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Economic and Political Weekly October 2, 2004 http://www.epw.org.in/showArticles.php?root=2004&leaf=10&filename=7753&filetype=html#tab2 Dignity at Work Strategies for Labour in Developing Countries This paper argues that historically the main mission of trade unions has been to ensure an equitable distribution of the fruits of economic growth. The unions accomplished this mission through strategies aimed at enhancing the content of 'substantive rights' - wages, hours of work and working conditions - and at minimising income inequalities between the incumbents and new entrants to the world of work. A return to this earlier emphasis on non-competing groups has assumed strategic importance in today's global economy. The paper discusses some options before the labour movement with special reference to the developing countries. There is much to learn from union experience in industrial societies, where they have made substantive rights accessible to a broad spectrum of workers including those at the lower end of markets. By building on such rights, the labour movement can help develop a social floor for the global economy, empowering workers to gain access to a larger basket of rights and entitlements. by A V Jose Unions in the Past Trade unions have been important institutions of industrial society, which came of age during the second and third quarters of the 20th century. Starting from humble origins in the 19th century they grew into a significant force, influencing the course and content of economic progress among the industrial economies of the west. During this period of industrialisation, they built strong organisations to represent the interests of workers and guided the development of numerous social institutions for governing labour markets. In the process they delivered major outcomes through improved living standards, equity and justice to workers all over the world. Trade unions have assumed two principal roles in their relations with individual employers, business associations, the state, and the public at large: (i) an economic role in facilitating production and ensuring an equitable distribution of the income generated through bargaining and negotiations at enterprise level, industry/sector level or national level; and (ii) a representative role in providing voice and identity to labour at the workplace, and in society [Freeman and Medoff 1984]. The balance of these two functions has been influenced by the pace and spread of industrialisation over recent decades. Throughout the 20th century, trade unions built up organisational strength and the capacity to mobilise their constituents. They constantly improvised strategies to represent workers' interests, broadened their agenda to combine the multiple functions of bargaining, voice and service provision, and created appropriate structures to carry out these functions. Over a period of time, unions transcended their role of defending special interest groups to become major partners in the development of markets, and in the process they matured into an influential force in industrial societies. Trade unions have grown from a predominantly bargaining role to a specialised role, representing the voice and interests of labour. As the transition coincided with a period of economic growth and a sustained increase in worker productivity, unions served as a conduit for turning economic growth and prosperity into improved living standards for workers. The benefits of collective bargaining in terms of wage and non-wage benefits, particularly through a reduction of working time, were transmitted to a broad spectrum of workers in industrial societies. Embracing a broader agenda including healthcare, leisure, recreation, retirement and non-wage benefits from employment, the unions took their place on new representative bodies and platforms for dialogue, and decisively influenced the content of social policy. Two broad indicators of the growing strength and influence of trade unions in industrial societies were union density and mobilising capacity. The former, which expresses union membership as a percentage of the total labour force, rose steadily throughout the period of industrialisation until the third quarter of the 20th century, bringing nearly two-thirds of the labour force into their fold [ILO 1997]. This trend was reversed in the mid-1970s when density dropped steeply in many industrialised countries. Many studies have attempted to analyse the causal factors underlying this trend. A more important concept is mobilising capacity, which refers to the ability of unions to influence public policy in industrial countries. A good indicator of the mobilising capacity of unions is the proportion of workers covered by collective bargaining decisions, which also shows the extent to which collective bargaining has been sanctioned and institutionally recognised in a country. There is a good deal of evidence that, irrespective of the trends in union density, more than three-quarters of the paid workforce in many industrialised countries remains under the institutional umbrella of centralised collective bargaining [Wallerstein and Western 1999]. Mobilising capacity has remained an important factor through the medium of high-density centralised unionism that has gained ground mainly in continental Europe and in Japan. It needs to be distinguished from the low-density decentralised unionism that became a defining feature of countries with limited mobilising capacity as in the case of the US [Rogers 1993]. In both cases, unions gained ground in industries or enterprises at vantage points in the market, and in the process gained significant outcomes for labour. The literature on trends in union density and mobilising capacity indicates that, with the spread of industrialisation, unions emerged as major partners influencing the allocation, stabilisation and redistribution functions of modern governments. This was especially true of countries where high-density centralised unions grew in strength. The post-war decades in north and central European countries have been marked by the rise of an activist state which supervises the distribution of benefits to workers and their dependents [Esping-Anderson 1996; Tanzi and Schuknecht 1995]. The activist states devoted over 50 per cent of GDP to financing Keynesian type policies for demand management in labour markets. What followed was a significant expansion of employment in public sector enterprises, in both manufacturing and service activities. Unions grew stronger within their citadels of the public sector. Union capacity to deliver successful outcomes became evident when the benefits they gained for workers were incorporated in statutes governing the labour market of many industrialised countries. Unions influenced the design and development of the post-war construct of industrial relations which was based on a strong political commitment to full employment and worker welfare. Some salient features of the system were: (a) full-time employment, governed by an open-ended contract; (b) collectively negotiated wage structures with minimal dispersion across skill categories; (c) social benefits to workers and their dependents distributed through the main income earner; (d) control over working time and safety standards; and (e) job security for individual workers. In order to understand the role of unions in this transformation, we need to bear in mind the environment from which they emerged in industrial societies of the 19th century. The new organisations' primary purpose was to protect the economic interests of workers who moved into towns in "the largest migratory movement in history". As it happened, these workers, devoid of the security and protection offered by their families and communities in pre-industrial societies, were the victims of unequal employment relations. Their physical labour was crucial to the smooth functioning of numerous manufacturing industries which derived economies of scale based on size and location. The new organisations emerged as countervailing forces within the power structure of industrial society. They derived identity and legitimacy from a sense of solidarity among the workers, whose skills were practically identical. They defined an ideology which reflected the basic aspirations of a secure income and a dignified existence. The main focus of their efforts in the early stages was to build on substantive rights that included better wages, regulated working hours and improved working conditions. As the workers acquired these substantive rights, they set a firm material foundation for the unions to embark on an ambitious agenda of developing labour standards that gave legitimacy to the rights and entitlements of workers, and also provided a moral framework for governing the workplace [Béteille 2002]. The acquisition of substantive rights has had two distinct features. Firstly, unions went beyond their traditional role of defending special interest groups in order to become major partners in the development of markets. As large numbers of workers were drawn into this partnership, the unions matured into a powerful engine driving economic growth in industrial economies. Secondly, unions converted their organisational space into a political space and thereby contributed to the development of democratic institutions. The dual role of unions as partners in development and as builders of democratic institutions corresponds to their twin accomplishments in strengthening the material and moral foundations of industrial societies. The strategies they followed in pursuit of these goals deserve some attention. Partners in Development Growth and accumulation in industrial economies made it possible for workers to secure higher wages, better living standards and more opportunities for wealth creation. Workers were simultaneously mass producers and mass consumers, thus contributing to a continuous expansion of the industrial economies [Landes 1998; Hobsbawm 1994]. They developed structures embodying partnership between workers which were crucially important to the development of markets. This partnership has had three main components: (i) participating directly in the production of goods and services; (ii) strengthening markets through raising or sustaining the general level of consumption; and (iii) promoting worker mobility. Participation in production often came through initiatives organised by cooperatives set up by trade unions. They were involved in fields such as housing, transportation, retail distribution, food and catering, healthcare, financial and personal services. These ventures mobilised the capital and skills of numerous small-scale producers as well as workers, and provided technical services that helped them organise production and distribution. The goods and services they produced had a moderating influence on prices; they helped consumers stretch their income and derive greater benefits from limited resources. Besides, the enterprises offered income-earning opportunities for labour market entrants in urban areas and facilitated their long-term movement into secure jobs. Organised labour also contributed to the establishment of institutions that strengthened markets. The institutions for wage determination, in particular minimum wages and solidarity wage structures, ensured a solid and rising wage floor for workers, boosted their purchasing power and raised aggregate demand. A second group of institutions aimed at reducing workers' vulnerability to cyclical fluctuations in the market and other contingencies that were beyond their control. Numerous insurance-based schemes, either privately funded or socially financed, have been organised to guard against contingencies such as unemployment, morbidity and disability. They are seen as an important element in the stability of market economies [Piore and Sabel 1984]. A third area for partnership has been in promoting worker mobility in terms of income, skills and employment status. This involved the design and development of training opportunities, and ways of making skill acquisition affordable for workers. Unions have led numerous initiatives, in collaboration with governments and employers, aimed at enhancing workers' skills, both incumbents and new entrants to the labour force [Jose 2002]. The partnership in development was an important adjunct to the unions' traditional role of defending workers' interests. The new role involved them in the design of institutions that minimised income disparities, and guaranteed a secure income with improved living standards for all in industrial societies. More importantly, they adopted an inclusive approach to workers outside the union, providing income-earning opportunities and services, which made them non-competing groups in the world of work [Western 1997]. This led to collaboration with other social actors in pursuit of another important goal: the nurturing of democratic institutions. Development of Democratic Institutions In the past, organised labour has served as a potent social actor creating a political space for the ascent of democracy. The post-war decades, known as the 'golden age' of industrialisation in Europe, created a favourable climate for sharing the fruits of economic growth. Organised labour, as a partner in production, helped establish several institutions for a broad-based sharing of prosperity. The presence of an activist state involved in the allocation, stabilisation and redistribution functions of modern governments encouraged the unions to consolidate their position and contribute to social policy-making in the framework of democratic institutions [Crouch and Dore 1990]. Unions have been an important vehicle for the transition to social democracy; they converted the economic space of the industrial workforce into a political space and made it possible for the whole of society to gain access to civil and political liberties. Historically, the most important contribution of unions is that they broadened the base of workers entering into industrial market economies and gave them access to civil and political liberties through democratic institutions. As a result, western industrial societies have become near synonyms for democratic societies. During the post-war decades, these democratic societies managed to institutionalise a regime for the governance of labour markets based on procedural rights accessible to all workers. The civil and political liberties which workers and citizens in general had acquired by this time were invoked to ensure equal opportunities and, implicitly, equitable outcomes in the world of work. In relation to the above-mentioned development, Hepple (2003) draws an important distinction between the content of substantive and procedural rights. Substantive rights are those which determine the actual conditions of labour, such as minimum wages, maximum working time and the right to equal treatment. Procedural rights are those which shape the procedures by which substantive rights are determined, such as the right to collective bargaining, the rights of workers' representatives and the right to equal opportunities. Industrial societies tacitly recognised that equitable outcomes by way of substantive rights automatically follow the establishment of institutions which guarantee procedural rights. The installation of a constitutional regime, based on the rule of law and ensuring access to procedural rights, marked a distinct stage in the evolution of workers' rights and human rights in general. A point for emphasis here is that workers' rights and incomes are two sides of the same coin. There are synergistic links between them, and they can be pursued simultaneously. Workers must have the wherewithal to exercise their rights. Conversely, we do not argue for income without the rights which enable people to enjoy their income. Rights have two components: negative immunities and positive entitlements. Berlin (1969) argued that these two components reinforce each other. Fundamental rights are the immunities enjoyed by citizens, which guarantee citizens' equitable access to a growing basket of entitlements resulting from economic growth. These rights are also necessary to prevent any aggravation of inequalities in societies undergoing modernisation and development. The chain of causation leading to the accretion of rights and entitlements assumes special significance in societies which are on the threshold of developing appropriate structures for workplace governance. Wilfred Jenks, an eminent jurist and a former director-general of the ILO, has described the transformation of workers' interests into rights as a continuous process that goes hand-in-hand with economic growth. Interests in material advancement mature into entitlements; they in turn gain legitimacy as rights though legal instruments and sanctions. Jenks noted: "only when the acquired interests of workers gain social recognition in the course of economic development can their usage be legitimised through legal instrument" [Jenks 1968]. It is important to bear this observation in mind, as the institutions of industrial relations and the partnership programmes built around them begin to emerge in the developing countries. In these countries industrial workers are the pioneers of an economically powerful middle class, who are in a position to claim benefits including higher wages, better working conditions, civic amenities and social security schemes. They are politically important allies of the state, and are represented by unions that are active in regulated industries and public sector enterprises. The benefits they derive from employment are embedded in a 'social pact' which sets the terms of compromise between capital, organised labour and the state in sharing the national product [Webster and Adler 1998]. These workers and their unions have played an important role in nurturing democratic institutions among developing countries. Assumptions Underlying Trade Union Strategies The industrial relations system, and the associated governance structures as they evolved in the west, were based on a number of assumptions. Firstly, it was never doubted that the urban industrial society would remain an enduring model for job creation and that it would continue to draw workers into organised sectors of the economy. This assumption has had strong empirical support from the developed countries, where urban-based manufacturing and service industries have provided secure jobs, higher wages and improved living conditions. As a result, the industrial society model has been widely commended as a pattern for the modernisation of all developing countries. The industrial relations system also built on the support of an activist state, which encouraged the distribution of benefits to workers, and mobilised the resources for distribution through higher levels of taxation. It was assumed that the inflow of migratory labour to industrial societies could be managed, and that migrant workers could become non-competing groups in the labour markets of receiving countries. Perhaps the most crucial assumption was that the industrialised economies would continue to dominate the global market for manufactured goods and that the incremental cost of modernising their high-cost, high-wage structures could be passed on to the consumers in both domestic and global markets. >From the 1970s onwards, one or more of the above assumptions proved to be untenable. The boom in commodity prices and the oil crisis of 1972-73 marked a major turning point, as they brought to light the weakness and vulnerability of industrial economies to volatile market conditions. These economies were about to enter another era, marked by stagnation and rising unemployment, which called into question the sustainability of their high-cost and high-wage markets. The pace of globalisation was accelerating, with the new competitors posing a formidable challenge to the traditional market leaders of manufactured goods and traded services. Initially the challenge came from the newly industrialising countries of Asia including the Republic of Korea, Taiwan-China, Hong Kong, Singapore, Malaysia and Thailand. These countries were led by an already industrially advanced Japan. Subsequently this group was joined by other Asian countries, notably China and India. Making a significant departure from conventional inward looking industrialisation strategies, these countries embarked on an adventurous course for faster economic growth, with greater reliance on trade and export-oriented industrialisation. The new thrust brought them rich rewards in terms of a phenomenal increase in output and jobs, and more importantly, major advances in the standard of living. This trend is likely to continue with the current pace of globalisation. Quite possibly, many more new entrants will gain leverage in global markets, and challenge the dominance of market leaders. Changing Work Environment and Challenges for Trade Unions Changing World of Work Towards the end of the 20th century, globalisation turned into a powerful force generating intense competitive pressure in product markets across the world. It has accelerated the mobility of capital and added to the vulnerability of labour. Some related factors that have contributed to the pace of change may be listed as follows: (a) technological progress and the changing composition of the workforce; (b) the increased supply of new labour market entrants, particularly women; and (c) the practice of flexible labour market policies. We take a brief look at the impact of these factors. Technological progress has made it possible to reshape the production process through new forms of industrial organisation and relocation to new production platforms. The disintegration of large workplaces and the rise of smaller, geographically dispersed units of production are visible signs of this change. Behind the disintegration of large workplaces is an ongoing process of separating work into different units of operations, related either to production, processing or the provision of services. The production-centred operations, which accounted for a very large share of total employment in industrial societies, are being divided into components depending on the intensity of effort involved. The less effort-intensive and the more standardised components are then outsourced to countries or regions offering cheap labour. The effort-intensive components are automated and technologically upgraded to more skill-intensive operations. A similar process of differentiation is underway in service-related jobs too, but the outsourcing of less skilled jobs is often directed to lower-paid workers in the same country or region. Most of the new jobs generated through reconstituting manufacturing operations have been gender neutral in character, which has made it possible to absorb large numbers of women into the paid labour force. An even more important feature of the new jobs - arguably a fallout of the 'creative destruction' underway in all markets - is that they have shorter lifespans, so that they do not conform to the post-war construct of a normal employment pattern espoused by the trade unions. The reshaping of production processes currently underway has set in motion a polarisation of the workforce into two distinct categories: the better educated, career minded, and individualistic workers at one end and those with fewer skills, marginalised, scattered and prone to exploitation at the other. In addition, there are demographic changes leading to an increase in the supply of workers in all countries. Many new entrants to the labour markets are migrants in search of work. Added to this is the influx of women into insecure and poorly paid jobs on the export platforms and production chains. Furthermore, competitive pressures have resulted in the adoption of flexible labour market policies, and practices such as subcontracting, outsourcing and the hiring of temporary and part-time workers are very common, especially at the lower end of labour markets. The inevitable outcome of these developments is worsening inequality among the labour force. Impact on Trade Unions These developments have had a discernible impact on union structures and modes of functioning all over the world. Two observations stand out. Firstly, the closing decades of the 20th century saw a conspicuous decline in union density in many countries of the industrialised world. As yet there is no real evidence of a likely reversal of the trend, although a handful of countries in northern Europe are notable exceptions. Some empirical data pertaining to long-term trends in union density are summarised in Table 1. The figures show quite clearly that among the larger countries of Europe - Germany, France, Italy, Spain and the UK - union density reached peak levels during the 1980s. It may, however, be noted that a decline in union density is not necessarily accompanied by a corresponding decline in the share of the labour force covered by collective bargaining institutions [Wallerstein and Western 1999]. Table 1: Percentage of Trade Union Members among Total Workforce in Selected Industrialised Countries [See Table at: http://www.epw.org.in/showArticles.php?root=2004&leaf=10&filename=7753&filetype=html#tab1] ------------------------------------------------------------------------ Source: Cornell Institute of Industrial Relations (IIR) Statistical Record on TRADE UNION MEMBERSHIP, available online at http://www.ilr.cornell.edu/library/downloads/FAQ/UNIONSTATS2002.pdf And European Industrial Relations Observatory on-line (EIRO) Report on "Trade Union membership 1993-2004", available online at http://www.eiro.eurofound.eu.int/2004/03/update/tn0403105u.html Secondly, there has been a pronounced shift in emphasis from centralised bargaining towards wage setting within the framework of decentralised and geographically dispersed bargaining units. The gradual shift of industrial employment to small and scattered units of production, using more skilled workers, led to the rise of enterprise-based company unions, akin to business unionism. The new unions represent workers at the higher end of the skill spectrum, but insulate them from a sense of identity or solidarity with larger collectives of workers. The new structures have offered efficient solutions, better wages and more fringe benefits, compared to earlier ones that catered to large numbers in an environment of militancy and solidarity [Jose 1999].The decline of centralised wage setting essentially meant an erosion of 'solidarity wage structures' and the rise of income inequalities [Wallerstein and Western 1999]. There is, however, a notable difference between developed and developing countries with regard to the current situation of unions and labour institutions. In the industrial economies, most trade unions are well past the stage of struggling to improve the basic conditions of work and living standards of their constituents. Economic growth during the post-war decades has led to a conspicuous decline in the number of workers exposed to exploitative conditions. As the industrial economies advanced to higher levels of income and productivity, the traditional membership base of unions shifted towards skilled work. The unions also moved into new forums for collaboration with employers, ostensibly for the creation of a new industrial relations regime, involving them as stakeholders. A perceptive observation made in this regard is that globalisation, having contributed to a widening of inequality, has also been accompanied by a rising tolerance of inequality, notably among the western industrial economies [Dore 2004]. The outlook and approach of unions in the industrialised countries have been influenced by the fact that the emerging industrial workforce is employed in enterprises at the frontier of technological progress and global economic leadership. Increasingly they are inclined to view industrial society from the supply-side, and to work with business and government for the development of human resources. Besides, the maturing of representative institutions during the 'golden age' of industrial society has effectively guaranteed workers a voice in the making of social policy. The shift away from the adversarial relations of the past is reflected in a discernible decline in the incidence and duration of industrial disputes among many developed countries (Table 2). [http://www.epw.org.in/showArticles.php?root=2004&leaf=10&filename=7753&filetype=html#tab2] Table 2: Incidence of Industrial Action* ------------------------------------------------------------------------ 1971-1980 1981-1990 1991-2000 [see complete table at: http://www.epw.org.in/showArticles.php?root=2004&leaf=10&filename=7753&filetype=html#tab2 ] ------------------------------------------------------------------------ Note: *Annual average of working days lost per 1,000 employees. Source: European Industrial Relations Review, May 2002, pp 31-32, ILO, OECD. The situation is qualitatively different in the developing countries where labour institutions have been unable to achieve a secure income for the majority of workers. Large numbers of people who enter the labour market do not possess the required skills or belong to competitive enterprises, and are therefore likely to remain excluded from the benefits of industrial relations championed by the unions. The ascent of flexible labour market policies seems to have reduced the prospects for unions to shape the labour market institutions that are beneficial to new entrants. It is unlikely that the post-war construct of a 'normal employment pattern', characterised by full-time jobs, stable career trajectories and dependency benefits can ever be guaranteed to the new entrants. Challenges for Unions This brief review of the emerging situation in the world of work aimed at highlighting two major problems, which epitomise the main tasks ahead for the labour movement. One is the rise of income inequalities between workers, especially in the developing countries. The second is its obverse: the entry of numerous people into flexible employment relations that are outside the reach of institutional safeguards. Large numbers who enter the labour markets do not possess the right skills, and so they tend to be excluded from any productive partnerships within markets. They are prone to be victims of exploitation and indignities in the world of work. The problem is compounded by the fact that potentially useful structures for the governance of labour markets are generally at very rudimentary stages of formation in developing countries. In recent times, the rise of larger regional markets such as the EU, NAFTA and ASEAN has also exacerbated the differences between workers in terms of employment, income and access to markets, both within and between regions. This casts a shadow on the transnational solidarity platform of workers nurtured by the international trade union organisations. If the unions were to focus exclusively on the concerns of workers at the high end of the markets, there is a risk of their influence becoming circumscribed to a dwindling proportion of the workforce. The crucial question is whether the labour movement can rise to the challenge of simultaneously addressing the concerns of all sections of the workforce. This brings us to the question of strategies to minimise competition between workers in different countries, which at the same time raise their access to global markets. How do the unions respond to the emerging situation? Our instinct is to revert to the familiar theme of 'organising workers' and to deliberate on strategies for restoring the labour movement to its vantage point of preceding decades [Bronfenbrenner et al 1998]. There has also been a good deal attention paid to the question of formulating and administering statutory minimum wages that can raise the living standards of workers at the lower end of markets [International Labour Review, 2003]. These are promising approaches, which have been discussed extensively in the literature on industrial relations. It may, however, be noted that a minimum wage regime is based on important preconditions, such as the presence of strong trade unions with mobilising capacity to influence the content of minimum wages, as well as administrative machinery that can ensure compliance with the wages set, either statutorily or through collective bargaining. These preconditions are non-existent in a number of developing countries, and the available evidence indicates that they are unlikely to materialise in the immediate future. It is hard to be optimistic about the prospects for raising the living standards of the poor through statutory minimum wages. But, without detracting further from the merits of such positive approaches advocated in the literature, I would like to direct attention to some related options which could be pursued by the labour movement with special reference to the situation in developing countries. Union Strategies in Developing Countries A Social Floor for All Workers: Lessons from the Past There is much to learn from the early phase of trade unions in industrial societies when they built up substantive rights and made them accessible to all workers, including those at the lower end of markets. I would argue that by focusing on the content of substantive rights, trade unions, especially those in developing countries, can help build a foundation - a social floor - for the global economy and also empower workers to gain access to a larger basket of rights and entitlements. What are the practical aspects of establishing a social floor in developing societies? What role does the labour movement play in realising that goal? First and foremost, there is an urgent need to eliminate competition between workers at the lower end of markets, both within and between countries. Three objectives require special attention: (i) raising the level of minimum social wages as a long-term solution to low-wage strategies; (ii) creating new institutional safeguards for people working under flexible market relations; and (iii) facilitating equal opportunities for access to and mobility within labour markets. The three goals together correspond to an absolute floor in terms of social wages, safety nets and opportunities for all in the global economy. They constitute a strategy for sustainable development and 'intra-generational equity' which could be pursued by the labour movement. The essence of such a strategy lies in empowering people, especially the poor, to live a dignified life in their world of work. The means of attaining that goal is to help them overcome the barriers of poverty and deprivation by ensuring access to basic amenities that enrich their lives. Amartya Sen (1999) has forcefully argued that such amenities - primary education, healthcare, clean drinking water and a sanitary environment - together can enhance the capabilities of people and make them more productive as partners in the functioning of markets. Some Areas for Trade Union Involvement A minimum social wage can serve as a powerful instrument for taking wages out of competition in overcrowded labour markets. Experience in developing countries suggests that social spending determines the level of minimum wages, which can be set in relation to a basket of entitlements including elementary education, primary healthcare, shelter, civic amenities and a safe environment made accessible to all citizens. These transfers would in turn determine a minimum 'reserve price' below which labour would not be sold on account of supply-side pressures. In this regard, it is worth taking a look at some countries/regions in the developing world that have moved in the direction of carefully planned social spending and in the process managed to attain significant increases in the real earnings of workers in rural areas. The Indian state of Kerala is a case in point. Kerala has achieved a discernible increase in real wages for rural workers as a direct result of rising levels of social consumption linked to public expenditure programmes [Jose 1994]. Another area for attention is the creation of new institutions to safeguard the long-term interests of low-skilled workers in terms of benefits such as healthcare, insurance cover and old age pensions. It is probable that most labour-market entrants, particularly low-skilled workers, will remain without regular full-time jobs, and therefore outside the protective umbrella of conventional labour market institutions. This indicates a pressing need for new institutional safeguards that can guarantee portable entitlements to all workers - casual, migrant, piece workers and subcontractors - irrespective of the location or duration of their employment. A third area of concern is the establishment of suitable and affordable training opportunities to help workers at the lower end of the market overcome the barriers of gender, ethnicity and race that hamper their mobility. Training can raise the supply price of labour, equip workers to respond to expanding economic opportunities and help them emerge as equal partners in the development of markets. A social floor for workers at the lower end of markets, built on social wages and new institutions for social protection and skill formation, is a relatively unexplored area for the labour movement in developing countries. It represents a major challenge calling for innovative approaches, leadership and guidance. The labour movement has the capacity and resources to mobilise political support for the above agenda. It is also in a position to liaise with relevant international organisations that could provide the necessary assistance. The International Labour Organisation (ILO) has made an effort to spell out the components of a social floor within the framework of an International Declaration on 'Fundamental Principles and Rights at Work' [ILO 2002]. Here we make a brief detour into the components of the Declaration. Its purpose is to highlight the fact that workers' access to substantive and procedural rights is an eminently feasible goal in developing countries, and that there are abundant prospects for attaining this goal through closer cooperation between the labour movement and other social actors. Social Floor as Reflected in the ILO Declaration The Declaration, adopted by the International Labour Conference of 1998, affirmed that all member states have an obligation arising from their membership of the ILO to respect, to promote and to realise in good faith, the principles concerning fundamental rights which are: (i) Elimination of all forms of forced or compulsory labour; (ii) Effective abolition of the worst forms of child labour; (iii) Elimination of discrimination in respect of employment and occupation; and (iv) Freedom of association and the effective recognition of the right to collective bargaining. We take a look at these components in the order listed above.1 The first and second elements of the Declaration, concerning the elimination of forced labour and child labour, point to the need for affirmative action and sanctions aimed at overcoming the absence of freedom in many developing societies. Forced labour and child labour are manifestations of an extreme degradation of life and their prevalence is plainly symptomatic of the non-existence of any right to exercise freedom. It is in the face of severe adversity and deprivation that people are compelled to trade away their dignity and self-respect because of an overwhelming concern for survival. The third element of the Declaration, proscribing discriminatory practices at work, is a persuasive argument in support of free and open labour markets under the watchful eye of the state. Discrimination at work is often linked to loyalties based on ethnicity, language or religion. In effect, they perpetuate monopolistic structures, create artificial barriers to the entry and mobility of workers, and forestall the development of free and open markets. Only when the barriers of discrimination break down, can the real gain from globalisation - a factor price equalisation of labour - become accessible to workers in all countries. The right to organise and bargain collectively, advocated under Conventions 87 and 98 of the ILO, concerns the basic right of people to articulate their views on justice in the world of work. This right depends on the presence of civil liberties and the associated immunities of all people defending their rights to life, property and freedom of expression. Such rights and immunities have established antecedents in the customary law of all developing societies. They are being granted constitutional support in many developing countries which are in the process of establishing democratic institutions. The creation of a social floor based on the rights and entitlements of workers in all countries requires closer cooperation between the labour movements of different countries. A global coalition of the movements supporting fraternal organisations in individual countries, helping them work towards the goal of a social floor, is an idea worth pursuing. Ideally the main thrust of such coalitions should be to create momentum for political action leading to the adoption of social policies. A political commitment to building a social floor can come only through endogenous processes involving the beneficiaries in individual countries. At best, the solidarity and support of fraternal organisations can help activate the political processes and sustain the labour movement in its demand for change. This is a propitious time for the labour movement to begin constructing a social floor to the global economy by enhancing the content of substantive rights. The speed and spread of globalisation has brought abundant opportunities for pursuing an inclusive approach towards all workers, irrespective of their locations, industries, and skill levels. Some Promising Developments In recent years, technological changes in transport and communications have opened up new channels for connecting people in the far corners of the world. The expansion of rapid transport and instant communication has effectively reduced the need for large-scale urban migration, and opened the possibility of a significant reduction in the cost of industrialisation. The labour markets in many developing economies are growing beyond the borders of urban enclaves, creating new income-earning opportunities and adding value to the assets and endowments of workers. There has also been an expansion in the coverage of new and inexpensive means of communication, connecting people with each other and with the markets. Besides, the media have emerged as a powerful instrument, making the people of different countries aware of avenues and opportunities for income generation. These developments have encouraged many customarily disadvantaged groups, particularly rural women, to enter the market for paid work. It seems that technology is beginning to facilitate a balanced distribution of the fruits of growth across rural-urban divides and gender categories. As globalisation connects more people to the world markets, developing economies are poised to undergo a transformation of their product and labour markets. This will take place much more rapidly than the corresponding transformation in the developed world. The experience of east Asian countries is a case in point. Among these countries, a significant rise in output, employment and skill levels, and a steep fall in mortality and fertility rates have come in less than a third of the time taken for a similar transition in the west [Oshima 1994]. The challenge for the labour movement today is to accelerate the pace of that change and to ensure that all workers in the developing world are empowered to join as partners in global markets. 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