Remarks by Angel Gurría,
4 February 2020 - OECD, Paris
(As prepared for delivery)
Prime Minister Löfven, Minister Hallberg, Director-General Ryder, Partners of the Global Deal, Ladies and Gentlemen,
Welcome to this Global Deal Conference. I am delighted to be opening this event today.
Back in 2016, Prime Minister Löfven initiated the Global Deal and we co-founded this partnership, out of the pressing concerns that the economic benefits of global labour markets were not being broadly shared.
This was a timely and necessary initiative. As the OECD had been reporting year after year, we had been witnessing a trend of increasing income inequality, a lack of social mobility, as well as persisting inequalities in labour markets, skills, health, exposure to environmental risks and even life expectancy.
The digital era and the future of work have magnified the risks and dangers of these inequalities. Our latest Employment Outlook on the Future of Work shows that low-skilled adults are 40 percentage points less likely than high-skilled adults to participate in training in OECD countries. In this context, the role of social dialogue is increasingly important. And this is why the OECD-Global Deal partnership has become so relevant.
The key idea that lies at the heart of the Global Deal partnership is that robust social dialogue is important to come to terms with these complex challenges and promote inclusive growth, as also highlighted in the OECD Framework for Policy Action on Inclusive Growth. When governments, employers, workers and their representatives work in a spirit of co-operation and mutual trust they can effectively anticipate future challenges and opportunities, find solutions, and manage change proactively.
Indeed, social dialogue is a “win-win” proposition: it is good for workers, good for society but also good for business. The OECD’s “Negotiating Our Way Up” report shows that the quality of the working environment is higher in countries with well-organised social partners and a large coverage of collective agreements. This, in turn, helps business gain the support of workers when it comes to innovation and productivity.
Social dialogue is also helping us to meet a number of the Sustainable Development Goals. As a forthcoming Global Deal brief shows, economies where social dialogue is ‘part and parcel’ of the system tend to have lower inequalities, lower poverty rates and a safer working environment. At the OECD, we have invested in developing the “Kampala Principles” agreed at the UN last year, which help governments, businesses, trade unions and civil society co-design better partnerships in developing countries.
Social dialogue is also integral to responsible business conduct. Many Global Deal partners are adherents to the OECD Guidelines for Multinational Enterprises and the OECD Due Diligence Guidelines for Responsible Business Conduct. Social dialogue is an important way to identify and address any negative impacts as it is often the workers who are the first affected, or the first to detect the root causes leading to negative impacts. This is why we engage closely with trade unions through our Trade Union Advisory Committee (TUAC), and why trade union engagement is part of the due diligence guidelines. Indeed, a large number of Global Deal partners are unions and civil society organizations that actively engage in social dialogue.
In parallel to all these efforts, the OECD is working on a Business for Inclusive Growth (B4IG) initiative, sponsored by the G7 French Presidency. This initiative brings together 40 multinationals that want to advance the fight for a more inclusive economy. Through Global Deal and B4IG, the OECD is helping actors on the ground to design and implement more inclusive and sustainable business models.
In spite of this evidence and progress, there is still so much to do. We are struggling with many of the challenges that made the Global Deal necessary. Collective bargaining systems have been, and still are, under increasing pressure. Trade union density has declined from 33% on average in 1975 to 16% in 2018 on average in OECD countries.
The rise in non-standard work has not helped matters: workers in non-standard jobs are 50% less likely to be unionised than standard workers. In more than two thirds of OECD countries, real wage growth remains well below the pre-crisis level, despite much lower inflation. On average across the OECD, real wage growth went from 2.4% to 1.4% per year.
There is still much popular discontent and widespread perceptions of injustice, insecurity and too many of our fellow citizens are being left behind. If anything, the political forces that question the global order of open economies and democratic societies may even have become stronger.
The good news is that our Global Deal is starting to deliver, helping us to define a path for our future goals, but also bringing real change to the world of work. The Global Deal has developed into a multi-stakeholder partnership, with more than 100 members that made important voluntary commitments. Business partners of the Global Deal have committed to ensure living wages or to respect the right to collective bargaining in their supply chains.
H&M for example, is working with IndustriALL and its affiliates to help building well-functoning collective bargaining systems at its suppliers and their subcontractors who employ a total of 1.6 million garment workers, mostly women. Or take Veolia, that committed to guaranteing its global workforce of 163.000 men and women a safe and healthy workplace and is using social dialoge to do so.
Trade unions are already negotiating Global Framework Agreements with multinational companies to help secure decent work in their operations.
And when Spain joined the Global Deal as the 100th partner, its government committed to working with social partners to address very low wages and to stepping up against the use of highly insecure forms of work.
We have also witnessed fair trade initiatives by civil society organisations to improve social dialogue and working conditions in developing countries.
Today, we look forward to hearing about how Global Deal partners are promoting social dialogue as we transition to the Future of Work and how we can bring forward the decent work agenda in global supply chains.
Ladies and Gentlemen,
Social dialogue is essential for market economies. It is essential to promote inclusive growth. It is essential for the OECD.
The Global Deal and its partners – governments, businesses, trade unions and civil society organisations – will keep supporting social dialogue and social partnership. You can count on the OECD to help shape a future of work that is fair and inclusive.
I look forward to a lively and fruitful conference. Thank you.
OECD work on Future of Work