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Sunday, 30 April 2017

The ILO: Facing one hundred years of solitude or success?

Salma Hussein , Friday 7 Apr 2017
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Views: 1323

Before the gates of a fascinating building overlooking Lake Geneva stand sculptures depicting the struggles of workers against exploitation and glorifying those who labour. This is somewhat perplexing as the statues now decorate the building of the World Trade Organisation (WTO)—the body that took over the premises of the International Labour Organisation in blunt symbolism of the path of the 20th century.

The ILO was created in 1919, right after the First World War, to ensure that peace would prevail through the dissemination of social justice. This meant giving the wage earners — the socially oppressed, the fuel of wars — a voice and fair remuneration. The organisation remained in this premises until the late 1990s when it was replaced by the WTO, a creation of the corporate globalisation era.

The ILO is celebrating its centenary in two years — 100 years of regulating the world of work. In preparation for the event, the organisation's Director-General Guy Rider launched in 2013 the Future of Work initiative, a long-term research project based on discussions between the world's top researchers, politicians, employers and trade unions on issues concerning labour.

The outcome of these discussions and results of the project are planned to be announced at the centenary ceremony. The ILO is currently hosting one of these discussions, "Global debate: the future of work we want," on 6 and 7 April.

The four axes of this global debate lie at the heart of Egypt's economic struggle: work and society, decent work for all, organisation of work and production and the governance of work.


The unemployment curse

If we take unemployment as one of the major challenges of today's economically troubled world, the world is losing the contribution of around 200 million. This number is increasing now by two million every year.

Egypt is part of the region with the highest rate of unemployment. At least one in every 10 unemployed persons lives in the Arab region. In Egypt, unemployment has never dipped below 9-10% over the past three decades.

Only two of every 10 highly educated young people can find a job, while eight are left to languish in their homes for long years, provided for by their extended families. Like all other parts of the world, unemployment hits the young educated population hardest. It is not difficult to link this phenomenon with extremism, frustration and social uprisings, which have all emerged — especially after the Arab Spring — in the developed and developing worlds alike.

The world is now debating the reasons behind this lack of jobs. One explanation often prevails: blame the technology. It is the same explanation that was advanced during the Great Depression of the early 20th century, when the use of modern machines was en vogue. But history belied this interpretation, because the technology boom of that time in fact led to new job opportunities and the creation of more jobs than those that disappeared.

The future of work and the policies that are needed thus depend on finding the right answer to this question.

The world is also looking into ways and means of protecting those who work in international supply chains. How can we develop and enforce a policy that protects workers against new forms of exploitation, in which the lords are located in multinational companies based mostly in developed countries, as opposed to the colonial exploitation of the 18th and 19th centuries? Egypt is also concerned by this debate.

Egypt is a middle-income country that, despite many reforms aimed at shaping it into an export hub integrated into the supply chains of food and textiles, is struggling to develop its economy. In this, it is much like the majority of its peers. In this context, supply chains have been revealed as the form exploitation takes in globalised capitalism.

A company based in a developed country (with many subsidiaries in different parts of the world) buys most of its goods and services from small firms in  developing countries. It is there that goods can be bought at very low prices, as opposed to at home where there exist some kinds of social protection for wage earners.

Companies then sell these products at many times their original prices, adding their own labels and collecting phenomenal profits. Meanwhile, more and more people are forced into unemployment in the developed country, even as millions of workers are exploited and overworked in the developing world.

All developing countries race against each others, to produce this good or that service for the big corporates: who will provide the cheapest shirts for Zara or Gap or other brands? Is it China, Bangladesh or Egypt? The more the labour force is exploited, the more contracts a country gets, and the faster its indicators improve in terms of GDP growth, exports, and job creation. The question is, is this good or bad for the economy and for the country as a whole?

It feels good to hear the success stories of factory owners, about how they managed to penetrate a certain market, build successful companies and produce an exporting miracle for such-and-such country.

But, when you read about the mothers having to leave their kids with relatives in rural areas for years to be able to provide for little food and poor education, by working over 14 hours a day with no weekends, and when these stories are piled into labour market indicators around the world, we can see the return of slavery in its worst forms.

The Egyptian paradox is that it took all the necessary steps to become a hub of these sweat shops, in order to join the development rail, but it is failing: the labour force has not been fairly treated, nor has the industrialisation by export model succeeded. This curse will remain as long as the decision makers don't realise that the best way to progress is to ensure labour rights.


The work curse

As the Roman saying goes: "work is a curse unless one is a warrior or a philosopher"-- both of whom have gained status and wealth around the world whether through hard work or talent. But this is not the case in Egypt, where work is a curse unless you are a senior government official or private sector executive-- jobs which are rarely landed through competence and merit here.

Today, the relationship between employers and wage earners seems to be much the same as in the early days of the West's Industrial Revolution. Countries like Egypt seek purely exploitative relations in an effort to emulate the success of South Korea. The problem is that times are different from those that supported the once-poor Asian country's incredible rise.

This effort has contributed to a higher number of working poor in Egypt, where half the working force are in poverty, according to data provided by the World Bank in 2010.

The high number of poor workers goes hand-in-hand with a higher average of weekly working hours in the country, which rose between 2002 and 2012 to reach an average of 53 hours a week for government employees and 56 for private sector employees, data from Egypt's official statistics agency CAPMAS shows.

Dwindling wages have prompted these workers to compromise between 13-16 hours of their leisure time every week in order to meet basic needs. Even this has failed to help many make ends meet--given the high poverty rates in all three work sectors: public, private and informal.

This has been coupled with a waiting army of unemployed people or those with intermittent jobs, if any — a commonplace phenomenon even in developed countries known as a the coexistence of underdevelopment/overdevelopment.

Half of wage earners receive less than EGP 1,520 a month on average, according to the National Wages Council. The figure is much lower in the private sector, where employees are paid on average less than EGP 910 a month. Yes, exploitation goes hand in hand with the growth of the private sector in Egypt—which lacking supervision from active labour unions, gives employees the leftovers of what is earned.

While some argue that the productivity of workers is weak or that some projects are not making enough profits to push up salaries, the World Bank's data on work share of GDP over the past decades largely disproves such arguments.

"The functional income distribution continued to shift towards capital. Much of the growth over the past decade has been captured by higher profits and rents rather than wage income," the bank said in its 2015 Systematic Country Diagnostic report

"The gross operating surplus of companies rose from 43 percent of GDP in 2000-02 to 50 percent of GDP in 2008 while the compensation of employees declined to around 25 percent of GDP and has remained around that level," it added.

That is to say, capital share (profits of project owners) went up by 75 percent.

According to a study by former finance minister and expert of work policies Samir Radwan, work share stood at an average 40 percent of capital under Mubarak.

Drawing an international analogy, the developed world has recently been disturbed by a considerable disparity between incomes, with wages falling to 60 percent of GDP while capital share saw a steep rise to 40 percent of GDP--up from 30 percent in the two decades following World War II.

All of such wealth, around the world and in Egypt, is centralized in the hands of the so-called 1 percent controlling the world through ballot boxes and large media outlets, capturing parliamentary democracy itself.

The future of work cannot be disassociated from that of capital in Egypt or elsewhere. The most balanced link between them was seen in the wake of the two world wars that destroyed capital and wealth, wiped out empires and killed millions. At the time, the quest for social justice was equated with the need to survive, and those were the golden years of the International Labor Organization.

Will the new centennial mark the peaceful start of a more balanced relationship between work and capital, led by the organisation? Or will the major capitalist crises now and the new century's mounting inequality prompt new world wars?

Will the world choose to empower the ILO to restore social balance to today's turbulent work world? Or will its isolation contribute to the fall of the world, as was the case in the 20th century? Which scenario will shape the future of work: peace or war? 

 

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