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How Labor Unions Can Alleviate Poverty

Developed nations are witnessing a steep decline in labor union participation. Labor unions are organized groups of workers who negotiate decisions concerning their working conditions. From 1985 to 2017, union membership declined by 13%. Several factors have contributed to this decline, however, labor unions are important as they play a role in reducing poverty across the world.

The Decline in Labor Unions

The recent trend toward globalization has admittedly fostered business competitiveness. However, this threatens labor unions due to the belief that unionization can harm a company’s ability to compete internationally. This belief stems from the strong negotiating power of unions, forcing companies to pay and treat their workers well, which many international companies do not have to do. In addition, organizational and technological changes have threatened union longevity. The final contributing factor is the decline of the manufacturing sector, a sector that is more likely to support unionization than other industries.

Along with the organizational factors contributing to the decrease in labor unions, the societal understanding of the value of labor unions is also decreasing. In part due to mass propaganda campaigns and anti-labor advertising unleashed by businesses in the last three decades, there is a growing sentiment that these organizations are no longer useful or necessary. This sentiment poses a direct threat to workers throughout the world as these organizations play an important role in poverty reduction.

Decrease in Economic Inequality

Labor unions play an important role in decreasing economic inequality. Unions provide people with the power to negotiate, which in turn, strengthens the middle class and increases salaries for blue-collar workers. Unions give power to people in lower positions in companies so they can negotiate and work for better wages. Unionized workers are typically able to raise their wages by 20% through negotiation.

White-collar workers do not reap the same benefits and labor unions play an important role in stopping runaway incomes for people at the top. This gives power to the middle class and reduces the power of the top 1%. Not only do higher wages for blue-collar workers support the workers themselves but they also boost economic mobility for future generations. By empowering workers to collectively bargain for higher wages, labor unions have played a vital role in the rise of the middle class.

Healthcare

Because members of labor unions can negotiate better benefits, they are 30% more likely to have healthcare benefits than non-union workers. Additionally, these healthcare benefits are typically higher quality than baseline coverage. On average, unionized workers are more likely to have health plans, including dental and vision care. Quality health insurance plays an important role in reducing the risk of poverty. The CDC finds that workers who possess and utilize health plans are more productive. Increased productivity among workers provides a foundation for educational and workplace success.

Along with increasing productivity, quality healthcare can reduce the risk of medical debt-induced poverty. Medical coverage for working adults can also cover the worker’s children. This is important as children who have medical coverage are less likely to develop chronic health conditions. Through family care, labor unions provide workers and their families the resources necessary to remain in good health, achieve success and protect their futures.

Work-Life Balance

Labor unions provide workers with the chance to negotiate better working conditions, including more paid time off. Unionized workers have 26.6% more vacation time on average than non-unionized workers. This time off is important for a work-life balance, overall longevity and family time. Children who spend quality time with their parents are more likely to be physically healthy and are less likely to partake in risky behaviors such as drug and alcohol abuse. Furthermore, these children are more likely to stay in school and achieve academic success, helping them secure well-paying jobs in the future. By supporting a work-life balance, labor unions ensure that households have a pathway out of poverty.

In these ways, labor unions play a vital role in reducing poverty. By increasing wages, strengthening the middle class, providing healthcare access and facilitating quality family time, labor unions can help people break cycles of poverty.

– Haylee Ann Ramsey-Code
Photo: Flickr

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The Necessity of a SDG to Address Modern Slavery

Modern_Slavery
The UN’s Sustainable Development Goals (SDGs) are set to be voted this month. These goals will shape development goals for the next 15 years for the U.N. and its member states.

Among the goals is achieving economic growth that will result in decent employment for all. Part of this goal includes a provision for addressing modern slavery and human trafficking, a human rights issue and a booming economy.

The awareness behind modern slavery has grown, now the focus is on understanding the roots. Before this, modern slavery and development were treated separately, and how interrelated they are was not seen.

If we think about it, how could modern slavery not affect development given that it negatively affects health, economic growth, rule of law, women’s empowerment and lifetime prospects?

Modern slavery also robs many young people who make up the majority of modern slaves, the opportunity to contribute to their society. Young people would contribute the most and for a longer time period.

Globalization plays a big role in the existence of modern slavery. The responsibility of it falls on major players such as businesses, financial sectors and individuals play a part in and should be aware of the possible ways in which we may be contributing to it.

The question still remains if addressing it as a SDG is enough? Modern slavery exists despite 12 international conventions and over 300 international treaties banning its existence. The Palermo Protocol in 2000 resulted in anti-slavery activity and legislation, but the movement has failed with little research asking why and what could be done differently.

Part of the problem with addressing modern slavery is the lack of punishment and enforcement. Criminal see it as a high-reward and a low-risk.

Out of all the countries, 41 percent have no trafficking convictions or had less than 10 convictions between 2010 and 2012. Additionally, there were about 13,000 possible victims in the U.K., but 2013 to 2014 saw just 130 convictions.

– Paula Acevedo

Sources: The Guardian, UN
Photo: scrapetv

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Global Public Goods: Financial Stability

z1 abstraction
Global Public Goods (GPGs) — covered in an earlier Borgen post — are essentially goods that enhance the welfare of society when consumed and have associated effects that are not bound by discrete political units. Examples include the provision of knowledge, cleaning up oceans and eradicating disease. The expanding discourse around Global Public Goods has grown in tandem with globalization and international issues that are more technical like phytosanitary foods export, satellite transmissions and financial stability are being studied, explored and debated.

The idea of financial stability as a GPG is better viewed inversely. It is best to look at how the instability of financial markets create recessions, downturns and depressions that slow global output and either increase poverty or decrease the rate of poverty reduction.

Financial markets may be unstable for many reasons including poor oversight and regulation and mismanaged macroeconomic policies at the national level. Advances in financing practices and telecommunications have complicated things and the liberalization of capital flows has raised the level of instability. With increasingly integrated and complex financial markets, mistakes in one nation act as contagions with global effects.

A quick look at Europe’s headache over the debt crisis in Greece, who is now on a course to drop from the eurozone and “destabilize the region and reverberate around the globe,” which, in turn, was catalyzed by the 2008 Wall Street shocks, is a present-day example of how these interdependent markets can result in a type of shared vulnerability and of the far-reaching effects that an unstable financial system results in.

Unfortunately, developing economies are exposed to greater risk due to the volatility of capital flows and the difficulty for developing countries to access financing, something that has been called the double stability and efficiency problem. Many studies have quantified the cost of financial instability on developing countries and an analysis of the literature puts the cost at one percent of GDP per year from 1975 to 2000, resulting in a reduction of income for developing countries by 25 percent for that time period.

It is clear that unstable financial markets are a malady for a strong global economy and that their costs are unfairly distributed, with developing nations being the hardest hit.

So what can be done? The GPG framework advances a solution, one based on the recognition that “the world has made enormous strides in communications and interdependence between countries, yet we have not developed the policies or institutions needed to manage that process.” Therefore, international institutions are needed to ensure the stability of the financial market, precisely because it is an international affair.

The prescriptions for securing stability that this new institution would advance would likely include harmonizing and introducing codes and standards for financial sector regulation, surveillance and coordination of macroeconomic policies and enabling liquidity injections for severely struggling economies, among other technical fixes.

Although unlikely to draw a crowd, these efforts would have a real impact on fighting poverty and making the world a more stable place.

The work required to coordinate and implement something of this nature will require sustained international cooperation, but what better venue to begin than the Third International Conference on Financing for Development (IMF), which is taking place next week in Addis Ababa, Ethiopia’s capital. There, the IMF plans to discuss “international policy issues such as maintaining global financial stability and international tax cooperation.” Along with other international efforts and the difficult realities faced by financing the Sustainable Development Goals, Addis Ababa may prove to be a turning point for GPGs.

– John Wachter

Sources: United Nations Industrial Development Organization, The New York Times, International Monetary Fund

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Cuban Economic Growth

Cuban Economic Growth
For decades, Cuba kept itself off the radar and rarely allowed access to the United States. However, Raul Castro, brother to the infamous Fidel Castro and current leader of Cuba, has recently allowed small changes to make an impact on Cuba.

After years of economic isolation and little internal growth, Castro faces a difficult job in making up for lost time. Small programs like the Cuban Emprende make a world of difference as community leaders learn how to grow their small businesses into larger, more modern companies, leading the way for Cuban economic growth.

The distribution of wealth in Cuba is skewed, with the poor representing a large portion of the population. The average Cuban worker earns around $20 a month, and little has changed in the past 50 years. Cuba has now opened the doors to looking into private investments, a monumental step in the direction of globalization.

In the past, Cuba was mostly affiliated with Latin and South America. By allowing other countries, such as the U.S., into the Cuban system, the people of Cuba are looking at a brighter economic future.

However, members of U.S. Congress seem tentative about whether this Cuban economic growth and reform are benefiting the labor rights as well as human rights of the population. Raul Castro has yet to make clear how the people are being affected by this change in internal government, so outsiders are weary of possible retribution. It is unclear as to how the U.S. will react to these changes and opening up foreign investment. Since the revolution of Cuba in the 1960s, the U.S. has not been allied with Cuba.

Chamber President Thomas Donahue recently visited the island for the first time in 15 years. He reports positive change in the direction of free enterprise, fewer government jobs and increased private hiring. Cubans are seeing a better daily life as companies begin to modernize and improve the impoverished neighborhoods as jobs become more readily available.

Raul Castro has recently implemented programs teaching Cubans how to successfully operate small businesses and create meaningful business relationships. Programs such as this offer the lower class an opportunity to support themselves in the realm of business and become potential business partners as foreign investors start to peer into Cuba’s economy.

Cuba is still in the early stages of change as its people adjust to the government’s new approach, but current conditions are looking promising as people find their new niches in a budding economy.

– Elena Lopez

Sources: Reuters, NY Times, TIME
Photo: InterNations

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NPR Makes a T-Shirt

NPR Makes a T-Shirt
Take a look at the shirt you’re wearing. Odds are it’s better traveled than you are.

National Public Radio’s (NPR) Planet Money recently published a multimedia series on the making of a T-shirt and its extraordinary journey through the world economy.

Believe it or not, your shirt and others like it are a wonder of the modern world.

The five part series follows a T-shirt from cottonseed to ink print. It would seem like a simple process, but the Planet Money special reveals the hidden complexity of a global enterprise.

Behind each of these cheaply produced shirts are multinational corporations and complex trade deals between nations — but, most of all, people’s lives. While the series takes a look at the entire process, it is the human connection that it seems most poised to drive home.

Although the chapters are mostly delivered through a dispassionate reportage, the deleterious effects of the garment industry in the developing world are likely to ignite the passions of most viewers.

Perhaps the most illuminating of these stories is that of Jasmine in Bangladesh.

More than 4 million people like Jasmine work in the garment industry in Bangladesh. Many of these people work for less than 35 cents an hour.

Cramped living and working environments, the absence of electricity and running water as well as disease make life extremely difficult. Jasmine, herself, lives in a small group home without running water and sends most of her earnings to her parents.

However, these hardships pale in comparison to the risk many of these workers face.

For instance, while the Planet Money team was filming, a major garment building in Bangladesh collapsed killing over one thousand workers. The online series shows difficult images of bodies tangled in the framework of the building.

Tragically, without the garment industry, NPR argues, Bangladesh would be worse off still.

In the end, the shirt they made traveled thousands of miles by air, by land and by sea. Even so, it’s total production cost just over 12 dollars. The cost in time, travel and human toil, however, is something a bit larger.

It is a complicated process with complicated results but for people in developing nations that make the goods that the developed world buys, the garment industry’s work is a double bind.

On the one hand, it sustains their entire nation and on the other, it does not sufficiently provide for, or protect, its workers. If nothing else, NPR has created a series that does not shy away from presenting a complex image of an industry, its products and its people.

– Chase Colton

Sources: NPR, Al Jazeera
Photo: Giphy.com

The Widening Gap of Global Inequality

poverty-reductionThe gap between rich and poor is widening. It takes money to make money, and so inequality is becoming exacerbated as the rich get richer.

Rising inequality has impeded efforts to eliminate global poverty. With a greater share of wealth being captured by those in the highest income bracket, the amount reaching the lowest is continually decreasing. Two nations with equivalent GDP growth rates could have drastically different levels of poverty depending on income equality. For example, in India, the net worth of 46 billionaires is $176 billion. This number represents 12% of the GDP of India, as opposed to 1% fifteen years ago. Half of that amount would be enough to eliminate absolute poverty in India.

The irony of this unchecked growth of the upper classes is that eventually it can result in a restriction of growth. Extreme inequality slows the development of markets and limits investment opportunities for the poor. Inequality also diminishes the political power of the poor. This skewing of power can reduce government efficiency and allow for tax evasion by the wealthy, limiting the government’s ability to invest in necessary infrastructure to sustain growth.

If we’re to see success in the fight against global poverty, then rising equality must be allowed to play its part.

– David Wilson

Source: The Guardian
Photo: Global Post

10 Ways To Be Involved in Foreign Affairs

10 Ways To Be Involved in Foreign Affairs
Directly from the Department of State Official Blog (yes, they have a blog), here are 10 ways to be involved in foreign affairs – how the average U.S. citizen can engage in international issues:

1. Travel. Nothing is better for understanding the world than travelling in it. Apply for a passport and download the free “Smart Traveler” App.

2. Study abroad. The U.S. Department of State offers programs for U.S. citizens to go abroad for cultural, educational and professional exchanges.  Get truly immersed in another culture – go to exchanges.state.gov to find a program that’s right for you.

3. Host an international student, scholar, or professional. There are a variety of hosting opportunities where you can invite an international visitor to your home for a meal, a place to stay during a week-long training program, or a semester of academic study.

4.  Export. The Dept. of State encourages and supports any business looking to begin or expand their exporting. Find information online to assist and participate in the State Department’s Direct Line Program — a unique opportunity for American businesses to speak directly with U.S. Ambassadors overseas.

5. End hunger. Almost one billion people suffer from chronic hunger, and, astonishingly, more than 3.5 million children die each year from under nutrition. Visit feedthefuture.gov to find out how you can partner with the U.S. government’s global hunger and food security initiative by donating products, services, or resources.

6. Stop wildlife crime. Take the online pledge to learn more about wildlife trafficking, inform others and commit to become a more responsible consumer in order to help save the planet’s wildlife.

7. Fight modern slavery. Twenty-seven million people worldwide are victims of human trafficking, or modern slavery. There are many ways you can help stop it; read the full list. 

8. Partner with the Dept. of State. The U.S. Department of State has entered a new era of collaboration and partnership with non-governmental groups. Find out how your organization can promote economic growth and opportunity by investing in the welfare of people around the world.

9. Invest in women and girls worldwide. The Secretary’s International Fund for Women and Girls helps combat violence, improve education and health, and creates economic and political opportunities for women worldwide. Or be a mentor with TechWomen, matching mentors with emerging female technologies in the Middle East and North Africa.

10.  Follow the Dept. of State on social media – and engage. More than 25 million people around the world follow the U.S. Department of State and U.S. diplomatic missions on social media. People are contributing their ideas to a global online conversation; join in!

 – Mary Purcell

Source: Department of State Blog

 

Does Globalization Help or Hurt Women?

Does Globalization Help or Hurt Women?

Some say globalization has excluded or even impoverished women due to disproportionate job loss from an influx of foreign goods into domestic markets. Others say that living standards have improved for women due to the creation of new jobs and economic growth in second and third-world nations. The discussion is nuanced, and there are both improvements and impediments to women’s equality:

Pro-trade Research

  • The World Bank’s 2012 World Development Report (WDR 2012) finds an increase in international trade has tended to increase women’s employment.
  • The value of trade growth goes beyond just job creation. Employment allows greater autonomy for women working outside the home, empowering them with greater decision-making authority – a key shift in development for the woman, and for the next generation.
  • The arrival of garment jobs in Bangladesh increased the probability of a five-year-old girl attending school. Either due to parental awareness to prepare their daughter for skilled work later, or simply because they had additional income.
  • Greater trade has increased job opportunities for women in many countries. This is especially true for manufacturing and service exports, characterized by labor-intensive production.
  • In Korea, the number of women employed in manufacturing grew from 6% in 1970 to around 30% by the early 1990s.
  • In Delhi and Mumbai, call centers now employ more than 1 million people, mostly women (WDR 2012).
  • In Bangladesh, female garment workers have higher self-esteem than other female workers in non-export industries; some even take employment against their family’s wishes.
  • In one study, female garment workers in Bangladesh marry and give birth at a later age.

Trade-inequality Research

  • There is still a wide disparity in the women-to-men wage gap for the same job.
  • In Korea, even with high labor demands, the women-men wage gap narrowed only marginally between 1975 and 1990 (Seguino, 1997).
  • Women are subject to more job insecurity. In Turkey, gross job reallocation is larger for women than men, showing women are subject to more volatile employment status. In Chile the gross job reallocation rates are more than twice as high for women than men.
  • A systemic issue is that greater employment segregation emerges as new industries and companies expand and increase in value. In East Asia, as countries have moved to more skill-intensive manufacturing, there has been a decline in the female manufacturing workforce. Between 1980 and 2008, women’s share of manufacturing employment has declined from 50% to 37% in Chinese Taipei, and from 39% to 32% in the Republic of Korea (Berik, 2008; ILO, 2011).
  • In agriculture, women’s weaker land rights and limited access to productive inputs can limit their opportunities to benefit from greater agricultural trade.
  • While gender gaps in schooling have largely closed, association in different fields of study, and thus different career opportunities, continues to be an issue. In higher education, women are more likely to choose fields related to education and health, but not science, engineering, or construction (WDR 2012).
  • In severely disadvantaged populations, such as remote rural areas, girls still tend to drop out of school more often than boys.
  • Companies under-invest in training female employees, reflecting the view that men are less likely to leave paid work to fulfill domestic responsibilities (Seguino and Growth 2006).
  • In Afghanistan, as one example, women’s mobility is severely limited because they are not allowed to interact with men outside the family, or work outside the home without permission from a male family member, or to own their own land.
Does globalization help or hurt women? It seems the expansion of global markets and trade is quantitatively lifting more women out of poverty and providing new access to opportunities. The impediments for women are indicative of historic sexism, and potentially greater globalization will help eradicate antiquated traditions. Read the full article for a discussion on how to turn the trend toward greater equality – all the time.
– Mary Purcell

Source: ITC
Photo: UFA.lookmart

The Top 3 Suprising Health Benefits of Globalization

global health 2_opt
Contrary to popular opinion, globalization has several little known and widely unpublicized effects on overall health and longevity. Previously, this phenomenon was primarily centered around the interconnectedness of people, ideas and economic capital; however, recent findings show that it might not be operating within the preconceived limitations and that there may actually be some health benefits of globalization.

Researchers at the University of Netherlands and Luephana University collaborated to analyze the mortality rates of globalized versus non-globalized countries. Utilizing the Maastricht Globalization Index (MGI) as a barometer to measure the various associations between globalization and health in a nation, scientists were able to determine-via statistical analysis-certain positive outcomes. Their results were unexpected, and what emerged from the study were three surprising health benefits of globalization.

  1. Infant Mortality Rates – In comparing the MGI to infant mortality rates, research values overwhelmingly showed that those countries with greater globalization levels also had reduced infant mortality rates. Scientists theorized that the converse relationship between the two might have to do with the higher educational, GDP and neo-natal care levels of a globalized versus non-globalized nations.
  2. Under Five Mortality Rates – Following the completion of the study, researchers were also able to determine that under-five mortality rates were decreased in those nations exhibiting higher levels of globalization. In regards to under-five mortality rates, the decreased numbers of female smokers was a significant contributor to the health benefits of globalization.
  3. Adult Mortality Rates – Even more surprising, the MGI showed a significant correlation between higher rates of globalization and lower rates of adult mortality in a nation. These health benefits of globalization were the most unexpected, and researchers found that improved access to sanitation was the greatest statistical contributor.

It appears that based upon these findings, there is a certain amount of scientific evidence highlighting the health benefits of globalization. Thus, advocating for the increased economic stability and food security factors of global poverty reduction is exactly what is needed to combat infant, under five, and adult mortality rates.

– Brian Turner

Source: Globalization and Health

Photo: Imperial International Public Health