Labour Rights in a Globalised World: What Future?Higher Standards or "€œRace to the Bottom"€?

Author:by Francesco Montanaro & Luigi Testa
SUMMARY

This paper tries to assess the impact of economic globalization on national labour law. The liberalization of movement of capitals, goods and services created a competition between developed and developing countries. Developed countries in order to not lose this new challenge started to modify their labour legislation, curtailing or erasing consolidated rights in the name of flexibility.... (see full summary)

 
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  1. INTRODUCTION The globalisation of economy is the phenomenon which broke the balance of labour market and the system of rights and guarantees which characterized most western countries in the XX century. For some authors, capitalism has entered, after the seventies, in a new phase: in fact, they believe that the "democratic capitalism" has been replaced by "supercapitalism"1 or "turbocapitalism"(2).

    What is this process and how can it influence the high wages and the rights of workers of most developed nations? The core of the problem is the competition between two groups of workers, which have different levels of wages and guarantees. One of them has low levels of participation in trade unions and weak and few rights. The entry of Indian, Russian, Chinese workers has dramatically increased the workforce employed in the world economy and the new scenario we are facing is a huge international open shop that starts to compete with national closed shop, in the best cases(3).

    On one hand, companies used to the practice of outsourcing assets, transfer their productions in these Countries, tipically least developed or newly industrialized Countries, in order to gain a competitive advantage. This process implies that companies assume the shape of multinational companies: they become transnational companies (Tnc), following the definition given by UN. Therefore, capitalism confirms and exalts its distinguishing feature: internationalism, rectius the a-nationalism. In fact, big corporations are the new key-role players in the international theatre and the subjects that threaten states' sovereignty. On the other hand we have the most developed nations, where this trend has caused de-industrialization and a slow but unstoppable worsening of labour standards. The mechanism is very simple: if states do not comply with the request of enterprises, they will transfer their factories, if they have not already done so, in other Countries. In general governments, both conservatives and progressives, even if in different ways and intensities, have so far permitted to achieve the desires of companies.

    New generations of workers in western Countries, especially in European Countries, are deprived of the achievements that the working class obtained in the previous century and this has led to a situation characterized by precariousness of work, real wages that tend to drop and unemployment. The immediate repercussions are precariousness of lives of thousands of workers, doubts on the future, low pensions, a faithless attitude towards State and democracy in general. People perceives political power like an appendix of economic power and think that public policies depend on economic lobbies' pressions(4); in the long run this perception could lead to a complete disaffection towards democracy and its values, with unpredictable changements in the shape of governments and states.

    In this work we will try to give a definition and a short portrait of globalisation with its influences on law in general, especially the birth of lex mercatoria and the privatization of judiciary function, and as regards labour law.

    Then, we will attentively assessItaly's situation, where a strong working class, as witnessed by the presence of the first communist party in the western Europe during the cold war, reached 1 R. B. Reich, Supercapitalism. ThE Transformation of Business, Democracy, and Everyday Life, Random House, 2008 2 G. Ruffolo, Lo Specchio del Diavolo, Einaudi, 2006 3 G. P. Cella, Il Sindacato, Laterza, 2004 4 It seems a confirmation of Marx's prediction in the Manifesto of the Communist Party(1848):"The executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie" BOCCONI SCH. L. STUDENT-ED. PAPERS, PAPER NO. 2011-05/EN 4 important results. The paradigmatic example is the Italian Workers Statute (legge 20 maggio 1970, n.300).

    To sum up, in a competitive situation it is obvious to forecast that the new balance, in the long run, will worsen the labour standards in the western countries and improve the present situation in the other countries. Is this conclusion inevitable? Are there any solutions? Will the bar be put higher or lower? Some answers to these questions will be given in this work, others will remain without solution.

    In this scenario, how do international law and international institutions intervene and how could and/or should they intervene? Among the international institutions EU has assumed a particular importance for its influence on Italian labour law and for its being a mixture of a confederation and a federation of states.

    The following paragraphs aim to examine the approach of the western Countries, especially Italy, and of European Union towards the working class' rights which until few years ago seemed to have consolidated, and then to describe the action of ILO and WTO in relation to fundamental workers rights, which are often written on the sand in many Countries.

    In the end, a range of solutions, which perhaps should allow us to grasp the nettle, will be prospected.

  2. THE OLD SIDE OF MODERNITY: A SHORT PORTRAIT OF GLOBALISATION "Globalization is on everybody's lips; a fad word fast turning into a shibboleth, a magic incantation, a pass-key meant to unlock the gates to all present and future mysteries. For some, globalisation is what we are bound to do if we wish to be happy; for others, globalisation is the cause of our unhappiness".5 The effort of giving a clear definition of what globalisation is, runs soon the risk of being useless. Even Economics Dictionaries yield to the vagueness of the phenomenon at issue, admitting with humility that "globalisation is a word that gets both its proponents and opponents very agitated"(6). So, on first approximation, we speak of "liberalisation versus regulation of international trade, capital movements, and migration"7. Nevertheless, setting globalisation against regulation means surrendering early to a temptation that is not quite correct: global market is indeed not a deregulated market but an auto-regulated one, and this is just the focus of our interest here. Firstly we must point out that networks between several areas of world are not a new phenomenon: it just has different positions and it appears in different scopes. With the birth of modern States, little by little, economic globalisation takes the place of political and legal globalisation. Then, increasing in size, economic globalisation demands a new process of political and legal globalisation too, as it was in Middle Age. However, the best definition for our work is:"il processo in seguito al quale gli Stati nazionali e le loro sovranità vengono condizionati e connessi trasversalmente da attori transnazionali, dalle loro chanches di potere, dai loro orientamenti, identità e reti"8.

    We must wonder if we have to speak of conditioning sovereignty or if we can proclaim its definitive erosion. If indeed, as somebody has noted, sovereignty is based on three pillars - an economic pillar, a military and a cultural one - the answer is not so difficult: the supremacy of 5 Z. Bauman, The Human Consequences - Columbia University Press, New York, 1998 6 Palgrave's dictionary of political economy, edited by H. Higgs, 2nd ed.- London : Macmillan, 1923-1926 7 ibidem 8 In other words, the sovereignty of States is conditioned and limited by transnational institutions; see Z. Bauman, The Human Consequences - Columbia University Press, New York, 1998 .

    LABOUR RIGHTS IN A GLOBALISED WORLD:WHAT FUTURE? 5 the economy's pillar has broken the balance among these three columns(9).

    "In the social production of their existence, men inevitably enter into definite relations, which are independent of their will, namely relations of production appropriate to a given stage in the development of their material forces of production. The totality of these relations of production constitutes the economic structure of society, the real foundation, on which arises a legal and political superstructure"(10). The risk scared as a truth by Karl Marx always lies in wait: legal pillar run always the risk of being patterned after the economic one, really as a superstructure after the structure. In the period before Industrial and French Revolutions, there was a close connection between law and economics; rather, capitalism and modern State can in a way be considered coeval. Products of the same process of modernisation, capitalism and modern State deeply interact with links of reciprocal dependence. With mercantilism, for instance, State considers international trade as the way to cement its outer sovereignty and its international hegemony. Mercantilism11 instead, considers the State as the only one who can grant the necessary authorisations and chartes. "Così il mercantilismo rivela un verso paradossale: mentre fa vedere la vera natura irrequieta e mobile del capitalismo, tiene vincolata questa natura ad un permesso dello stato"12. Industrial and French Revolutions settle the supremacy of the middle class and consequently the imbalance of 'ratio status' and 'ratio economica'.If national laws continue to be connected with a definite territory, the area of influence of biggest firms is not confined within State's territorial limits: "Se all'inizio la dimensione territoriale del potere statale segnava una subalternità dell'economia alla politica, nel più lungo periodo essa ha contrassegnato una deminutio del potere statale, disegnando destini più gloriosi ed esteri per l'economia"13. If territory is one of the constitutional elements of a State, global market overtaking territorial limits will overtake State too; if territory is the area where to exert sovereignty, international companies are taken away from the sovereignty. Thus, the view changes, or, better, comes back to pre - Westfalia14, namely before the creation of the nation state Here therefore the return of lex mercatoria, which is "un...

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