day. (Note 1) No nation is immune: for example, in 20 industrialized countries over 10% of the population on average was living below the poverty line in the mid-1990s. (Note 2)
Inequality within many countries and between the world's richest and poorest nations has also grown exponentially over the last few decades. In 1960 the income gap between the wealthiest and the poorest fifth of the world's population was 30 to 1. By 1999, it had increased to 74 to 1. In 1995, average GDP per capita in the richest 20 countries was 37 times the average in the poorest 20 - a gap that doubled in 40 years.(Note 3)
The continued development of the global economy in this direction is neither sustainable nor desirable. Inequality not only leads to a decline in productivity but also breeds poverty, social instability and even conflict. In view of this, the international community has recognized the need to establish some basic rules of the game to ensure that globalization offers a fair chance at prosperity for everyone.
The role of international labour standards
In 1919, the signatory nations to the Treaty of Versailles created the International Labour Organization (ILO) in recognition of the fact that "conditions of labour exist involving such injustice, hardship and privation to large numbers of people as to produce unrest so great that the peace and harmony of the world are imperilled." To tackle this problem, the newly founded organization established a system of international labour standards - international conventions and recommendations drawn up by representatives of governments, employers and workers from around the world - covering all matters related to work. What the ILO's founders recognized in 1919 was that the global economy needed clear rules in order to ensure that economic progress would go hand in hand with social justice, prosperity and peace for all.
Today, the ILO has developed a comprehensive Decent Work Agenda which takes up many of the same challenges that the organization faced at its inception. The Decent Work Agenda aims to achieve decent work for all by promoting social dialogue, social protection and employment creation, as well as respect for international labour standards. The standards have grown into a comprehensive system of instruments on work and social policy, backed by a supervisory system designed to address all sorts of problems in their application at the national level. They are the legal component in the ILO's strategy for governing globalization, promoting sustainable development, eradicating poverty, and ensuring that people can work in dignity and safety.
Note 1 - World Bank: Global Poverty Monitoring website: (consulted October 2004).
Note 2 - W. Sengenberger: Globalization and Social Progress: the role and impact of international labour standards (Bonn, Friedrich-Ebert-Stiftung, 2002), p. 19.
Note 3 - ibid., p. 20.