Week 12 Blog: Work, People and Globalisation- Towards a new social contract for Australia

Work, People and Globalisation: Towards a new social contract for Australia

There has been much discussion in employment relations around the world as to the adoption of neoliberal practices and the ‘opening up’ of economies to the pressures of globalisation and international interconnectedness.  The adoption of neoliberalism, in Australia in particular, has seen the privatisation of the public sector and the removal of protections for employees from corporate multinationals. An article written by Russell Lansbury (2004) calls for a restoration of the social contract at work and the improvement of particular protections for employees that he refers to as the three pillars. The social contract at work is defined as:

“The mutual expectations and obligations that employers, employees and society at large has for work and employment relationships… it is a set of norms that holds us all accountable for adding value at work and providing work that is a productive, meaningful life experience” (Kochan 1999, as cited in Lansbury 2004, p. 109).

The three pillars Lansbury (2004) identifies have all been undermined in recent years by the government’s adoption of neoliberal agendas. Lansbury describes these three pillars of the new social contract as a major requirement for Australia for the future prosperity of the nation.

                  1. Access to employment

This is in regards to all people who are able and willing to seek work. More specifically it suggests a commitment to full employment and a significant reduction in the unemployment rate. It ultimately reflects an unemployment rate of zero, however with the rise in levels of precarious employment in Australia it also includes employees who are under-employed and not able to get enough work to live adequately. Under privatisation, employers have met increases in labour demand with increasing workload of existing employees, rather than creating new jobs.

                 2. Entitlement of citizens to education and training

The importance of this pillar is ultimately to do with both ensuring employees effectively perform at work and also that workers will be able to adapt to changing technology and economic pressures. Lansbury highlights that Australia is not keeping up with the level and quality of training that other ‘advanced industrialised economies’ provide. The rise of precarious and temporary casual work has been a large contributing factor as employers outsource labour and are stagnant in contributing financially to training.

             3. Economic security in retirement

Historically retirement incomes have been boosted by the superannuation guarantee contribution, which in essence aimed to address the issues caused by the aged pension sitting at just 25% of average weekly earnings. The issue arises again because of the increase in precarious and casual work caused primarily by the neoliberal agenda of the state. An increasing number of groups fair poorly in obtaining economic security for retirement, including the unemployed, low income earners, and people in casual work.

The article is quite well written in that it looks at how employment relations in Australia have changed over the last few decades. In particular he depicts how the direction Australia is heading in is strongly resemblant of American employment relations, who have a very strong neoliberal agenda. In this he effectively highlights the three main areas that the Australian government and employment relations institutions will have to address in the near future so that we are able to create a dual-system with equal features of protectionism and neoliberalism. He does this effectively through justifying the three pillars incredibly well, as well as providing future direction for both research into the issue and for these employment relation’s institutions to consider. If Australia wants to prosper in the economic benefits that globalisation can provide, we must be able to look after our own local employees and citizens, and if we don’t we will be heading backwards as a society.

REFERENCE

Lansbury, R 2004, ‘Work, People and Globalisation: Towards a new social contract for Australia’, The journal of Industrial Relations, vol. 46, no. 1, p. 102-115

Week 10 Blog: US Manufacturing Industry Pushes India for Free Trade

An article that I have found interesting in respects to the trade relationship between India and the US was published in the Economic Times this month. It is titled “US manufacturing industry pushes India for free trade” and it draws light on the ‘brick’ (manufacturing) side of the so called ‘brick and click’ paradigm. It is well known that a lot of the companies that have recently outsourced to India have been ‘click’ companies in that they are associated with the telemarketing and IT industries attracted by English-speaking, educated and cheap workers. With India’s emerging economy becoming the next target on the radars of large MNCs it is important to look at how a free trade agreement will affect employment relations in the manufacturing industry as well as the IT industry.

With Narendra Modi being elected as the new Prime Minister of India, US manufacturers have been provided with the opportunity to effectively work towards establishing a free trade agreement, which will ultimately create a ‘level playing field’ for foreign companies looking to invest in India. This is being packaged by advertising that it will result in significant boosts to economic growth and prosperity in both countries, as well as evening the balance of the trade relationship which has largely been in the US’s favour.

If we seek to understand the potential impact that a free trade agreement could have on employment relations in India it may be beneficial to look towards the North American Free Trade Agreement (NAFTA) and the outcomes that Mexico has been experienced since its introduction. Some areas that NAFTA has had positive effects in are as follows:

-       Trade among NAFTA countries has more than tripled

-       Job growth in NAFTA countries has been strong

-       The North American Agreement on Labour Cooperation (NAALC) has;

o   Improved working conditions and living standards

o   Protects, enhances & enforces basic workers rights

o   Raised public profile of major labour rights issues

-       NAFTA countries maintain their own independence and legal frameworks

In comparing a potential free trade agreement between the US and India with that of the NAFTA we can see that if it is implemented correctly the benefits to both countries, and the world economy as a whole, will be extremely significant.  It is important to note that, although there are a vast number of benefits resulting from the NAFTA, there is still a large degree of exploitation taking place in regards to workers rights. I believe that the growing support, in the form of new social movements and fair-trade for example, is the tool that will need to be used in order to influence any free trade agreement in the direction of improving and enforcing workers rights in India from the top-down. It may be the case also where there is an opportunity to cut costs of production through the removal of barriers to trade rather than through the continuing degradation of Indian workers rights.

REFERENCES

Economic Times 2014, US Manufacturing Industry Pushes India for Free Trade. Available from: <http://articles.economictimes.indiatimes.com/2014-09-10/news/53770373_1_linda-dempsey-facilitation-bilateral-trade-and-investment>. [1^st October 2014]