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World labour report: vols. 1 and 2.

For the first time in its 56-year history, the International Labour Office (ILO) is publishing a series of reports comprehensively dealing with the situation of labor on a worldwide basis. The first two volumes of the projected series cover employment, income, social protection, the impact of new information technology, labor relations and standards, working conditions, training, and the status of women. Any attempt to encompass the world situation of labor can only be partially successful. Despite their title, these volumes do not and cannot discuss the living and worklife conditions of great numbers of the world's workers, necessary information being unavailable to their authors. Thus, China, a member of ILO that accounts for one-fourth of the world's population, reports no data to ILO on employment, unemployment, or wages. The two volumes--henceforth referred to here as the Report--are virtually silent on the conditions prevailing there. Similarly, information on South Africa (not a member of ILO) is missing.

The Report, far from being a compendium of statistics, synthesizes the facts and data provided to ILO by its 150 member states, and extracts significant trends from them. This has surely been a most difficult untertaking. ILO membership is vastly disparate, consisting of democratic and authoritarian states; states with market and with nonmarket economies, characterized by varying degrees of government intervention; highly industrialized and economically backward states; a handful of states with per capital gross national product (GNP) of $10,000 or more, and a great majority of states with $1,000 or less (in 1980). ILO must function in, and its treatment of labor conditions must take into account, an international environment that, contrary to the expectations of its founders, has become more careless of human rights, and where many states limit or deny civil rights. "Many societies find it difficult to reconcile effective government with full respect for human rights," states ILO.

ILO has identified workers' rights with human rights at least since World War II; the theme of rights remains implicit in this Report. Undeniably, the principle of promoting "greater social justice," which Francis Blanchard, ILO's Director-General, claims as the ILO's fundamental objective, informs and suffuses the Report. But the treatment revolves around economic rather than political concepts. It is the gulf between the "industrialized" and the "developing" countries which is the central characteristic of the situation of world labor--not the dichotomy between democratic and authoritarian states. But infringements upon or loss of such civil liberties as freedom of association or of speech have invariably spelled deterioration of workers' status, and the Report is not silent on such matters. The chapter on trade-union rights and their violation is perhaps the most disturbing one of the two volumes; it details the sharp rise in the number of complaints involving such violations (including the death, disappearance, or arrest of trade unions' leaders and activists). "The number--73 during the past 8 years--and diversity of the countries concerned are also tending to increase, which means that these countries belong to every region and every economic and social system." This formulation does place Poland, where an autonomous trade union movement was summarily crushed, on a level with Great Britain, where unions may suffer from the present government's hostility, but where their rights to exist cannot be invalidated.

A problem with the Report is the lack of any discussion relating the situation of labor in the industrial and in the developing nations. Thus, in addition to omitting large numbers of the world's workers from coverage, the Report describes two worlds rather than one. Yet, these two worlds are inextricably linked by trade and investment. Employment as well as unemployment is engendered in the one by the economic activity in the other. With increases in linkages between the industrial and the developing countries in recent decades, the Report offers no comment on their impacts on labor. Nevertheless, the imagine of two worlds reflects a stark reality. The industrial country with the lower GNP per capita in 1980--Poland--was richer--frequently twice as rich or more in terms of GNP per capita--than Mexico, Brazil, India, the Philippines, and a host of other countries, which together make up more than three-quarters of the world's population. The labor problems of these countries--the causes of their largely disguised unemployment and their poverty--differ radically from those in industrial countries.

This become evident in the first chapter of volume 1 of the Report. Here, the underutilization of labor and poverty emerge as the central reality of workers in the developing countries. Economic growth policies have often helped to generate high growth rates--but they have generally failed to eliminate underemployment and low incomes. ILO notes, "Economic growth is not a simple process by which the fruits of development are equitably spread. In a number of Asian countries, such as India, the share of population below a given poverty line has fluctuated but shown no long-term tendency to fall, while in others, such as Bangladesh, there is probably a long-term tendency for poverty to increase.... [Un] Latin American, the share of the population in poverty remains high, although in some Latin American countries--as in certain Southeast Asian countries--high growth and improved income distribution have led to a considerable reduction of poverty." Where development efforts center on the mdoern urban sector and export crops, human resources in rural areas often remain undeveloped, peasants are driven off the land; and while per capita GNP rises, the distribution of income remains lopsided. Households in the highest income decile in such countries as Brazil, Mexico, India, and the Philippines receive one-third to one-half of total household income (in the United States, Germany, and Great Britain, it is less than 30 percent; in Sweden, it is 21 percent).

Reading this chapter, one must conclude that the core problem of developing countries remains rural poverty and underemployment, associated increasingly with the commercialization of agriculture, and attendant mechanization and concentration of arable land. The small peasant is either reduced to rural wage labor or in compelled to migrate to urban areas to join the "informal sector" to eke out a livelihood. Industrialization has not begun to solve the employment problem. "[It] is rarely a major employment generator in the developing countries." While once regarded as the engine of economic advance, "high rates of industrial growth [have turned out to be] consistent with rural stagnation and poverty." The remedies ILO urges appear modest in scope and expense--more "selective" mechanization so as to safeguard agricultural jobs; animal-powered and other "inexpensive" but well designed farm equipment; small-scale manufacture of household utensils; and so forth. "In principle, the use of appropriate mechanized methods and modern inputs such as fertilizers and pesticides can strengthen the differential edge which small farms generally enjoy over large farms in providing productive employment per unit of land."

The Report includes a section on the urban "informal" sector, which provides employment in activities--casual construction work, open-air hawking, food retailing and so forth--where formal rules of contract, licenses, taxation, and labor inspection do not prevail. The Report outlines some of the steps to formalize these activities, for example, providing bank credit. Basically, it views the spread of the informal sector as a manifestation of decadence, resulting as it does from the displacement of the rural population, and the inability of urban institutions to provide productive employment. "... [The] emergence of such activities [may be viewed] as an unfortunate aberration: If structural change in rural areas could create an egalitarian growth path for agriculture and if small-scale enterprises were able to operate on the same terms as large-scale units, then most of the so-called informal activities might no longer exist."

The employment and unemployment problems of the developing countries are so remote from those of the industrial countries that agriculture, the locus of those problems in the former, is barely mentioned in the Report in reference to the latter. Data show why: Agricultural employment in the Organization for Economic Cooperation and Development (OECD) countries represented but 10 percent of total civilian employment in 1980 (3.5 percent in the United States)--compared with a 59-percent average for all developing countries. Industry absorbed 34 percent of all employment in the former countries, 20 percent in the latter; for services, the respective proportions were 56 and 21 percent. Where ILO traces the roots of the employment and productivity problems of developing countries to institutional factors (for example, the concentration of land), it is more cautious in explaining the widespread unemployment in the industrial market countries after 1973. Just as there has been no agreement on the causes of the Great Depression, there is today ". . . no single, simple cause or explanation of the difficulty the world economy is experiencing."

In the centrally planned (or nonmarket) economies, unemployment is not, or has not been permitted to become, an overt problem, nor has it been officially recognized. Yet, the Report states: ". . . for all the profound differences that separate the political, economic, and social systems of Eastern Europe from those of the Western economies, one could argue that there is a feature which is common to both: the underutilization of economic and human capacity."

Among the factors listed as having underlain unemployment in the West are declines in the rate of capital investment, partly from the inflation in energy prices; rising labor costs; unpredictable exchange rates; the deadweight of debt upon the developing countries, and the retardation this cause in exports from the industrial countries; and slowed expansion in service jobs, partly owing to rising labor costs spurring a shift to self-service. Furthermore, jobs have been lost as the production of apparel and consumer electronics has shifted to low labor cost areas, as the demand for steel and other metals has weakened, and as productivity has risen faster than demand in such industries as food processing and textiles. The Report notes the comparatively high rate of employment growth in the United States--2.2 percent a year between 1973 and 1980, and unmatched by any other major industrial country. Virtually all of this growth occurred in service industries, and was possibly attributable to the unmatched rise in self-employment--1.9 percent annually. It declined in the other OECD countries. The sources of the rise in American self-employment are, unfortunately, not explored. Manufacturing employment showed no trend for the United States; it declined in all the other major economies.

The example of the United States does not dispel the tone of pessimism that pervades the Report. The gain of 65 million jobs for all OECD countries between 1960 and 1980 still left 34 to 35 million unemployment persons in 1983. The relatively strong economic growth and high unemployment in the advanced countries remains a worrisome feature of their societies. For, aside from wasted human resources, it is ". . . all the more unacceptable as it involves a de facto discrimination: . . . it is above all the young, women, unskilled workers and racial minorities who are most exposed to unemployment." ILO offers no definitive remedies; it proposes systematic, in-depth analyses, asking whether we may not be "faced with a new disease, a form of pernicious anemia that causes producers, equipment and capital to languish."

The Report deals at length with income and wages. As noted, the vast majority of the world's people have per capita incomes below the poorest industrial state listed in the Report. Yet, growth rates of per capita GNP have been high by historical standards. For well over one-half of the population residing in the countries listed by ILO--which mainly excludes China--annual growth rates in per capita GNP averaged between 2.0 and 4.9 percent between 1960 and 1980 (the rate was 2.3 percent a year for the United States). In view of the skewed distribution of income in developing countries, high income growth benefits were less evenly distributed than in the industrial market countries. Greater income inequality has been conventionally associated with the rapid economic expansion; the labor shortages caused by faster expansion would eventually make for greater equality of income. But "this is only a general tendency to which there have been many exceptions." In fact, the great labor surplus that characterizes the societies of many developing countries makes the existence of this "tendency" altogether questionable. This is implied in the evolution of the income distribution in such countries as the Philippines, Peru, India, Bangladesh, Mexico, and Brazil, also noted in the Report. Income inequality is somewhat mitigated by social services, which benefit the lower income strata more than the higher; by cash transfers; and by targeting aid to certain disadvantaged groups who have little chance to benefit from economic growth. However, the data presented in the Report suggest that redistributive policies have been considerably more effective in the industrial than in the developing nations.

ILO's conclusions regarding income development over the past two decades are "rather optimistic.... [The] great bulk of the population of the world has experienced an increase in income, even if it has been smaller than would have been warranted by the growth performance of their countries."

This smaller increase in the developing countries' household incomes than in their economic growth is reflected in a lag of real wages behind per capita GNP in 30 of the 42 developing countries listed by ILO, in all centrally planned economies--but in only 4 of the 20 OECD nations shown (including the United States, where wages declined at an average annual rate of 0.4 percent during the 1970's while GNP per capita rose 2.2 percent). ILO attributes the gap between real-wage and GNP growth to policies that seek to use the economic growth dividend for creating new jobs, rather than its being used to raise the living standards of workers already employed; and it implies that these policies will continue in effect until "the bulk of the labor surplus has been absorfed." We have already referred to the large size of the labor surplus in developing countries. Agriculture in these countries accounted for 59 percent of their total labor force in 1980, but generated only 17 percent of their gross domestic product. The time horizon of labor surplus absorption that suggests itself by these proportions--and the large component of rural wage labor--means that the livelihood of generations of many fully employed, underemployed, and unemployed workers in these countries will hover near or below poverty levels. Judging by the specialized studies the Report cites, this is all the more likely as the comparative advantage of developing countries in terms of labor costs in expected to diminish with the adoption of microelectronics in the manufacturing processes of the industrial economies.

The Report's discussion of labor relations tends to confirm these prospects. Collective bargaining, ILO notes, is in difficulty everywhere today because of an economic situation marked by high unemployment, slack production, nd inflationary pressures. This situation constrains collective bargaining--". . . the public authorites often fear that the free play of discussions between employers and workers may have harmful effects on the general economic situation . . . and they therefore try to exert unusually strong influence on collective bargaining." Thus, the bargaining strength of the parties involved may not be the decisive factor in arriving at an agreement between labor and management. The constraints are ultimately dictated by the economic growth and redistributive policies of the state.

True, many observers urge broad-based participation in the development process, freer play for conflicts of interest, and greater reliance on collective bargaining as a key instrument of compromises and tradeoffs. But the "temptation of the restrictive approach is very strong, particularly in periods of economic difficulties. . . ." The governments of the market economies, to be sure, operate in a tradition of voluntaristic labor-management relations; but, they, too, have "instituted some coercive measures during the past 10 years." The Report mentions Denmark, Canada, France, Belgium, and The NEtherlands. The voluntaristic approach in these countries had failed in dealing with the problems arising from recession.

The deep gulf that separates labor in the developing countries from labor in the industrial economies is also ever present in the Report's discussion of conditions of work--including safety and health, hours, and labor inspection. In the industrial economies, occupational safety has measurably improved; death rates from fatal accidents have plummeted--in some countries by 30 to 50 percent over the past 10 to 20 years. In part, the decline stems from systematic changes: automation exposes fewer workers to potential accidents, robots are performing the more dangerous types of work. Yet, nonfatal injuries have remained quite high, despite legislation that compels the installation of machinery that is free or nearly free from hazards.

Occupational health remains much the greater problem. Sources of radiation have proliferated in a number of industries. New chemicals are continuously introduced in the workplace and the capacity to test for toxicity has been "strained to the limit." The depth of public concern with occupational health problmes is conveyed by the extent of research priorities listed by the National Institute for Occupational Safety and Health, and reproduced in the Report. The list includes occupational lung diseases, occupational cancers, cardiovascular diseases, neurotoxic disorders, muscular and skeletal injuries, and others.

In the developing countries, the state of occupational health and safety is not merely poorer than in the industrial economies, "conditions have become worse in certain respects," as competition for resources has sharpened in recent years. Fatality rates remain several times higher than in the West. Injuries have continued to rise--nonfatal injuries have increased more than twice as fast as the labor force in the 21 developing countries for which ILO received data. The reasons are not hard to find. Imported machinery is often secondhand, lacks safety guards, and may also be poorly maintained. In mining, timbering is often inadequate and tunneling techniques dangerous. Work hours are often long, causing fatigue which in turn can cause accidents. Piecework has become more common; the greater work speed also makes for accidents.

Furthermore, chemical hazards have been introduced in agriculture in regions "ill-equipped to deal with them." Pesticides, herbicides, and fertilizers have led to widespread illness among rural workers and their families. The "uncontrolled transfer of technology" has frequently led to "an unacceptable level of occupational accidents and diseases." Some production processes which are hazardous to health have been transferred to developing countries to take advantage of their lower environmental standards and production costs.

The Report refers to the long struggle for occupational health and safety that began with the factory acts in England during the first half of the 19th century. It notes the 25 Conventions that ILO has formulated on the subject--Conventions which, of course, require national legislation once a member state has adopted them. The Report does not dwell on the adequacy of such legislation. However, a chapter on labor inspection implies that however adequate protective labor legislation may be, it is increasingly coming under the scrutiny of cost-benefit norms, and is often weakly enforced. "The ambitious legislation of the 1970's, proclaiming that workers' safety, health, and welfare should carry greater weight than financial considerations, while not abrogated, will cease to be followed up with equal ambition. . . ." While most developing countries have created labor inspectorates over the past 40 years, their labor ministries remain underfinanced and their share of government funds often comes to 1 percent or less. The economic situation has widely been considered to be inimical to the "rigid" enforcement of labor standards--the worst working environment being not having a job at all.

The Report's value resides not only in the information it provides, and in synthesizing a vast array of facts, but also in making visible the difficult situation of workers in developing countries, as well as in the West. It highlights the great gulf that exists between the conditions and workplace standards in the former, and the more advantaged position of workers in the latter. The Report does not succeed in showing that the fate of labor in both groups of countries is tied together but this is the message it implies.
COPYRIGHT 1985 U.S. Bureau of Labor Statistics
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Copyright 1985 Gale, Cengage Learning. All rights reserved.

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Author:Brand, Horst
Publication:Monthly Labor Review
Article Type:Book Review
Date:Nov 1, 1985
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