The FINANCIAL — from Frankfurt, Germany. Why are we paying thousands or hundreds on items for which the workers who create them, are paid cents – Gerd Muller, Federal Minister for Economic Cooperation and Development of Germany, asked during the ADB seminar related to Quality Employment and a Better Workplace. Low wages are directly impacting the businesses themselves as when people cannot afford to pay, companies are seeing their markets shrink.
Many economies in different areas are struggling to generate quality employment, jobs that are productive and well-paying. During the Asian Development Bank’s 49th governor’s meeting, one of the seminars was devoted to Quality Employment and a Better Workplace. Participants discussed factors that contribute to the creation of good jobs, including technological change, fragmentation of production and trade.
Gerd Muller, Federal Minister for Economic Cooperation and Development of Germany, was the speaker for the seminar. “Why are workers generating cents for producing various items for which consumers pay hundreds or thousands?” – the Minister asked.
In Frankfurt, The FINANCIAL interviewed Sharan Burrow, General Secretary of the International Trade Union Confederation. Mrs. Burrow, who was one of the panelists of the seminar, provided her estimation of labour rights protection in different regions.
“If you have more and more jobs on less and less pay, people cannot make ends meet and cannot consume. If people cannot afford to pay because they live in poverty, that impacts the whole area of the economy. So companies are seeing their markets shrink. The most intelligent of them understand that they have to take responsibility and this includes a minimum wage on which workers can live with dignity otherwise their companies are facing a future which is not sustainable,” said Burrow.
“The rights of workers are not robustly protected through Asia. With the dominant model of trade now being global supply chains it is a model of low paid, insecure and often unsafe work. Too often workers do not have social protection both in multinational companies and government structures. We looked inside fifty of the largest companies. The figures show that up to 94% of the workforces who make profits for those companies are actually invisible. They are not employed by the company and there is no responsibility from the company to protect these worked from the exploitation of the contractors. That ultimately means that as the company pays less and less to the contractor they pay less and less to the worker. Then, of course, exploitative conditions flow from that,” said Burrow.
We need to clean up the model, said Burrow. “It is not a sustainable model, neither for workers nor for global trade. Asia is a dominant population base of global trade. So, ADB has a role to play. They are now the only development bank with the exception of IDB, who do not have a labour protocol and do not monitor labour violations and do not look for a way of resolving disputes, and we need to clean it up.”
According to Burrow, in practice no progress has been witnessed in line with labour rights since she became involved in this job. “Labour’s share in GDP is declining. So, we need workers’ wages to be increasing. You also need to increase social protection. 75% of workers globally have little or no social protection. We see workers with no rights and no social protection in the informal economy actually being employed through the supply chains. More than 30 million are in modern slavery now. That is not acceptable.
58 percent of countries exclude groups of workers from labour law; 70 percent of countries have workers who have no right to strike; 60 percent of countries deny or restrict workers’ collective bargaining; and 52 percent of countries deny workers access to the rule of law.
Meanwhile, there is still some optimism for Burrow. “Some governments as well as some corporations have committed to make the rule of law a fundamental cornerstone of global supply chains, and the G7 group of nations has taken the first step. They concluded the G7 Germany summit with a statement: “Unsafe and poor working conditions lead to significant social and economic losses and are linked to environmental damage. Given our prominent share in the globalisation process, G7 and G20 countries have an important role to play in promoting labour rights, decent working conditions and environmental protection in global supply chains.”
In Burrow’s words, labour rights and protection are greater in developed countries. Still, it is changing. “Now we see inequality within the countries creating economic risk in both the developing and developed economies. When you look at the G20, you know that informal work is between 20 and 90% across those richest countries. That tells us that unless we formalize work, unless there are fundamental rights, unless people can ean a minimum living wage that affords them dignity, then the model of modern economy that we have built today is simply not sustainable.”
“In order to solve these problems in global supply chains we need transparency and rule of law inside companies. Governments should take responsibility for legislating and implementing core labour standards and also mandating due diligence for corporations. On the ground it is simple, one wants to have a formal job, then have social protection, and a minimum wage on which it is possible to live with dignity. We are talking about wages, the fight for a minimum living wage in Asia. That would require companies to pay sometimes as low as USD 25 or as high as USD 50 extra per month depending how n the country. This is a tiny amount of money when you look at the cash received as their profit. And also it is important to have safe working places,” Burrow suggested.
In the case of Georgia, the key issue is contradiction of the Georgian Labour Legislation with the international labour standards.
Despite the amendments made to the Georgian Labour Code in 2013 the ILO and the Council of Europe demand the Government of Georgia continue labour law reform to put it in compliance with international labour standards.
Based on observations from the Georgian Trade Unions Confederation, which provides information for ITUC and other international organizations, restrictions on the right to strike in Georgia are not in line with ILO standards. The list of the sectors where employees are not allowed to strike is way too long and the Government needs to stick to the ILO definition on essential services; no law on work safety and hygiene; non discrimination and equal pay for men and women are not sufficiently regulated by the labour law of Georgia; restrictions on parental leave (men can’t take leave to take care of a newborn child); restrictions on the union representation during collective labour disputes; almost no regulations for young workers; no regulation for work-family responsibilities reconciliation; very insufficient regulation of mass layoffs and no mechanism to enforce the labour law; a clear demand for real and effective state labour inspection.
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