The working poor

Many of us were raised with the mantra of get a good education, find a job for life, work hard and the happy ever after will fall into place.

Now with 2020 vision hindsight - backed by the latest ILO annual report on the world of work - my bubble of hard work = success panacea for long-term security is most certainly burst!

World Employment and Social Outlook: Trends 2020 (WESO) highlights how half a billion people around the world are struggling to find enough decent paid work to make ends meet. As ILO Director-General Guy Ryder comments, “For millions of ordinary people, it’s increasingly difficult to build better lives through work”.

The report finds that income inequality is higher than previously thought, especially in developing countries, and that 267 million young people are not in employment, education, or training, and warns that unemployment is projected to increase by around 2.5 million in 2020.

Freedom of association, collective bargaining and independently elected worker representatives are the antidote to inequality

The authors rightly blame “persisting and substantial work-related inequalities and exclusion” for preventing so many of the world’s people from finding decent work and blighting the future prospects of millions. They also call for a new type of growth, which encourages value added activities, through “structural transformation, technological upgrading and diversification”.

But what might that “structural transformation” look like, and what role can global business play in driving it, and supporting the achievement of Sustainable Development Goal 1, the eradication of poverty and Decent Work?

In diverse ways we all share responsibility for achieving the SDGs. History, and economics, have taught us that global economic downturns are cyclical, but that growth and recovery tend to be slower when we fail to invest in the infrastructure, systems and governance of the countries we do business with. We invest for growth, but people must be at the heart of this investment.

Inequality happens when people are denied a voice. It can deepen a person's sense that they lack individual worth and trap them in a cycle of grinding poverty while they work themselves into the grave. It challenges what we believe “decent work” ought to be and what it’s meant to achieve.

Freedom of association, collective bargaining and independently elected worker representatives are the antidote to inequality. The most effective way to reducing inequality is by having a framework whereby workers can raise collective concerns and negotiate for better conditions and pay.

ETI has a plethora of guidance on the elements of the Decent Work agenda. Some - like our guidance on rethinking business models - aim to create a level playing field by tackling inequality one step at a time. 

So what can businesses do?

  • They can focus on long-term sustainability and respect human rights at work
  • They can work collaboratively with other stakeholders, including trade unions, to create the right structures. By supporting collective bargaining, and not passing the responsibility of absorbing extra costs onto suppliers or consumers
  • They can use their leverage and influence to make the business case for negotiated living wages. Workers with salaries that meet their needs will be more loyal and perform better. They boost productivity and profit. Responsible businesses who pay living wages will yield stronger returns for shareholders in the long term
  • They can commit to being transparent in their operations and become active in networks that drive change - helping to build the groundswell of pressure that leads others to follow suit
  • They can commit to going the extra mile to ensure that basic rights and protections are part and parcel of supply chain worker experience.

So that when global economic conditions improve, they'll be in a stronger position to take full advantage of it, with a workforce that is loyal, fairly remunerated, and valued.

Further reading

ETI has published Base Code Guidance on Living Wages and has a range of resources for businesses on how to embed freedom of association, which can be found here. Our report, Business models and labour standards: making the connection, calls on companies to review their business models to ensure they are protecting workers, rather than worsening labour exploitation.