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Agenda List of Participants Opening speech by Ms. Guigou Speech by Mr. Somavia Background Document Annecy Conference Papers ILO Press Release

Amy B. Dean
President
South Bay AFL-CIO
2102 Almaden Road
Suite #107
SAN JOSE, CA 95125
USA

It has been a pleasure to be here and I have really enjoyed myself over these last couple of days. This has been a great Conference and I thank you for inviting me and giving me the opportunity to make a small contribution.

As I understand it, on this panel we are discussing the ways in which we attempt to restore balance among the major actors in the economy, and to figure out, in this post-industrial era, how to negotiate the tensions between the forces of the market, on the one hand, and the social and political values and goals that many of us have in our different nations, on the other.

I would like to do three issues as I approach responding to that question. I want to briefly address what makes a new economy different from an old economy with respect to the impacts on working people, in particular, in the land of the future, Silicon Valley. The second issue I want to talk about is: what these differences mean concretely for the next generation of labour organizations? While we have examined extensively what the regulatory framework could look like on a larger international scale, we also have to explore institutional forms that are relevant to carrying out the work more locally if we are to create a regulatory framework that could bring parity to power relationships. Specifically, I will propose an interpretation for this framework for the next generation of labour organizations, and how must they function in it, to be relevant actors in this new economy. Without being too technical I want to relate this framework to the numerous legal impediments from the perspective of the United States alone, impediments to enabling us to build a collective voice for workers who work very differently today than they did within the old economy.

Lastly, I want to respond briefly to what I found to be an incredibly compelling argument in the paper about the ways in which we begin to replace the role of the state as we try, once again, to bridge our economic and political values. I could not elaborate on that point because, while the institutional actors are not even in place to be able to do this completely, I was intrigued by many of the arguments that you put forward in the paper.

Very quickly, this is a snapshot of the old and new economies, as they relate to the impact on workers and what that implies for the next generation unions. I think it is important that, when we talk about the changing borders of the economy, that we talk not only about national borders that have given way to an international economy, but also about borders that are both international and local as well. In other words, while we see that capital roams the globe freely and can move from country to country, at the same time, the economy is rooting itself in regions worldwide. This is an important point for thinking about the next generation of our organizations, both employer organizations as well as the public sector.

The second element that I think is the hallmark of the new economy and that is often missed when people talk about the new economy is the way in which the firm is restructuring itself in the production process. I think too often people talk about the new economy as though it were only involving new products and new technologies, but that is not the point. The point is that the firm has begun to restructure itself in dramatic ways that have a huge impact on working people. As we know, and as has been discussed today, no longer do we have vertically integrated silos of production where all the functions of a firm are performed under one roof. Instead we see networks of firms that create an enterprise, usually networked at the regional level. This is a very important point. It has been done not just in the context of saving money for the employer but also to externalise any costs that are not core to the firm's ability to compete on the basis of innovation.

Lastly, both here and in our country, as well as in others, are notions of justice that have changed dramatically since World War II when we built a social contract that was based, not only on a different industrial model, but also on a different model around social justice.

I think it is those three points, the shifting borders, the restructuring of the firm and changing notions of justice that really do create a good framework for analysis. What does that mean for working families?

Very briefly, looking at the land of the future, in Silicon Valley, we know that what is taking place there is not an anomaly. We know that increasingly firms depend on constant innovation and rapid development of new products for commercial markets in order to beat their competitors. In the words of Intel's Andy Grove, "only the paranoid survive". This is a significant point because paranoia has not always been an American mainstream value. Although you may have felt that it was, it has not been from our perspective. That is an incredibly important point because it speaks to the fact that this is the pace at which these industries need to operate to be successful. Moore's law was talked about earlier yesterday, the oft-quoted law that the power of integrated circuits doubles every 18 months. I think that illustrates an important qualitative distinction between the old and the new economy, and the fact that competition through innovation has enormous implications for working people. It is in a large part what is fuelling the growth of non-standard work, again, not because it is simply cheaper but because of the need for flexibility to purchase specialized skills and to expand and contract workforces based on volatility in the market. This is an important reason for redefining the ways in which people work.

The second point is the primacy of intellectual capital. In this industry, it is no longer the strength and dexterity of one's hands and the strength in one's back that necessarily helps you enter the economic mainstream of the economy.

Thirdly, I want to make a metaphorical point about the hour-glass nature of the new economy. We have done a lot of work at looking at how income is being distributed and how prosperity is being shared in the heart of Silicon Valley and other similar regions. If you look at California's own job projections as well as its education projections over the next 15 years, both in terms of the skills and the education that will be needed, ten of the 20 fastest growing occupations in the State of California will pay less than 10 dollars per hour. So we are not just an economy of engineers and we are not just an economy of technical positions, we are also an economy of waitresses and janitors and low-wage service sector people.

If you look at the employment projections between now and the year 2015, according to California's Economic Development Department, 39 per cent of the jobs that will be created over that period of time will require only a few hours of on-the-job training, 25 per cent or more will require a Bachelor's degree or higher, and very little in between. These numbers are nice because they really do demonstrate well the hour-glass nature of the economy: as firms externalise any function that is not core to innovation, we really are left with two kinds of jobs - high skilled and high paid jobs and low-wage service sector jobs with very little in between.

Having said that, then, what does that mean for the role of the next generation of labour market organizations? I very much agree with the paper and the presenter that labour organizations have always been responsible for the way capital is created. We did not create industrial unions because we thought that was the best way to deliver representation for people. We did it to contest for influence, given that the economy had shifted and was based on mass production. Just as in the past, as labour organizations have had to restructure in the context of how the economy has restructured, so too must we do that today. I think this is a serious point because we are really only about 40 percent of the way through this industrial revolution. We have not even hit the half-way mark. Technologies like IT and biotechnology are just beginning to emerge, as other kinds of emerging technologies are coming on line, and I think that there are enormous social and political implications for these technologies and the role of unions is key. But I will be the first, as a trade unionist, to say that our organizations are not prepared to be relevant actors in the context of the restructured economy.

I would argue that there are two major ways we have to focus our work. This is certainly something on which I have spent the last five years, and on which I will probably spend the next 20 years of my life. Labour unions need to think about themselves in two particular ways: one, as labour market institutions, and two, as social and political actors. In the context of labour market institutions, they must see themselves as playing a coordinating role in the sector, a coordinating role in particular occupations, and seeing themselves as incredible value-added players in those particular sectors. For example, when I say a coordinating role, I mean coordination among the small and medium sized firms within an occupation or within an industry. Playing this role means coordinating all the training players, the community-based organizations, community colleges, and all the different organizations that have an impact on that particular sector. Labour must become the coordinating entity as it moves people from job to job.

Secondly, labour must own the supply side of training in the regional economy. That is the way we will control the supply of labour in these economies--by virtually controlling the supply chain of training. It is important because, as you look at these small to medium sized companies, none of these companies on their own can afford nor have the incentive to train people given that median job tenure in California is only three years. Therefore being able to coordinate and shift costs across the firm becomes an extremely strategic role for labour long term.

Labour must become proficient at being able to broker the supply and demand of labour within a labour market. Yet, I am suggesting nothing different from the ways in which a temporary agency functions. Temporary agencies were created to fill an important niche that client firms needed but are not filling, the niche that the employee side needs. Thus, we have determined that marrying training with job development and placement is an absolute critical core capacity unions of the future must have.

Let me conclude this point. I have given a number of brief examples of the role that labour market institutions need to play. A good point was made last night by the brother from the ICFTU. In the 1930s unions in the United States were created to fulfil an important goal, largely, to create a consumer class. But it was a goal that neither government nor industry could fulfil on its own. I believe, very much in the same spirit, that the next generation of employer's organizations will fulfil a role that neither government nor industry can fulfil on its own: to create some entity that allows people to connect on a permanent basis to their place of work--in other words, organizations that build occupational identities and build connections between employees and the job. There was a conflict that somebody raised last night that was exactly on the money, that the work systems in these firms absolutely depend on an environment of cooperation and trust. Cooperation and trust are rooted in notions of reliance, yet, when you have to, for example, contract your workforce because of pressures on the market--not because you are necessarily a bad guy or a bad girl but these are the forces of the market, you cannot expect that your employees will be more loyal to you than to another company, or to a union.

Unions will play a very important role if we can just get it together. I do not say to set forth an immediate task, but rather to recognize it as a challenge for the long haul. Unions will play a very important role in being able to negotiate tensions, as industry will need a significant partner. On the question of what is labour's role as social and political actors - certainly much more than what we are doing now. Labour builds lots of political capital and we do not leverage it for anything useful. I think we have to think about the ways in which the labour movement, not just here but across the world, leverages its political influence. I like to think of it as a continuum of political outcomes. Obviously, the first one is simply meeting our immediate institutional interest but it should not stop there. In fact, if we stop there we are not building our movement.

The second political outcome is that we have got to figure out ways to build our union movement through political influence. I have just described the way unions should operate in the new economy. There are enormous legal impediments in the United States to even being able to function in that capacity. Without getting into a legal conversation, I will provide one example: communities of interest for purposes of bargaining collectively were defined six years ago. This definition presupposes that a group of workers are all housed under one roof working for the same employer. However, we know that is simply not how people go to work. We know that I may go to work under one roof, sitting next to somebody who is employed through some kind of intermediary institution. Although we are all under the same roof, we have multiple employers. Or for that matter, people may be working for the same employer and be spread out across the world. Therefore, redefining what constitutes legitimate communities of interest for the purpose of bargaining collectively, whether we work individually or we work under one roof, is an important reform. There are many others but this is not the point of the topic. The point simply is to say that from the United States perspective, we need a massive overhaul of our labour law if we are going to be able to reform ourselves in the way that I have talked about.

Let me say a couple of things on the question of labour's political interest. I will speed it up by saying it is meeting our political institutional needs, it is using politics to grow our union movement, and it is, thirdly, leading the social movement for change. I am happy to say more about that long term strategy.

The last point I want to make is specifically with respect to the paper. This is what was very interesting to me. This whole problem that we are struggling with is characterized by the fact that we have extended our economic borders without co-extending our political borders. It is an enormous problem for all of us and it is unchartered terrain and territory. I am not of the belief that there will be some international regulatory order, nor some international regulatory body of law any time soon. However, the idea of the hybrid approach [of marrying contractual obligations so that you create a parity of power between interests and make this a condition of our trade agreements that make a parity of power between the major interest for purposes of negotiating your own rights and responsibilities] is not only politically viable but also consistent. It is viable because it does not depend on a shared sense of political values across multiple nations, number one, and number two, it is incredibly consistent with the needs of the new economy, in which new economies do take root more at the regional level, negotiating particularized agreements at the regional level between parties. It becomes extremely functional, not just for employees but for employers. So I think that the point that you make about what replaces the role of the state is a question not so much of 'who' but 'how' is a very, very relevant point for further discussion. It is the best thing I have read, the closest thing I have read to anything I think has political viability. Thank you.