Labor report on labor in Hong Kong

Hong Kong took “a “significant step forward” in July by adopting its first minimum wage legislation, but the hourly rate of US$3.60, set in November, “is still insufficient to cover basic living costs.”

So says the International Trade Union Confederation (ITUC) in a report on core labor standards in Hong Kong that the ITUC, at its own initiative, prepared, for the World Trade Organization’s General Council review of trade policies. Hong Kong, a founding member of the World Trade Organization, lost its independent status when sovereignty was transferred to the People’s Republic of China in 1997.

Here is how the ITUC summarizes the current status of fundamental worker rights in the former British colony:

" Hong Kong law allows workers to join unions, but provides little protection for those who do. The government refuses to bargain collectively with its own employees or to create a legal framework for collective bargaining in the private sector. In practice, employers have wide latitude to dismiss striking workers."

Although about 21 percent of the city-region’s wage workers are unionized, less than one percent are covered by collective bargaining agreements, and these are not legally binding, according to the ITUC’s report.

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Linking Trade and Labor via the WTO, or much sooner

Why do China’s people spend so little compared to Americans? A major reason is that China’s workers are paid so little for their work.

That pretty much sums up an article on “The Frugal Republic” by James Surowiecki in the December 7 New Yorker.

“While [China’s] boom has been extraordinary, ordinary workers have not reaped the gains one might expect,” Surowiecki writes. “In the past decade, in fact, the share of GDP that goes to wages has actually fallen, while the share that goes to profits has risen.” Further, only a small fraction of the workforce receives unemployment benefits, and pensions are underfunded and haphazardly administered.

No wonder, then, that household consumption in China accounts for 35% of GDP, only half the rate of the United States, as the New Yorker financial writer points out, adding:

“Ultimately, all China’s barriers to higher consumption are a product of the fact that for the past three decades the entire economy has been focused on one thing: making stuff. The Chinese and American and American economies are mirror images of each other.”

In short, China makes things; the United States (and other countries) consumes them. An unsustainable imbalance, meaning that it can’t last.

A drawing accompanying the New Yorker article shows a Chinese woman packing fancy high-heeled shoes coming off an assembly line. The worker is in her bare feet, shoeless.

As early as a half century ago, many unions foresaw that kind of umbalanced result from free trade – workers deprived of their share of the benefits from working in the international economy. The unions argued for adding a “social dimension” to trade agreements.

What if their idea had been accepted then? Wisely implemented, it could have served as a guideline for a half century of trade agreements more balanced than the worker-unfriendly policies that now prevail.

The idea is not dead, but it needs updating for the 21st century. Since the global economy has exploded, especially in the past 15 years, the original concept would have to be buttressed with a set of other provisions ensuring that the complexities of globalization and its various institutions serve the common good.

Toward that end, the International Trade Union Confederation and its Global Union partners last month prepared a statement of priorities for the WTO Ministerial Conference held in Geneva November 30 to December 2. The conference was not a negotiation session, so it is impossible to know for sure what effect the statement, and the 60-member union delegation promoting it, had on the ministers.

One positive sign: in summing up the conference, its chairman cited “trade and social issues” as among the “new” topics that the WTO needed to address to conclude the stalled Doha Development Round next year. A high-level preparatory group is to meet in mid-December to consider those issues.

But it could be too late. New WTO policies take years to adopt, more years to enforce.

At the Geneva conference Ron Kirk, the U.S. Trade Representative (USTR), emphasized that trade can, and should, help the economic recovery “right at home – particularly in terms of creating the well-paid jobs that Americans want and need.” (See “In Geneva and in Washington the call is for Jobs, Jobs, Jobs.”)

In an interview with the Associated Press, Ambassador Kirk voiced his impatience with WTO procedures. “The whole notion of everything taking 10 years, 15 years, and 20 years is just antithetical to me,” he said. “The world changes too quick. Competition is too fierce. The consumers, businesses, workers can’t often wait 20 or 30 years just to get a result.”

Will the Obama administration, having become more job-conscious, set its own job-creation link to trade? It’s a safe bet that experts are pouring over all the options, before checking where WTO boundaries may or may not exist.

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Urgent advice for G20 summiteers: Jobless recovery is no recovery

The world’s top labor leaders are urging the world’s top government leaders to make the global unemployment crisis the No. l priority on their agenda.

It is imperative, the labor leaders insist, that the government leaders turn their G20 summit next week into a jobs summit. “As regards unemployment, the worst is still to come,” says labor’s Pittsburgh Declaration, after the city in which the summit will be held September 24-25.

In releasing the 14-page declaration on September 16, Gus Ryder, general secretary of the International Trade Union Confederation (ITUC), said: “Governments must do much more to arrest the plunge in jobs.”

Although the G20 summit is a meeting of governments, about 50 union leaders from every continent will be in Pittsburgh to lobby their government officials on the urgency of the unemployment crisis.

According to the OECD, the number of jobless people is likely to reach 57,000,000 people this year in its 30 member-countries. Counting the whole world, 200,000,000 may be pushed into extreme poverty this year.

And yet a New York Times headline announced on September 5, “In Unemployment Report, Signs of a Jobless Recovery,” juxtaposing two opposing trends: a continuing decline in employment and a seeming improvement in some sectors of the economy.

“Many experts,” the Times explained, “envision a jobless recovery, in which the economy grows and job losses persist.”

Whatever the future holds, there’s something we should get straight right now. A jobless recovery is a contradiction in terms. It is an oxymoron. Failure to recognize it as such prolongs a dangerous delusion about the economy: that it can work fairly well even when unprecedented millions of men and women are without work.

That delusion reinforces policymaking that concentrates on improving financial markets, to the exclusion of the labor market. How much confidence can we place in an economy whose growth is unconnected with work when so much work is left undone?

‘Inequality’ identified as the root of global crisis

While the Pittsburgh Declaration has a long inventory of specific reforms to be adopted, it also calls on world leaders to “build a new model for a balanced economy,” for this fundamental reason:

“It [the new model] must bring to an end the policies that have generated massive inequality between and within nations over the past two decades and that are the root causes of the current global crisis. A fairer redistribution of wealth is the only sustainable route out of this crisis – and the only way to restore the trust of working people in their economic and financial systems.”

To build a new model requires leaders to “muster the political will to break with the policies of the past so as to ensure that there is no return to ‘business as usual’.”

More specifically, it requires them to “turn away” from a model they embraced at the London G20 summit early this year when they endorsed the current model of “an open world economy based on market principles.”

However, the Declaration adds, workers and unions “have no confidence that this time governments and bankers will get it right.” To get it right, “it is essential that the voices of working people in developed, emerging, and developing countries are heard in the G20’s discussions.”

The G20 does heed the advice of bankers and their organizations. When will the G20 start listening to the voices of workers and their organizations?

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Speaking out against nuclear weapons

There are currently almost 24,000 nuclear warheads in existence, with a destructive power equivalent to 400,000 times the power of the bomb dropped on Hiroshima in 1945. Nuclear arms account for a significant portion of global arms expenditure, which reached an all-time high of US $1,400,000,000,000 in 2008, an increase of 45% over the preceding decade.

So said the International Trade Union Confederation (ITUC), the global voice of workers in 157 countries, in launching a worldwide campaign against nuclear weapons. The campaign, run in cooperation with “Mayors for Peace,” which groups more than 2,000 cities in 130 countries, is a lead-up to the May 2010 UN review of the Nuclear Non-Proliferation Treaty (NPT).

Guy Ryder, ITUC general secretary, expressed labor’s concern “about the prospect of further nuclear proliferation, particularly in North Asia, South Asia, and the Middle East,“ and added: “The only way to deal with this is through multilateral negotiations, and the 2010 NPT review is tremendously important in that regard.”

A petition to UN Secretary General Ban Ki-moon, as well as other information, can be found on the campaign website http://www.ituc-csi.org/.

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