Reducing Income Inequalities

1. Reducing Income Inequalities Trade Union Congress of the Philippines (TUCP) Ariel B. Castro Director for Education

2. Introduction and overview • Unions evolving role • Labor market realities • Disturbing economic signs • “Jobless Growth” • High unemployment and underemployment • Wages and benefits not kept up with prices • TUCP responses • Concluding remarks

3. Evolving union roles given realities Union renewal and revitalization strategies to confront: • Changing nature of work • New model of human resource management • Changing composition of labor force • Political/legislative challenges

4. Economic realities • Economic growth in the Philippines is expected to fall to 4.3 percent this year and 4.2 percent in 2009 amid a global credit crisis (The Economist, 2008) • Double digit inflation is eating into consumer spending and wages have failed to keep pace with rising living costs

5. Economic Realities (2) • Remittance flows of overseas Filipino workers (OFWs) now equivalent to 10 percent of GDP • Economy is underperforming relative to its neighbors in the region with per capita GDP growth of one percent trailing its neighbors’ 4-6 percent • Investment climate requires some reforms that should include reducing power rates, curbing corruption and cutting red tape

6. The World Bank Development Report 2005 A 2003 survey involving 719 firms in the Philippines ranked the issues that make the country’s investment climate unattractive to business: • 35.2% corruption • 33.8% courts on property rights • 33.4% unreliable power supply • 30.4% high tax rates • 29.5% uncertain economic and regulatory policy • 26.5% crimes, theft and disorder.

7. Jobless Growth • Employment levels are rising, but most of the new jobs created (60-75%) are in the informal sector • BPOs are the growth center, and would surpass manufacturing in the next few years

8. ADDITION TO LABOR FORCE VS. JOB CREATION

9. Comparison of Daily Minimum Wage, and the Family Living Wage, Sept. 2008 Source: NWPC

10. Labor Market, Employment and Working Conditions • Quality of employment has deteriorated, with new employment concentrated in contractual terms, home-based work, and informal arrangements • Women and young people face unemployment, inadequate education and training, exploitation and discrimination at work • Inspections of establishments have indicated increasing violations of labor standards (over 50% with violations) and of the wage law (over 25%)

11. 8.08 Filipino Migrants

12. Social outcomes lackluster • Given present trends, Philippines unlikely to realize its MDGs by 2015 in: • families living in extreme poverty • child malnutrition • maternal mortality Source: World Bank

13. Trade Union Responses Alliance Building for Constructive Engagement with IFIs Promoting Decent Work for All

14. Asian Labor Network on IFIs • Network of TUs, Pos, NGOs and academe from four countries most hit by the Asian Financial Crisis[Indonesia, Philippines and Thailand] • More than an institution for workers’ education, it has evolved into an organization with a multifaceted approach to advocacy and social action

15. Mission Statement “Committed to engage IFIs and the Philippine Government in constructive dialogues on policies, programs and projects that have direct impact on Filipino workers and society at large” “People believe that IFIs propose, the Government implements, workers and people suffer”

16. ALNI/P Priority Advocacy Issues

17. Framework of engagement • Advocates to stop Liberalization, Deregulation, Privatization [LDP] until: • Past and proposed policies are assessed as to their impact on employment and incomes • Future policies, programs and projects must include measures to help displaced workers • Tripartite negotiations are made • Arose from Philippine experience in LDP

18. Efforts to constructively engage IFIs

19. Efforts to constructively engage IFIs • Building relationshipswith IFI officials • Representation meetings • Cooperation with Asian Development Bank • Meetings with ADB Officials • Participation in consultations (WB, IFC) • Meetings with Government Agenciesinvolved in the design and implementation of IFI programs

20. Efforts to constructively engage IFIs • Dialogue with ADB regarding their Labor Standards Handbook • Research on CLS Compliance of IFC funded utilities company • Involvement in the WB-CAS processes • Continuing dialogue with WB, IFC, ADB, etc.

21. CLS in ADB Operations Labor market assessment Country strategy and Programs IPSA, Labor consultants Pre-Project Design Loan negotiations, Bidding documents Project Design Compliance Monitoring, Consultation process, Capacity building on CLS Project Implementation

22. Efforts to constructively engage IFIs • Media Advocacy • Generate Public Support • Media Briefings • Press Conferences

23. Efforts to constructively engage IFIs • Advocacy and Planning Workshops

24. Why should unions engage IFIs? Union jobs are at risk ADB/IFIs heavily influence govt policies Privatization/restructuring public enterprises Liberalization, deregulation policies Taxpayers of donor countries finance ADB lending at ~P5-7B/yr Citizens of borrower countries pay back loans whether or not IFI-funded projects reduce poverty Debt burdens greatly reduce govt spending on public infrastructure & basic social services

25. TUCP is also engaged in • Improving labor supply-building skills, employment facilitation • Raising labor demand-cooperatives, credit unions, workers’ enterprises • Wages - pushing for productivity improvement and gainsharing

26. TUCP also has programs in • Country governance • CSR (corporate social responsibility) • Reproductive Health and family planning • Anti-trafficking in persons • Informal sector • Migrant workers • Etc. We also do regular trade union work

27. Unions have to quickly convert to social movements and do many things themselves