Conference on Organized labour
Responses to the Conference Paper
Paul Garver
I.U.F. Belgium
11 August 1998
The International Economy: A Threat to National Trade Unions?
The international economy poses a threat to national trade unions in the same way that the consolidation of national economies in the 19th century in Western countries posed a threat to locally-based trade unions. Those unions had to expand their operations to the national level in order to effectively represent their members in the light of the larger scale of capital enterprise. This did not imply that locally-based and workplace unions were no longer essential. It did not entail the demise of unions at levels below the national, but the re-configuration of the roles they played and often an enhancement of their effectiveness. In a very real sense, national economies provided unions with an opportunity to expand their influence in the longer term.
An internationalised economy is not a new phenomenon. Economists have pointed out that in the late 19th century, international trade and investment was in relative percentage terms as important as it is today. Unions have tried since that time to strengthen their own international organizations. The International trade secretariats were founded in this period, as trade unionists, mainly in Europe, developed cross-border contacts for mutual support. Since the Western industrial economies were relatively sheltered from international competition from the First World War until the 1970s, trade unions found it possible to advance the interests of their members through legislation and collective bargaining at the national level.
Economic globalization has been rapidly changing the rules of the game in the last two decades. Structural changes (such as the shift to service-based economies and large-scale technological innovations that reduced the need for semi-skilled manufacturing labour) have tended to reduce union membership density and bargaining strength in many countries. Globalization exacerbates these effects by encouraging transnational employers to put workers and their union representatives in different countries into competition with each other in bidding for jobs. Threats of de-localisation and/or subcontracting to producers in low-cost countries enhances employer bargaining power. In an interdependent world economy, trade unions, unless they effectively co-ordinate their efforts across national borders, can no longer limit competition over wages and conditions, and justifiably fear a "race to the bottom" directly affecting labour standards.
Since the 1980s many governments at the behest of corporate elites have used the pretext of global competition to achieve "greater discipline in labour markets." If their proclaimed goal was to check inflation and lower comparative labour costs, their methods served directly or indirectly to weaken unions and their bargaining power. Some governments (UK, New Zealand, Australia) adopted a openly hostile attitude to traditional union claims and functions, by dismantling systems of collective bargaining, removing the administrative extension of the results of bargaining, expanding management prerogatives to unilaterally decide employment conditions and encouraging Individual employment contracts. These steps were praised by the OECD, World Bank and IMF, which have encouraged governments to emulate this model. Thus institutional mechanisms at the national level, which have served to moderate the worst excesses of pure market forces since 1945, no longer function effectively, and inequities and exploitation of vulnerable workers multiply.
At the same time there are no effective International mechanisms for regulating globalization (The Bretton Woods organizations World Bank and IMF remain major proponents of unrestrained globalization). Is there then no control over the negative social consequences of increased global competition?
Trade unions achieve a measure of control over the global economy in basically the same way that local unions gained influence over national economies -- that is, by expanding the scope of their activities to the global level, without abandoning their national functions. The global economy offers not only threats, but opportunities and manoeuvring room for unions with a global reach. By coordinating their efforts within transnational corporations, unions achieve leverages and bargaining strengths to improve their ability to achieve their own members’ goals.
This is not a theoretical proposition. Through the international trade secretariats, unions have been improving their abilities to influence the behaviour of transnational companies. Global agreements for enhancing trade union rights and upward harmonization of labour standards have been negotiated by ITSs with certain TNCs (for example Danone and Statoil). Unilever extended to all its global subsidiaries affected by the sale of its speciality chemicals division the same guarantee of maintaining wages and working conditions that had been agreed with its European Works Council.
Even in companies and industrial sectors without formal recognition agreements with the ITSs, international trade union coordination and strategy development is becoming a normal part of trade union activity. Networks of trade unions meet at the world and regional levels (both physically and increasingly through use of Information Technology) not only to compare conditions, but to develop coordinated campaigns for trade union rights and improved labour standards within specific companies and sectors. While the number of trade unionists directly involved at international levels remains proportionately too small, more union local leaders and shop stewards are involved in such company-based networks than ever before, creating a constituency within many unions for more sustained and strategic commitment to trans-national organization.
Admittedly, the labour movement still plays the tortoise to transnational capital’s hare. TNCs have gone much farther and faster in using the resources of modern informational technology to link their global operations. The financial and human resources capital is willing and able to commit to globalization exceeds by far those currently at our disposal. But by proceeding step by step, always in communication with its membership base, unions will do what they need to do to play catch-up and can succeed to achieve what may appear ambitious targets for global union organizing and ultimately bargaining.
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