Speech | Global Worker Rights

Trumka on Technological Change and the Future of Work

Paris, France

Good afternoon everyone.

Let me start by thanking you, Mr. Secretary General, and the OECD at large, for this opportunity to meet and to exchange views. The Liaison Committee Meeting is an important moment for us, the TUAC and the constituencies that we represent. It is an opportunity for a conversation on the policy issues that you have to deal with and that matter for the labour movement.

As you can see, we are here in number, with Ohmi-san of Rengo and Jorunn Berland of the Norwegian unions with whom I have the privilege to lead the TUAC, but also Sharan Burrow of the ITUC, Luca Vinsentini of the ETUC and my other colleagues of the TUAC. Let me also make a special welcome to Nolberto Diaz, general secretary of the CUT Chile, which today became the 59th member of the TUAC. Nolberto will have an opportunity to take the floor when we come to the conclusion of our meeting today.

For today’s conversation, we want to address the twin challenges of the Future of Work and the Future of the Firm.

The Future of Work is rightfully a central focus of the OECD today, with the on-going review of the OECD Jobs Strategy.  We hope the OECD will bring its leadership, hopefully in close coordination with the ILO, to the task of ensuring that the challenges of technological change and the transition to a low carbon economy are managed in ways that lead to working people enjoying better lives and a fair share of the wealth we create.

As the OECD embarks on this work, we hope to keep two questions in mind. 

First, who owns technology, who gets the benefits of change—the people of the OECD or a handful of billionaires?”   

Second, what happens when developed countries are unwilling or incapable of seeing to it that the needs of the majority of the people are met, that the public benefits from technological change?  What are the social consequences? What are the political consequences?  Can democracy survive in such an environment?

Technological change is a constant feature of modern life. Because technological change is the product of working peoples’ inventiveness and working peoples’ money. Just to take one example--every single one of the technological innovations built into an iPhone was developed using public money.

Technological progress should drive increasing productivity, and increasing productivity should drive higher wages. This was the story of the post-war boom in OECD member states. But this virtuous cycle only happens when there are tight labor markets, when workers have real voice and real bargaining power, and most importantly, when governments see rising incomes for working people as a good thing, not a bad thing.

When technological change is combined with austerity, mass unemployment and government policies designed to accelerate a downward spiral in wages—a handful of wealthy investors will capture the wealth technological change creates, and the already a serious crisis of democracy in OECD countries will worsen. 

Fundamentally, I believe we all agree the key issue is jobs. But we would be making a terrible mistake if we think just any jobs will lead to better lives for working people. The people of the countries of the OECD expect their governments to pursue policies that will lead to jobs that provide rising incomes and economic security. We expect productivity gains to lead to good jobs—as such gains have throughout the modern era. And we utterly reject the idea that somehow government policies that encourage falling wages and a fundamental power imbalance between employers and workers can somehow be fixed on the back end by redistributive policies. 

As long as market capitalism has existed, it has been clear that labor markets without robust labor market institutions and progressive government involvement result in imbalances that both cause economic and political crisis. Simply put, deregulated labor markets cannot deliver good jobs, economic or political stability.

The United States is the poster child for unregulated labor markets. The result has been wage stagnation, falling public investment and public disenchantment with democracy itself. Recently Harvard University polled Americans born after 1980—millennials—and asked them if democracy was necessary for a good society. Only a third said it was. And fully 24% said democracy was an obstacle to having a good society.

But for technological change to lead to better lives for most people we need not just well-structured labor markets, we need firms that can help shape and support these outcomes. Quality jobs require quality businesses, quality CEOs, quality corporate governance, long-term business models that shift away from financial short-termism.

We need policies that drive these positive models forward both in global supply chains and also in digital business—both areas where the boundaries between individual firms, and between firms and employees, often become blurred, threatening a situation where no one is responsible for the fair treatment and economic security of working people. Yet the digital work environment creates an imbalance in information between workers and employers creates power imbalances as great as those of the age of the robber barons.

Perhaps most relevant to the work of the OECD, productive firms require fair and thoughtful corporate tax policies. The OECD’s work promoting multilateral coordination on tax policy in recent years, particularly the BEPS process, is among the best work we have seen from the OECD. This work needs to be expanded and strengthened. But I must observe that in the recently released Economic Outlook instead the staff is lending intellectually embarrassing political support to the Republican tax plan—a plan that is completely contrary to the OECD’s values and goals in that it encourages international tax evasion, shifts the tax burden in a regressive direction and incurs vast deficits in the process. The idea that it will meaningfully add to U.S. economic growth is ridiculous and yet that is what the Economic Outlook says. We urge the OECD to focus on continuing its work against tax havens and tax evasion rather than trying to appease those who benefit from such abuses.

Finally, on the subject of firms, we know that there has been a lot of talk about inequality among firms—that somehow the problem of economic inequality is due to some firms being so much better than other firms. Let me be clear, we see this type of argument as a way to avoid the real issues. While the labor movement wants all firms to be above average, we do not want to postpone the conversation about inclusive growth and worker bargaining power until we reach that impossible goal.

So ahead of our conversation this afternoon, let me share a couple of final thoughts to help guide the conversation.

If the future is not going to be grim both economically and politically, change in the workplace, within industries, nationwide, must be bargained, and bargained collectively. Better access to skills and education matters—indeed it is critical. But conversations about education are a debased currency because for too long policymakers who actually wanted workers’ power to erode and our incomes to fall have always tried to change the subject to education whenever we pointed out that our lives were getting worse and our members were losing confidence in democracy. Fundamentally the erosion of the bargaining power of the working people is the root cause for productivity not being shared and for rising inequalities. The implications for the OECD are this: stop with recommendations that weaken collective bargaining, lower the minimum wage and weakens unemployment insurance, and stop with the double standard where the OECD refers to the employer community and the investor community, but then talks about solutions for workers as if we can make it on our own as isolated individuals.  We face an imminent threat of competitive wage cutting by OECD countries that, if allowed to move forward will both lead to macroeconomic and political catastrophe. Instead of marching inexorably toward a crisis using code words like “structural reform” and “flexibility,” we must get serious about protecting democracy by building social solidarity.

We don't need more global rules, but better ones, if we want to avoid the political collapse of multilateralism. The labor movement stands for multilateralism, rest assure. But our support is for a system that addresses both today’s topic—the world of work, and the world of businesses—and to fill in the regulatory gaps between jurisdictions. We are not there. We have missed opportunity after opportunity to ensure a minimum level of policy coherence between trade rule and labor standards and to balance the right of investors with the rights of the ordinary people. Time has run out.

Let me close by talking about democracy. Next year, the TUAC will celebrate its 70th anniversary. The TUAC was founded in March 1948 at a trade union conference in London on the Marshall Plan. Let me quote the final statement: we the labor movement “will contribute to the establishment of the economics, social and political conditions which are essential to safeguard the principles of free citizenship and democratic institutions, and which above all can ensure a progressive improvement in the life and labour of the people.” Today, the labor movement stands united behind these fundamental principles. We restate this commitment in the face of rising anti-democratic forces and after a generation of neo-liberalism has left ordinary people believing democracy means inequality, poverty and rising economic insecurity. Last June I called upon the OECD to “be in the business of helping people build democratic institutions that give them economic and political voice—guardians of equality and democracy.” OECD membership and the OECD vision of inclusive growth must be about democratic institutions, about rule of law for all, about independent judiciary, about ordinary people, trade unionist and activist not fearing arbitrary ruling and detention. That matters for current members of the OECD and for those that aspire to become members.

Let me close with this. Events of the last few years should have made clear that the alternative to a just society is not the libertarian paradise of Silicon Valley billionaires. It is a racist and authoritarian nightmare. The labor movement hopes the OECD will be a strong voice for a just global order where technological change leads to better lives for ordinary people and against the looming threat of racist authoritarianism.

Thank you for your attention and let’s now begin our afternoon conversation.

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