The Limits of Corporate Responsibility
Considering normative expectations and the economic rationale, should corporations enter the political arena?
In the heart of the Agenda for Sustainable Development is the demand to end poverty worldwide. Decent work seems to be the best way to generate income for people worldwide under fair conditions. In 2017 according to calculations by the International Labour Organization (ILO), about 200 million people are unemployed, another 1.4 billion are underemployed. There is still a long way to go. Guy Ryder, the general director of ILO has found the time to discuss with DDD why unemployment is still growing, and the challenges of industry 4.0 for workers worldwide.
Guy Ryder: For a few years now, unemployment rates have been declining in most developed countries. Despite this trend, they remain above pre-crisis rates in many countries, notably in Europe but also in Canada. Also, the pace of employment gains is slowing across many developed countries.
At the global level, we see an increase in unemployment which is driven by deteriorating labour market conditions in emerging countries, largely as a result of the weak output and its labour market impact in a number of major emerging countries (e.g. Argentina, Brazil and Russian Federation).
We should remember that this is not just about the level of growth but also about the relationship between growth and decent and productive employment.
We should recognize the urgent need to address these deteriorating labour market conditions. Too often we think that growth alone is the answer. We should remember that this is not just about the level of growth but also about the relationship between growth and decent and productive employment. We need to lay the groundwork to boost economic growth in an equitable and inclusive manner.
This requires a multi-facetted policy approach that addresses the underlying causes of weak aggregate demand, such as rising income inequality that results in lower purchasing power for much of the population. I believe a coordinated effort by countries that have fiscal space could limit the increase in global unemployment by close to two-thirds.
In sum, strong pro-employment and pro-equity policies are needed more than ever.
The Sustainable Development Goals are aiming to guarantee decent work. What policies have proven to be best to guarantee decent work? What are the obstacles?
Skills development, education and re-training should be a key priority in all countries.
The ILO’s Decent Work Agenda has a lot to offer in this regard. First, the pursuit of full and productive employment with adequate pay must be an end in itself and be actively pursued through macro- and micro-economic policies and supportive measures. Skills development, education and re-training should be a key priority in all countries.
Second, social protection schemes, including health and unemployment insurance, should be made universally available, thus facilitating more flexible labour markets by enabling workers to adjust in security to changing employment possibilities.
Third, social dialogue which brings governments, workers and employers together to face these challenges will not only inform decisions but also facilitate economic growth and development.
And finally, fundamental principles and rights at work must be fully respected and protected. Freedom of association and the right to collective bargaining are particularly important, not least to maintain a fair and legitimate balance of power in labour markets.
Obviously, there are obstacles that need to be tackled, starting with growing inequalities and mutations within the world of work with the rise in non-standard employments. Even though non-standard employment is not necessarily a bad thing, there is a need to make sure that workers are adequately protected in terms of labour rights and social coverage.
Another implication of Industry 4.0 is that developed countries may regain comparative advantages in tasks in global value chains…
Economic development, sustained growth and the creation of new and better jobs is fundamentally about technological learning and about diversification into new industries. As the technological gap is rising, the learning and catching up process will also become more complex and difficult to master.
Another implication of Industry 4.0 is that developed countries may regain comparative advantages in tasks in global value chains which they had outsourced in the past to low income countries. The new technologies make it profitable for companies to re-shore or insource tasks in sectors such as garment, textile, sport equipment or electronics.
At the same time, Industry 4.0 may create new opportunities for developing countries to create jobs by attracting tasks in services.
Such re-shoring may be motivated by the need to bring production closer to markets or to allow higher flexibility in production. One example is the new Speedfactory which is currently constructed by Adidas in Germany to produce high-end fashionable sports shoes (trainers). The factory will allow the firm to cope with the short fashion cycles of high-end sport shoes.
At the same time, Industry 4.0 may create new opportunities for developing countries to create jobs by attracting tasks in services. The demand for services, maintenance and repair will be high in such newly developing technologies. This challenges developing countries to undertake a major effort to educate and train their labour forces, and prepare them for these emerging jobs.
Technological innovation and globalization are combining to produce profound and rapid changes, particularly in the workplace. This transformation is accompanied by high levels of uncertainty, and in some cases fear of change.
We will get rid of repetitive and hard tasks which will be performed by robots.
Some of the technological changes will be positive for many workers. For example, we will get rid of repetitive and hard tasks which will be performed by robots. However, as jobs will both be created and will disappear, there is a need to get ready and make sure workers receive adequate training.
Also, we have seen that technology can create huge productivity gains which, at the same time exacerbate income inequality. Given the already visible economic and political risk of widening inequality, addressing the distributional challenge of productivity gains will be an important factor in shaping the future of work and society.
…the future of work is not pre-determined.
Last but not least, we have to ensure that workers’ rights remain protected. Strong social dialogue between government, employers and workers and other civil society groups is the bedrock for this exercise.
Let me also insist on the fact that the future of work is not pre-determined. It is for us to decide the kind of future we want. These changes are happening at the workplace where employers and workers meet every day. This is why their voices should be heard when we discuss the future of work.
The White Paper “Arbeit 4.0” presented by Minister Andrea Nahles on 29 November 2016 represents an important contribution to this discussion.
Do you think, as some scientists claim, that the rapid technological changes will question the concept of work as it is? And if so, what do you think of new forms of adapting to the situation, like basic income for example?
There is no doubt that rapid technological change will continue to impact the labour market and challenge the notion of what constitutes work as we know it today. For the ILO, a significant challenge is the impact of this technological change on the traditional employment relationship.
When the game changes, also the rules of the game need to change.
Technological changes should also occur in parallel with institutional changes. When the game changes, also the rules of the game need to change. This includes, among others, modernising and updating labour regulation and social protection to ensure adequate coverage for workers in all types of employment. This includes updating the rules governing the eligibility for social benefits and social protection coverage to more accurately reflect the composition of the workforce.
In this context, the idea of a basic income for all is an interesting one. It has gained traction in a number of countries as a new policy tool that can be used to reform social security and eliminate poverty and material deprivation. The countries that have adopted pilot schemes will be pivotal for gauging their effectiveness as buffers against shocks and systemic risks stemming from automation and globalization.
Ultimately, the cost-effectiveness and efficiency of these schemes will depend on a range of factors. Providing a basic income is just one possible approach. We need to think more broadly and search for innovative ways to provide decent and meaningful work as well as social protection.
Our research does show that the risk of social unrest or discontent has heightened across almost all parts of the world as a response to the ongoing global uncertainty and the persistence of major economic challenges.
Our Social Unrest Index also showed that discontent with the social situation and a lack of decent job opportunities were actually factors that could play a part in a person’s decision to migrate.
We expect the number of international migrants to increase further over the next 10 years, even more so as people’s inclination to migrate tends to increase in regions with growing unemployment and slower growth.
Creating more decent work opportunities and reducing inequalities in the countries of origin could certainly help limit this trend. We have a number of projects in developing countries, particularly those affected by disaster, crisis and conflict, which promote fair migration channels and, alternatively, help countries develop labour market policies that create jobs and livelihoods at home.
At the moment we are experiencing a rise of nationalism. Which consequences will the abolishing of free trade agreements have for the situation of workers worldwide?
You are right. Nationalism and populism are on the rise, and they are likely to have a strong impact on globalization. We saw this in recent elections, and we saw this again with the vote on Brexit in the United Kingdom.
Globalization is increasingly perceived by many working people as benefiting only the rich.
I believe that there is a direct link between these events and growing inequalities which have not been properly addressed. Globalization is increasingly perceived by many working people as benefiting only the rich. We have witnessed rising wage inequality, increased informality and a proliferation of non-standard forms of work. Also, public opinion wants policymakers to do more: not only reduce unemployment, but create quality jobs. Unless we address this powerful call for change, the trend may well continue.
ou mention the possible collapse of free trade agreements. I think it is too early to evaluate the impact on the situation of workers. Globalization has made it possible for countries to reduce poverty and create jobs. However, it also led to many jobs being transferred from developed to developing countries with sometimes poor working and safety conditions. The Rana Plaza tragedy in Bangladesh was probably the most serious example of international policy failures.
…labour market and social institutions can play an important role in determining how trade impacts on labour markets
There is no consensus on the extent to which trade is the driver of decent work deficits. However, what we do know is that labour market and social institutions can play an important role in determining how trade impacts on labour markets. This includes national policies, such as comprehensive social protection systems (including health care) to protect those workers who are impacted by trade, and labour market policies that keep them active in the labour market.