Unions for a Sustainable Global Economy. Agenda Item 6

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1 Unions for a Sustainable Global Economy Agenda Item 6

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3 UNIONS ARE THE FOUNDATION FOR A SUSTAINABLE GLOBAL ECONOMY The global economy is at a crossroads. Inequality is up, corporate profits are soaring, but working people s wages are stagnant. This crisis, caused by corporate greed, has increased the urgency to change our economy from one that only benefits the wealthy and powerful to one that is fair, inclusive, and sustainable for all. Since the 2008 financial crisis, corporate profits have rebounded. Global stock markets are at pre-recession highs. The world s GDP has tripled over the past few decades. But this growth has been hoarded at the top. For example, executive pay has skyrocketed, while workers have lost purchasing power. The share of national income going to labour has declined in most of the world s largest economies. Oxfam reports that currently 42 people control more wealth than the 3.7 billion people who make up the poorest half of humanity. The richest 1 percent have more wealth than the other 99. The number of billionaires jumped 13 percent in 2017 to 2,043, the highest number ever. Their total net worth rose by 18 percent to $7.67 trillion more than the GDPs of France and Germany combined. This in a world where 1 in 10 people live on less than $2 a day and 1 in 9 goes to bed hungry every night. Forty-five percent of respondents to the ITUC s global survey described their financial situation as desperation or on the edge, and 52 percent said they were just getting by. In the United States, the richest nation in the world, 5.3 million people live in absolute poverty. This widening gap between the top 1 percent and the rest of us is an existential threat to our democracies and to our fundamental rights. A rising concentration of income allows executives and other high earners to manipulate the economic and political system. LIVERPOOL JUNE 2018 MAKING IT HAPPEN 3

4 There is mounting frustration among people who feel that government rules and economic forces are rigged in favour of the rich, leaving them with few options. Trumpism, Brexit, the National Front in France, Duterte in the Philippines, and other right-wing populist causes are in part a misguided response to missing rungs on the economic ladder. From the OECD to the ILO to the staunchest supporters of the neo-liberal order such as the IMF, there is recognition that unions curb runaway inequality and that collective bargaining is good for longterm economic growth. It stems the rising tide of inequality, and raises wages for covered workers, which has a spill-over effect into the labour market generally. It helps flatten CEO-to-worker pay ratios. As economists from Princeton and Columbia Universities concluded in a recent study, unions have had a significant, equalizing effect on the income distribution over the twentieth century. This effect will continue into this century as well. The UN s Sustainable Global Development Goals for 2030 also recognizes that poverty elimination, and inequality by proxy, is the greatest global challenge and an indispensable requirement for sustainable development. Unions will play a large role in meeting this goal. Unions fight poverty, promote more democratic societies, and according to the UN s World Happiness Report, foster greater satisfaction with work. The global labour movement must provide an inclusive economic vision to counter corporate domination and far right extremism. This vision needs innovative platforms to build good jobs, address climate change, and spur new trade and investment models. 42 PEOPLE CONTROL MORE WEALTH THAN THE POOREST 3.7 BILLION 4 LIVERPOOL JUNE 2018 MAKING IT HAPPEN

5 THE GROWING GLOBAL MOVEMENT FOR GOOD JOBS The labour movement is poised for a growth, after years of decline. Shrinking union coverage is directly linked with working people being denied our fair share. A recent paper by IMF economists states that roughly half the increase in income inequality in advanced economies is driven by de-unionisation. That figure below shows the clear relationship between inequality and density in the United States % Year Union Membership Rate Top 1% Income Share Top 10% Income Share Source and notes: Author s analysis of Current Population Survey (CPS) data compiled by the Bureau of Labor Statistics and the Union Membership and Coverage Database, and income tax compiled by The World Top Incomes Database. LIVERPOOL JUNE 2018 MAKING IT HAPPEN 5

6 Another contributor to downward wage pressure is the rise of temporary and informal work. More than 1 in 10 employees in the EU are employed on temporary contracts, up 25 percent between 2001 and From the years 2005 to 2015, 94 percent of net job growth in the United States was alternative work, meaning independent contracting, freelancing, temping, and working on-call or in the gig economy. In Africa, nine-in-ten workers have informal jobs. In the coming years, the ILO estimates that vulnerable forms of employment such as self-employed workers are expected to stay above 42 percent of the global workforce, accounting for 1.4 billion people worldwide. A staggering number of these workers are in Southern Asia and sub-saharan Africa. In nearly all countries, the casualisation of the workforce hits women and youth hardest. The growth of informal and temporary work is perpetuated by business models built on dodging responsibility for worker welfare, violating labour rights, and saving labour costs, thus fuelling poverty and income inequality. Companies like Uber, Deliveroo, Amazon and Mechanical Turk are simply exploiting people by denying workers any social rights and protections, such as the right to sick leave, holiday pay, pension payments, parental leave, and unemployment benefits. This attack on social protections has permeated many countries labour relations beyond the platform economy and is threatening economic security more broadly. Workers in more traditional positions, for example retail and restaurant employees, are increasingly subject to unpredictable, just-in-time scheduling that makes obtaining full-time work, going to school, and planning for child care difficult. Precarious work is one factor in a global pensions crisis unfolding now. Many employers are failing to offer an adequate workplace pension, and this is combined with cuts to state pension plans, insufficient levels of personal savings, and an ageing population. UNI and its affiliates call for universal, portable, and inclusive social protection, which safeguards a decent living standard for all workers through unemployment insurance, social security, and pension benefits and access to healthcare and other public services. 6 LIVERPOOL JUNE 2018 MAKING IT HAPPEN

7 The problem is worse for women who earn less in all sectors than men and the gap in some cases is widening and they can therefore save less towards their retirement on average. The fight against inequality UNI and affiliate unions across the globe are advancing new approaches to win good jobs and lessen inequality. In the United States, the Fight for $15 movement has already won raises for 22 million people across the country by advocating for minimum wage laws. The Europe Needs a Pay Rise push is fighting the assault on collective bargaining across the continent to help workers win the raise they deserve. In Indonesia, millions of workers striking for a living wage won a pay increase, though the struggle still continues. The largest industrial action in the history of the world happened in India when tens of millions of workers struck for better pay. The Asia Fights for +50 is an innovative push to establish a wage floor across Southeast Asia that will stop the regional race to the bottom by taking wages out of competition between governments. This is a critical initiative to raise standards for workers in an area that is a vital link in the global supply chain. From domestic care givers to taxi drivers to delivery service employees, unions are devising strategies to help platform workers organize and establish new standards for the future world of work. Workers should have a right to retire, supported by decent state and workplace-provided pensions, with minimum employee and employer contribution levels to ensure a good standard of living in retirement. The social and personal benefits of this are numbers: a better quality of life in retirement, improved physical and mental health in older people, reduced levels of working with ill-health, lower levels of pensioner poverty, and reduced rates of youth unemployment. The global labour movement is tackling gender discrimination as well, and UNI will advocate not only for the breaking of the glass ceilings keeping women from advancing to leadership positions but also shattering the glass walls which keep women from seeking careers in male-dominated fields. To achieve this goal, the labour movement is pushing for reforms in schools and in workplaces to ensure that women are encouraged and able to enter traditionally male fields such as science, technology, engineering, and math (STEM); construction; or transport. For a just economy to flourish, we need to widen the pool of talent and skills available to employers and ensure that everyone s skills are being developed to their maximum potential. LIVERPOOL JUNE 2018 MAKING IT HAPPEN 7

8 ENVIRONMENTAL JUSTICE IS NECESSARY FOR ECONOMIC JUSTICE Inequality takes many forms, and the harms of climate change disproportionately affect working people and people in the Global South. Rising temperatures create new hazards for workers in physically demanding jobs, such as in logistics centres. But outside of the workplace, climate change is putting hundreds-of-millions of people s lives at risk. Man-made climate change has created mass displacement from increased conflict, drought, flooding, and famine. An average of 21.5 million people are annually displaced by climate crises, and by 2060, there may be up to 1.4 billion climate refugees. The current drought and famine in Eastern Africa is a haunting example of the scale and human toll of a changing climate. Unions play a role in mitigating climate change by advocating for a just transition from fossil fuels, pushing for clean energy infrastructure, and initiating training programs to help members reduce their environmental impact. UNI has been a leading labour voice in calling for environmental justice and the growth of good, green jobs, and it recognizes that a just transition can only be effective if tailored to the conditions in individual countries. The gap between the Global North and South must not be exacerbated as a result of social and environmental transition. Unions lead the way in a just transition Local 32BJ of the Service Employees International Union has shown how labour can push for good, green jobs with its Green Supers training program. More than 75 percent of New York City s greenhouse gas comes from buildings, and 32BJ has trained more than 1,000 property managers, called superintendents or supers, to make their buildings more efficient and more ecological. This means less water waste, less electricity used, and fewer cubic tons of greenhouse gases spewing in the air. 8 LIVERPOOL JUNE 2018 MAKING IT HAPPEN

9 NEW TRADE AND INVESTMENT MODELS MUST PUT PEOPLE AND PLANET FIRST The global investment industry, including the banking, insurance, and pension fund sectors, manage approximately $69 trillion in assets, giving them vast influence on the global economy and corporate behaviour. Over the last two decades especially since the financial crisis of the role of Socially Responsible Investors ( SRI ) has become more prominent. Some of these SRIs rely upon Environment, Social and Governance factors (ESGs) to assess portfolio companies. However, a recent decision acknowledges that the UN Guiding Principles for Business and Human Rights (UNGP) apply not only to businesses but also to investors, and this has changed the SRI landscape. It is now clear that all investors have a responsibility to use their influence to ensure that the companies in their stock portfolios respect human rights, including the human rights of workers. Together with the Committee on Workers Capital, UNI has worked within the SRI arena to develop and strengthen the rules regarding investors, due diligence and the UNGPs, and even to develop the human rights policies of investors. UNI also works regularly with the SRI community when there are issues concerning worker rights on the job or in the supply chain. UNI will continue to use its influence with SRIs to drive action and positive change and will push the SRIs to act on their commitments and ensure respect for human rights across all companies in which they invest. The Fourth UNI World Congress in Cape Town adopted a motion on financial services calling for a Social Pact for Sustainable Banking, with goals to create financial sectors that serve the real economy and communities. Crucial initiatives have been taken since then to promote these goals, and UNI will build on this work over the next four years to make sustainable finance happen for real. At the World Economic Forum, the G20, and the OECD, UNI has advocated the need for progressive tax reform that promotes equality while unblocking economic growth. However, OECD data shows that governments have increased their reliance on regressive consumption taxes, which target the poor and let big business and wealthy individuals off the hook. Tax avoidance also puts downward pressure on wages by allowing corporations to offshore profits away from where work is being done. Reform also means enforcing and strengthening tax codes to reduce tax avoidance. The fight against tax dodging is critical for an inequality agenda. Tax dodgers rob trillions of dollars from necessary public services while pouring that money into their own pockets. LIVERPOOL JUNE 2018 MAKING IT HAPPEN 9

10 Governments must start using the tax system to make our societies more equal not less. This means progressive taxation of the wealthy and of corporations to adequately invest in public infrastructure and benefits. It also means that we must tax the flow of data, which will account for 20 percent of the world s GDP by This emphasis on a just tax policy is especially important now, with many economists like Nobel Prize winner Joseph Stiglitz raising concerns that the recent Trump-backed corporate tax cuts in the United States could worsen a global race to the bottom. Global trade agreements opaque negotiation processes have largely kept out the voices of advocates for labour and social rights, leading to outcomes that have stunted governments power to regulate for the public good. Although the new wave of multi-lateral trade agreements, TiSA, TPPA, TTIP, are either on hold or unlikely to ever materialise, their basic model is in place and trade discussions as such are far from silenced. In particular, governments and companies are pushing for fully liberalized trade routes of digital goods and services wherever possible, including multi-lateral trade and investment agreements, the new EU-Japan Agreement, the US proposals to renegotiate NAFTA, and directly into discussions within the WTO. This e-commerce agenda will essentially affect all UNI s sectors. It affects the regulation of financial services, the development and protection of universal public services, democratic regulatory control, data ownership and rights, labour market regulation, workers rights and decent work. If unfettered, will lead to a growing digital and economic divide between the Global North and the Global South, between the handful of companies who own most of our data, and the rest. UNI maintains that trade agreements must put people and planet first. They should aim to improve labour standards, enforce fundamental human rights and promote economical and digital equality. 10 LIVERPOOL JUNE 2018 MAKING IT HAPPEN

11 THE E-COMMERCE AGENDA IN TRADE AGREEMENTS Fully liberalised trade routes of digital goods and services Removal of any national treatment clauses meaning that they will remove the rights of countries to give preferences to their own companies, products and services, or restrict foreign ones. Unhindered cross-border data flows would prohibit any country from demanding that their data remains within its borders. It will mean that the data is governed by the law of the other country where it is held, which may provide no effective consumer, privacy or fraud protections. Given that data is the new gold, this is particularly alarming as many governments have not yet realised the value of their data and are signing away the right to develop the means of harvesting the value from the data in the future. Removal of localisation demands to foreign providers to set up shop physically in the host country will be removed. This, in turn, raises numerous regulatory questions. If a foreign provider is not physically present, how will the service be regulated? End to technology transfer requirements would widen a digital knowledge gap. Many developing countries have a trade clause aimed at bridging the digital divide by stipulating that foreign providers make the technology used available to the host country. This in turn has a positive flow effect as local firms and employees benefit from using the new technologies and thus acquire new skills. The US, the EU and Japan wish to ban all technology transfer clauses. LIVERPOOL JUNE 2018 MAKING IT HAPPEN 11

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