19 June, 2009
TNCs seek to shift their risks and costs onto workers, often with institutional and government support. In addition, offshoring, outsourcing and subcontracting have become an integral part of corporate cost-reduction strategies and affect not only production work but also increasingly high-skilled and well-paid jobs in design, research and development activities. Relocation as well as a large part of green-field investment takes place in countries where, in many cases, there is a very low rate of unionisation, no democratic unions or no unions at all.
TNCs have provided employment through direct capital investment, while building complex global supply chains and multi-level networks, which reach out to thousands of contractors and suppliers all over the world. These networks have made it possible for companies to source goods and services anywhere, reorganise production lines quickly, forcing workers to adapt constantly to new performance requirements, or to leave the country at a moment's notice if a cheaper and more compliant workforce is available somewhere else.
TNCs have thus significantly altered the industrial structure within and among countries for their own benefits, including by moving decision-making centres and by transforming the employment relationship on which labour protection systems are largely based. While it is abundantly clear that TNCs have a significant influence over the working conditions of millions of workers across the world, they refuse to recognize their influence and they argue that they are not responsible for the workers along the supply chain.
TNCs have created a global labour market in which workers from the same and/or different countries are continuously put into competition with each other. Moreover, the unrestricted mobility of capital allows it to take advantage of differences in wages, working conditions, and labour legislation. Conflicts of interests are created between groups of workers in different regions, between workers at different worksites, and also within and across countries. Workers are pushed to work faster, cheaper, and for longer hours, which leads to increasing work-related health problems. The TNCs ability to relocate manufacturing and research and development is a threat not only to jobs but also to wages and workers' bargaining power.
To date, trade unions have had limited success in challenging the power of TNCs. The relocation process driven by TNCs is taking a heavy toll on workers and many regions are facing the spectre of de-industrialisation. However, industry is a key component of growth, technological and social development, and balanced trade patterns. It is vital for employment. Government policies are therefore needed to promote equitable and sustainable growth, facilitate the adaptation of traditional industries, and encourage the development of new ones. Unions have a new role to play in this field, linking the social and environmental dimension in their strategy for the benefit of all workers.