Tackling Global Inequality

Inequality is on the rise in so many areas around the world. ACTU President, Ged Kearney, tackles some of the big questions on inequality in this speech delivered in Perth on Saturday 15 October at the Unions WA International Committee Conference

Good morning, thank you for having me with you today.

I’d like to pay my respects to the Wurrundjeri people of the Kulin nation, the traditional owners of the land on which we meet, their elders past and present.

Global inequality is an important issue and it’s great to see recently it has been recognised as such by IMF, OECD, World Bank and other usually stuffy organisations.

Global GDP has tripled in the last 30 years – and yet we have seen no corresponding strengthening of wages, secure work, safe work and other human rights protections.

In fact, we have seen the opposite: the devaluing of human lives and human dignity, and the denial of proper wages and conditions.

Of course, Unions have been beating this drum for quite a while as this goes beyond a high level high economic comparison.

The growing disparity between workers across the globe is having real consequences on people’s lives right now.

Workers around the world are struggling every day. Many are coming to terms with automation and technological advancement that threaten to rapid evolve the way we work.

But many are struggling against ancient issues that have no place in a modern world – like slavery.

Slavery/people trafficking – links with temporary worker visas

The Australian Government has a National Action plan to combat human trafficking and slavery, which is great, but is has big problems. Specifically, it doesn’t recognize there is a continuum between temporary visa workers and labour trafficking.

This is why we are so strongly vocal on the issue of temporary workers – we’re called racist, xenophobic, protectionist or anti-business.

But the reality is these workers are too easy to exploit, and many of their pay and conditions are virtually indistinguishable from slavery.

Migrant workers are more vulnerable to exploitation for a variety of reasons, including limited language skill, limited understanding of rights, and limited social networks that could empower them to advocate for themselves.

Research from the Australian Institute of Criminology and indeed our own experience demonstrates that exploitation of migrant workers occurs in the same context where modern slavery occurs.

Victims of modern slavery are not a distinct group that only antislavery organisations encounter. Our perception is often that they are trafficked sex workers, or domestic servants.

It is more appropriate to consider the issue as an experience of victimisation that can impact anyone who is vulnerable, including temporary skilled migrants, international students, working holiday makers and even Australian citizens.

The low number of identified victims of trafficking in Australia is a direct result of insufficient screening processes and unaddressed barriers to seeking help experienced by exploited, trafficked and enslaved people.

Simply providing information once to a temporary overseas worker before commencing employment will not address thoughts that he or she is not vulnerable or that the risk is simply worth taking. Nor does information enable a worker to get help when needed or resist economic pressures from home.

Information should be available to migrant workers throughout their time in Australia by linking workers and unions to provide assistance and advocacy to help workers report workplace violations.

The information provided to workers should also include details on the penalties employers face for contraventions of the Fair Work Act and Migration Act.

The current emphasis on penalties and compliance is only part of a more comprehensive response that should hold people accountable for unlawful conduct, but also foster a climate of safety and trust for the victims of that conduct.

The most important intervention is to counterbalance the power an unscrupulous employer has over vulnerable workers and create incentives for reporting workplace violations.

Doing so will improve not only the rate of identification of fraud and labour exploitation, but also that of human trafficking.

We want protections for all workers, regardless of their immigration status. We also want improved accountability for the labour hire industry, which is often the main culprit in exploitation and trafficking.

The Fair Work Act must be amended to make it crystal clear that that all workers are covered – regardless of immigration status. Doing so will disrupt the imbalance of power within exploitative work relationships and establish an incentive for exploited workers to come forward.

And when breached are uncovered, the response can’t simply be to send workers back where they came from.

There must be more accountability on employers – they must take the ultimate responsibility for the effects their actions have on exploiting workers.

It’s a similar issue to what we are seeing in global supply chains.

Supply chains

There is too often a disconnect between those making decisions and the effects those decisions are having on workers. And with supply chains growing along with global interconnectedness –they are becoming longer and more dangerous.

Major corporations control 60% of global production, transport and services through their supply chains – and yet these corporations deny responsibility for the wellbeing of both their own workers, and the societies in which they operate.

These abuses are happening because of an economic system based on an ideology that sees human beings as expendable commodities.

Global supply chains have become a common way of organizing investment, production and trade in the global economy. In many countries, particularly developing countries, they have created employment and opportunities for economic and social development.

There is also evidence, however, that the dynamics of production and employment relations within the global economy, including in some global supply chains, can have negative implications for working conditions.

The collapse of the Rana Plaza building in 2013 and factory fires in Pakistan and Bangladesh in 2012 took the lives of over 1,500 people and prompted a renewed call for global action to achieve decent working conditions in global supply chains.

Challenges for decent work existed in many countries before they engaged in global supply chains. In some instances, the operation of the chains has perpetuated or intensified them, or created new ones.

Challenges may arise when lead firms make investment and sourcing decisions that affect working conditions in their global supply chains without being directly responsible for employment.

There is a risk that global pressures on producer prices and delivery times and intense competition between suppliers may place downward pressure on wages, working conditions and respect for the fundamental rights of the workers participating in the chains.

When local discount stores are selling t-shirts for $3, too many off us are happy with the bargain and don’t think at all about how they can possibly sell something so cheaply.

We get used to lower prices – we demand lower prices – and businesses squeeze their supply chains further to try and meet that demand.

In subcontracted tiers of global supply chains, suppliers – often large or small actors operating informally – may cope with such pressures through the use of forms of employment which may not comply with labour regulations, in some extreme cases resorting to forced and child labour.

In turn, such practices create unfair competition for suppliers who do comply with labour regulations and international labour standards.

Because the scope of labour legislation, regulation and jurisdiction is at the national level, cross-border sourcing of goods and services creates difficulties in the achievement of workplace compliance.

Regulatory structures are established and enforced by government authorities that may not have the resources or the expertise to monitor compliance in all or most workplaces.

Not all governments have been able to cope with the rapid transformation brought about by exposure to the global economy, which has created governance gaps.

Suppliers and workers at the bottom of the chain often receive an extremely small share of the retail price.

By way of example, the estimated labour costs for one conventional T-shirt from Asia is around 20 euro cents, regardless of the retail price. That’s around 30 Australian cents.

For each box of tea sold in the United Kingdom for £1.60, a tea picker is expected to make just £0.01.

The growth of international outsourcing via global supply chains has raised significant employment implications.

Whereas wholly owned subsidiaries of major corporations have direct responsibility for employees, in global supply chains coordinated by a lead firm, where production is outsourced and subcontracted without ownership, the buyer is not the legal employer and has no formal responsibility for the employment relationship in the supplying company or further subcontracted firms, despite the lead firm’s significant impact – positive or negative – on the conditions of work.

This presents challenges for the promotion of decent work in global supply chains.

You only have to look at on company that is in the news right now for all the wrong reasons: Samsung.

Samsung case study

When your products are literally exploding – you have big problems. And Samsung’s current PR disaster has cost them almost $2 billion and counting.

And while the series of events that lead up to this sort of failure are long and complex, it’s clear that there have been very real concerns at Samsung for some time.

Samsung workers have shed light on the working conditions throughout the multinational’s supply chains. The International Trade Union Confederation and IndustriALL global union recently released a report entitled, “Samsung – Modern Tech Medieval Conditions.”

The report says the company has denied justice to the families of former employees who died from cancers caused by unsafe workplaces, dodged tax and engaged in price-fixing cartels.

It concludes: “Samsung’s corporate culture is ruthlessly geared towards maximising profit to the detriment of the everyday lives of its workers.”

The ITUC is petitioning Samsung to end worker abuse and abolish its no-union policy.

Currently, contractors in Samsung’s supply chain who join a union face a “contract guillotine.” The company uses its power and leverage to intervene with its suppliers.

From the top of its supply chain down, Samsung prohibits the formation of unions by threatening to cancel contracts wherever workers organise.

And this is important – because unions and business ultimately have the same interests at heart and should be working more closely together.

Samsung SDI, the company that made the fire-prone batteries in the Samsung Galaxy Note 7, cut their workforce by 35% and have suppressed union organising for more than ten years.  Like other Samsung companies, workers are afraid to point out problems on the production line.

Now the risk that consumers face with using Samsung products is the same risk their workers have faced making them.

If only the company had been open to listening to their workers – they may have saved $2 billion.

Women’s experience in the workplace

All of these pressures felt by workers around the globe are often worse – far worse – for women, and sadly girls.

Not only must they contend with low wages, exploitive conditions and life threatening work environments – they also face the added threat of domestic, workplace and sexual violence.

Traditionally men have held the majority of management and decision-making positions, while women have been over represented in low-paid jobs with little or no organized representation.

In this way, gender is deeply intertwined with power relations in the world of work, with the traditional balance of power favouring men.

The arrival of a woman in a traditionally male-dominated workplace can upset existing power relations, and may lead men to respond aggressively, reasserting not only their position of power but also their masculine identity.

Some men reassert this power through sexual harassment, which affects not only women, but also men who do not conform to the predominant, masculine stereotypes.  It can, thus, create a more violent environment for everyone.

Available evidence suggests that harassment, of both men and women, most often occurs in male-dominated work settings.

Sometimes, men not only punish women for entering traditionally-male workplaces but also for leaving traditionally-female work, especially unpaid household and care work at home.

One study from Nigeria observes that women who work outside the home – and, therefore, cannot carry out  household responsibilities to the level expected by their male partners – are more at risk for intimate partner violence.

These findings are similar to those of a study in India that suggests domestic violence is on the rise, because men view increased labour force participation of women as breaking traditional gender norms.

These problems can be magnified in cultures where women face more structural inequality – and often this correlates with the countries where labour rights and the risk of exploitation are higher across the board.

But even women in countries like Australia face discrimination that we are yet to fully eradicate.

Geneva/ DV as a workplace issue

Recent trip to ILO in Switzerland – for the first time we have recognition at the global level for domestic violence as a workplace issue.

Intimate partner violence, or domestic or family violence often spills over into the workplace, negatively impacting workers’ lives and enterprises’ productivity.

In the past, violence between partners or spouses was not thought to be of concern for the world of work.  Now, however, experts note that domestic violence can no longer be considered by businesses as a ‘secret’ issue with little or no effect on the workplace.

This is why we are calling for Domestic Violence Leave to be available for all Australian workers.

Again, we face opposition from business groups who should learn from Samsung’s experiences and work more closely with unions – because the impact of domestic violence measured at the level of national economies is substantial.

Domestic violence has been estimated to cost the United Kingdom approximately 16 billion British pounds in economic output, services and human and emotional costs while the annual cost to our economy during 2002-2003 was $8.1 billion Australian dollars.

Conclusion

While the picture for workers can seem bleak – the good news is strong unions can lift workers up – this will have an immeasurable impact on global inequality

But it means we need real actions from countries like Australia.

We can no longer turn a blind eye to the impact our labour laws and business behaviour is having on workers here and overseas.

Just as we are leading the way in DV – we must also show leadership on worker’s human rights – which is why conversations like we are having here this weekend are so vital.

Thank you.