The Crisis of World Labor

Marcel van der Linden

BOTH THE SIZE and composition of the world working class have changed dramatically over the past four decades. But these massive shifts are not reflected in the strength of workers’ organizations.

In what was traditionally called the global South, capital accumulation has resulted in the fast growth of the number of wage-earners in industry, building, services, and transport. A recent International Labor Organization (ILO) study revealed that in the period 1980-2005, the labor force in the Middle East and North Africa region had grown by 149%. In Sub-Saharan Africa, Latin America and the Caribbean it had roughly doubled, in South Asia it had increased by 73%, and in East and South East Asia by 60%. (Kapsos 2007)

Simultaneously, enormous shifts are taking place within separate regions. An historic migration from the countryside to swelling megacities is under way. In 2000, the Chinese Ministry of Human Resources and Social Security estimated that there were 113 million migrant workers in the country. Ten years later that number had more than doubled to 240 million, including 150 million working outside their home areas. Of those 150 million about 72% were employed in manufacturing, construction, food and beverage, wholesale and retail industries, and hospitality. (CLB 2012: 4)

In India, internal labor migration has exploded since the 1990s, the temporary and seasonal migration rate being highest in poor regions like Nagaland and Madya Pradesh. (Bhagat/Mohanty 2009)

Such shifts are often accompanied by an intensification of social struggles. In Indonesia, the Konfederasi Serikat Pekerja Indonesia (Indonesian Trade Union Confederation) organized a national strike on 3 October 2012, and a second one — demanding a 50% increase of the minimum wage — on October 31 and November 1, 2013. These were not truly general strikes, but they nevertheless were joined by many hundreds of thousands of workers, especially in the Jakarta region. (International Viewpoint, 4 November 2013)

In India, on 20 and 21 February 2013, over 100 million workers across the country struck for a list of demands including a living wage indexed to inflation, universal food security, and equal pay for equal work. (International Viewpoint, 2 March 2013) In China, the labor shortages that began to emerge from 2004, led to a rapid growth of workers’ protests, which have “not only increased in number but have shifted focus from a reactive response to labour rights violations towards more proactive demands for higher wages and improved working conditions.” (CLB 2012: 5)

The Chinese Academy of Social Sciences reported that there were more than 60,000 so-called ‘mass incidents’ (popular protests) in 2006 and over 80,000 in 2007. Since then, official figures have no longer been published but experts believe that in recent years the number has further increased. (CLB 2012: 9)

Following the beginning of the economic crisis more than thirty national strikes occurred in Greece, while Spain and Portugal saw several general strikes, including bi- and multi-national ones. The dramatic overthrow of the Mubarak dictatorship in Egypt in 2011 could not have happened without the labor movement’s strong support.(Beinin 2011) And in South Africa massive and often violent strikes follow one another rapidly.

There is, however, a fundamental problem. The militancy of the workers has not yet been consolidated in strong organizations. In fact, “old-style” labor is in decline, and fundamental changes will be necessary before a vibrant transnational union movement can be built.

The State of the Unions

The surest sign of organized working-class formation is the development of trade unions and similar interest groups. Independent mass trade unions had their origin in the 19th century, and exist today in large parts of the world — although there are also major regions where they have almost no influence.

The most striking example of a fast-growing capitalist economy without independent trade unions is the People’s Republic of China. It hosts the world’s largest workers’ organization, the All-China Federation of Trade Unions (ACFTU) with 230 million members. This is not an independent union, but rather a transmission belt for the Chinese Communist Party. Most of the numerous labour conflicts in the People’s Republic take place not with the support of, but despite the ACFTU. (Bai 2012)

The China Labour Bulletin calls the ACFTU “something of a lost cause at present. In general, it lacks the tools and the strategies needed for a timely and effective response to workers’ initiatives and is out of touch with the realities of labour relations in China today.” (CLB 2014: 38)

In countries with independent workers’ organizations union density (union members as percentage of the total labor force) generally has been declining. Table 1 reconstructs the trends in 13 countries for the period 1920-2010. In 11 cases the high point lies in the past (between 1950 and 1990), although the situation is relatively stable in Canada and Norway. In nine cases we can observe a clear downward trend.

The table might give the impression that the situation is more promising in India or Indonesia. But remembering that union density is calculated for the formal economy, which in the case of India for example covers about 8% of the labor force, a union density of 41% thus boils down to 3.2% of the total work force.

On a global scale union density is almost insignificant. Independent trade unions organize only a small percentage of their target group worldwide, and the majority of them live in the relatively wealthy North Atlantic region.

By far the most important global umbrella organization is the International Trade Union Confederation (ITUC), founded in 2006 as a merger of two older organizations, the secular reform-oriented International Confederation of Free Trade Unions (ICFTU) and the Christian World Confederation of Labor (WCL).

In 2014 the ITUC estimated that about 200 million workers worldwide belong to trade unions, and that 176 million of these are organized in the ITUC,(1) while the total number of workers is roughly 2.9 billion (1.2 billion of them in the informal economy). Therefore, global union density currently amounts to no more than 7%! (ITUC 2014: 8)

Quite a few factors contribute to this weakness. First, the composition of the working class is changing. Unions find it difficult to organize employees in the service or financial sector. The rapidly growing informal economy is complicating things further, since workers change jobs frequently, and have to earn their income under often very precarious conditions.

Another important factor is what labor economist Richard Freeman has called the “labor supply shock” that has manifested itself since the early 1990s. Through the entry of Chinese, Indian, Russian and other workers into the global economy, there has been an effective doubling of the number of workers producing for international markets over the past two decades.

A decline in the global capital/labor ratio shifts the balance of power in markets away from wages paid to workers and toward capital, as more workers compete for working with that capital. […] Even considering the high savings rate in the new entrants — the World Bank estimates that China has a savings rate of 40% of GDP — it will take 30 or so years for the world to re-attain the capital/labor ratio among the countries that had previously made up the global economy. Having twice as many workers and nearly the same amount of capital places great pressure on labor markets throughout the world. This pressure will affect workers in the developing countries who had traditionally participated in the global economy, as well as workers in advanced countries. (Freeman 2010)

Secondly, significant economic shifts have taken place. The growth of foreign direct investment in the core countries and the semi-periphery of the world economy has been impressive, and transnational corporations and multi-state trading blocs (EU, NAFTA, Mercosur, etc.) have multiplied. Brazil, India and especially China are important new players who change the rules of the game. This is accompanied by new supranational institutions, such as the World Trade Organization, established in 1995.

Thirdly, the old-style unions have to face more and more competition from alternative structures. In Brazil, South Africa, the Philippines or South Korea new, often militant, workers’ movements (social movement unions) have emerged. (Scipes 2014) New forms of rank-and-file trade unionism outside the established channels appeared since the 1970s, with international connections at the shop-floor level “bypassing altogether the secretariats, which they see as too often beholden to the bureaucracies of their various national affiliates.” (Herod 1997: 184)

A well-known example is the Transnational Information Exchange (TIE), a center in which a substantial number of research and activist labor groups exchange information on TNCs. Another example is the “counter foreign policy” existing since the early 1980s in the AFL-CIO. (Spalding 1992) I should also mention the increasing number of activities carried out by non-governmental organizations (NGOs) that should in theory be the responsibility of the international trade union movement, such as the struggle to regulate and abolish child labor.

The ineffectiveness of old-style unions is underlined by the growing tendency on the part of Global Unions (formerly called international trade secretariats) to engage in the direct recruitment of members in the periphery. Think, for example, of the activities of the Union Network International (the Global Union for the service sector) relating to IT specialists in India. (Süddeutsche Zeitung, 8-9 September 2001)

The Fate of Workers’ Parties

Another expression of class formation is political in nature. Labor, Social Democratic, and Communist parties are generally considered to be political representatives of the working class.

The oldest parties, the Social Democratic and Labor parties, electorally are not doing very well. Most reached their apex between 1940 and 1989; Switzerland was earlier (1930s), while Portugal was later (early 21st century). The only exception (until recently) is the Brazilian Partido dos Trabalhadores.(2)

More important is though, that this family of parties is struggling with a fundamental identity problem. Social Democratic and Labor policies have since the 1930s-40s been based on two pillars: social Keynesianism and a specific “red” party subculture with its own sports associations, women’s clubs, organizations for nature lovers, consumer cooperatives, newspapers, theatre groups, and the like.

The sociocultural and economic reversal since the 1960s-70s toppled both “pillars.” The parties’ subcultural networks fell to pieces and social Keynesianism became less feasible. A great many challenges had to be met more or less simultaneously. Traditional centralism had to be reconciled with basic democratic movements and feminism with the conventional androcentric culture.

Moreover, the environmental movement needed to be taken seriously without abandoning the pursuit of economic growth (the condition for social redistribution in a capitalist context). Generalized confusion resulted in a tremendous increase of floating voters; ageing and decreasing membership numbers; and the virtual disappearance of active proletarian members.

Paradoxically, this loss of identity explains the explosive growth of the umbrella organization, the Socialist International. Since the 1970s the number of countries with SI members has more than doubled. This is especially remarkable since the membership of the SI was rather stable during the preceding decades. In the years 1951-1976 the number of affiliated parties had always fluctuated between 34 (at the foundation in Frankfurt) and 39. (van der Linden 2006)

Most of the parties which joined the SI after 1976 did not fit the organization´s old profile. Before the mid-1970s nobody would have considered ex-guerilla movements like the Popular Movement for the Liberation of Angola (MPLA), the Sandinista National Liberation Front (FSLN), or the autocratic Democratic Action in Venezuela as Social Democratic parties. Such organisations could find a home within the SI because its profile was fading.

This dilution became official when the SI adopted a new “Declaration of Principles” at the 18th Congress in Stockholm in 1989, which acknowledges the existence of “differences” in members´ “cultures and ideologies” but emphasizes at the same time that the SI´s core values (peace, freedom, justice and solidarity) “originate in the labour movement, popular liberation movements, cultural traditions of mutual assistance, and communal solidarity in many parts of the world.” (www.socialistinternational.org/4Principles)

In short, the Socialist International could grow so dramatically only because the classical Social Democratic parties were in a deep identity crisis.

Communist parties are the second major political form. The large majority of them were born or grew significantly in three waves: during the five years from mid-1918 to 1923, in the aftermath of the October Revolution; in the 1930s, as a response to the economic depression; and immediately after the Second World War.

Some parties still have a rather solid, be it often small, base, such as the ones in Portugal, Spain, and Greece. These parties all developed under right-wing dictatorships and are characterized by their intransigence . Similarly, the influential South African Communist Party still has a significant influence on the politics of the African National Congress.

But for most parties the high point was in the 1940s. Now, in quite a few countries the parties have been dissolved after electoral decline, splits or financial bankruptcy. This has for example been the case in Britain (dissolved 1991), Italy (disbanded 1991), Finland (bankrupt 1992), Brazil (internal coup and split, 1992). Other parties have gone through mergers, e.g. in Mexico (founding of the Unified Socialist Party, 1981), Denmark (formation of the Red-Green Alliance in 1989) and in the Netherlands (founding of the Green Left Party in 1989).

Even the CPI-M (the Communist Party of India Marxist) in West-Bengal, which got a majority of the votes in a whole series of elections (1971, 1980, 1989-2004) has now been reduced to a minor player (two out of 42 seats!) because of its violent neoliberal policies.

Causes of Trade Unionism’s Weakness

My hypothesis is that both old-style trade-unionism and old-style workers’ parties as described above can no longer cope with the challenges offered by the contemporary world. Globalization and neoliberal challenges require new policies and practices that they apparently cannot offer. Hence their crisis. Here, I will only try to substantiate this critique for the unions, not for the parties (this I’ve partly done in van der Linden 2003: 95-116).(3)

I see at least two major difficulties. For a start, the historical trajectory of trade unions is, like that of other organizations, to a significant extent shaped by their founding moment. As Arthur Stinchcombe observed half a century ago:

“The organizational inventions that can be made at a particular time in history depend on the social technology available at the time. Organizations which have purposes that can be efficiently reached with the socially possible organizational forms tend to be founded during the period in which they become possible. Then, both because they can function effectively with these organizational forms, and because these forms tend to become institutionalized, the basic structure of the organization tends to remain relatively stable.” (Stinchcombe 1965: 153; also Scoville 1973: 74)

Early trade unions in Europe and North America were mostly the creations of highly skilled male white workers, who had only one boss at the same time, were relatively powerful on the shop floor, and attempted to establish collective bargaining. This proved to be an exceptionally successful model that later on also inspired other sections of the working classes (women, Blacks, low-skilled).

It became the norm for trade unions across the globe. But the specific historic context in which this model had been constructed was forgotten, so that “a naïve belief in the universal applicability of some form of collective bargaining’”(Sturmthal 1973: 5) became more or less universal. Adolf Sturmthal (1973: 9) listed a series of conditions for “a genuine collective bargaining system,” including “a legal and political system permitting the existence and functioning of reasonably free labor organizations” and the requirement that “unions be more or less stable, reasonably well organized, and fairly evenly matched with the employers in bargaining strength.” However:

“Effective unions have rarely if ever been organized by ‘non-committed’ workers, i.e. casual workers who change jobs frequently, return periodically to their native village, and have no specific industrial skill, even of a very simple kind. Yet even fully committed industrial workers with little or no skill are capable of engaging in effective collective bargaining only under certain conditions which are rarely found. In most (though by no means all) newly industrializing countries, large excess supplies of common labor are available for nonagricultural work. Not only are unskilled workers rarely capable of forming unions of their own under such conditions; if they succeed in doing so, their unions have little or no bargaining power.” (Sturmthal 1973: 10)

This is probably the crux of the matter. In the advanced capitalist countries, standard employment relations that had become dominant in the 1940s-70s are gradually broken down, while casual and informal labor was always the norm in Africa, Asia and Latin America. (van der Linden 2014; Breman/van der Linden 2014)

Another difficulty is that old-style trade unions, having also become more or less ingrained with the nation-states where they originated, find it very difficult to cope with the transnationalization of capital. Globalization has stimulated new forms of cross-border organizing that challenge traditional organizational models.

Already in the mid-1960s the growing influence of TNCs stimulated the setting up of World Corporation Councils, notably in the chemical and automobile industries. Although many trade union militants had high expectations of these new bodies, their effectiveness has been rather less than anticipated, owing to the conflicting interests of employees in different countries. (Tudyka 1986; Bendiner 1987; Olle/Schoeller 1987)

The formation of trading blocs implied a certain equalization of legal and political parameters, so that the building of transnational trade union structures within each bloc was an obvious step. This collaboration is usually not evolving primarily at the top level of national trade-union confederations, but at the sub-national or branch level. In many cases, institutions other than trade unions (such as religious and human rights organizations) are also partners in projects of this kind. Examples include the 1980s Coalition for Justice in the Maquiladores, the Comité Frontizero de Obreras, and La Mujer Obrera. (Armbruster 1995: 80-2; Borgers 1996: 81-5; Carr 1999)

Equally worthy of note in this context is the Council of Ford Workers, founded by the United Auto Workers (Bina/Davis 1993: 165-6). Joint actions against TNCs by trade unions representing particular occupations in different countries (e.g. coal miners, electrical workers) have become much more frequent over the past two decades as well. (Herod 1995: 342; Armbruster 1995)

When the French car-maker Renault announced the closure of its Belgian factory in February 1997, solidarity strikes and demonstrations were organized in France, Spain, Portugal and Slovenia, giving birth to the new term “Euro-strike.” (Imig/Tarrow 2001) While trade unions support such actions, they frequently do not play a leading role in them.

According to Stinchcombe (1965: 154), “an examination of the history of almost any type of organization shows that there are great spurts of foundation of organizations of the type, followed by periods of relatively slower growth, perhaps to be followed by new spurts, generally of a fundamentally different kind of organization in the same field.” It might well be, that the great spurt of old-style unions has by now almost exhausted itself and that a next spurt with a new type of unionism is “in the air.”(4)

Prospects for Revitalized Transnational Unionism

What are the challenges that a renewed trade unionism will have to face? First, it will have to develop a clear vision of where to go. Revitalization requires convincing policy proposals expressing solidarity between different segments of the working class within and between countries and continents.

Second, there is the changing composition of the world working class. Until now workers’ organizations of OECD countries have dominated the International Trade Union Confederation. But their share in the world labor force is shrinking. More and more wage-earners live in Asia, Africa, and Latin America. And an increasing proportion of these workers is female (Table 2).

More than 40% of the world working class (1.2 of 2.9 billion employees) is active in the informal economy, and they have virtually no presence in the old-style union movements.

New forms of trade unionism will have to target this changing working class. The first-phase demarcation of the working classes was extremely narrow and eurocentric, and needs to be revised and expanded. (Antunes 2013: 80-95) There can be no doubt that the newly defined target group should no longer be dominated by white male workers in the North Atlantic region, but by women and people of color, many in forms of hidden wage-labor, precarious jobs, or debt bondage. Trade unions in the periphery and semi-periphery are sometimes abandoning the old demarcations, and have begun to recruit all kinds of “non-traditional” workers.

A broadened definition of the target group will necessarily lead to a drastic change of unions’ operational systems, in order to assist these workers to further their interests effectively. This also implies ending the strong emphasis on collective bargaining strategies.(Hensman 2001) It’s quite possible that mutualist arrangements should be given priority in many cases, that is organizational forms focusing on mutual insurance against sickness, disability, and unemployment that were so prominent in 18th- and 19th-century European and North American labor movements. (van der Linden 2008: 109-31)

Much can probably be learned from the “occupational unionism” that preceded the industrial unionism of the 20th century. (Cobble/Vosko 2000) Jeffrey Harrod sees “the beginnings of collective organisations aimed at materially improving conditions but not based directly on work and production factors.” He mentions, for example, “extra-economic” networks of unemployed Japanese youths whose social activity is centered on internet cafes; and Indian groups of casual workers pressuring the state for greater protection. (Harrod 2014: 13-14)

Some old-style unions already try to open up to such developments, albeit hesitantly. In Italy, the trade-union confederations CGIL and CISL have created special structures for the representation of “atypical” workers; and the Austrian employees’ union GPA now also enrolls “dependent self-employed workers.” (Cella 2012: 180)

A final necessary change concerns organizational structures and cultures. First, the dual structure of the international trade union movement — collaboration of national confederations plus Global Unions — is a problematic relic of the past and likely to be discarded. Probably the best option would be a new unitary structure facilitating the inclusion of the “new” target groups in the international trade secretariats.

Second, the somewhat autocratic approach prevailing in the present-day international trade union movement will need to be replaced by a democratic approach, and greater participation of the rank-and-file workers. The possibilities offered by the internet are a positive contribution to a renewed structure of this kind. (Lee 1997)

Third and most importantly, new methods of collective action, especially across borders, have to be deployed. While lobbying governments and transnational organizations has to date been the principal activity of the international trade union movement (with the notable exception of the anti-apartheid campaign of the 1980s), and efforts are made to cultivate the good will of states (Greenfield 1989), effective action requires much greater effort in active measures such as boycotts, strikes, and so on, which in turn demands a substantial strengthening of the internal structures.

As Dimitris Stevis (1998: 66) has rightly observed, international labor organizations are “not simply sleeping giants, but fundamentally weak intersocietal federations.”

The question is whether the existing international trade union movement can meet these challenges. It is likely that a new spurt in union development will be a difficult process, interspersed with failed experiments and moments of deep crisis. Organizational structures and patterns of behavior that have existed for over a century are not easily changed.

Moreover, it is highly unlikely that new structures and patterns will be shaped through reforms from above, through the central leadership. If there is one thing that history has taught us, it is that trade union structures almost never develop smoothly by means of piecemeal engineering. They are generally the outcome of conflicts and risky experiments.

Pressure from below through competitive networks, alternative action models, etc. will be a highly important factor in deciding that outcome. What forms those pressures will take, and whether they will be sufficient to bring about major changes, no one can say yet with any certainty.

Notes

1. This calculation is probably misleading. A significant, but unknown, part of the union membership consists of pensioners.
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2. The PT’s success could be a statistical artifact. Between 2000 and 2009 there have been two elections for the Brazilian Chamber of Deputies. In 2002 the PT achieved its highest result ever (18.4%), but the average for the decennium was lowered by the bad result of 2006 (15.0%). While PT won 16.9% of the vote in 2010, in the 2014 election their vote for the Chamber of Deputies fell to 14.0%.
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3. The chances that successful new workers’ parties will be established soon seem rather slim. Eric Hobsbawm once famously pointed out, that workers’ parties with a mass following emerged mainly in one specific historical period, namely between the 1880s and the 1930s. “These parties, or their lineal successors, are still in being and often influential, but where they did not already exist, or the influence of socialists/communists was significant in labor movements before World War II, hardly any such parties have emerged out of the working classes since then, notably in the so-called `Third World.’” (Hobsbawm 1984: 60) The most important exception to this rule was the founding of the Workers’ Party in Brazil in 1980, which gained a significant following. It is not possible to exclude the possibility that the Brazilian experience will be repeated in other places, but at the moment there are no grounds for assuming that this will happen. For now it seems that trade unions will have to rely entirely on their own strength.
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4. Perhaps we could consider this whole process as an example of “the handicap of a headstart” or of uneven and combined development. See van der Linden 2007.
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