Although they had nothing to do with the actual causes of the 2008 Global Financial crisis, it is ordinary workers and their families who have arguably suffered the most from its effects. While governments and international agencies seem most concerned to protect the returns to Capital in the name of financial austerity and economic good sense, little has been done to protect the well-being of working people or the global environment. Both trade unionists and environmentalists oppose the destruction wrought by neoliberal market economics; the challenge is for them to work more closely together in the future to promote truly sustainable development

Blewitt, John

Chinwugo, Paliani

English

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THE GLOBAL FINANCIAL CRISIS, WORKING PEOPLE AND SUSTAINABLE DEVELOPMENTA Schumacher Institute Challenge Paper Paliani Chinguwo and John BlewittThe Challenge: Although  they  had  nothing  to  do  with  the  actual  causes  of  the  2008  Global Financial crisis, it is ordinary workers and their families who have arguably suffered the most from its  effects.  While  governments  and  international  agencies  seem most  concerned  to  protect  the returns to Capital in the name of financial austerity and economic good sense, little has been done to protect  the  well-being  of  working  people  or  the  global  environment.  Both  trade  unionists  and environmentalists oppose the destruction wrought by neoliberal market economics; the challenge is for them to work more closely together in the future to promote truly sustainable development.1. BackgroundThroughout the last half of the 20th century, there have been rapid and massive transformations in global finance, international trade and technological innovation. National economies have become increasingly  integrated  and  the  ideology  of  neoliberalism  today  remains  dominant,  if  totally discredited in many people’s eyes. Barriers to trade such as government regulations, often designed initially to protect local environments and populations, have been removed in order to facilitate the diffusion of technology and the mobility of goods, labour and - most importantly - financial capital across national borders.1 In 2008, a crisis occurred in the global financial system, triggered by greed and irresponsibility in the banking sector and exacerbated by a number of significant corporate failures.  This  crisis  destabilized  the  increasingly  interconnected  national  economies  as  multi-national firms experienced a drop in sales and a further decline in their rate of profit which has been a recurring problem in the post-war world.2 Although classical economists argue that this decline in the rate of profit has been due to wage pressures, it seems far more likely that the true cause has been  the  failure  to  invest  in  new  capital  equipment  in  favour  of  unproductive  money  market speculation.  As the global economy lurched towards recession after the financial bubble burst in 2008 both workers and the global environment slipped down the political agenda. Despite the hand wringing  following  the  inconclusive  climate  conference  in  Copenhagen  in  2009,  the  20th anniversary of the Rio summit in 2012 bears witness to two decades of lost opportunities to improve the  global  environment  and  to  fashion  more  ecologically  sensitive  economic  arrangements  at virtually every spatial scale or level.2. How were workers affected?The economic recession, the financial crisis and the climate problem have combined to make life even more difficult for many working people. Even before the crisis wage growth was stagnating and the proportion of people on low pay was increasing. As the International Labor Office reported:Redistribution from wages to profits and from median-wage earners to high wage earners reduced aggregate demand by transferring income from individuals with a high propensity to spend to people who save more. Before the crisis, some countries were able to maintain household consumption through increased indebtedness, while other countries based their economic growth mainly on exports. This model, however, has proved to be unsustainable.31 Altvater, E., (2007) The Capitalist Energy System and Global Financial Market: The Impact on Labour. Labour,  Capital and Society vol. 40 issue 1 & 2 page 18-34; 2 Brenner, R. (2006) The Economics of Global Turbulence: the advanced capitalist economies from long boom to  long downturn, 1945-2005. London: Verso.3 ILO (2010) The Global Wage Report 2010-2011: wage policies in times of crisis. Geneva: International Labor Office.1Financial Crisis, Working People & SD – A Schumacher Institute Challenge Paper – January 2012In the three years following the global economic crisis of 2008, 27 million jobs have been lost with global  unemployment  likely  to  remain  at  6%  for  the  foreseeable  future.  Global  youth unemployment is high too,currently at 12.7%, and the employment to population ratio is the lowest it has been for over twenty years. In 2011 1.52 billion workers were in vulnerable employment. Additionally, the number of working poor is also growing steadily leading the ILO to state:...to generate sustainable growth while maintaining social cohesion, the world must rise to the urgent challenge of creating 600 million productive jobs over the next decade, which would still leave 900 million workers living with their families below the US$2 a day poverty line, largely in developing countries.4The problems of the advanced capitalist economies have severely affected developing countries. There is clear evidence that in response to the plunge in demand for exports, price volatility and the  falling  the  rate  of  profit,  multinational  firms  have  intensified  processes  of  organizational restructuring, introducing new work patterns that aim to increase labour productivity. This has led to increased  long  term  unemployment,  short-time  working  and  temporary  lay-offs  in  many manufacturing sectors.5 Indeed, the impact of this increased labour exploitation has moved beyond the confines of the workplace; with the reduction or loss of wages many working people have fallen into  debt,  pushing  them into  poverty  and  thereby  adding  to  the  distress  and  misery  of  many families.6 Wage cuts have meant that the workers can no longer even afford to cater for basic needs including proper and adequate food. Sharp increases in the work load of employed workers has also resulted in increased dangers, ‘accidents’ at work and a decline in workers’ general health and well-being. Despite the under-reporting of occupational accidents in some countries records show that every day in the region of 960 000 workers suffer injury at work and 5330 die as a consequence of work-related  diseases.7 Excessive  fatigue,  stress  and  stress-related  illnesses  are  becoming increasingly common, resulting in higher levels of absenteeism due to sickness. The extra need for, and costs of, medical care further compromise the basic human rights of many households to decent food,  adequate  shelter  and  children’s  education.8 Finally,  as  the  quality  and standard  of  living declines, the life expectancy of many working people and their families is likely to decline too. To put it bluntly, the  welfare of working people have been sacrificed on the altar of a global market economy that does not work.93. Neoliberalism, Labour and the Environmental MovementThe 2008 financial crisis of neoliberal globalization provides opportunities for trade unions across the  world  to  radically  challenge  the  ideology  of  free  market  economics  and  its  social  and 4 ILO (2012) Global Employment Trends 2012: preventing a deeper jobs crisis. Geneva: International Labor Office.5 Mashilo, A. (2010) Changes in Work and Production Organisation in Automotive Industry Value Chain: An  Evaluation of Responses by Labour in South Africa. Unpublished Master’s thesis, University of Witwatersrand, Johannesburg, http://hdl.handle.net/10539/8249 ; Masondo, T. (2010) Worker Participation in Workplace  restructuring in Automotive Industry: A Comparative Study of German and South African Volkswagen Plants. Unpublished Master’s thesis, University of Witwatersrand, Johannesburg. http://hdl.handle.net/10539/83906 Webster E, Mashilo A, Masondo T & Bischoff C (2009) Changes in Production Systems and Work Methods. Unpublished mimeo., University of the Witwatersrand, Society, Work and Development Institute (SWOP); Froud, J. et al. (2000) “Restructuring for Shareholder Value and Its Implications on Labour.” Cambridge Journal of  Economics vol 24 no. 6 page 771-797; Barchiesi, F., (1997) Flexibility and Changes in Forms of Workplace  Subjectivity: A Case Study of the South African Auto mobile Assembly Industry. Unpublished Master’s thesis, University of Witwatersrand, Johannesburg http://hdl.handle.net/10539/84187 Hämäläinen, P., Saarela, K.L. & Takala, J. (2009) Global trend according to estimated number of occupational accidents and fatal work-related diseases at region and country level. Journal of Safety Research, Vol.40, No.2, pp.125-1398 Chinguwo, P. (2011) The Impact of 2008 Global Financial Crisis on Workers at FORD in South Africa. Published Master’s thesis, University of Witwatersrand, Johannesburg. http://hdl.handle.net/10539/103779 Chinguwo, P. (2011) ibid.2Financial Crisis, Working People & SD – A Schumacher Institute Challenge Paper – January 2012environmental consequences. Accompanying the degradation of work and fall in working people’s living standards, business and government leaders increasingly call  for economic growth  - not always acknowledging that growth is not the solution to everything. Global poverty and inequality has been increasing markedly in recent years. The ‘trickle down effect’ is a myth, as much of the ‘wealth’ that was created in the good times was not real - just numbers on a screen - and it is the rich rather than the poor who have benefited. At the same time, too many business organisation still see the natural environment as something to be exploited, just as ordinary workers are and have been.   Despite  the  growing  public  prominence  of  Corporate  Social  and  Environmental Responsibility many of the bad old ways persist as businesses still regard environmental safeguards, like labour, as a cost to enterprise and a brake on development. Thus neoliberal deregulation has licensed serious attacks on labour and the environment in the name of economic growth, energy security, jobs and so on.There are now new opportunities for unions to network more efficiently across geographical regions and to co-operate effectively to overcome sectional rigidities and stubborn particularism. In recent years new internationalist networks or reconfigurations of trade unions have emerged in the South (the Southern Initiative on Globalization and Trade Union Rights,  SIGTUR), in  Latin America (thanks to reforms to the Organización Regional Interamericana de Trabajadores, ORIT) and new international strategies have been developed by South African trade unions. Unions have vigorously contested  violations  of  labour  standards  among  signatories  to  the  North  American  Free  Trade Agreement and others have organised to support, or promote, ethical trading initiatives such as in the garment industry.10 A certain labour environmentalism has also emerged from concerns over occupational  health  and safety,  environmental  justice issues and a  recognition that  unrestrained capitalist economic growth is bad for both people and the planet. As Silverman notes, the same chemicals that pose hazards to workers are invariably those that pollute streams and kill wildlife:By understanding the domination and exploitation of workers and of nature as inextricable, labor environmentalists situate humans within the natural. Exploitation is the unifying term, which makes the common enemy common; both kinds of exploitation result from one process. For green unionists the separations between humans, the work environment, human environment, natural environment, and nature itself have become elided. This interconnection allows a unified approach to workers’ problems and the environment’s needs. It encourages a common solution and offers a profound basis for alliance with environmentalists around the world.11Environmentalists and trade unions have much in common. They both often confront the same enemies  -  the  big  corporations,  neoliberal  financial  bodies  and  unresponsive  or  downright repressive governments. There is every reason for environmentalists and organized labour to work more closely together.12 There are also genuine and real alternatives to globalization emerging from labour’s  new internationalism and,  considering  the  recent  revival  of  socialist  thought  and anti-capitalist protest, to global capitalism also.13 For environmentalists, it is important to remember that human health and well being is an important part of the sustainable development agenda; work often provides a great deal of meaning to people’s lives, and sustainably productive work benefits 10 Waterman, P. & Wills, J. Eds (2001) Place, Space and the New Labour Internationalisms. London: Wiley-Blackwell.11 Silverman, V. (2004) Sustainable Alliances: The Origins of International Labor Environmentalism. International  Labor and Working-Class History, Fall 2004, No. 66, pp.118-135.12 McElrath, R. (1988) Environmental Issues and the Strategies of the International Trade Union Movement. Columbia Journal of World Business, Fall, 1988, pp.63-67.13 Brecher J, Costello, T. & Smith, B. (2000) Globalisation from Below: The Power of Solidarity. Boston: South End Press; Radice, H. (2009) The Idea of Socialism: from 1968 to the present-day crisis. Antipode, Vol. 41, No. S1, pp.27-49.3Financial Crisis, Working People & SD – A Schumacher Institute Challenge Paper – January 2012individuals, households, communities, societies and the environment.Trade unionists  and their  allies  have been looking to  improve social,  economic  and ecological environments  for  many  years.  The  International  Confederation  of  Free  Trade  Unions,  the International  Trade  Secretariats  (Global  Union  Federations)  and  the  European  Trade  Union Confederation  have  participated  in  a  variety  of  international  conferences  including  the  1972 Stockholm Conference on the Environment, the 1992 Rio Earth Summit and the 2002 Johannesburg World Summit on Sustainable Development. Chapter 29 of Agenda 21 explicitly recognized the importance of trade unions in the promotion of sustainable development concepts and practices. In 2012 the International Trade Union Confederation (ITUC) and Sustainlabour organized the second Trade Union Assembly on Labour and Environment at Rio+20. Jobs, the green economy and the environment go hand in hand. For example, recent research conducted by the Millennium Institute concluded that investing 2% of GDP in the green economy could create up to 9.6 million new jobs per  year  for  the  next  five  years.14 A joint  report  of  the  International  Labour  Organization,  the European Union and the International Institute of Labour Studies, Towards a Greener Economy: the  social dimensions15 has argued decisively that market solutions by themselves will be unable to create  a  low carbon global  economy,  high  value  and highly  skilled  jobs,  necessary  new green technologies, products and business opportunities. Appropriate regulation, public investment, new research and development together with a more sustainable system of higher education and social dialogue with trade unions are of considerable importance too.4. ConclusionA ‘new labour internationalism’ has emerged which is seriously challenging global neoliberalism.16 Vibrant  cooperation  among  trade  unions  across  the  globe  can  help  create  revolutionary transformations  in  society  that  will  in  turn  have  positive  knock-on  effect  for  ecological sustainability, local democracy and worker autonomy. To achieve this though, internationalist trade union practices must overcome national boundaries, internal sectionalism and  those world-views which ignore the intrinsic value of the natural environment and the rights of all the living creatures whose prosperity depends upon it. Thus, the need of human beings for creative and fulfilling work is not separate from the need for a more socially and environmentally just world. If future global development is to be sustainable then the future of creative and meaningful work, human social wealth, material sufficiency and ecological well-being need to be accorded equal consideration. We can only secure a sustainable future if we stop destroying the planet through the blind pursuit of simply more and more and more.Paliani Chinguwo is a Director of Research at Malawi Congress of Trade Unions (MCTU), Senior researcher for the African Labour Research Network (ALRN), and a member of the Group of Experts for the Southern  Africa Trade Union Coordinating Council (SATUCC). His most recent book is The Impact of 2008 Global  Financial Crisis on Workers in South Africa, published in 2012 by LAP Lambert.John Blewitt PhD. is a Senior Lecturer at Aston University, Birmingham, UK, where he is Co-Director of the MSc Social Responsibility and Sustainability. He is a member of the IUCN Commission on Communication and Education, a Schumacher Fellow, a Fellow of the Royal Society of Arts and of the Higher Education Academy. His most recent book is Media, Ecology and Conservation: Using the media to protect the world's  wildlife and ecosystems, published in 2010 by Green Books, Totnes.14 ITUC (2012) Growing Green and Decent Jobs. Brussels: ITUC.15 IILS (2011) Towards a Greener Economy: the social dimensions. Geneva: International Institute for Labour Studies.16 Webster, E., Lambert, R. & Bezuidenhout, A. (2008) Grounding Globalization: Labour in Age of Insecurity. London: Blackwell.4

The global financial crisis, working people and sustainable development

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The global financial crisis, working people and sustainable development

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