Event

Report on the

Asian Conference on
Strategies in Addressing the Labor Market Restructuring
under Globalization

9-10 January 2007, Manila Philippines

As part of its thematic focus on labor, the International South Group Network (ISGN-Asia) organized the Asian Conference on Strategies in Addressing the Labor Market Restructuring under Globalization in Manila, Philippines on January 9-10, 2007. The event was co-organized by International Gender and Trade Network (IGTN), Front Nasional Perjuangan Buruh Indonesia (FNPBI, or National Front for Workers’ Struggle in Indonesia) and the Nepal Progressive Trade Union (NPTUF) and aims to:

More than 40 participants joined in the two-day conference, including 10 foreign delegates, representing labor rights NGOs, regional networks, trade unions, women’s organizations and social movements (see separate paper, Directory of Participants). There conference featured panel presentations, country and regional reports and a workshop. A Solidarity Night, co-sponsored by SULONG (Solidarity of Unions and Labor Organizations for New Government) capped the event where participants get a chance to interact with representatives from various people’s organizations, labor centers and progressive political parties in the Philippines (see separate paper, Program).

Former University of the Philippines President and chair of the broad political alliance, Laban ng Masa (or Struggle of the Masses), Dr. Francisco Nemenzo, emphasized in his keynote address the need for the labor movement to utilize the technological advances in communication and transportation and to develop new forms of working class organizations that are appropriate to the emerging mode of production.

The panel discussions provided an overview of the political economy of globalization, the reorganization of production thru international system of subcontracting and labor markets and the implications of this on migration, manufacturing and service workers, women workers, labor rights, and on labor movement and trade unionism.

It was reiterated that globalization is just a new term for an old phenomenon where capital transcends national boundaries in search of bigger profits thru colonialism and imperialism. Today, the same process is facilitated by multilateral institutions, trade blocs and agreements, multinational and transnational corporations and aided by technological advances particularly in transportation and communication. These conditions made possible the division of production processes in different locations and ushered the so-called ‘new labor regime’ which is also a new term for old capitalist schemes of using mainly casual and contractual labor, subcontracting and outsourcing, depressing wages, etc.

Subcontracting and outsourcing are among the main features of globalization that provide companies more profit by maintaining ownership over brand names, patents, processes, etc. while passing on the business risks and responsibility to labor to subcontractors. Manufacturing and other peripheral functions are subcontracted in countries where labor is cheapest and where market is highly deregulated.

Under globalization, there is a growing flexibilization and informalization of labor, where regulations and labor rights including trade union organizing, deemed ‘rigidities’ and detrimental to achieving global competitiveness, are eliminated. Globalization also intensified the movement of labor across national borders, now estimated to be about 3% of world population, fueled, on the one hand, by high unemployment in developing countries and increasing privatization of public services in developed counties, on the other.

The restructuring of global production and labor markets systematized the oppression of workers on an international scale. National labor markets are played against each other in a ‘race to the bottom;’ in factories regular workers are played against contractual workers while women and children are treated as second-class labor. Governments change their laws to conform to neoliberal globalization.

There is a rise in the number of ‘precarious workers’ – casual, contractual, fixed-term, temporary, trainees, home-based workers, etc. whose rights are even more unprotected. Even among the regular workers, there is a general erosion of workers’ rights. Unemployment and job insecurity are high due to footloose capital and outsourcing; threats of closure/relocation; technological changes and reengineering; and privatization.

While an increase in women’s employment in the recent years is noted, data indicates that women has lesser control over productive resources than men and that wage differentials between women and men is still prevalent.

It is recognized that the trade unions and labor movement have contributed a lot in promoting workers’ rights and have shown creativity in its advocacies, showing solidarity with other sectors, taking up political issues, public policies and even international issues. But because of globalization, the trade unions are now in a completely different environment – with more workers, the contractuals and casuals, who are not part of labor organizations and movement and therefore there is less energy for the unions.

There have been defeats in the struggles and trade unions are generally on the defensive, often the struggle is one of survival, as unions face declining membership, erosion of bargaining power and government support. A longer-term coalition should be a major concern for trade unions and political issues must be addressed for long-term survival and existence. New ways of trade union organizing must be explored.

The country and regional reports show how economic reform programs adopted by national governments intensify neoliberal globalization, increase unemployment, promote flexible labor, undermine workers’ rights, and pose tremendous challenges to the labor movement.

In Korea, the IMF bailout program in 1997 included a Roadmap to Advanced Industrial Relationship aimed at neutralizing the collective power of organized workers by allowing labor substitution during strikes in public sector, flexible wage systems, hiring less union staff, lessening the requirements on lockouts and dismissal. The law of irregular workers was revised to allow the use of irregular work for up to two years. The ratio of irregular work in total employment now hovers around 55%. The Korean government also entered into the Korean-US Free Trade Agreement purportedly so its economy will get ‘external shocks’ and generate more jobs.

The Korean labor movement is faced with intense repression of workers’ struggles and the movement suffered continuous defeat. The government promotes industrial unionism with the unions focusing only on negotiation without rank and file and thereby managing workers’ discontents. Even the biggest trade union confederation was co-opted into ‘social corporatism’ agreeing to the government proposal to form Tripartite Council and the lay-off bill.

In India, the comprehensive economic reform package implemented after the 1990-1991 crisis include privatization, capital market reform, and liberalizing foreign investment, e.g. removal of import licensing for garments, 30-40% tax exemptions and 5-year tax holidays for foreign companies.

The changes resulted in the retrenchment of almost half the workforce and a surge in the number of contractual workers (300 million in construction alone). Most are found in the 200 economic zones all over the country.

The profile of labor is rapidly changing as workers migrate across sectors and from secondary to tertiary level. Moreover, women employment increased; agricultural workers continue to decline, there is a shift from formal to informal work, from organized to unorganized, increasing casual, contractual, temporary work and the quality of employment continues to deteriorate. Disputes related to retrenchment, regularization, non-payment pf mandatory dues and refusal of management to bargain on the change of service conditions are on the rise.

Trade unions confront a crisis of membership, declining bargaining power and fragmentation. The labor movement tries to cope by forging more unity bringing about bigger alliances among trade unions, NGOs and people’s organizations, and intensifying the struggles. Informal sector workers have begun to organize either under the umbrella of NGOs, with people’s organizations and as associations.

In Taiwan, the import of foreign workers was legalized in 1992 to respond to the need of construction and manufacturing industries for low-cost labor force and to avert the transfer of these industries overseas. By 1993, the government expanded the importation to include domestic helpers and caregivers. Foreign labor now shoulders the bottom layers’ work in Taiwan; they are a great force that stabilizes the society. But the country’s foreign policy deprives migrant workers of their rights. They cannot change employer except when the employer stops the employment, the factory shuts down or the subject being taken cared of dies. Migrant workers are not allowed have long-term employment, i.e. no more than six years, and to form unions as only residents of the Republic of China are allowed to do so.

Indonesia experienced shortage and soaring price of energy, retrogression of technology in factories and bankruptcy in industries with the implementation of liberalization policies after the downfall of Suharto. More than a million workers lost jobs in 2004 and now unemployment is at 11 million only six million of which are permanent and 40 million more underemployed. In 2003, the Megawati government passed a labor law providing more privileges to subcontractors, contractual and migrant workers. Trade unions have shrunk to only 7%. High unemployment in the country pushed new graduates to seek employment overseas. In 2005, the government tried to revise the Labor Law but the workers responded with huge protests, a broad alliance of labor unions formed to resist the bill.

Economic crisis sharpened in Bangladesh with the imposition of structural adjustment program by the IMF – factories closed won and millions lost jobs, as local industries cannot compete. Meanwhile, employed workers are deprived of their rights.

Philippines used to have a fairly progressive social welfare benefits in the 1950s. But under globalization, labor is under attack – the protection of workers’ rights is under threat as efforts to amend the country’s Labor Code to harmonize with neoliberal policies are underway. The country’s labor market is now characterized by a huge informal sector (only 12 million out of 32 million labor force are regular) mostly found in the service sector; high unemployment creating huge surplus cheap labor, the average wage being 2-7 USD per day; massive overseas migration; increasing use of women and child labor; and a small percentage of unionized workers. These data are expected to exacerbate between now and 2020 because of globalization. Workers need to confront these issues head on.

In Thailand, the 1997 crisis weakened the struggle of workers for fear of losing their jobs. Historically, the organized labor in the country played a crucial in the revolution against absolute monarchy (1932), against the imposition of military dictatorship and in improving public policies on labor including raising employment standards. But today the level of unionization is only at 3% and the ability to strike had been severely undermined. There is also a perception that unionism today is too narrow because it refuses to lead the struggles and to take up broader political demands. Under the present military dictatorship with neoliberal government ministers, there is a need for the labor movement in Thailand to link up with and organize migrant workers. There is a need to fight neoliberalism, and to struggle for democracy, political reforms and stronger bargaining power of unions.

Among women workers, those in the garment and electronic industries are among the most affected by the informalization and flexibilization of labor. Women are considered dispensable labor and generally receive lower wages than men do; thus, they have to cope with the increasing cost of living viz. declining wages. There are greater restrictions on union organizing, especially for women.

Women workers tackle these challenges and limits by building alternative trade unions, working with different groups, building the women’s movement and conducting researches, supporting women’s rights, etc. There have been victories including reforms in the labor laws in Japan and Korea, formation of women trade unions, and organizing local domestic workers’ unions.

There was a consensus that to remain effective, trade unions and labor movement must confront the challenges of globalization and labor market restructuring by building workers’ consciousness, thoroughly rejecting neoliberalism and intensifying resistance to globalization.

There is a need to transcend the limits of traditional trade union organizing and explore creative methods of organizing workers. It is crucial to organize workers and to restore their power in unity with irregular workers. Trade unions must confront capital in the sphere of production.

Trade unions and labor movement must establish firm linkages with the broader political movement. Cooperation must be established among trade unions and with other organizations and social movements opposing globalization. Organizing women must be given particular attention. Solidarity must be built across national borders.

The struggle for workers’ rights must be revitalized and labor movements must fight for pro-labor policies and demand positive legislations. Alongside, an alternative vision of development that takes into account the workers’ progress must be promoted. ###