Employment & working conditions

MEE employment and working conditions have been determined mainly by technological and structural changes which have gained momentum in recent years through trade liberalization, increased mobility of capital and enterprises, and regional economic integration.

In the higher-income OECD countries, the key labour issues in the MEE sector in an increasingly globalized world economy are: (a) employment promotion in the short term via new export opportunities, (b) employment retention in the medium term, through changes in strategy and output composition, cost reductions and innovations in products, product servicing and other services beyond manufacturing, and (c) employment growth in the long term, particularly through environment-related investments and innovations in machinery and industrial processes. The pursuit of these three objectives calls for negotiations on (i) productivity-enhancing flexibility in: working time, employment contracts and retirement schemes, and (ii) reductions in fixed labour costs combined with increases in performance-based bonuses.

In the middle-income countries, the key issues are to: (a) increase overall productivity to cope with increased foreign competition through improvements in: technical capacity and skills, functional flexibility of employees, and employee attitudes concerning efficiency and quality control (especially Central and Eastern Europe and Latin America), (b) promote retention of foreign direct investment (FDI) and employment through up-market strategies and inter-firm arrangements that promote local development linkages (especially East/South-East Asia), (c) protect employment via production and marketing alliances with foreign companies that threaten local production and employment through their exports (especially upper-middle income Latin American economies with rapidly liberalizing trade regimes), and (d) negotiate productivity-based wage increases.

Most of the low-income countries also face the above issues, although the most critical one is to promote FDI and employment in small and medium enterprises, especially in MEE assembly, preferably through negotiated arrangements with foreign companies with a view to optimizing medium-term employment and development effects.