Ronaldo Munck

This piece reports on recent research around the relationship between trade unions and internationalisation in the context of globalisation. It argues for a more open, less pessimistic view than the dominant one. This view builds on the experiences of the 1970s and is cognisant of the depth of the current crisis.

Transnationalism

Unions and the workers they represent have always been part of a transnational system of labour relations. Capital has always been mobile and the capital/wage-labour relation has never been hermetically contained within national boundaries. However, until quite recently, the dominant system of industrial relations had been confined, almost exclusively, within a national frame. In the 1970s, a ‘new’ international division of labour emerged as the ex-colonial countries began to industrialise and the multinational corporations became central players in the neo-colonial global system. This period saw a major flourishing of transnational labour activity and the hope, soon dashed, that union internationalism could act as a ‘countervailing power’ to that of the multinationals.

Later in the 1990s the era of globalisation began, characterised by the hegemony of neoliberal economics, the victory of the West in the Cold War and the rise of international institutions such as the World Trade Organisation. The international union movement was unified during this phase and clearly recognised the major challenges posed by globalisation to a ‘business as usual’ approach. Today, with the unravelling of the neoliberal consensus and its whole global development model in 2008, a new period of crisis and uncertainty opens up (Munck, 2010a).

Ilan Strauss

To misuse Marx’s often quoted phrase: governments are in love with tax revenue but ‘the course of true love never did run smooth’. This failed romance should be of concern to those of us who prioritise egalitarian economic outcomes, because taxes and benefits can substantially mitigate the effects of poverty. Among OECD countries, differences in tax and benefit regimes are vital in accounting for differences in poverty rates. After the benefits of tax and welfare are taken into consideration, ‘market poverty’ in north European economies declines by around three quarters, whereas in the US this declines by only one-quarter. For low income economies the development of an effective tax regime can therefore be of great benefit to the working and non-working poor.

Given the above, it is important to ask if globalization has affected the ability of economies to implement an affective and progressive tax regime. And if so how? Although it is a mistake to attribute all the problems facing national tax regimes to globalization, it is equally incorrect to propose that globalization has played no role at all in shaping these issues.

THE WELFARE STATE

From a national perspective tax revenue has become even more important as higher levels of unemployment and the rise in the proportion of pensioners in most OECD countries has helped to create further demand for welfare spending. Even with the rise of neoliberalism, state spending has continued to increase, plateauing at around 35-40% of GDP in OECD countries. In order to try and keep up with state expenditure, tax revenue as a proportion of GDP has risen from 23% in 1965 to around 33% in 1999; with rising social security contributions the largest component of tax revenues in OECD countries at 26% of contributions, in 2003.

Anamary M. Linares

Oscar F. Estrada

A changing political context The Cuban economy is unique in many regards; its exceptionality mainly lies in its persistence in building socialism within a largely neoliberal globalised world. The disintegration of the socialist bloc, which accounted for more than 80% of the country’s foreign trade, had a severe impact on Cuba. Since the crisis of the 1990s, provoked by internal structural distortions spurred by the collapse of European socialism, the Cuban economy has been constantly struggling. The nadir point of the crisis was reached in 1993 when GDP was nearly 35% lower than in 1989. Subsequent data showed a remarkable recovery in the performance of the main macroeconomic aggregates. However, the statistics of the last five years reveal an exhausted economic model.

David J.P. Espina

The combination of external factors (global crises, natural disasters, and the US economic blockade) with internal structural distortions, resulting from incomplete reforms initiated in the early 1990s, has produced an ailing economy. Some of the salient symptoms of the current situation include: unsustainable fiscal deficits as a percentage of GDP (amounting to 6.7% in 2008 and 4.8% in 2009); permanent deficits in the trade balance, and especially in the goods sector since exports of professional services help maintain some level of equilibrium; large-scale withholding of payments to foreign creditors and investors; and wages in the state-owned enterprises (SOEs) which are not acting as incentives to increase productivity. Wages do not foster productivity growth due to their low purchasing power, the egalitarian distribution of many goods and services (besides health, education and food), the government policy of full employment, and the undesired but increasing weight of non-labour sources of income. These factors are particularly relevant in a context lacking any big or medium private enterprises. It is also important to note that the public sector (including SOEs) employs 83.8% of the official labour force[1] .

Lee Changgeun

For the past decade, labour conditions in South Korea can be characterised by rapid increases in precarious work and low pay, both of which have contributed to widening inequality. As of March 2011, precarious workers accounted for 48.5 % of the total labour force (17 million) and low pay rate as the share of wage earners earning below two-thirds of median wages (ILO) was 28% (4.79 million), a jump from 23% in 2001. Not surprisingly, most low paid workers are precarious workers. Almost half of precarious workers are expected to fall into the low-pay trap. In 2011, on average, precarious workers were paid 52.8% less than regular workers. Wage decile ratios have also deteriorated. The D9/D1[1] ratio has grown from 4.81 in 2001 to 5.49 in 2011. It is, therefore, no surprise minimum wages have attracted so much attention in recent years in Korea.

Have minimum wages achieved their goals in Korea?

The Minimum Wage Act was implemented in 1988 and has applied to all workers since November 2000 except family businesses that hire only family members, domestic workers and seamen. There is one unified national statutory minimum wage. For security guards and other intermittent workers, a sub-minimum rate of 90% is applied. This figure is adjusted annually.

Thomas I. Palley

Marshall McLuhan, the famed philosopher of media, wrote “We shape our tools and they in turn shape us”. His insight also applies to the economy which is shaped by economic policy derived from economic ideas, and it is the theme of my recent book which argues the global economic crisis is the product of flawed policies derived from flawed ideas.

 Broadly speaking, there exist three different perspectives on the crisis. Perspective 1 is the hard-core neoliberal position, which can be labelled the “government failure hypothesis”. In the U.S. it is identified with the Republican Party and the Chicago school of economics. Perspective 2 is the soft-core neoliberal position, which can be labelled the “market failure hypothesis”. It is identified with the Obama administration, half of the Democratic Party, and the MIT economics departments. In Europe it is identified with Third Way politics. Perspective 3 is the progressive position which can be labelled the “destruction of shared prosperity hypothesis”. It is identified with the other half of the Democratic Party and the labour movement, but it has no standing within major economics departments owing to their suppression of alternatives to orthodox theory.

Ian Graham (author)

Somyot Prueksakasemsuk

“Union rights are human rights.” That has been said loud and often. But it bears repeating. Labour rights are specialised extensions of the principles set out in the Universal Declaration of Human Rights. “Everyone has the right to form and to join trade unions for the protection of his interests,” the declaration insists. Nobody reading this column is likely to disagree (except, perhaps, with the “his”). Philosophically, core human rights such as freedom of association have always underpinned core labour rights.

We seldom hear the equation put the other way round: “Human rights are union rights”. And yet it is just as true. A place that disregards any of the basic human rights is a place that trade unions will find irksome.

Nora Räthzel

From work or nature to work and nature: another kind of unionism

On a one-week tour organised by João Paulo Cândia Veiga from the University of São Paulo and Manoel Edivaldo Santos Matos from the Union of Rural workers (Sindicato dos Trabalhadores y Trabalhadoras Rurais de Santarém, STTR) in Pará, a region of the Brazilian Amazonas, we visited eight communities along the Rivers Arapiuns, Maró and Amazonas. These are small communities of between 90 and 300 people. They are of mixed indigenous and Portuguese origin, some groups defining themselves as indigenous. Traditionally, they lived from fishing, hunting, gathering fruit and planting manioc. But with the arrival of timber companies their lives have become unstable. In the eighties, but on a much larger scale in the nineties, timber companies entered more remote areas of the rainforests. Game, fruits and fibres on which people had lived began to decrease radically. In the middle of the nineties, supported and organised by the STTR, the communities living in the areas began a struggle for the ownership of the land they worked and lived on. They won this struggle but their battles have not ended. The timber companies remain, employing carrot and stick strategies to get at the wood: threatening activists on the one hand and promising to provide electricity and jobs on the other. The companies do not keep their promises, jobs are heavy and wages are low. But when survival is difficult, some people see no other choice than to work for them. Others are too concerned with the future of the forests to accept such an option, which creates tensions within communities.