Global Unions Critique the World Bank’s flagship report at the Annual Meeting

17 October 2018
The World Bank’s World Development Report 2019:The Changing Nature of Work, has attracted significant criticism from trade unions and civil society since a draft was circulated earlier this year. PSI and BWI responded to the draft report and the work of the bank and its lending arm in a panel organised by PSI, BWI, UNI and ITUC, at the World Bank Civil Society Policy Forum.

The day before the World Bank's report was officially launched, PSI, BWI, UNI and ITUC, organised at panel at the World Bank Civil Society Policy Forum during the annual meetings in Bali. PSI’s Asia Pacific Regional Secretary, Kate Lappin, and BWI’s Asia-Pacific Regional Campaigns Officer responded to the draft report and the work of the bank and its lending arm.

Earlier versions of the report called for the abolition of minimum wages, employer contributions to social protection and even further labour market deregulation. Since then the report has undergone several edits that have refined the attacks on labour rights.

The earlier version argued that:

"High minimum wages, undue restrictions on hiring and firing, strict contract forms, all make workers more expensive vis-à-vis technology.” and “Burdensome regulations also make it more expensive for firms to rearrange their workforce to accommodate changing technologies.”

And was edited to :

Changes in the nature of work caused by technology shift the pattern of demanding workers’ benefits from employers to directly demanding welfare benefits from the state. These changes raise questions about the ongoing relevance of current labor laws.”

And

“Enhanced social assistance and insurance systems would reduce the burden of risk management on labor regulation. As people become better protected through such systems, labor regulation could, where appropriate, be made more balanced to facilitate movement between jobs.”

During the workshop a World Bank official doubled down on the argument that governments should no longer be required to deliver Decent Work, suggesting that the term Decent Work is ‘moralistic’ and that the Decent Work agenda is unrealistic. He argued that the report focuses on the needs of the most vulnerable, such as women in the informal sector, platform workers, self-employed and other informal workers where the Decent Work agenda is not relevant. Decent work does make one fleeting appearance in the final version of the report; however, this is tempered with the insight that most jobs now fall outside of this framework.

What this perspective seems to miss is that trade unions represent workers in both the formal and informal sector, and have often served as an engine to shift people into the formal sector to enhance and expand their rights. While social protection is critical for all workers, it must be seen as complementary to workers’ rights to freedom of association and collective bargaining, not a replacement. References to collective bargaining itself are buried in page 118 of the report, and rather than championing this as a mechanism for formalising employment and winning real improvements in workers’ wages and conditions, it is framed as a relic of a bygone era.

During the panel Kate Lappin said

“the Bank is effectively suggesting that the Amazon business model, a model that depends on government welfare to compensate for poverty wages, is both inevitable and desirable. IFIs should instead focus on strengthening labour market institutions, promoting collective bargaining, raising real wages to recover lost labour share of national income and supporting governments to collect revenue to deliver quality public services.”

The bank has failed to recognise that the history of trade unionism reflects a history of struggles of workers who started off without effective labour rights and collectively won them. The report cites the case of unpaid Community Health Workers and suggests that they could be provided security through state social protection. PSI responded that Community Health Workers who are unionised in Pakistan have proven that collective action can shift them to formal work, receiving a guaranteed minimum wage and increased protections awarded to formal workers.  

BWI’s Ed Millar pointed out that the Decent Work Agenda is international law. The casual disregard for international standards displayed by the World Bank is shocking, he argued. Imagine if an institution argued for the abolition of the human rights framework for half the world because it was too hard or unrealistic - they would be rightfully shamed. Yet the World Bank is comfortable discarding labour rights that form an essential component of human rights obligations.

Women’s rights groups also reacted to the report and erosion of labour rights. The model proposed would cement precariousness and an environment where women are perpetually subjected to exploitation and will institutionalise the gender pay gap and sexual division of labour. Job security and union protection is an essential element not just of a Decent Wage but in stopping workplace sexual exploitation and harassment. The idea that women precarious workers should be happy with ‘good jobs’ and welfare dependency is deeply paternalistic, said a member of the Asia Pacific Forum on Women, Law and Development (APWLD).

Following the release of the report the International Labour Organisation (ILO) released a statement expressing their concern about the

“WDR’s approach to labour market institutions, regulations, the informal economy and social protection, and its lack of consideration of the gender dynamics of the changing nature of work”.

Following the panel, unions, women’s groups and civil society resolved to write to the World Bank and register their opposition to the report and the agenda it represents.

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