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An irresistible force? Managing Globalisation
Unions 21@ Compass Conference

Unions 21 organised one of the breakout sessions at this year's Compass conference. The theme of the whole conference was "Shaping our global world". Sue Ferns, Chair of Unions 21, oversaw the debate as Tony Burke (Unite-Amicus Assistant General Secretary), John Evans (General Secretary of the Trade Union Advisory Committee to the OECD) and Will Hutton (Chief Executive, The Work Foundation) discussed "An Irresistible Force? Managing Globalisation".

Tony Burkebegan proceedings arguing that the merger of Amicus and the T&G into Unite is a way of combating globalisation. It cuts out wasteful competition between the two unions and leaves them better able to target their industrial power where they see fit. Companies are multi-national in a globalised world, so unions needed to follow suit. When multi-nationals play off their workforces against each other through internal procurement markets then unions need to have a coherent response. In essence, Unite is a product of globablisation. Both sections of the new union have already begun to look for new union partners outside of the UK. Amicus is in talks with the United Steel Workers union in the USA. Burke said that it's the same companies that the unions deal with so it makes sense.

He felt that there were other methods for unions to employ in preventing multi-nationals "racing to the bottom" in terms of wages and conditions. It is crucial that unions support and get involved in the learning and skills agenda - helping their members to improve their skills and be prepared for the challenges of globalisation.

Establishing global framework agreements with multi-nationals is another option for managing globalisation. John Evans pointed out that this is already happening through a number of Global Union Federations. Over 50 agreements have now been signed. Evans agreed with Tony Burke that it is essential that multi-lateral organisations reinforced work towards minimising the negative effects on workers, noting, optimistically, that core labour standards had been put back on the table at the recent G8. Around 80 successful cases on the neglect of labour standards have been taken to the ILO by trade unions. This must be enhanced, the ILO needs the means to apply core labour standards across the globe. Evans asked why workers' rights do not get the same emphasis as investor rights or intellectual property rights.

John Evans spoke about some of the new pressures that workers face in today's world. His claim that the global labour force had doubled in the past 15 years was queried by Will Hutton. Hutton pointed out that the billions of Chinese peasants had not suddenly become part of the global labour force and that this may just be scaremongering by western governments. Evans pointed to the evidence of downward pressure on wages and conditions and that this is due to a bigger labour force. On the subject of China and India there was some disagreement. Will Hutton did not necessarily see these often cited countries as a threat. He said in the case of China it is the world's subcontractor or 'reprocessor' - there is little value-add in China so the bulk of the benefits and the financial returns remain elsewhere.

Will Hutton argued for the need to be 'more forensic about globalisation.' For many in the west, globalisation and trade growth are good. Inequalities in western economies are in areas that are sheltered from trade or globalisation - the care or security sectors, for example. The level of mergers and acquisitions is what is putting pressure on the workforce.

John Evans and Will Hutton shared concerns about the rise of the super-rich. Evans pointed out that the share of national income going to workers has decreased from 75% in the 70s to 65% now in developed countries. This is partly because workers do not benefit from productivity gains. In comparison it is the CEOs that have seen an increase in their share doubling from 5% to 10%. Will Hutton felt that the financial effects of globalisation had led to the emergence of a super-rich plutocracy. A level of 'frivolity' had become part of this world where if one CEO earnt £2 million, then another would want £10 million. He lamented the poor corporate governance structures in place and called for a defence of public companies.

All three speakers mentioned the 'outrageous' activity of private equity firms that, in Hutton's words, 'makes Caligula's Rome look like a vicar's tea party.' Some of the mega-bucks deals financed by debt have created a serious level of short-termism that is bad for the future of the acquired companies. There is no investment in R&D or sustainable development and pension funds are put at risk. This has reached such a degree that even some private equity partners are concerned.

John Evans remarked that this creates a new challenge for unions - previously unions always knew that the company and the employer were one and the same. Now, private equity's ownership and practices had blurred the relationship. Will Hutton set a greater challenge - unions should stop trying to change the system and embed themselves at the heart of it. They are institutions that deliver equality - part of the 'enlightened infrastructure' of modern society and this is what they should focus on.

Globalisation was recognised as a great force but it appears there are many solutions for shaping and managing it. These solutions require significant change and strategic responses. But unions if they evolve in the face of these global challenges can continue to shape the world.

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