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SESSION FOUR: THE EFFECTS OF GLOBALISATION ON WORKERS AND TRADE UNIONS

1. The Instruments of Globalisation in other Countries

Similarities:

The Philippines and Korea and Pakistan

• Government’s agenda and intentions are quite familiar to us. That is, investment liberalisation, trade liberalisation, privatisation, cuts to social service spending.
• Australia also a signatory to GATT and a member of WTO; also a prime mover in APEC

The word ‘reform’ to describe these policies: our group nodded vigorously when one of the participants commented on how he had come to hate that word ‘reform’ – it has come to be associated with destructive and undemocratic changes in Australian society.

Differences:

The Philippines

• The extent that the SAP is based on a formal understanding or agreement between the institutions and the national government. In Australia it is an informal understanding.
• Emergence of significant resistance and opposition to privatisation – making it an electoral liability. The Federal government may quite likely be prevented from fully privatising Telstra (telecommunications) by a majority in the parliament’s upper house which has the power to reject the legislation after its passage through the lower house, where the government has its majority. The senators in the upper house may in the end support the government but at the moment they are opposed.
• Note that the Australian Labor Party initiated the partial privatisation of telecommunications, the Commonwealth Bank in the late 80’s early 90’s. Also, an attempt in 1998 by the state Labor government in New South Wales, the most populous state in Australia, to privatise power generation and distribution was defeated by an alliance of unions, local communities and the left within its own ranks.

(Note: Since our study circle the election result in the state of New South Wales saw a huge swing to Labor - - one of the reasons was the policy of the right wing Liberal Party – national party coalition to privatise power generation.)

• A major feature of both Labor and Liberal governments since the mid 80’s has been trade liberalisation – tariff reductions and the withdrawal of subsidies etc. However, the Labor government consulted with union leaderships over its program and in some cases the unions were able to extract concessions on the rate of liberalisation, and other commitments like skills development programs, wage subsidy etc.
• In 1997-98 the vehicle industry unions prevented the efforts of the new Liberal government to slash tariffs in the car industry – they formed a tactical alliance with the multi-national car companies (GMH, Toyota and Mitsubishi) to achieve this.

We noted that the SAP in Korea has been imposed by the International Monetary Fund.

2. Union strategies re IMF / World bank / national governments re SAP’s

We decided to fully discuss this question in the final 2 sessions.

Our brief discussion supported proposals for stronger intervention by international union bodies and forums but we are keen to explore how this can be built through grass roots participation, not just official international union structures.

We noted also that the willingness of Australian unions to organise solidarity across state borders (that is within a national framework) was inadequate.

We noted the new debate springing up in Australia to move away from enterprise level bargaining to return to an industry framework. This would require a shift in union resources – a reallocation of resources to support industry wide campaigning.

We noted for future discussion that union strategies might be affected by the trends in union density.

We discussed the issue raised by our Korean comrades about how unions should deal with the relationship between big home grown capitalists and the threat of foreign tnc’s. It was a vigorous debate.

Some of the opinions, points and questions which emerged from our discussion follow:

• "patriotism is a form of manipulation of the masses"
• where are the pressure points in the relationship between foreign tnc’s and local tnc’s which unions can use to get a better deal for workers?
• How unions tackle the tension between foreign and local tnc’s will be influenced by the specific characteristics of the industry. The media industry as an example: local capital will tend to employ Australian journalists, rather than outsourcing news production to their home country (eg USA). Are local tnc’s (eg Murdoch – News Corpn and Packer – Consolidated Press) any better or worse than domestic big business, that is Fairfax). International capital has no reason to stay and consolidate in Australia apart from profitability, Australian capital has a stronger reason to stay.
• What sort of regulatory framework should operate to control both foreign and Australian tnc’s? Should this be extended to the behaviour of Australian tnc’s in other countries, eg Fosters Brewing in New Zealand and in China.
• Do foreign tnc’s have more leverage to cut wages and shed labour and attack unions than local tnc’s? Once again this required an examination of the specific industry: eg in the construction industry the answer is ‘no’ because buildings cannot be imported and exported but this is changing with the trend to the import of building components.
• Can workers and unions exercise more leverage on local capital than foreign tnc’s? We noted the role of foreign labour hire agencies in driving the expansion of casualisation into the Australian ‘culture’: eg Serco, Berkely Challenge (owned by P&O). Another is Manpower Services. These labour hire agencies are all foreign tnc’s.

Weakening trade unions

• generally, yes: for example union density has declined from 55% in the mid 70’s to 28% in 1998; although we are concerned to identify ways in which unions themselves have contributed by not analysing the changes clearly and quickly and, therefore, unintentionally contributing to the decline
• structural change in the labour market has contributed to the reduction in numbers, power and influence of blue collar unions, which is associated with the freeing up of capital movement, thus affecting the development and status of manufacturing and resource extraction and the emergence of service industries like tourism and hospitality, significant cuts to the public sector and privatisation has put the powerful public sector unions (blue and white collar) on the defensive;
• the reactionary Fraser government (Australian capital’s first attempt at neo-liberalisation) in 1978 introduced ‘secondary boycott’ legislation (Sections 45D and E of the Trades Practices Act) – its specific purpose was to wipe out solidarity organising by unions. It has considerably restrained unions from solidarity organising.
• We noted the decline in workplace shop committees; also that it seemed harder to find workplace delegates;

The decline in union density and power was discussed against the Australian experience of the Accord.

A series of 8 Accords operated from 1983 to 1996 – these were formal agreements between the Australian Council of Trade Unions and the Labor government which covered a range of economic policies – wages, investment, taxation policy, superannuation (pension plans), skills development, the social wage, eg child care, family support.

One strongly held point of view by some participants was that the Accord had contributed directly to the loss of union membership and power because it was controlled by the leaders of the ACTU and key unions. Some Accords were regressive, others were more positive for workers. But, for significant periods there was no membership involvement at all in campaigns around wages and the other policy items. One exception was the massive organising to prevent the Labor government from introducing a goods and services tax.

The Accords were negotiated around general acceptance at leadership level of government decisions to open up the Australian economy to international forces, for example deregulation of the finance sector.

Another point of view was put which (a) acknowledged in general the points made by critics of the Accord, but (b) pointed out that the Accord had delivered significant gains for workers who had little bargaining power – eg child care workers.

There was general agreement that the Accord strategy was not discussed in the detail required at workplace level.

During the Accord years unions agreed that wealth production was union business – not just wealth distribution – and so committed to supporting productivity improvement which would make Australian based companies more competitive. The focus was on a high skilled – high wages approach to productivity improvement, "but somehow this got lost". Also, often in focussing on competition unions ended up promoting one workforce as a competitor against another, thus contributing to divisions among workers or at least a loss of solidarity between workers in different work places.

This debate is important for future discussions about union strategy in Australia: what should be the nature of the relationship between a union movement and a progressive government? Should the relationship be expressed through a formal agreement? How should the union movement protect a reforming government from attack by its enemies in big capital and, at the same time prevent a progressive government from retreating from its pro worker commitments and policies?

Dismissals and sackings of workers
This has been a strong feature of the Australian economy in the past twelve to 18 months but up to then the approach has not been as overt.

More subtle approaches have been taken – ‘downsizing’ and ‘contracting out’ in the public sector. For example school cleaners in the public education system have been shifted almost exclusively from direct employment to outside contractors, and their numbers reduced at the same time. Aligned with competitive contracting and redundancy packages workers themselves have been persuaded to assist with ‘downsizing’.

Australian unions have been able to win good redundancy rights for workers. It was suggested that we had been "our own worst enemy" in this regard because the redundancy rights encouraged workers to think that that if they agreed to leave their employment with a solid pay package they would get another job soon.

New companies and industries have been built around casualised work forces.

The Minister for Workplace Relations, Peter Reith, has engaged in a relentless drive to remove workers rights when they are ‘unfairly dismissed’. His aim s to increase the reserve army of insecure workers.

Unequal distribution of wealth
There have been a number of reports which have highlighted the shift to even greater unequitable and unfair distribution of wealth. This reinforced our own perceptions.
We do not have these report at hand at this stage but will attempt to make them available at our next discussion.
However, we did have the latest reports on business productivity from an article in the Financial Review. The main points in the article:

• The profit share of gross domestic product is at a record high of just under 18 percent – it has been on an upward trend since mid 1991, and is 50% higher than in 1975.
• Labour productivity has grown at an average 2.7% per year over the past 5 years, but average wages in the private sector have stalled
• Australian corporates ability to control wages meant that the local sharemarket outperformed Wall Street after a decade of lagging behind
• The difference between wages growth and output growth is so great that labour costs have fallen relative to the US market
• "Workers have been bypassed in the accumulation of corporate wealth."

The above developments were described as "effectively the pay off for 15 years of economic reform."
Of course, this is against a background of official average unemployment of about 8% and real average unemployment at 16%.

Job Insecurity
There is now a wealth of academic research and government statistical data which highlights the growth of job insecurity in Australia. The impact is now felt by workers who have traditionally been secure – eg the skilled trades workers in ‘permanent’ employment’.

This research is driving discussions through the union movement to develop a national "Work Time Life" industrial and social campaign.

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