From the TUC

Lindsey is about the future of globalisation

04 Feb 2009, by Guest in International

Exactly what has happened over the Lindsey refinery construction contracts is still far from clear. Undoubtedly too, the motives of the protesters and strikers are not all the same. Unions see the action as a defence of negotiated standards and a call for UK-based workers to have a fair chance of applying for jobs. Some – though it looks like a small minority, given the way that the BNP were marched off the site – see it through a Eurosceptic or even xenophobic lens. Others will simply see what is happening as deeply unfair, and will follow whoever offers the most convincing explanation and solution.

Yet for all the confusion on the ground, the big issue at stake could not be clearer. This is a battle for the future shape of globalisation. Indeed it is a continuation of the centuries-old battle over how the benefits of a market economy are distributed, which has existed since the first trade unions were formed with their mission to regulate the wages and conditions of the great mass of ordinary people dependent on getting a job to earn a living.

Unions have done that in two ways. At the level of each enterprise – and sometimes a whole industry – they have sought to regulate the workplace through collective bargaining. The individual power relationship between employer and employee is inevitably one-sided, but by working together through a union, employees can even out that relationship and get a fair deal.

Just as important has been legal regulation of the workplace. Not every workplace can be unionised, nor is every issue best resolved through collective bargaining – asbestos should simply be banned, not made subject to different agreements in every workplace. Unions have won legal protection both for their own activities and to protect individual workers. Similarly consumer and environmental movements have tamed other excesses of unregulated capitalism.

While individual employers constrained by either statute or union organisation will complain and prefer to be exempt, the irony is that they benefit too. If other employees did not have wages in their pockets they would not have the money to buy their products.

This is no doubt why President Barack Obama has said in his early days in office:

I also believe that we have to reverse many of the policies towards organised labour that we’ve seen these last eight years, policies with which I’ve sharply disagreed. I do not view the labour movement as part of the problem, to me it’s part of the solution. We need to level the playing field for workers and the unions that represent their interests, because we know that you cannot have a strong middle class without a strong labour movement. We know that strong, vibrant, growing unions can exist side by side with strong, vibrant and growing businesses. The new argument is that the American economy is not and has never been a zero-sum game. When workers are prospering, they buy products that make businesses prosper.

Each advance of these civilised protections has been resisted. Dire warnings were issued when small children were banned from the nation’s chimneys. Any rule immediately stimulates increasingly creative ways of getting round them from those who stand to lose out.

This is why there is a battle for the future shape of globalisation. Britain’s unions are not protectionist. We have supported free trade since our inception. Nor will we take lessons on nationalism from politicians who have restricted the free movement of Bulgarians and Romanians when unions spoke up for the principle of the free movement of labour. Freeing up markets and reducing barriers today creates wealth and prosperity, just as it always has – and we know that the great slump of the 1930s was made longer and harder by protectionism.

But globalisation needs the same mechanisms to redistribute wealth and protect people from exploitation that took many years of struggle by unions and progressive political parties to create at the national level. There is little point in creating extra wealth if it is not shared fairly. But the genius of the founders of the European Union and successors such as Jacques Delors was to build social protection into the EU, recognising that the creative destruction of free markets needed balancing with social protection – making those who benefited from the creative side pay at least something towards those who suffer from the destruction.

Europe’s social protection has not kept up with globalisation, as we can see in the protests and strikes going on at the moment. The Posted Workers’ Directive is meant to ensure that companies could not undermine existing standards by shipping in workers from abroad to undermine locally negotiated terms and conditions, just as the UK’s own Fair Wages Resolution used to do at the national level. Yet here the directive has been implemented in a way that does little more than ensure that workers posted here get the minimum wage.

Even worse, a string of European court judgements – Viking, Laval, Ruffert and Luxembourg – has raised doubts about what unions and EU member states can do to resist having their agreements and minimum standards undermined by mobile capital deploying workers across boundaries.

Ministers rightly warn about the dangers of protectionism and xenophobia. But the pressures will increase unless they do something to deal with the problems that have caused these disputes. Globalisation will not work without consent, and that will not come without more social protection and a level playing field for workers as well as employers. While it is still unclear exactly what has happened at Linsey, the worst scenarios will be believed until government can tell protesters that if there has been undercutting of wages and conditions than we are against it and the law will protect you.

For a moment over last weekend it looked like ministers had grasped this. Yet since then it looks like the shutters have come down as ministers have increasingly defended the status quo. They should learn from history, listen to Obama and engage with the Europe-wide union campaign to rebalance Europe in favour of its citizens. That means changing both EU rules and the way that the UK has implemented the Posted Workers’ Directive to protect agreements. Social protection ensures consent for change, ensures prosperity is fairly shared and brings further prosperity in its wake.

This post first appeared on Comment is Free.