|
||
|
LABOUR:
AFTER THE MARKET, NOW UNIONS TO RESCUE INFORMAL SECTOR Geneva, 19 Oct 99 -- Trade unionists from 31 countries began a five-day meeting here Monday at the International Labour Organization (ILO) on how to better the working conditions of millions of unorganized workers around the globe in the so-called 'informal sector.' A new ILO background paper, "Trade unions and the informal sector: Towards a comprehensive strategy," for the meeting says reliance on the market since decades to deliver prosperity was misplaced. The report actually makes the case for active government intervention to improve the lot of the traditionally neglected sector of workers. The unionists are to discuss more concrete policies for governments in such areas as labour standards 'to put into practice the promises they made about upgrading the quality of jobs in the informal sector.' This broadening of the role of the organized trade unions, with the support of the ILO, to reach out to the numerically more powerful labour force and give them a 'voice' is, in effect, a new direction. Moreover, it appears to be a case of weak assisting the weak. Organized labour unions and their movements are already under great strain and there are rampant violations of the freedom of association as well as many other international labour standards around the globe. The 'informal sector', which essentially covers the unorganized spectrum of economic activities in commerce, agriculture, construction, manufacturing, transportation and services, now absorbs as much as 60% of the labour force in urban areas of developing countries. It is also recognized as the only part of the economy creating any new jobs at all. Past neglect of informal sector workers is explained by a number of assumptions (i.e. that the work was transitory by nature, that scarce resources were best deployed in trying to mobilize and maintain members in the 'modern economy' and that self-employed workers were viewed as 'entrepreneurs' and thus not potential trade union members) that are no longer so clear cut. The ILO itself has been researching and proposing policies on the informal sector for almost 30 years. The general policy approach traditionally advocated by the ILO has been a compromise that attempts to preserve the income- generating potential of the sector while removing exploitation and gradually raising employment standards. The search for consensus between the interests of employers, trade unions and governments in debates about the sector have resulted in endorsement of that compromise, which aims at the gradual integration of the informal sector into the modern economy. According to the ILO report, the strategy of gradual formalization of the informal sector is 'simply not working.' The 'trickle down' theory of economic and social development has proved to be unrealistic. During the 1980s and most of the 1990s, says the ILO report, an excessively optimistic perspective on the informal sector was popularized by the proponents of neoclassical economic theory. 'Consequently, the development of public policy concerning the informal sector in the last few decades must be seen in the context of the pervasive influence that the standard structural adjustment policies, imposed by the international financial institutions, have exerted on economic development.' As part of the neo-classical paradigm, a new and controversial view of the informal sector emerged, the report maintains. According to this line of thought, rather than trying to restrict or regularize the informal sector, governments should concentrate on creating an enabling environment for it. "The whole emphasis switched to deregulation and withdrawal of the government to ensure that the private sector was not 'crowded out' by public investment or overburdened with government red tape. These policies were pursued first, and most vigorously, in a number of Latin American countries, but they spread to other regions and assumed centre stage globally." This policy towards the informal sector was part of the broader laissez-faire approach to economic policy and the dominance of sheer self-interest in the 1980s and most of the 1990s, the ILO report observes. In this period, the focus of economic policy narrowed from the pursuit of broad-based development, full employment and high levels of income for all to concentration on fighting inflation, encouraging private investment and promoting market forces at all costs. The policy package advocated by neoclassical economists for developing countries also included devaluation of the currency; removal of subsidies for basic commodities; reduction of government expenditure on education, health and social protection; employment reductions in the public sector; labour market reforms to increase flexibility and mobility in the formal sector; and reduced trade protection. The rational for this policy package was a belief that all government intervention was bad: that government cannot make a positive contribution to jobs and growth and that the economy should be left entirely to market forces. According to the ILO report, the outcome of these policies was detrimental in most countries, with the promised economic rebound through export-led growth failing to materialize, and unemployment and underemployment increasing, while access to health, education and other social services diminished. "In part, these inequalities derived from promoting a global economy and powerful multinational companies while simultaneously strangling social protection at national level, eroding worker solidarity and replacing collective responsibility with individualized working relationships." The informal sector activities cover a vast range of small-scale, income generating activities which take place outside the official regulatory framework and typically utilize a low level of capital, technology and skills, offering commensurately low levels of pay, little if any job security and often appalling working conditions. "The informal sector reflects the survival strategy of the poor, those without steady jobs or incomes and without any form of social insurance," says Manuel Simon, Director of the ILO's Bureau for Workers' Activities. "It is often the only recourse for workers left to fend for themselves." The low productivity and income combined with the absence of social protection, training or social services is a particularly harsh burden on many of the most vulnerable groups in society, including women, children and migrants, who are disproportionately concentrated in the informal sector, says the ILO. In most countries, except in Latin America, the proportion of women working in the informal sector is higher than that of the men. In Africa, more than a third of women engaged in non- agricultural activities work in that sector. Because of job segregation in the formal sector, women have been more affected than men by retrenchments resulting from structural adjustment programmes. The alternative for many of them has been to seek employment in the informal sector, where they are generally found in low-paid precarious employment. The ILO report is also quite specific about the 'substantial scale' involvement of children in the informal sector. It estimates that in developing countries alone, at least 120 million children between the age of 5 and 14 are working full time. The number rises to about 250 million if those for whom work is a secondary activity are included. Of these, 61% are in Asia, 32% in Africa, and 7% in Latin America. While Asia has the largest absolute number of child workers Africa has the highest incidence at around 40% of children between 5 and 14 years of age. The participation rates of children are higher in the rural areas than in urban centres. However, regardless of how debates within the ILO on the informal sector evolve and how governments respond to trade union policy proposals, it would be unrealistic to assume that this sector will be rapidly integrated into the modern economy, the ILO report admits. It also adds that 'unfortunately, trade unions must assume that this sector will be a prominent feature of most developing and many industrialized economies for the foreseeable future.' While the efforts of the trade unions as well as ILO's support to the cause of at least half, if nor more, of the working population of this world are certainly commendable, the five-day meeting appears to be missing an important strand in its deliberations. Labour will present its recommendations to governments in an apparent bid to remind them of their responsibility. But where is the industry/business in all this? The five-day ILO- sponsored meeting appears to have no one from one of its most crucial, and powerful tripartite segments - employers. Without their active involvement, the best of intentions of labour groups and governments can easily be frustrated. Later this week, the International Confederation of Free Trade Unions (ICFTU) plans to announce at the ILO its thinking on the process of incorporating the issue of labour standards and trade into WTO mechanisms, a controversial issue between the developed and developing countries as they prepare for the upcoming Ministerial meeting of the World Trade Organization next month in Seattle. (SUNS4533) The above article first appeared in the South-North Development Monitor (SUNS) of which Chakravarthi Raghavan is the Chief Editor. [c] 1999, SUNS - All rights reserved. May not be reproduced, reprinted or posted to any system or service without specific permission from SUNS. This limitation includes incorporation into a database, distribution via Usenet News, bulletin board systems, mailing lists, print media or broadcast. For information about reproduction or multi-user subscriptions please contact < suns@igc.org >
|
||
