Ecumenical Reflexions on Political Economy. A summary of ten years
of deliberations on issues of development by an informed group of
economists, sociologists, political scientists and theologians. Compiled
by Catherine Mulholland. First published by WCC Publications,
World Council of Churches, 1988. Internet edition by Dr. Robinson Rojas

6. Labour, Employment and Unemployment

Why this issue?

Labour, employment and unemployment are of concern to us as Christians as we believe that production to meet human needs -household, community and national - is important; that the labourer who is the agent of production is worthy of her/his reward; and that employment (or vocation) is an important way of human self-realization and of participation in creation. Therefore the increasing denial of all of these by unemployment and pauperization is a threat to the fullness of life promised in Christ. This concern is integral to the growing importance that churches attach to the world of labour and socio-economic development. It translates into a Christian commitment to full and fully adequate employment and is the basis for the study published by the AGEM on Labour, Employment and Unemployment which stresses the importance of ecumenical solidarity, especially with the under- and un-employed of the developing countries. It is recognized that no one alone can solve the crisis and the AGEM hopes to help Christians understand their commitment and the actions that they can take to help ensure employment for all.

This chapter will look at the reflection of the AGEM on this issue under the following:

1) the nature, structure and trends in employment and unemployment;

2) the problem today;

3) policies and laws and how they can help ensure full employment for all.

Employment and unemployment - nature, structure and trends

What are employment and unemployment and what is their extent? It is impossible to be precise as there is no universally accepted definition and national statistics cannot easily be compared or assessed. An additional factor which escapes statisticians is clandestine employment which is

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growing in industrial countries, and underemployment and employment in the informal sector in developing countries which is equally difficult to measure as it falls outside the normal definitions of "employment".

We must, therefore, look at the issue of employment and unemployment from a different perspective. Rather than drawing conclusions from numbers which by their very nature will be imprecise, we can look at the trends and structures of employment, how these have changed, and the two important characteristics of employment which are adequacy of and access to employment.

The adequacy of employment can be considered from two perspectives - quantitative or material, and qualitative or of intrinsic vocational value. Quantitative adequacy can be defined in terms of whether a household's employment does or does not enable it to afford a socially acceptable material standard of life. Qualitative adequacy includes whether or not the worker can see a value and a source of self-realization and self-respect in the work done and whether that self-respect is shared by others and leads to a status and a basis of participation in the community and civil society, including in the taking of decisions.

The nature of employment has changed substantially over the last twenty years both in quantitative and qualitative adequacy. In the recent past both jobs of above-average adequacy and employment/self-employment of clear quantitative and qualitative inadequacy have risen rapidly. The former is significant in that it suggests that properly managed technological and production changes need not reduce the overall quality of employment. It is, however, the latter phenomenon which is quantitatively larger and of the greatest concern from the perspective of an option for the poor. Employment is less quantitatively available - relative to the number of persons needing it - and often qualitatively poorer today than in 1965. For some this means unemployment, for others part-time or low-paying jobs or less return from farming and other small-scale self-employment. For even more people it means less security.

Access to employment or meaningful self-employment is crucial to human beings:

1) it is the basic route open to achieve survival and self-reliance;

2) achieving household incomes adequate to meet basic consumption needs is for the vast majority of households dependent on access to employment;

3) participation in creation, in making and doing, is in large part via employment: an attempt to separate work from life is a denial of the fullness of either;

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4) self-respect, self-definition and dignity in most societies depend to a large, often dominant extent, on what one does;

5) security and power depend on participation in production, that is on earned income.

But effective access to employment requires more than that jobs or meaningful self-employment opportunities exist and that there are people who wish to take them up. Relevant training and inputs for the self-employed are needed and this is often where the unequal nature of access to employment is revealed. In general access to employment has declined sharply over the past twenty years and has become increasingly unequal with poor and newly vulnerable groups, whose old skills and access have been eroded, most severely affected by the rapid changes in production techniques and technology, industrial decline, natural disasters or international production and trade pattern and price shifts.

Access to employment is uneven along many cleavage lines: North/South, local/migrant, male/female, white/black, organized/unorganized, formal/informal, skilled/unskilled, middle-aged/young-old. Many of the groups who suffer from reduced access to employment such as immigrants, women or minority communities, were welcomed into the labour force when employment demand was high and citizen male workers were in short supply. They are now blamed for unemployment, rising social service costs and levels of unemployment. This blaming of the worst-hit victims by other victims is often encouraged by those employers and politicians whose policies lie at the root of inadequate growth of access to employment and is furthered by such means as tightening immigration legislation and launching drives against social services.

Trends and structures

Globally rates of growth of production have declined fairly generally over the past two decades and almost without exception over 1979-83. At the same time open unemployment, partial employment and materially inadequate employment have risen markedly virtually everywhere except in some of the socialist industrial economies. Recent recoveries are very partial both in degree and extent. Within employment there have been fairly uniform structural shifts away from agricultural and into services. There has also been a shift away from production of goods more generally (e.g. manufacturing, construction), although this is less marked in economies which initially had relatively small industrial sectors.

In capitalist industrial economies, despite existing wealth and modern technology, the largest and most evident aspect of the employment

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problem is massive rise in unemployment. By 1985 it had climbed to about 8 percent in North America and over 10 percent in Western Europe except Scandinavia, the highest absolute levels ever and in many cases the highest relative to employment in fifty years. Furthermore, average national unemployment rates are deceptive. Regional variations in most countries are at least 2 to 1 while unemployment of minority group members and of youth is rarely under twice that of adult white males. In extreme inner-city cases, both North American and British, black youth, unemployment rates exceed 60 percent.

In many respects socialist industrial economies have shown different trends. Their rates of growth of production and employment have declined over the past two decades. However the open unemployment which has become so characteristic of industrial capitalist economies is virtually unknown in most of them, and the semi-formal and low-income employment or disguised unemployment so typical of poor economies is much less severe. The quality of employment is -especially in poorer socialist industrial economies - not fully adequate and the rate of progress towards adequacy has slackened, but the appalling employment trends of the capitalist industrial, the newly industrializing and the very poor economies have been notably absent in these countries.

In the so-called newly industrializing economies and other developing countries with large export sectors, the employment structure differs from industrial economies in several factors. There are fewer formal (recorded, large employer) sector wage-earners and more informal (including peasant) self-employed and employed. There are also weaker and less inclusive security nets and narrower margins above abject misery and absolute poverty, which means that the human costs of the declining adequacy of employment are greater.

It is important to note that two changes in the position of the developing economies in the international sphere have greatly affected employment in these countries, either directly or indirectly. The first is the worsening terms of trade for some primary products since 1975 and for most since the end of the 1970s. The direct effect on employment is uneven while the indirect effect via reduced export earnings, import capacity and government revenue has been uniformly severe as has been the fall in material adequacy of employment/self-employment in the primary export sectors. The second change concerns the external debt which has mortgaged the export earnings, present employment and the future growth of the majority of poor and middle-income economies.

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Global generalizations conceal major regional and national contextual specificities, but one important characteristic of the current employment crisis which crosses all lines is the phenomenon of transnationalization of production and capital. The concentration of production and capital and of control over most adequate - and many less than adequate - jobs has continued to grow. No similar transnationalization has taken place on the side of workers or those in solidarity with them. In sum the forces of capital and those of repression have transnationalized and acted together for their common purposes far more extensively and successfully than those of labour and liberation. The result has been a polarization of employment, in respect to employer patterns and to quality and material rewards and prospects of work, increasing repression, and weakening or destruction of worker self-organization.

Causes

There is little agreement on the precise causes of the post-1969 global recession and unemployment, but the extreme nature of the crisis for workers and employment clearly relates to policy choices which put reducing inflation ahead of protecting jobs, restoring profits and investment before meeting the basic needs of the poor, boosting production before sustaining nutrition, cutting public services before ensuring human health, education and survival. In light of the catastrophic impact on adequacy and access to employment, many have adopted the "blame the victim" approach which says that too high wages or too great laziness or too high social security cause unemployment and it is, therefore, the unemployed and trade unions who are to blame for unemployment. From another perspective it can be said that the workers most affected never had adequate wages and that the highest and most rapidly growing costs have often been salaries and state military spending rather than wages. As for the argument that people are too lazy or receive too many benefit payments, many are in fact too ill fed, too little educated, too sick, or too worn down to work very hard. Of those the International Labour Office says that 30-40 percent of the underemployed or disguised unemployed have no unemployment or other economic security benefits at all.

These myths do not explain the declining adequacy of employment -they are attempts to justify it by blaming and depersonalizing its victims. They are used as ideological instruments to justify demanding sacrifices from the poor and weak (not the rich and powerful), to confuse and demobilize workers and justify repression.

60 Ecumenical Reflections on Political Economy

Policies and legislation

Whether employment becomes more accessible and more adequate or the reverse is historically and contextually conditioned. Nonetheless, just as many of the causes of the current crisis can be attributed to policies, so the resolution to the employment problem is largely subject to policy control. Any serious option for the poor and for people requires making fuller and more adequate employment a priority.

The object of employment policy cannot be to prevent change. To have held the technology, employment levels and conditions and remuneration patterns of 1885 constant in industrial economies would hardly have created fuller or more adequate employment than exists in them today. The poor of poor countries neither want nor need the preservation of the status quo. Change is inevitable; the true questions concern which changes are desirable (and for whom), how they can be managed, what time scales or rates of change are consistent with averting serious harm to vulnerable groups and communities and to people whom rapid, unplanned, uncompensated change will render poor and unemployed.

All policies must take account of historical, geographic, socio-political and other contextual realities such as limitations on material, financial and institutional resources. But within general policy parameters significant choices exist between lines and instruments such as restricting expenditure (and what expenditure) and raising taxes and between seeking to maximize fixed capital formation investment and giving at least equal priority to investment (e.g. education, retraining) in, and employment of, human beings.

This room for policy choice indicates that the employment situation is, to a great degree, the result of national policy decisions and priorities, not of inexorable external forces. It also suggests that the continuation of present dominant national political economic priorities and policies is unlikely to result in substantially fuller or more adequate employment in the foreseeable future.

In conjunction with, or as a result of, policies, laws concerning employment adequacy and access are important in several respects:

1) in setting minimum standards of remuneration, working conditions, tenant-landlord relations, access to land and worker rights to self-organization and economic action;

2) the struggle for legislation in itself is usually consciousness-raising;

3) even inadequate and unenforced laws have a certain value for explaining and justifying action and for mobilizing support for their implementation.

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The following are reviews of some of the main relevant policy sectors and instruments at global, regional, national and enterprise levels as an input into the process of informing concerned individuals about policies relevant to employment so that they can make themselves more active participants in comprehending, discussing and influencing them.

Policy levels and their importance and potential

Global political economic policies and employment

To speak of global political economic policies is primarily to speak of globally coordinated policies. Policy coordination can take place in various different forums such as the OECD and GATT discussions, IMF and World Bank negotiations as well as within international organizations such as the International Labour Organization (ILO).

The international political economic policy level is important for two main reasons:

1) many policies such as economic expansion are possible only if coordinated action towards them is pursued by all or most countries;

2) international organizations are significant sources of ideas and experience, of technical assistance and in some cases of resource transfers.

Overall economic policy coordination - of a relatively loose nature - is carried out by industrial capitalist economies through the Organization for Economic Cooperation and Development (OECD). While not a major initiator, the OECD is important because a single economy cannot succeed in operating an employment-generating, growth-oriented policy. Greater concern over unemployment and greater attention to economic growth in the OECD is, therefore, important for all countries.

The General Agreement on Tariffs and Trade (GATT) and, to a lesser extent, the United Nations Conference on Trade and Development (UNCTAD), are important as this is where international trade policy is coordinated. Trade policy can have important employment consequences as it is often the vehicle for transporting jobs, instituting rapid economic change, and regulating protectionism with both its positive and negative implications.

One area in which international coordination of economic policy has been far-reaching is the economic stabilization programmes of the IMF and the World Bank. The International Monetary Fund's contractionary (of credit, imports, consumption, jobs and real-income levels) approach to stabilization has been largely negative in its consequences for employment. The IMF should not add employment creation to its array of

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conditions for making and continuing credit, but its contribution should be to design programmes with maintenance, recovery and expansion of production as a central goal. The World Bank and the Development Assistance Committee of the OECD, which are in the business of providing help for development, must realize their role in providing concessional finance flows to aid in employment generation in poor countries.

The major international institution for coordinating and to a degree monitoring employment and workers' rights policies is the International Labour Organization. The ILO has a unique tripartite governing body formula with each delegation comprising governmental, organized labour and employer members. Its achievements in the 1970s in concentrating government attention on employment and basic needs through the World Employment Programme and for over half a century in building up a body of legally binding conventions on the rights of labour and of workers organizations are significant.

Regional policies and employment

The AGEM looked briefly at three regions and their regional organizations: the OECD, the European Economic Community (EEC), and Southern Africa, in order to identify the main ways in which regional level organizations of employment policies are important.

Within the OECD the post-1979 emphases on reducing inflation, trade deficits and public borrowing have played a significant role in the prolonged recession, weak recovery and growing unemployment. The OECD strategy of mutual member self-reporting, self-examination and coordination of macro and sectoral economic policy with specific attention to employment and wages could be used to reverse this trend.

The EEC also has programme and policy elements directly and indirectly relating to employment and conditions of employment. Its regional coordinating structures could be strengthened and broadened in order to overcome or transcend national differences of interest and achieve a truly regional approach.

Employment policy coordination in Southern Africa has been focused on two specific issues: migrant labour to South Africa and middle- and high-level human development. The former is centred on the Southern African Labour Conference (SALC), and the latter on the Manpower Commission of the Southern African Development Coordination Conference (SADCC). A good deal of studies, dialoguing and projection making have been done, but much more coordination is needed in such

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policy areas as general employment and remuneration which still vary widely among SADCC member states. While a regional trade union council exists, it is unclear what its operational or transnational solidarity impact is.

Ways of promoting employment at the national policy level

The national policy level is important because this is the level at which economic policies affecting employment both as to level and to adequacy are made and implemented. The policy instruments and considerations at the national level are contextually defined but there are certain commonalities with respect to policy areas which will influence employment.

The policies which have the greatest impact on the fullness and adequacy of employment within the industrial capitalist economies are fiscal and monetary policies because these influence the levels of aggregate demand, of incomes, of investment and of economic growth (or contraction). At present most countries still place too high a priority on reducing inflation and/or budgetary and trade deficits and too little on restoring and expanding employment.

In the newly industrialized, semi-industrialized and poor economies, many of the same policy instruments and considerations apply as set out in relation to the industrial capitalist countries. But there are a series of additional and contextual issues and policy instruments which require special attention:

1) the first cluster of differences includes that the international economic setting - and global institutions such as the IMF - exert tighter constraints on these economies than on industrial economies, and that poor people in these economies have much lower margins above survival and that the economies have much less ability to adapt production and employment patterns rapidly;

2) another crucial characteristic is the economies' disarticulation with different sectors, regions and communities at very different levels of economic development, ability to adapt, self-organization and capacity to compete effectively for resources;

3) labour is plentiful while adequate jobs and self-employment opportunities are scarce; this has implications for priority policy areas and the kind of technology adopted.

The AGEM has identified several areas in which national policy in both industrialized and developing countries can work to put the emphasis on creating fuller and more fully adequate employment especially through increasing the numbers and adequacy of employment opportunities for

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poor people. The areas pinpointed by the AGEM concern sectoral and institutional policies such as technology policy, trade policy, wage and price policy as well as direct employment policies. These policy areas are important in that in some cases they act directly upon employment, while in other cases they complement or influence the employment component of other policy areas.

Technology policy: In the area of technology policy and employment on a global level no real coordinated approach exists. Technology policy at the national level is, therefore, important to control the actions of TNCs, and to ensure that technology and technological changes serve the interests of the poor and vulnerable, rather than deepening and entrenching their poverty and vulnerability.

The key questions in relation to technology and levels and adequacy of employment concern transitional costs (i.e. retraining, and providing interim security for those workers negatively affected) and who controls the technology and for what purpose. Employment-generating, quality-raising and life-enhancing technology with positive effects for poor people is possible and can be made economically attractive. Technology which reduces routinization and monolithic external control of workers is practicable. How much the positive use of technological change increases workers' self-determination depends on the strength and vision of organized labour and on national policies.

Trade policy: Trade policy is important because trade can create employment. But not all trade creates employment and the kind of trade which creates employment is not necessarily free trade at all times. Free trade may have negative effects on employment when it is used as a mechanism for transporting jobs and bidding down real wages, or when it causes too rapid economic changes and sudden protectionism. The issues in trade policy therefore concern selectivity and timing. Trade policy affects the make-up of employment and production and where the employment is and for whom. For this reason some protection may be a good thing at some times but for protection to be used as a shock-absorbing device it needs to be combined with policies which not merely create new jobs, but create jobs accessible to the workers and communities who would otherwise bear the costs of change.

Direct employment policies: At the national level employment policies including job creation, human security (of which training and retraining are integral parts), working conditions, incomes and labour organization are important in that job creation is often cheaper in the medium term than the budgetary costs of unemployment. Policies which directly affect

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employment are numerous and varied and include working week, work-sharing, demographic access, training, mobility enhancement policies, and using public funds for socially needed work. None of them offers simple solutions and many of them divide workers, such as the area of demographic access which often seems to pit the old, who still want or need to work, against the young who are struggling to attain their first full-time employment, and minorities who have been worst hit by lessening access to employment. Training and mobility enhancement policies are important in that they assist people in adapting to change and enhancing both current employment or the possibilities of finding more adequate employment.

Employment policy at the workplace: Perhaps the most important level at which national policy has an impact is at the workplace. A priority for fuller and more fully adequate employment cannot be won solely at this level but unless the struggle for it is waged here it is most unlikely (with the possible exception of some socialist economies) to be won nationally. There are at least three reasons for this:

1) many operational decisions are taken at the workplace level;

2) if one is serious in one's commitment to an option for and solidarity with the poor, then actual poor people must take part in decision-making, provision of information, identification of basic needs to be met, and aspirations towards which to strive;

3) struggle for change at the workplace acts as a consciousness-raiser because poor people's consciousness and conceptualization of what their problems and needs are and how to overcome and meet them are based on experience at this level.

In order to make gains in the workplace, linking with a supportive national policy framework is likely to be both essential and complementary to workplace action. Trade union and other labour legislation is important in that its proper purpose in the context of further and more fully adequate employment is to enable workers to organize themselves effectively, to achieve (whether by collective action or legally defined norms) basic rights including decent incomes and working conditions and to participate in decisions directly affecting them. But policies and legislation for their part must be accompanied by implementation at the workplace. Material minimum wage, interest rate ceilings, grower price or working condition policies will remain so many dead letters if employers, money lenders, landlords and merchants can coerce unorganized workers and peasants into accepting far less than their legal rights.

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