AT MINISTERIAL LEVEL
(16-17 May, 2001)
Economic Growth Session
We welcome this opportunity to discuss with the Ministerial Council
some of the key messages that TUAC takes from the OECD Growth Project.
We have played an active role in the development of the project, and see
it as an opportunity to have an important policy discussion on how economies
can take the “high road” to attain sustainable growth, higher productivity
and higher employment.
The project has reinforced the fact that if Information and Communications
Technology (ICT) is to be used effectively OECD countries have to invest
far more in human capital such as skills and competencies as well as in
the social institutions, such as unions, which give workers a voice in
managing change. If we get this right, social and economic objectives can
be mutually reinforcing. To put it crudely, social policy need no longer
just be concerned with how to “distribute the pie” but can actually “make
the pie bigger”. This, historically, was also the OECD’s original vocation,
namely to link economic development and social progress.
With regard to government policy, one lesson that we feel is neglected
in the growth report is the importance of maintaining macro-economic policies
that achieve the highest level of sustainable growth. This is crucial to
set in motion higher investment, faster productivity growth, increased
use of new technology and higher employment. Given the present context
of rapidly deteriorating growth prospects that is a very important lesson,
particularly for a key meeting of Finance Ministers.
A further priority for governments must be to invest in education
and training, especially ensuring that there is widening access to high
quality education. This means, as the Report recommends, that teachers
must receive decent remuneration and the teaching profession must be re-motivated.
That will cost money. But it is important to remember the slogan
that I once saw on a bumper sticker in New York “if you think education’s
expensive try the cost of ignorance”!
We also have to put in place effective systems of lifelong learning
that create a general entitlement to lifelong learning. In my own country,
Belgium, we have negotiated sectoral agreements with business to ensure
that firms do not under-invest in workers’ training. We have established
sectoral training funds to overcome the “free rider” problem. My colleagues
in the Netherlands have adopted similar approaches, which seem to be working.
In some countries such as the UK unions themselves are providing direct
training and access for adult workers to higher education systems. Workers
who have dropped out of the formal education system may be suspicious of
going back to school or even admitting to their employers their educational
weakness but we find that they will trust their unions. That is why some
companies and governments also are signing partnership agreements with
unions to provide training. It is interesting that the US ICT firm Cisco
Systems have signed such an agreement with the United States Communications
Workers’ Union (CWA). Our conclusion for governments here is that you must
actively encourage such partnership approaches.
It is also important to go beyond just looking at human capital and,
as the report does, show the significance of social capital in managing
change in the labour force. It is significant that the Report’s policy
conclusions recognise the need to give workers a greater voice. For most
workers, unions are and must be their “voice”. There is plenty of evidence
now appearing that shows both that changing work organisation is a key
to higher productivity, and that new forms of work organisation are more
widespread and that schemes of worker involvement are more effective when
unions are involved. Our recommendation to business here is “be flexible”
as we are, don’t hide behind “management prerogative” and let’s discuss
how we can jointly empower workers as some, but too few, good companies
have done. Our recommendation to governments and the OECD is examine and
publicise good practice. Be prepared to offer incentives and disincentives
to ensure socially acceptable change. Make full use of the OECD Guidelines
on Multinational Enterprises to start social dialogue at all levels, from
the boardroom to the shop floor.
Finally we must avoid the destruction of social capital that exists
at national level. Too many OECD countries have seen a continuing rise
in inequality with large numbers of people below the poverty line. A growing
number of the young unemployed in OECD countries are in households where
no-one works, they are detached from the labour market and excluded from
society. So, even within OECD countries, we have to stop the social divide
being re-enforced by a digital divide between the knowledge-poor and the
knowledge-rich. When I look at our membership in TUAC I see that many unions
are radically changing to ensure that we represent knowledge-rich workers
and ensure that they are well-rewarded, but also act to bring the excluded
into the knowledge-society. This must be supported by active government
To conclude, Chair, there are also choices of which competitive strategy
to follow. One route which I would call "the low road" leads to greater
inequality and more fear. It creates corporations consisting of a small
elite of entrepreneurs on the fast track, and the rest are casual labour.
This is not acceptable.
The other path seeks to maximise the benefits of markets but to temper
their excesses with social institutions. It reconciles a capitalist economy
with a decent society. That leads to a future direction of OECD policy
work to deepen the analysis of social capital and, particularly, the role
that trade unions can play as the workers’ voice.