Trumka on Fighting Inequalities Exposed by COVID-19 to the OECD and the Business for Inclusive Growth Coalition

Thank you. Let me begin with a word of gratitude about the OECD and the importance of international coordination in this terrible crisis. It’s important to have both good comparative data and strong international leadership. So I want to express my personal appreciation to Gabriela [Ramos] and to Secretary General Gurria for all you and your staff have done in this crisis. Finally, let me thank Marie-Ange Debon for your leadership of the Business for Inclusive Growth Initiative.

The global coronavirus crisis is simultaneously the worst health crisis and the worst economic crisis since the Second World War. In a sense it is no one’s fault. The disease is a product of natural forces. Unlike the reckless and exploitative financial practices that led to the 2008 crash, it is not something someone did. But the vulnerability of global society to a pandemic, the vulnerability of the United States and the vulnerability of the poorest countries and the poorest people to a pandemic—these things are very much the consequence of human action. And the consequences of public policy decisions. Now we see the full cost, much like a person who doesn't pay fire insurance premiums doesn't see the cost of what he has been doing until there is a fire.

We now face immediate and extremely serious challenges.

The first challenge is the challenge of simply getting the coronavirus under control, and protecting the lives and health of working people.

The second challenge is emergency economic relief—or the steps that must be taken to minimize the economic damage of the steps we must take to get the virus under control. And here again, we see around the world more and less effective approaches. We see areas in dire need of immediate action, such as the global garment industry, where the companies controlling supply chains that employ millions in the developing world have been reluctant to take any responsibility for what happens to their workers. It’s utterly unacceptable.

The third challenge is truthfully where global leadership failed in 2008—and where we simply cannot fail again. This is the challenge of putting in place policies that drive growth and increase incomes after the initial shock we are living through. The policies that lead to the job creating investments in 21st century technology that we need to see around the world to make us more resistant to future pandemics. To address climate change. And to reach the U.N.'s Sustainable Development Goals.

I will say bluntly—if instead of adopting expansionary policies in the months to come we see a revival of austerity economics—I fear for the survival of democracy. And I fear for the very idea of an international economic and political order.

We must meet all three of these challenges successfully or the consequence of the coronavirus crisis will be massive unnecessary loss of life and a global depression. The social and political consequences are both unpredictable and unthinkable. There is a statistic that gives a sense of the scale of what is happening in the global labor market. The latest ILO report estimates that global working hours in the second quarter are expected to be 10.5 percent lower than in the last pre-crisis quarter. This is equivalent to 365 million full-time jobs based on a 48 hour work week. Behind that statistic is both widespread devastation in sectors like retail, hospitality and entertainment—and consequent rises in unemployment.

Like the disease itself, unemployment has disproportionately fallen on the most vulnerable. Contingent workers, migrant workers, women workers, and workers already facing ethnic, religious and racial discrimination. There is a deep sense in which what we are seeing now in the spread and economic impact of the coronavirus is the wages of inequality. It is the consequences of the long term neoliberal attack on social solidarity and public institutions, and recent right-wing authoritarian attacks on the idea of international cooperation. This is because essential public health measures simply cannot be done within the ideology of market fundamentalism.

In this sense fighting the coronavirus is like fighting a war. It requires social solidarity, collective action and planning. At the same time, we can see what works:

Social dialogue works. Countries with some of the strongest systems of social dialogue have shown that they can come up with creative solutions that successfully address the most important economic challenge. They are maintaining workers’ income and holding businesses together in the face of revenue collapse. We have seen countries like New Zealand that moved in a more neoliberal direction returning to principles of social dialogue and social solidarity. They are showing positive results in terms of both containing the disease and mitigating the economic impact of the shutdowns necessary to fight the disease.

Joint action by business and labor works. At the global level, the pandemic has created space for some joint work between the International Trade Union Confederation and the International Chamber of Commerce. Together, we have advocated for debt relief and for a coordinated action on public health and reconstruction plans dedicated to uplifting the lives of working people.

Large-scale, targeted, active labor market policy works. Countries that have put in place comprehensive payroll support programs like Denmark, the U.K. and Canada—or have used short time unemployment systems like Germany—have seen unemployment kept within manageable levels. The U.S. approach of general stimulus and funding for employers with weak employment conditionality has led to Great Depression levels of job loss. This type of direct payroll support must be combined with active labor market policies to help those who still lose jobs toward needed tasks like tracking the disease, shoring up front line workers in healthcare and the food production and distribution system.

Finally, international cooperation works. We have seen unprecedented international cooperation among scientists in pursuit of treatments and a vaccine. Cooperation that is responsible for a sense that meaningful medical relief is a matter of months—and not years—away. We have also seen international cooperation among central banks that has so far prevented the collapse of financial markets.

But, tragically, that kind of cooperation has been absent in so many other areas—ranging from the production and distribution of PPE, where the law of the jungle seems to prevail. To the treatment of vulnerable migrants and refugees. To the policing of supply chain practices by the world’s largest businesses.

And this brings me to the work of the Business for Inclusive Growth coalition. This work obviously began before the coronavirus crisis. The Trade Union Advisory Committee and the global labor movement have strongly supported the coalition’s agenda of mobilizing business groups to address income inequality and embed living wages. But the importance of this work has grown enormously as a result of the coronavirus crisis. Because we are going to face a decision of enormous consequence as a global society as we emerge from this crisis. Will we continue down the path that has made this crisis so deadly and destructive, or we rebuild based on an economic order built on social solidarity. Rising wages, increasing economic security and giving voice to working people.

Almost a decade ago, the world’s leaders, through the U.N., endorsed the call for Universal Social Protection. Today, 55% of people have no access to social protection. Another 20% have little coverage of essential services or income measures central to the promised social protection floors in the U.N.’s Sustainable Development Goals. In developed countries this is a matter of making good policy choices and undoing the self perpetuating political economy of inequality. But it is not an issue of resources.

But in the developing world in the face of the coronavirus crisis we must show international solidarity. This is why the global labor movement is calling for the creation of a Global Social Protection Fund, which would require less than $5 billion a year in the 28 poorest countries and from the U.S., $25 billion a year for partial support for low- to middle-income countries according to need. We thank the OECD, the E.U. and other governments for supporting this plan. I look forward to working with you to making it a reality.

In a similar vein, thanks to decades of work at the OECD, we have important tools that should be used to address the consequences of coronavirus for supply chain workers and their communities. The OECD’s Multinational Enterprise Guidelines should be enforced to ensure that multinational employers pay their suppliers and maintain income and social protections for the supply chain workers from Honduras, to Bangladesh to Cambodia that have created so much wealth for them. The recently signed Call to Action between the International Organization of Employers and the ITUC is a first step to recognizing the need to maintain the income of the 150 million supply-chain workers in the garment industry. For the work of the OECD, there should be an expectation of all Business for Inclusive Growth coalition members that they take active steps to mitigate the risk for violation of the OECD Guidelines. That they commit to constructive dialogue and not reject offers for mediation to peacefully resolve specific problems with respect to these guidelines.

And more broadly, let us work together to embed the things we are learning in this crisis in the economic life of the global economy and in the way we structure our trade policies and our systems of market regulation. Because we can't fight a global pandemic with public institutions crippled by tax evasion. We can't fight a global pandemic when we have a small number of firms controlling inordinate shares of output. Nor can we excuse trade rules that ignore the risks of such high levels of concentration in either a few firms or a few production locations.

We can't fight a global pandemic when workers are voiceless and powerless in unsafe workplaces that are effective super-spreaders of disease.

We can’t fight a global pandemic when workers don't have paid sick days. We can't stop a global recession without setting real living wage standards globally.

We can't stop a global recession when work has been made precarious and millions of workers in both developed and developing countries are excluded from social protections.

And we can't manage a global economy without structures for workers and employers at every link in supply chains to work together to manage the human and economic consequences of disruption.

On behalf of the Trade Union Advisory Council to the OECD, let me say that we are really pleased that global business is engaging with the OECD—and with each other through the B4IG initiative. We are committing ourselves to dialogue with you and developing a space of common cooperation in the midst of this global pandemic. Thank you and I look forward to questions.