The 108th International Labor Conference of the International Labor Organization (ILO), held third week of June this year, is called a Centenary Conference. The ILO was formed in 1919 as part of the Treaty of Versailles, the treaty that formally put an end to World War I and accepted the surrender of the German-led Axis powers. Why the inclusion of the ILO agendum in a peace treaty? The quick answer: the winning Allied forces, principally the United States and the United Kingdom, were deeply concerned over the spread of the Leninist Bolshevik ideology that inspired the successful worker-peasant revolution two years earlier, 1917, in the war-weary Russia. The framers of the ILO Constitution countered the Bolshevik threat with a positive guiding framework: “Lasting peace is not possible without social justice”.
And yet, the ILO, with its ability to convene the three industrial relations actors (government, industry and labor) to support and abide with the “international” labor standards on hours of work, freedom of association, collective bargaining, social insurance and various issues related to work conditions everywhere, managed to become the conscience of the world in the area of work governance and labor relations. The ILO’s standard-setting, monitoring of compliance by Member States of the established labor conventions and recommendations, and technical assistance given to developing countries on how to improve labor governance and industrial relations practices became part of what industrial relations gurus call the “social contract” of the 20th century. This social contract is credited as a major stabilizing factor of the countries of Europe and North America in their “glorious golden decades” of the 1940s-1970s. These were the decades of welfare capitalism and social democracy that saw the enthronement of policies promoting industrial democracy (e.g., system of collective bargaining in the United States and co-determination in Germany), strong social protection (e.g., free education and health insurance for all in Canada and Scandinavian countries), unemployment insurance for the displaced and jobless, etc.
Fast forward to 2019. The world of work has changed tremendously. In the Centenary Conference, thousands of trade unionists and civil society activists marched outside the Palais des Nations carrying posters with a common message: Social Contract for the 21st century.
The reality: the old social contract has crumbled. Under the globalization decades of the 1980s to present, social and welfare protection for the working populations in both developed and developing countries has been eroded. A Global Race to the Bottom has ensued, a Race rolling back welfare protection and even subverting basic labor rights. Under their global supply chains, multinational corporations, as global investors, are able to fly in and out of countries in search of cheap, non-unionized and malleable labor. The Race to the Bottom is facilitated by the Washington Consensus prescriptions of economic liberalization, deregulation and privatization. Under neo-liberal globalization of the last few decades, unionism has been on retreat or in decline, in both developed and developing countries.
The problems facing the labor movement at the global, regional and national levels are compounded by the disruptive impact of the ICT-based technology revolution and the dislocating impact of climate change. Moreover, with the downsizing of the public sector under deregulation-privatization programs, governments are spending less and less on social and labor protection. The most vulnerable and disadvantaged in this evolving global, regional and national economic and labor landscape are the non-regulars, including the “endos”, in the formal sector, and those earning marginal incomes in the vast galaxy of the informals. Meantime, the rich are not only getting richer; they are getting fabulously rich, with Thomas Pikketty, documenting in his magnum opus Capital (2013) how the rate of return to capital has outpaced return on growth and everything, resulting in the never-ending process of concentration and centralization of wealth in the hands of a few. As a result, the world has never been so unequal.
It is against the foregoing backdrop that many academics, UN institutions, trade unions and CSOs have been talking since the turn of the millennium about the need for a new global social contract. The call for a new global social contract has been loudest this year, with the ILO centenary.
Surprisingly, this call has received positive response from two institutions that the trade unions and CSOs have been denouncing as among those responsible for the Race to the Bottom. These are the World Bank and the International Monetary Fund (IMF). These twin sisters of international finance have been at the forefront in the promotion of unregulated globalization, deregulation, liberalization and privatization of markets, including labor markets.
Early this year, the World Bank came up with its World Development Report 2019 – “The Changing Nature of Work”. The Report has on its cover a fresco painting by Diego Rivera, a Mexican Communist, who illustrated in his paintings the leading role of workers in the advancement of a society. The Report raises the need for a new social contract and calls for more government spending on social protection for the poor and greater investments by governments and the private sector on skills development. The idea is to “empower” workers to be ready for the challenges of the 21st century, in particular to able to adjust to the complex requirements of life and work under the evolving technology revolution.
Despite this labor empowerment message, however, the World Bank 2019 Report was still heavily criticized by a number of trade unions and CSOs. The main criticism: The World Bank continues to espouse “labor flexibility”, which, the trade unions interpret to mean the non-regularization, casualization and degradation of paid work.
The IMF also took up the social contract message. This time, the IMF delivered the message right during the ILO’s International Labor Conference this year.
Christine Lagarde, the IMF’s Managing Director, talked of the importance of more social spending to cover the needs of the workers. This talk is consistent with the new direction set by Lagarde for the IMF, to broaden the discussion of the traditional financial issues, by taking into consideration their “macro-critical” impact such as social inclusion, gender equality and so on. In the ILO gathering, Lagarde’s speech is symbolically titled “Forging a Stronger Social Contract—the IMF’s Approach to Social Spending”. To her, the social contract revolves around the provision of social protection, which she defines as spending to cover the social insurance, social assistance, as well as public spending on health and education, of the working population. Admittedly, this is revisionism of a different kind for the IMF because the IMF, in the past, had always insisted on austerity measures, including cuts in social programs, just to balance the budget of an indebted country. The Philippines experienced this in the IMF-supervised peso devaluations in the 1960s, 1970s and 1980s, including the IMF-led “structural adjustment” program, from the 1980s to 2000s.
But now, like the World Bank, the IMF is pushing for more spending on social protection as well as more allocations for education and skills development for all.
And yet, one major issue that the World Bank and the IMF have failed to tackle is reform of the globalization architecture. How to reform globalization, or the kind of global economic integration that has developed in the last four to five decades of economic liberalization, deregulation and privatization? They have also remained silent on trade union issues such as labor flexibility, which is at the roots of the Race to the Bottom.
In this regard, the world needs to listen to other global players, including the trade unions and CSOs, on what the global social contract of the 21st century should be. This column recommends the works of the social activists, researchers and academics belonging to the Asia-Europe People’s Forum (AEPF). Through the annual AEPF assembly and engagement with Asian and European governments, the AEPF has produced a large number of documents outlining an alternative social and economic order that is inclusive and sustainable for humanity. For example, Francine Mestrum, a leading light in the AEPF, has been writing on the importance of society’s commons – land, water, air and other resources – that should be treated as belonging to the people as a whole and, should not, therefore, be privatized and commercialized for the benefit of only a few.
The AEPF has also been calling for two transformation challenges — just transition in the transformation of the economy to become green or greener and just transformation to help everyone, workers in particular, adjust to the technology revolution. The point is that in these twin transition challenges, the jobs and dignity of the workers should not only be maintained but also, and more importantly, enhanced and strengthened.
This, admittedly, is not easy. This is why more, not less, debates are needed on what should be the social contract for the 21st century. The ILO offices in Geneva, Bangkok and Manila should organize meetings, where more alternative inputs from the people below can be heard. After all, it is the future of humanity and Mother Earth that are at stake.