Global Labor Strategies

Global Labor’s Forgotten Plan to Fight the Great Depression

In the early 1930s, as global unemployment tripled in two years and the world plunged into the Great Depression, the world’s labor movements developed a program for fighting the global crisis through international public works.  It’s a little-known historical might-have-been that could have helped halt the Great Depression, the rise of Adolph Hitler, and the Second World War.  And, as the efforts of world leaders to address today’s “Great Recession” threaten to break down in nationalist rivalry and petty political bickering, it bears lessons – and perhaps an alternative vision – for today.

Workers and organized labor have historically advocated government public works as a solution to unemployment.  Not only would they provide jobs and income for those directly employed, but they would raise overall purchasing power, thereby creating demand for the products of other workers and creating a virtuous circle of economic growth.  In the context of swelling unemployment in the early Depression, discussion of national public works programs developed in many countries.

The proposal for international public works originated with General German Trade Union Alliance (ADGB), which included most of Germany’s trade unions and represented the great majority of its workers.  The plan won the support first of the German union alliance, then of unions around the world, and finally of the League of Nations’ International Labor Organization. 

The plan was worked out by the head of the Alliance’s statistical department, W.S. Woytinsky.  Woytinsky was a Russian émigré who had been president of the St. Petersburg Council of the Unemployed during the 1905 revolution and had organized mass action to force the city to provide public works employment.  Observing Germany’s combination of spiraling deflation and spiraling unemployment in the early 1930s, he came up with the idea of using credit expansion to finance massive public works.

Taking a cue from recent League of Nations policy proposals, Woytinsky proposed an international agreement that would allow the lowering the gold reserve requirements for national currencies.  That would let central banks create new money that could finance international public works and thereby create the purchasing power needed to reflate the economy.

In a June, 1931, article, Woytinsky proposed an “Action Program for Reviving the Economy.”  It called for the labor movement to “assume the role of conveyor of the idea of an activist world economic policy.”  It was up to the labor movement to “force the state and all public institutions to implement measures to revive the economy.”

Labor’s policy “must be a global economic policy.  All nations are suffering because the world economy is sick, and therefore they must all concentrate their forces upon joint action to overcome the worldwide crisis.”  The international agreement would provide an alternative to the rise of economic nationalism, supporting “tariff reductions and European economic unification” as well as “internationalization of wage policy and social policy.”  The program would also support workers’ fight for higher wages, shorter hours, social rights, and regulation of business.

Is Another World Possible?

[This article originally appeared in The Nation, available here.]

The recently concluded World Social Forum is a good gauge for assessing the state of the world's alternative social, economic and political movements. Organized in 2001 as a counterpoint to the World Economic Forum, the annual meeting of global and corporate elites held in Davos, Switzerland, the WSF brings social movement organizations and activists from around the world together around the idea that "another world is possible." If Davos represents a failed globalization from above, the WSF represents an emerging globalization from below. It's a massive affair--this year more than 100,000 people gathered here for the five-day event. Part political convention, part carnival, part countercultural happening, the WSF serves as the center of gravity for the global justice movement that emerged in the late 1990s to contest corporate globalization.

The question on the minds of many was how to respond to what some call the "crisis of crises"--the economic, climate, political and cultural catastrophes that have engulfed the planet--and whether social movements can provide a unifying alternative vision for a better world. Economist Walden Bello of Focus on the Global South summed it up: "There is a sense of urgency and seriousness combining both pragmatism and principle. There is much less rhetoric. Things are taking place very fast outstripping what many predicted. There is a clear collapse of neo-liberalism. We have been triumphant over Davos.... Now we need alternatives and must get down to the hard work of creating them."

A Letter from Europe: Labor at Malmo

The European Social Forum held in Malmo, Sweden from September 17-21 marked another step in the reappraisal by European trade unions of how to approach the neo-liberal policies of the European Union. The Forum featured a vigorous and productive debate on new directions for labor among traditional unions, the alternative labor movements, and allied social movements.

The debate could not come at a more opportune time. As the impact of the global economic crisis spreads throughout Europe, labor movements can not expect that the so-called European Social Model will protect workers from its consequences. That model, which emerged in the decades following WWII, was characterized—with national differences—by a generous welfare state, collective bargaining, and more or less full employment. It was the result of a tripartite “social partnership” between trade unions, employers, and the state.  But the reality is that, today, even before the crisis fully envelops the continent, you can barely recognize many of the model’s traditional elements. And yet while trade unions increasingly realize that the European Social Model has been undermined, they still tend to look back to the model as strategy for the future.

Neo-liberal Europe

But the good old days are gone. Today, the fundamental goals of the European Union are guided by the principles of neo-liberalism. Collective social programs such as health insurance, pensions, and educational systems have become partially privatized in some countries as politicians seek to open new markets to private capital. “Precarity” of work now extends to the entire life of an increasing number of workers. And collective bargaining is under direct attack by many European institutions. For instance, in the last two years, the European Court of Justice ruled on cases –filed by both corporations and the European Commission itself—which, while acknowledging that fundamental labor rights such as the right to strike and the right to collective bargaining exist in Europe, also ruled that they are less important than the right to freely compete by the employers. And the EU is just about to approve a new Directive (the term for European laws) which not only allows companies to increase working time to more than 60 hours per week, but also introduces individual bargaining in place of collective bargaining on this issue.

On migration there is a dual strategy: on the one hand, with the "Blue Card Directive”  the EU is promoting access to Europe by highly skilled and educated workers. On the other hand, policies toward undocumented workers are becoming increasingly xenophobic, legitimating current laws in some member states by “regulating” detention for up to 18 months as well as allowing repressive “deportation” policies.

Overall, conditions for workers in Europe are worsening. According to official EU statistics—which in many cases are underestimates—around 8% of all employees in the European Union are officially registered as unemployed. More than 16% of the EU population, that is 72 million EU citizens, are currently considered at the risk of poverty (with an income below 60% of the median income in their country). Furthermore, since the 1980s real wage increases are no longer in line with productivity growth and the wage share (the workers income in relation to the overall national income) has declined in almost all European countries. (see European Commission, European Economy, Statistical Annex, 2006. 

A developing discourse

Many trade unions are increasingly becoming open critics of neo-liberal Europe, and the European labor movement is trying to find ways to respond to the attacks that it is now under. This includes the European Trade Union Confederation (ETUC), which is the formal representative of trade unions within the EU’s tripartite structure and which is deeply enmeshed with the bureaucracy which runs the EU. They formally support both the Lisbon Treaty—the latest attempt to redesign the institutional and political framework of the EU along neo-liberal lines, and the aggressive free-trade agenda of the EU Commission (see Global Europe Competing in the World).

Social Movements 2.0

On September 27, 2007 the world experienced its first virtual strike.  In response to a wage dispute, IBM workers in Italy organized a picket outside their company's virtual "corporate campus" based in the 3-D virtual world of SecondLife.  According to a report in the Guardian, workers "marched and waved banners, gate-crashed a [virtual] staff meeting and forced the company to close its [virtual] business center to visitors...The protest, by more than 9,000 workers and 1,850 supporting 'avatars' from 30 countries", included a rowdy collection of pink triangles, "sentient" bananas and other bizarro avatars.

While the strike was playful, it was also buttressed by careful planning and organization. Workers set up a virtual strike taskforce, developed educational materials in 3 languages, and held more 20 online worker strategy meetings.  The hard work paid off. According to Christine Revkin of the Swiss union federation involved in the strike, the protest led to new negotiations and the workers securing a better deal. Twenty days after the initial protest the Italian CEO of IBM resigned. (Here's a YouTube video from the strike and the new virtual IBM protest museum.)

Stories like this offer a glimpse into the powerful potential of the emerging 2.0 world, a place where workers use social networking tools to quickly reach across national and workplace borders, outflank their bosses, and wield collective power. But right now, the type of virtual solidarity seen in the IBM strike remains more promise than reality.   People are willing to sign petitions, donate money, trade information and join in political discussions online, but translating these activities into labor solidarity built on trust and a willingness to take economic or physical risk on another's behalf is exceedingly rare.

As a result, political action online has been largely relegated to electoral politics and tepid humanitarianism: it's been great for raising money for Tsunami relief and mobilizing voters, but pretty flaccid when it comes to wielding social movement power. (One exception is organizing around highly repressive regimes, where workers, students and others have successfully used mobile phones, twitter, etc. to organize escalating protests and free jailed activists.)

This tension around the pros and cons of online organizing has spurred a healthy debate inside and outside global labor and social movements. Earlier this year Eric Lee, the Godfather of the online labor movement posted an article entitled "How the Internet Makes Organizing Harder", which drew a flurry of responses. More recently community organizers in the US have been debating on DailyKos the merits of an article entitled "Real Change Happens Offline", written by Sally Kohn, campaign strategist at the Center for Community Change

GLS has been experimenting with online strategies for close to a decade now, largely spurred by our earlier work in the 1990's trying to figure out how to build and maintain a large but informal network of North American contingent workers. We come to the problem as longtime chroniclers of social movements interested in the underlying forces at work online, how these forces can help or hinder social movement building, and how they challenge existing union and social movement structures.  Over the coming months we'll be tracking some of the latest strategies and tools of 2.0 social movements.  This first post begins to layout out some basic trends and questions GLS has been tracking.

What's New and What's Not

Social networking is not new and not about technology.  It's not about Myspace, Facebook, or YouTube; instead it's what everyone does every day: kindle and expand networks of friends, family, co-workers, etc. In the political context it's about finding and building communities of interest, linking common struggles, and acting collectively. Facebook and other online social networking tools are just a new way for people engage in this age-old activity.

But at the same time the online universe is not simply another place for people to congregate, circulate a petition, debate politics or mail out a newsletter.  Nor is it simply a new technology like cable television -- merely bringing more channels into the home.  Instead the web is increasingly looking like the invention of the printing press, which radically changed the lives of even those that could not read by spurring the protestant reformation and scientific revolution.

During just the last several years the internet has evolved from its first generation as a static information portal (e.g. websites) to what is now referred to as Web 2.0, marked by the explosion of user-generated and interactive content (Clay Shirky, author to Here Comes Everybody, has done some of the best work on the implications of Web 2.0 for organizations.) There are five reasons why this newly evolved electronic space is especially relevant to the future of the global social movements:

1. Group Formation: New social networking tools, ranging from Facebook and Twitter to email and listserves, make forming groups—and hopefully social movements—much easier. Every time labor organizers knock on doors, hold a community meeting or organize a protest the primary goal is to entice individuals into group activity; they hope to transform isolated actors with little social power into a powerful force for social change.  The problem is that group formation has always been very hard to do. 

What is new about tools like Facebook is that they make more varieties of group formation possible.  Now, totally on their own, millions of people are finding others who care about the same things they do, whether it be around oyster farming, workplace complaints, or radical politics. What the web has revealed is that there were thousands of these latent groups that for hundreds of years were never able to form because it was too difficult for people to identify others with similar interests and too difficult for them to efficiently communicate when they did.  So now even the most transient and marginalized sectors in society can potentially form support and sharing networks. Thousands from the homeless community, for example, have gathered online to share their stories and swap survival strategies, often posting from public libraries.

At their core labor and other social movements are about group formation, and now suddenly the tools exist to make it much easier to bring people together.  In practice, the labor movement might begin helping workers access and learn how to use these new tools, and let them uncover their own latent groups---groups that may well not fit neatly into a narrow trade union agenda. Labor and social movement organizations might also spend more time trafficking where people are already gathering online, such as within the Obama social networks, and practice getting in the middle conversations and shifting debates.

Trouble at Wal-Mart: The Rocky Road to Labor Reform in China

The industrial relations system in China is in play as workers, peasants, corporations, and a variety of civil society, state, and party actors vie to determine its future.  Now the collapse of the global financial system and the likelihood of a deep global recession/depression add a whole new dimension to the struggle of Chinese workers and reformers for a more equitable system. Global markets for goods made in China will shrink. Thousands of foreign companies with operations in China could be swept away or be forced to significantly downsize. Indeed, even global giants like automaker GM, one of China's biggest auto producers, are teetering on the brink of bankruptcy. China’s banking system—while somewhat isolated from global pressures—is likely to feel the effects of the financial crisis. No one knows what effect the crisis will have on the value of the vast quantities of the US dollars and debt that China currently holds.

Against this back-drop we take a look at aspects of the Chinese industrial relations system before China is sucked into the vortex of a global recession.

Trouble at Wal-Mart

It has been two years since the ferociously anti-union Wal-Mart recognized the ACFTU in its stores. The event made headlines around the world.

Under Chinese labor law if 25 workers petition for a union, a committee can be elected and the union must be recognized. Normally this is a top-down pro-forma affair in which both management and the official union play a part, but in this case, Wal-Mart’s refusal to play by the normal rules forced the ACFTU to actually recruit workers at the workplace and establish the union without management participation. Once Wal-Mart recognized the first union branch, at its Fujian store, recognition quickly followed at Wal-Mart’s other Chinese facilities. Today, the ACFTU says it represents 50,000 Chinese workers at 108 Wal-Mart locations in China. Many hoped the Wal-Mart experience would be a breakthrough in the development of the Chinese industrial relations system and in the evolution of the ACFTU. Things have not turned that way.

We have a good glimpse into the world of Wal-Mart’s workers through voices of the workers themselves as they discuss and debate--and criticize--the actions of Wal-Mart and the ACFTU in on-line blogs. Some of these discussion threads, as well as relevant articles from the Chinese press, have been translated by the excellent, and increasingly indispensible, China Labor News Translations (CLNT). Read them here.

Wal-Mart has not engaged in serious collective bargaining and the ACFTU has fallen into a typically cozy relationship with Wal-Mart’s management. After Wal-Mart and the ACFTU signed a substandard contract at a store in Liaoning province, the company presented the agreement as a template for contracts at stores throughout China and essentially refused to bargain any further. Among the contracts provisions were a pay increase that did not keep up with inflation and which will not come into effect until mid-2009.  According to CLNT report, “Many individual store unions were not even given a chance to sign the template themselves. Indeed in Shenzhen City, for example, the Buji store has signed a collective contract on behalf of fifteen other outlets in surrounding areas.”

For its part, the ACFTU defends its approach to bargaining with Wal-Mart. According to Zhang Jianguo, the ACFTU’s director of collective bargaining, the new contracts require annual negotiations, wages above the minimum wage, and contain language on working hours, vacations, and social security and training.

But workers at Wal-Mart’s Bayi store wanted to negotiate a better agreement. A grassroots leader, Gao Haitao, who has become a hero to Wal-Mart workers throughout China for his combative defense of Wal-Mart workers’ interests, organized a fight back and made new demands in negotiations with management. Instead of negotiating, “Wal-Mart simply bypassed Gao by convening the staff and workers’ congress and finding a trade union chair from another store to sign the contract in his place!”, according to CLNT.

The ACFTU—which says it supports Gao—stood by while Wal-Mart refused to bargain leading the CLNT to conclude. “….the experience of Gao Haitao and the farcical top-down collective bargaining contract negotiation procedure shows that there is no genuine collective bargaining by workers’ representatives. When a Wal-Mart union did come out to negotiate a good contract, the ACFTU did not tender its support.” As a result of Wal-Mart’s actions Gao resigned from his job in frustration in September in a move that many see as a blow to authentic union development in China.

Labor's Dead: Long Live Labor!

It has been decades since Labor Day was a celebration of workers and trade unions as its 19th century founders intended it to be. Today, it marks the end of summer. Perhaps the local paper runs an op-ed or an article with a labor theme. Occasionally it prompts a bit of reflection on the decline of trade unionism, and very occasionally on ways to reverse that decline.

The truth is that conventional trade unionism is pretty much dead. It is now time for post-mortems and for questions about what could come next. Is another labor movement possible? Can existing trade unions survive even if they manage to change or will new ones be needed?

Today only 8% of private sector workers in the US belong to a union. Vast sections of the country are essentially union free. No wonder. The organizational structures, laws, and institutional arrangements that shape today’s labor movement have their roots in an earlier era stretching back to the 19th century. And while capitalism has undergone revolutionary changes in the past few decades, changes we generally refer to as globalization, the labor movement has remained essentially unchanged and nation based.

Three trends, in particular, stand out:

(1) Modern corporations roam the world looking for low labor costs, lax regulations, and weak labor unions. This pits workers and communities against each other in a classic race to the bottom to attract and retain jobs.

(2) Corporations have abandoned the old vertically and horizontally integrated organizational structures, in which companies sought to keep most aspects of production and distribution in-house, in favor of newer core/ring systems in which they perform only core functions while farming out the rest to complex supply chains of contractors and subsidiaries. Workers making the same product, or providing the same service, may be employed by many different employers, making solidarity and collective action difficult.

(3) Corporations divide the remaining in-house workforce into a core group of workers with standard jobs and at least some expectation of long term employment, and a secondary group of contingent workers: part-timers, temps, contract workers, on-call workers, and day laborers usually with sub-standard wages and benefits and little or no job security.

These trends—capital mobility, “dis-integrated” corporate structures, and contingent staffing strategies—all thwart labor’s ability to organize and bargain effectively and make it much more difficult for unions to do the kinds of things that would make them attractive to workers and worth fighting for. For instance, on critical issues like protecting jobs, unions have been unable to deliver, and in recent years labor has had extraordinary difficulty even holding on to gains made earlier in the 20th century.

Labor Charts a New Course on China

Trade unions and labor organizations around the world are seeking to establish a presence in China. Initially, that means beginning a dialogue with the All China Federation of Trade Unions (AFCTU)—China’s only legal union. Last year, following its split from the AFL-CIO, the US Change to Win federation, comprised of 7 US unions, broke new ground when it opened talks with the ACFTU.  And in December, the Brussels based International Trade Union Confederation (ITUC), the global union umbrella organization comprised of 309 affiliated organizations in 156 countries, voted to begin a “critical dialogue” with the ACFTU. (The AFL-CIO is the largest affiliate of the ITUC, while Change to Win  is not a member.)

This is not simply a story of bureaucratic relationships. Trade unions are an especially important non-governmental interlocutor on labor and worker rights issues in China—a country with few civil society organizations but a significant formal trade union sector. The lack of civil society organizations means that rights oriented NGO’s have many fewer dialog partners in China than do trade unions. 

Today, one in four workers in the global economy is Chinese. Many are employed by the same global corporations or their contractors that employ union members in other countries. This employment relationship potentially gives foreign unions more standing to advocate for the labor rights for co-workers employed in China by those companies and for Chinese workers generally.   

We’ve written extensively about why the new engagement is a good thing and suggested topics for discussion. Labor’s opening to China represents a significant move away from its Cold War era shunning doctrine, long considered outmoded by many labor activists. Under that doctrine, most trade unions have had little contact with the ACFTU because they do not consider it a legitimate trade union but an arm of the Party/State apparatus. Chinese law does not recognize crucial international labor rights such as the right of workers to establish independent unions, to bargain collectively, to strike, or to elect union officials of their own choosing. 

There have been some previous attempts to create a dialogue with the ACFTU, particularly in the 1980s when China adopted a market economy and opened up to foreign investment. While some individual unions and Global Labor Federations have maintained contact over the years through various joint projects, most unions severed formal relations following the suppression of the pro-democracy movement in 1989.

Meanwhile global corporations and investors flocked to China to take advantage of China’s low wage labor force and business friendly environment.  The consequences of labor’s absence from China were graphically illustrated last year during the debate over the Labor Contract Law which extended new rights to workers. Foreign corporations and their business associations in China actively lobbied the Chinese government to weaken some of the law’s key provisions. But global labor—with no organization or influence on the ground in China—could only comment from afar. Many realized that this asymmetry needed to be addressed.

A GLS Report Back: The Crisis in Chinese Industrial Relations

Take a walk through Beijing or Shanghai or any big Chinese city and you will experience, in a very tactile way, China’s economic miracle. The forest of construction cranes, the neighborhoods being torn down and rebuilt, the shops bursting with consumer goods, the traffic clogged streets, and a prosperous looking citizenry all speak to the country’s remarkable achievements. China’s 20 year run of nearly double digit growth has transformed an economic basket case into a world economic power.

Look a little closer and you can see another side to China’s spectacular growth. The temporary dormitories on building sites for migrant construction workers, the barracks-like housing in the factory districts, the train stations full of workers with bindles or cheap suitcases coming from or going to their hometowns in the provinces. These images graphically portray the turmoil of life for large segments of the Chinese working class and they beg the big question yet to be answered: what role will workers have in the new economic order?

In this and a following post we offer some observations gleaned from recent conversations by GLS staff with dozens of knowledgeable observers—including workers—in China, in the US, and in Europe about what is currently happening inside and outside of China in the battle for economic fairness and labor rights and why it matters for workers everywhere.

When Global Labor and China's Union Talk

(Note: half of GLS's staff is travelling in China, the other half is busy on different assignments, so we will be posting only sporadically until early May.)

In our recently released report, Why China Matters: Labor Rights in the Era of Globalization and in a subsequent post, Labor’s Opening to China, we discuss new and on-going efforts by global labor organizations to open a dialogue with the All China Federation of Trade Unions, China’s only legal union. We argue in some detail that the talks are long overdue but that they pose problems for both sides.

Western unions want a presence on the ground in China where so many of the companies that employ their members have set up shop.  But they worry about giving their stamp of approval to a state/party affiliated union that may sign sweetheart agreements with global corporations. And indeed, at the local level, the ACFTU, by all accounts, often functions as a management dominated company union in the workplaces where it is present. 

The ACFTU wants global recognition and support in a world increasingly skeptical of Chinese institutions but they must also worry that Western unions often talk cooperation abroad and practice protectionism at home.  China bashing is still a standard part of the repertory of many unions despite the fact that it is US based and other foreign corporations—not the Chinese government—that drive much of China’s export oriented economy.

Both sets of concerns are legitimate.

It is a given that unions, like other organizations, have institutional, industrial , and national interests that they seek to promote and these interests shape their actions abroad to a significant extent.  But unions are also learning an important lesson of modern diplomacy:  it is essential to talk even with those with whom you may not agree.  Engagement need not be a sign of approval, but rather a search for common interests. It is in this spirit that non-Chinese labor organizations and the ACFTU should conduct their dialogues.

Labor’s Opening to China

The announcement in December by the International Trade Union Confederation (ITUC) that it would begin a “dialog” with the All China Federation of Trade Unions (ACFTU) marks a sea change in global labor’s approach to China.  Equally significant is the endorsement of the talks by the AFL-CIO.  Until now, the ITUC, the AFL-CIO, and most national labor federations shunned official contacts with the ACFTU—China’s sole legal union—because they did not consider the party-state controlled organization a legitimate representative of China’s workers. 

But, according to Guy Ryder, the ITUC’s General Secretary,

“By starting a dialogue with the Chinese trade union, ITUC wants to have more influence on the ground in China….It should enable us also to discuss the role of China in the world.”

The action actually caps a gradual shift toward engagement with China by unions from around the world. Some European unions affiliated with the ITUC have been active in China for over a decade. The Change to Win federation in the US began talks with the ACFTU last year. Officials have exchanged visits and plans are underway to expand contacts in the coming months.

The policy shift by the ITUC, the AFL-CIO, and other global unions is long overdue. Three decades of rapid economic growth have transformed China from an economic backwater into the world’s workshop.  Workers, trade unions, communities, and countries throughout the world are confronting the challenges posed by China’s growing role in the world. Today, about 25% of all the workers employed in the global economy are Chinese.  The “China price” sets the global norm for wages and working standards up and down the value chain, from inexpensive garments to sophisticated electronics.  As a result the hard-won gains of workers in the global North are being rapidly undermined, while the aspirations of workers in the developing world are being dashed, as China becomes the wage setting country in industry after industry.

China’s export oriented development model has had a particular impact on trade unions everywhere. Multinational corporations—the very firms that employ millions of union members around the world—have flocked to China seeking to take advantage of its low wage workers and business friendly policies, reducing labor’s bargaining leverage and the number of union jobs. These firms have been central to China’s development. Roughly 66% of the increase in Chinese exports in the past 12 years can be attributed to foreign owned global companies and their joint ventures. (Stephen Roach, Business Times, Singapore, 8/8/06) These companies account for 60% of Chinese exports to the US. Despite all of the talk in the current presidential campaign, the “Chinese threat” is less about trade with China than it is about “trade” with US based companies like Wal-Mart, GE, or any of the other of the hundreds of Fortune 500 companies that have set up shop in China to cuts labor costs and avoid environmental regulations. Ways, however imperfect, must be found to reach out to Chinese workers to find mutually acceptable ways to halt a global race to the bottom, which in end, hurts all workers.