Are decent working conditions a luxury only achievable in rich economies? In other words, are their improvement part of economic and social development? Or could they underpin efficiency alongside social justice even in poor countries? In a paper published in the book Systems of Production (Burchell et al 2003), Gerry Rodgers considers these issues.
Rodgers answers the above by suggesting that improving working conditions are or should be part of the development process. Some basic rights should be achievable anywhere, but they should also be able to adjust upwards as an economy becomes richer, or when economic resources allow.
He defines decent work as the availability of employment, certain rights at work, a degree of security and workplace representation which promotes constructive dialogue between management and workers.
The poorest countries tend to be those which have yet to industrialise and remain predominantly agricultural. They also lack sufficiently developed institutions which seem to be part of the development process. I am of course making some big assumptions here: that development means industrialisation, and that it is desirable and achievable for all poor countries. While these basic ideas are controversial for some, it remains the case that if the poorest sincerely desire an improved standard of living, industrialisation is the way to go. Simply stating the case does not mean that it is straightforward, or that it requires the same policies in every country. Given limits to planetary resources and the increasing demands for energy that emerge in the development process, there is a strong case to be made that late industrialising countries should be assisted in forging a ‘greener’ path to rising wealth than has hitherto been the case.
The poorest developing countries, by definition, tend to have the lowest wages and poor working conditions. Those with a large amount of surplus labour in pre-capitalist sectors may also have to go through a certain degree of urbanisation and the development of capitalist production, both on the land and in newly-emerging industries, before average wages start to rise for many of their citizens. If development proceeds successfully and if increasing productivity and wages begin to shift the balance of power in society towards the working classes, the pressure for further increases in wages and improved working conditions can often emerge too. This has been happening in China in recent years, with an increasing prevalence of industrial strikes and demands for such improvements. But is there a place in earlier stages of development for ‘decent work’?
One strand of thought holds that a floor to wages and working conditions not only prevents the excesses of exploitation in the workplace, but will also prevent destructive competition through firms relying on cutting wages and then prices. This process may benefit one or a few firms, but if generalised to the economy as a whole, it can put downward pressure on consumption and growth in aggregate demand, and discourage more creative forms of competition through product and process innovation.
This may apply more to richer countries where many, but by no means all, firms have to compete through innovation. In developing countries, firms and their employees will be learning to use already established technologies as they attempt to ‘catch-up’ with richer ones. However, there may still be a place for decent work at a level which does not unduly undermine the development process as it begins.
UN bodies such as the International Labour Organisation (ILO) have made the case for international labour standards to underpin equitable development globally. In response, developing country governments and many economists have labelled this as a form of rich country protectionism. I would argue that it is a matter of degree, and that if decent work at some basic level can not only promote social justice while maintaining employment and improving efficiency, then global agreements to establish such standards may have a place in developing countries as well as rich ones.
As discussed above, richer countries can clearly afford a higher level of decent work, as Rodgers argues. In periods of recession or slow growth, often accompanied by rising unemployment and a shift in the balance of power away from labour, there can be pressure to undermine labour market regulation. Such pressures might be cyclical, or structural and longer term as they shift with changes in the overall economy. If they succeed, wages might fall with worsening job security and working conditions, but this may not guarantee increased employment if it reduces demand, or efficiency if the latter allows more destructive forms of competition to emerge.
To reiterate, there is at least a debate to be had about the appropriate level and change in social policies which encourage decent work, both in poorer and in richer countries. Such policies could, if carefully implemented, be a win-win in both social and economic terms.