Unions fight back for secure jobs

Interviews / Valeska Solis, Anita Gardner and Aisha Bahadur

Translation / Chris Whitehouse

Text/Editing / Carla Coletti and Anita Gardner

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What began as a crisis of financial markets in 2007 and 2008 rapidly became a global jobs crisis, causing hardship to many working women and men, families and communities. While the global economy is showing signs of recovery, unemployment is still a major problem for many workers and their unions. Globally at the end of 2009, the International Labour Organization (ILO) estimates that unemployment was at 6.6 per cent, which is an estimated 210 million people, 34 million more people than the year before. The ILO projects that in 2010 the global unemployment rate will be 6.5 per cent.

Since the beginning of the financial crisis trade unions internationally have denounced its negative impact on employment. Precarious jobs were the first to disappear, soon after good jobs were dramatically cut to be replaced by precarious and less protected ones. Governments and international institutions recognized the trade unions' legitimate demand for exit strategies focused on job creation, but only as long as they needed the support of workers for costly recovery plans that benefit the financial sector and bigger companies.

Many trade unions put in place strategies to protect working families from the devastating combined effect of social cuts, rising unemployment, higher food prices and increasing job insecurity. Collective bargaining has been in most cases the fundamental tool, although the negotiating power of organized labour, already weakened through sustained membership decline, has been further diminished by the job losses in this crisis.

This report examines how the crisis unfolded in three economically different countries, Uruguay, United Kingdom and South Africa, and how three unions affiliated to the IMF are defending the rights of workers in the metal sectors as they attempt to respond to government policies, to business attacks on wages and rights, and to increases in unemployment.

URUGUAY

Uruguay, a small country with a population of approximately 3.4 million, was ruled by a dictatorship in the 1970s, but returned to a democratic form of government in the 1980s. The country endured a major economic, political and social crisis in 2002 when real wages fell steeply and the unemployment rate reached 17 per cent. With the election of President Tabaré Vásquez the Frente Amplio government in 2004, the situation in Uruguay began to change as progressive and robust social and education policies were introduced.

Uruguay was not overly affected by the international crisis. Uruguay is a producer of raw materials, mostly food, and the effect of the crisis on these products was to increase their price and, with an increase in international demand, this has benefited the country. At the same time, Vásquez's government intensified its focus on the internal market and adopted employment policies with increased wages and consequently increased domestic consumption.

Uruguay's response to the crisis was the opposite of what neoliberal orthodoxy proclaims. Precisely by amplifying its social and employment policies in order to increase consumption and social protection it made itself less vulnerable to the international crisis. This was in stark contrast to the traditional recipe recommended by international financial institutions, such as the International Monetary Fund and the World Bank, that called for lower labour costs in response to the crisis.

The increase in export prices and demand during the crisis raised tax revenues and enabled the government to pay for its expansionary social policies. However, as Álvaro Padrón, of the Friedrich Ebert Stiftung office in Uruguay, argues a conservative government would also have had economic success due to the increased revenue from exports, but would have introduced restrictive domestic economic policies. "We have seen this before. Uruguay grew a lot in the 1990s, but employment policies were negative," explains Padrón.

Instead, Vásquez's government increased pay in the public and private sectors by more than 20 per cent and adopted employment policies that reduced the unemployment rate to five per cent, the lowest in the last 80 years. The government attracted foreign investment by highlighting the skilled nature of the country's workforce rather than low labour costs, introduced policies against informal work and outsourcing, and promoted collective bargaining. Significantly, the government's policies have also encouraged unionization such that in the last five years the number of union members has increased by 300 per cent and at 38 per cent density has reached the highest rate in Latin America.

Today, Uruguay has a growing, autonomous, independent trade union movement, with a single trade union central. Padrón believes that even with a progressive government strong pressure from the trade union movement was essential. "This government is committed to making progress on issues of interest to the unions. However, nothing would be done if the unions stopped fighting. Remember that the employers also put pressure on the government," says Padrón.

One of the mechanisms by which wages have increased is through collective bargaining. Under the Frente Amplio government, collective bargaining has been extended to all sectors, including domestic work, the police and agriculture. Negotiations take place by economic sector and unions are organized by economic sector, with one union in each sector. The unions have an agenda that goes beyond traditional issues. For example, in the metalworking sector, the union is negotiating with employers and the government about how to attract investment that guarantees increasing the value of production. Their aim is to change the structure of the economy so it is not so dependent on raw materials.

Marcelo Abdala, General Secretary of IMF affiliate the National Metalworkers' Union (UNTMRA), believes the international crisis affected some automotive companies that are highly integrated with the international economy, but that it did not affect other sectors. He argues that collective bargaining, negotiations in sector wage councils and the increased importance of the internal market compensated for deficits in exports produced by the crisis, mitigating the impact of the crisis overall. "For example, the tanning industry, which is linked to the automotive sector, suffered the same consequences as some auto components companies," explains Abdala.

"Our national confederation, PIT-CNT, has given priority to collective bargaining on industrial development issues through the so-called sector production committees, with participation by representatives of capital, labour and the Minister for Industry. These bodies negotiated an extension to social security and unemployment benefit coverage and increased the working class's role in collective bargaining. In this context, and in the wage councils, we have been successful in negotiating agreements," explains Abdala.

In Uruguay the system of wage councils was reintroduced in March 2005 to set wages for each sector of the economy. From 2005 to 2009 these wages councils worked in close coordination with sector negotiations. The system enabled the country's economic recovery in the mid-2000s to also result in a rise in employment and wage increases. This was achieved without affecting fiscal stability and prices. Uruguay's experience contradicts the received wisdom according to which governments' should first, focus on economic growth, second, address job creation and third, think about increasing wages. "In fact, in Uruguay, increased wages and higher employment appear to have made a substantial contribution to maintaining robust economic growth," says Abdala.

Juan Castillo, General Secretary of PIT-CNT, says that even if the impact of the world crisis on Uruguay was limited many companies temporarily closed or laid off workers, meaning workers had to register for unemployment benefits. The most vulnerable sectors were young people, women, workers who do not have the protection of a collective agreement and other workers in the informal sector.

In this context, PIT-CNT formulated a strategy involving discussions, mobilizations and negotiations that in the end were successful. "We pushed for a tripartite approach in the sectors experiencing the greatest difficulties and we put into practice agreements that had already been negotiated with the government on social security benefits, special and transitional employment laws and increased coverage of unemployment benefit," said Castillo.

"Collective bargaining is crucial for us to achieve our objectives. It is an instrument that is useful not only to improve wages in times of prosperity but also, and this is even more important, to mitigate the most negative effects of the crisis and ensure it is not always the workers who have to pay for the crisis," he argued.

UNITED KINGDOM

More than 500,000 people participated in the "March for the Alternatives: Jobs, Growth and Justice" in London on March 26, 2011, a protest rally organized by the Trades Union Congress (TUC). This massive mobilization of union members and working people was in response to the government's plans to introduce severe austerity measures and drastic cuts to public spending in the United Kingdom, announced by the Conservative/Liberal Democratic government since it came to power in May 2010.

The cuts are expected to lead to 500,000 public sector lob losses and between 600,000 to 700,000 job losses in the private sector over the next four years. These job losses will exacerbate already high rates of unemployment in the UK, which rose as a result of the global financial crisis from 5.2 per cent in 2008 to 7.9 per cent in the last quarter of 2010. IMF affiliate Unite actively supported the rally on March 26 and has launched a major campaign called "Don't Break Britain" in an attempt to mobilize union members and working people against the government's plans.

Tony Burke, Assistant General Secretary for manufacturing of Unite, believes the UK government is running an ideological political programme. "They are taking opportunities to tighten the screws on trade unions and they are making changes to employment legislation that will affect working people," he argues, believing that the UK was deeply affected by the crisis due to an over-reliance on the financial sector in the country's economy.

"We have allowed the British economy to be utterly reliant on the financial services sector. And when that began to collapse thousands of people lost jobs, and the economy got completely out of balance," he said. "Labour (the former government), while it did some excellent things, it didn't rebalance the economy and over relied on the financial services industry to drive the economy and create growth and wealth," explained Burke. "It generated wealth, but Labour should have made sure it was not going to bring the economy down," he said.

Even before the crisis hit, Unite was arguing for growth in manufacturing. "What we would like to see in the UK is very much based around a German model, where the German government helps and assists their manufacturing industry," argues Burke, citing the example of Sheffield Forge Masters, which needed a soft loan to assist with the manufacture of key components for nuclear reactors. "The first thing the Conservatives did was to cancel that soft loan to Sheffield Forge Masters, putting a considerable number of jobs in jeopardy," explains Burke, adding, "that wouldn't have happened in Germany or France."

While public sector workers will be in the front line for losing jobs and suffering cuts in pay, all workers in the UK will be hit through the loss of services from transport, to childcare, to health care. Workers in the manufacturing industry will also be directly impacted by the cuts. "We are losing jobs in the aerospace industry because of the cancellation of government defence projects. This is having an effect on our members," reports Burke.

At the height of the crisis, a lot of companies made wholesale changes to working practices. Pay freezes were imposed and people were promised that if they accepted short time working their jobs would be saved. "But the reality was that people were still made redundant," said Burke. "We did reach agreements with some companies to help them over a very difficult period. But the problem is that some employers took advantage of the situation to drive down working conditions," he said.

Unite is continuing to work with companies and government agencies like the Manufacturing Skills Alliance to promote employment in the manufacturing industry particularly through apprenticeships, which is extremely important given the high levels of youth unemployment in the UK. As is the case in many countries, the UK has seen women and young people hit hardest by unemployment in this crisis. In the last quarter of 2010, the total youth unemployment was 965,000, the highest since records began in the UK in 1992. "We are arguing that companies should be looking at taking on apprentices in skilled areas and in the manufacturing sector," said Burke.

Another common global feature of the jobs crisis is the sharp increase in the rising number of people employed precariously or in "atypical" jobs. There were 1,771,000 people in involuntary part-time or temporary work at the end of 2010 in the UK, again the highest number since records began in 1992. Due to weak labour legislation, employers are able to replace people in well paid employment with low paid precarious employment. On this issue, Unite has been at the forefront of arguing for the rapid introduction of the European Union's Agency and Temporary Workers Directive that aims to provide protection for workers employed in this way. "Unfortunately, the Labour government dragged its feet for too long and it prepared legislation that the Tories will introduce which is probably among some of the weakest legislation with regard to temporary workers in Europe," said Burke.

Another impact of the jobs crisis in the UK has been a decline in wages. The most recent TUC Labour Market Report indicates that inflation is running around 5.1 per cent and growth in average weekly earnings is at 2.3 per cent. Some sectors are lower and the only sector where earnings growth comes close to inflation is finance and business (4.4 per cent). Currently the average settlement in manufacturing is between two and 2.5 per cent pay increases.

Of even greater concern is the future of collective bargaining in the UK as in some parts of the manufacturing industry in the UK, where an employers' federation still exists, they no longer want to have national collective bargaining. "This is happening in the print industry where there is a national collective agreement covering over 20,000 people. The employers have said that they no longer want to have national collective bargaining. That means that pay bargaining is now going to take place at local level. Stronger workplaces will be able to deliver pay increases, but in areas where we are not so strong it is going to be very, very difficult," warns Burke.

SOUTH AFRICA

In South Africa, the effect of the global crisis also dealt a significant blow to jobs, with 1.1 million jobs lost between 2008 and 2010. This has placed a huge strain on low income households, with many struggling to meet basic needs. South Africa continues to have one of the most unequal societies and high unemployment at around 25 per cent.

"We lost about 62,000 workers," says Irvin Jim, General Secretary of the National Union of Metalworkers of South Africa (Numsa). "In the rest of the economy we lost one million jobs. In our country where there is no comprehensive social security, where one worker supports five families, the over a million jobs lost in the economy means many families have been plunged into serious social ills of poverty, unemployment and inequalities," he explains.

The 'Framework for South Africa's response to the international economic crisis', agreed on by 'social partners', organized labour, business and government in February 2009, sets out measures to implement interventions under a broad stimulus package with economic and social components. Under the framework IMF affiliate Numsa demanded a moratorium on retrenchments and was successful in supporting companies access to crisis related assistance. The union is also working with the Department for Trade and Industry and the International Trade Administration Commission to investigate import duties in order to protect the local auto, components and equipment industry.

Numsa has been the most successful union in South Africa at gaining access to the training layoff scheme for workers, another initiative under the framework, where workers are directed to training with subsidies for wages for a period, to give companies time to recover and thus prevent retrenchments. Thousands of jobs have been saved through the union's efforts to secure the scheme in workplaces. "We did this in several companies where retrenchments would have taken place and we succeeded to stop retrenchments," explained Jim.

The key to Numsa's success in saving jobs during the crisis has been the development of the union's strategic response to the job loss crisis, with a combined focus on industrial strategy for job creation and retention along with local level training of unionists to respond to the crisis and defend workers. The union has ensured the education, training and development of its shop stewards in order for them to be a strong first line of defence in the fight to save decent jobs in the sector.

Numsa initiated this strategy at its 2009 Jobs Summit and has worked with government and business to ensure measures are in place to defend jobs. Nevertheless, Numsa has called for a shift in macroeconomic policy. "Numsa welcomes the fact that government is now championing a jobs campaign. However we take the view that for the New Growth Path to be able to deliver it would have to be overhauled and unstuck from the "Washington consensus", neoliberal macroeconomic framework embedded in our country," said Jim. "In our country we have an abnormal situation where finance capital has been privileged over industrial capital and Numsa has been making a call for a vibrant industrial strategy that is jobs led," he explained.

"This means shifting the country into a completely new trajectory where South Africa's manufacturing and industrialization will be a priority. This will mean transformation of our minerals-energy complex to ensure beneficiation and diversification so that we can meaningfully reverse the legacy of colonization where our minerals are still only exported as raw material," explained Jim. "The process we are championing will lead to job creation in the country," said Jim.

The union has also successfully used its collective bargaining strength to call for a ban on the use of labour brokers, making significant inroads in this campaign. This tops the union's most worthy achievements during this time, as it is precarious workers, employed by labour brokers with no job security, that have been most affected by the crisis. "For instance, in the auto industry we secured medical aid for workers who are on fixed term contracts. Using our collective bargaining strength through a strike action, we banned labour brokers successfully in the auto sector and tyre sector. The motor sector employers committed to phase out labour brokers over a three year period to 35 per cent in the industry," said Jim.

Not everyone is convinced about the robustness of the South African government's response to the crisis. In October 2010, the ILO stated that while South Africa was one of the first countries to develop a framework response to the economic crisis, it was one of the worst performers in terms of concrete action. "There are critical issues, that government could have moved with speed on making sure that government departments at all levels procured locally. We could have imposed an export tax on minerals so that we encourage investment in our country. The government could have also cut interest rates more quickly. In these contexts ILO might be correct," said Jim.

Numsa understands that they are part of a global struggle. "Everywhere you look in the world you see millions of workers who are out of work, suffering high food, energy and oil prices and the world goes on as if they do not exist. This is the flip side to the capitalist world we live in, in which a small tiny minority are filthy rich!" exclaims Jim. "Slowly the masses are beginning to say enough is enough. They are shedding their fear and confronting their situation," says Jim.

"We saw the student riots in Britain against the ruthless budget cuts of the conservatives and liberals in power there. We saw the riots and strikes in France against similar harsh conditions of the working and poor people. Today we witness the uprising in Tunisia, in Egypt, in Yemen, and sooner than later, perhaps, much closer to home," argues Jim.

"Global capitalism is failing humanity, burning the earth, polluting our rivers and oceans, and risking blowing all of us into thin air. The fundamental question is how do our working class institutions like the International Metalworkers' Federation begin to take up campaigns that must be about building an alternative world. For Numsa such an alternative world is socialism, which is not an end in itself, where instead of advancing greed we should advance humanity," he argues.