From the TUC

G20 employment ministers agree to decent work, but can’t agree the world needs a pay rise

14 Sep 2014, by in International

The labour and employment ministers of the G20 countries met in Melbourne last week (such meetings are now so much a part of the G20 architecture they have their own acronym, LEMM). As I reported beforehand, unions were pressing for agreement that the world needs a pay rise to deliver more social justice & equality, and also to boost growth. Ministers like Britain’s Esther McVey wouldn’t go that far, but what she did agree to is remarkable nonetheless: the need for quality – rather than any – jobs; the need to move people from informal to formal work; the need for stronger health and safety standards… There isn’t enough in terms of specifics in the LEMM’s conclusions, and it doesn’t go far enough on wages, but it does provide a platform for pressure leading up to the G20 Leaders’ Summit in Brisbane in November where TUC General Secretary Frances O’Grady will be part of a global union team demanding that PM David Cameron and the other 19 leaders sign up to a pay rise for the world.

The main conclusion of the LEMM – highlighted by right-wing host employment minister, Australia’s Eric Abetz in the post-summit press conference – was that jobless growth was unacceptable, and jobs need to be quality jobs, as set out in the ILO/OECD/World Bank submission to the meeting:

“there is one factor on which we are all agreed, and that is when we have economic growth—and the Finance Ministers have set themselves a target of two percent economic growth above trajectory—that with that, there needs to be jobs growth, and rich jobs growth with meaningful jobs. So, in the past we have regrettably seen in some economies, economic growth without jobs growth, and if we want the social dividend from economic growth, it is vitally important that economic growth be in lock step with jobs growth.”

The full statement – a three-page communique with five annexes – contains a lot of important and welcome commitments, albeit general rather than specific. The second paragraph states clearly that “there is a continuing need to generate hundreds of millions of decent jobs that can lift working families out of poverty and drive sustainable development.” And paragraphs 4 and 5 are worth quoting in full (my emphasis):

“4. Promoting and creating quality jobs, and tackling the economic and social consequences of unemployment, underemployment, inequality and social exclusion, are priorities for all our economies. Reducing youth unemployment, stimulating demand, and raising female participation and employment, in particular, command a high priority. We must also invest in preventing unemployment from becoming structural by creating better jobs, providing training to meet the skills needs of tomorrow, improving job matching and boosting labour market participation.

“5. Supporting people to gain and maintain quality employment – underpinned by fair and accessible social protection – is the best strategy for assisting under-represented and vulnerable groups, as part of a broader social contract consistent with the ILO Declaration on Fundamental Principles and Rights at Work. We also recognise the important role of social dialogue when developing our labour and employment policies.”

The reference to the ILO is revealing: the LEMM’s conclusions have its pawprints all over them, and ILO Director-General Guy Ryder was quick to welcome them. In particular there is support for formalising employment (subject of a committee at this and next year’s ILO conference aimed at producing a legal instrument); a commitment to “promoting safer workplaces” which is subject to an Annex all of its own that would make the deregulators choke; and persistent references to the role of the social partners and social dialogue are all but support for collective bargaining and tripartism. The concluding statement says:

“We take a strong stand against forced and child labour, and encourage the implementation of applicable international labour standards by governments and social partners. We will explore the scope for further work on this issue.”

On wages, Abetz was specifically asked at the press conference why the L20 submission on wages – modelling that showed a wage rise across the G20 group would create growth – was not reflected in the text. He responded that there will always be differing views, differing studies, different considerations.” But Annex A to the statement does include an agreement (again, my emphasis) to:

“Improve national wage-setting systems and bargaining arrangements, establish minimum wages and reduce the non-wage costs of labour, where appropriate, and achieve a more sustainable alignment between employment, wages and productivity.”

At the G20 Leaders’ Summit in November, we’ll be pressing for the leaders to formally endorse the conclusions of their employment ministers to ensure they don’t get lost or overturned, and to put some specific targets on the general commitments made. And in particular, less than a month after the TUC’s national demonstration, we’ll be arguing that the world’s workers need a pay rise.

3 Responses to G20 employment ministers agree to decent work, but can’t agree the world needs a pay rise

  1. postkey
    Sep 15th 2014, 9:08 am

    ” . . . we’ll be arguing that the world’s workers need a pay rise.”

    This ‘Marxist’? thinks that increases in wages are not needed by {US} ‘capitalists’.
    ” The first problem is that it assumes (implicitly) that US producers depend on domestic workers not only for employment but also for sale of their products-as if it were a closed economy. In reality, however, US producers are increasingly becoming less and less dependent on domestic labor for either employment or sales as they steadily expand their production and sales markets abroad: “On both the supply [employment] side and the demand side, the US worker/consumer is perceived as incrementally inessential.” [15]
    The second problem with the argument is that wages and benefits are micro- or enterprise-level categories that are decided on by individual employers or corporate managers, not by some macro or national level planners of aggregate demand (as in a centrally-planned economy). Individual producers (large or small) view wages and benefits first, and foremost, as a major cost of production that needs to be minimized as much as possible; and only secondarily, if ever, as part of the national aggregate demand that may (in roundabout ways) contribute to the sale of their products.” 
    He also thinks that New Deal-type reform programs “are bound to be ignored by governments that are elected and controlled by powerful moneyed interests.”
    Increases in aggregate demand are not needed by ‘capitalists’.

  2. Owen Tudor

    Owen Tudor
    Sep 15th 2014, 9:25 am

    Thanks for that postkey! I think that might explain why the global unions are pleased that they managed to persuade the LEMM to include “stimulating demand” in the list of issues commanding a high priority (it wasn’t there until unions lobbied for it.) A small gain, but worth having, IF it gets implemented….

  3. Karun
    Nov 1st 2014, 11:18 am

    Employment and job creation is one of the most important economic aspect leaders have to think about. This year’s G-20 Summit looks promising. Indian PM Narendra Modi’s visit to Australia will help foster better opportunities for employment and trade affairs. Kow more here: