COMMUNIQUE OF THE MEETING OF THE
OECD EMPLOYMENT, LABOUR AND SOCIAL AFFAIRS COMMITTEE
AT MINISTERIAL LEVEL
Paris 14-15 October 1997
___________
TUAC EVALUATION
Introduction and Overview
1. The OECD meeting of Labour and Social Affairs Ministers was the first
of a series of high level meetings on jobs to be held over the coming months
which includes the Luxembourg European Summit and Kobe G8 Jobs Conference
in November 1997 and another G7/G8 Employment Conference to be held in
London in February 1998 under the chairmanship of the UK government. The
outcome of this OECD meeting of Labour Ministers therefore may be significant
in setting the tone of the debate at the forthcoming meetings.
2. The meeting was chaired by Mr. Ad Melkert, Minister of Social
Affairs and Employment of the Netherlands. The agenda covered:- policies
for low-paid workers and less skilled job-seekers; enhancing the effectiveness
of active labour market policies: a streamlined public employment service;
and lifelong learning to maintain employability. An informal debate also
took place over the policy implications for governments of changes in workplace
oganisation. The issue of globalisation was also touched on.
3. The Communique, final press conference, plus the tone of the speeches
made at what was the first meeting of Labour Ministers in five years, represent
an evolution in the application of the OECD Jobs Study. Now, low pay is
"an economic and social problem in itself", and together with
persistent unemployment they represent "threats to the social fabric".
The Communique referred to the variety of policies being put in place to
help the low-paid and less skilled job-seekers that point away from the
old agenda of labour market deregulation. At the concluding press conference, Mr. Melkert went further by noting the "remarkable consensus
among Ministers", on the need for policies that "stimulate people
to accept change without fear", and the positive role that minimum
wages play in providing decent wages for workers and their families, further
noting that such a consensus was not possible five years ago. Furthermore,
Donald Johnston used the Ministerial meeting to announce a major OECD project
into youth unemployment, that may culminate in a summit meeting in late
1998.
4. As to the future of Public Employment Services, reform rather than
revolution was seen as the answer. Australia's attempt to get Ministers
to endorse their contestable market system for all reemployment services
was defeated. On lifelong learning, the role of trade unions was recognised
by Ministers when they, "saw an urgent need for concerted action,
in co-operation with their colleagues ... and the social partners"
in designing and implementing policies in this key area. At the final press
conference it was announced that the OECD would consult TUAC and BIAC on
this.
5. Disappointingly Ministers did not discuss the proposal in the TUAC
statement to Ministers, and reinforced during the consultations, for a
sustainable growth initiative to underpin labour market change. A mixed
message was given as regards globalisation. On the one hand, Ministers
merely "reaffirmed their commitment to observe internationally recognised
labour standards and looked forward to the outcome of work on this currently
underway at the International Labour Organisation" without announcing
new initiatives. One the other hand, "Ministers called on the representatives
of workers and employers to play an active role in finding economically
viable and socially acceptable solutions to the challenges of globalisation."
An early test of OECD governments' commitment to core labour standards
will be whether they agree to a binding clause guaranteeing labour standards
in the Multilateral Agreement on Investment, currently under negotiation.
6. The messages contained in the Communique must spread across the work
of the OECD, especially as regards the next phase of the Jobs Strategy.
The focus must now shift towards the positive elements contained in the
original Jobs Study, notably during the country surveillance process. Indeed,
the Chair of the meeting called for a "fine tuning" of the Jobs
Strategy "where knowledge on best policies is still insufficient and,
consequently, there is room for alternative policy choices." TUAC
will seek to ensure that trade unions have a voice in the OECD's follow-up
work to the Ministerial meeting, especially that on youth unemployment
and lifelong learning.
Policies For Low-Paid Workers and Less Skilled Job-seekers (§§
8-11)
7. TUAC has criticized in the past the follow-up to the OECD Jobs Study
for arguing that the unemployed had to be "priced" back into
work and for presenting a "one size fits all" model for countries.
This negative perspective must now change. The Communique makes it clear
that unemployment and low pay are both a threat to the social fabric, and
for the unemployed, "getting them back into work would only be a partial
and temporary response" and that workers "get trapped in low-paid
jobs or revolve between a low-paid job and no job". The OECD Secretary-General
said at the meeting: "There is an urgent need for Governments to design
and implement effective adjustment policies which bring people with them."
The Chair of the meeting warned the meeting against efforts to deregulate
"labour relations in ways which are not compatible with conditioning
labour skills, productivity and motivation in an evenhanded way".
Governments should "not be ideological on the question of labour market
regulation. At times it may be more strategic to replace the option of
deregulation by decent regulation, in order to build a bridge between flexibility
and security."
8. In the place of the "one size fits all" strategy, Ministers
agreed "that only a broad-based strategy, comprising macro and micro-economic
policies, and tailored to the specific circumstances of each country"
would significantly improve the performance of labour markets. Within this,
a twin track approach for the low skilled was endorsed, whereby once in
employment, workers should be motivated and have the opportunity to climb
the career ladder. Incentive structures should be put in place that encourage
employers to recruit and train the less skilled, and which help workers
to accept jobs, and to invest in their career development. The Communique
also states that "a particular responsibility falls on the social
partners in setting wage structures which favour the upward mobility of
low-paid workers". In the longer term lifelong learning strategies
would help the low-skilled.
9. Ministers discussed a number of different approaches adopted by Member
countries to achieve these objectives, including, subsidies to employers
to hire and train low-wage workers, public sector job creation and training
schemes, and reductions/exonerations in payroll taxes for the low-paid
coupled with wage floors. On the matter of minimum wages the Chair of the
meeting in the final press conference stated that they were needed to raise
the net income of workers to stop the rise in the numbers of working poor,
and that policy makers were no longer scared by the job destruction arguments
made against them. Ministers accepted that there was insufficient evidence
as to which policy mix would achieve the overall objectives and called
on the OECD to do further work in this area.
Active Labour Market Policies (§§12-16)
10. The second theme in the Ministerial discussion must be regarded
in the context of contracted public expenditure which has hit active measures
in labour market policies in many OECD countries. The discussion of the
theme by itself is therefore an attempt by Ministers to re-vitalise and
re-gain momentum in support of a longstanding policy instrument which lost
the support of the Finance Ministries and Treasuries in the period since
the last OECD Labour Ministerial in January 1992. While spending on labour
market programmes is not expected to rise significantly in the near future,
Labour Ministers' emphasis was clearly put on enhancing the effectiveness
of active policies.
11. A key to prevent the unemployed drifting into long-term unemployment
and social exclusion is seen in improving the job-search assistance function
of Public Employment Services (PES). The communique recommends a closer
integration of the functional delivery of active and passive (income support)
labour market policies in those countries where agencies are institutionally
separated. Ministers stressed the importance of early intervention in job-search
assistance.
12. Private sector job placement services were not regarded as an alternative
to Public Employment Services. At best they constitute an additional element
aimed at exposing the PES to competition in some of its functions. On the
contrary, Ministers regarded the effective provision of placement and related
services as an essential element of a nation's infrastructure. The "action
point" in this section of the communique is therefore a call by Ministers
on the OECD to continue the ongoing work of reviewing member countries'
Public Employment Services with a view to holding a conference in the future
which will draw further conclusions for policy.
Lifelong Learning To Maintain Employability (§§17-20)
13. During the TUAC consultations, a key message given by the trade
union side to Ministers was that Lifelong Learning, while supported by
everybody, was in many instances an "empty box" unless concrete
action is identified. Ministers have now moved towards filling that box,
by building on the partnership approach designated as the way forward by
the January 1996 meeting of Education Ministers. Ministers called for "concerted
action" in co-operation with their colleagues in Education and Finance
Ministries plus other public authorities, and importantly, the social partners.
14. Making the link between lifelong learning initiatives in schools,
wider labour market programmes and within enterprises, Ministers recommended
closer collaboration be established between the OECD's Employment, Labour
and Social Affairs Committee and the Education Committee on matters of
mutual interest in the field of lifelong learning. It was also recommended
that Ministers from these two government departments meet together on these
issues. This welcome step forward was called for in the TUAC statement
to Ministers.
15. Specific areas where concerted action with the social partners and
others was called for in the area of lifelong learning included: investment
and finance related issues; improving mechanisms for the early identification
of individuals requiring access to lifelong learning, including the development
of different criteria to identify those more at risk from drifting into
long-term unemployment and social exclusion; the establishment of, or adaptation
of existing mechanisms, e.g., individualised development plans to facilitate
ease of movement between lifelong learning opportunities linked to labour
market interventions and those such as adult education that are linked
to non-labour market services; to establish broader criteria for the assessment
and recognition of skills; and the development of information channels
to assist the assessment by individuals of the quality, costs and effectiveness
of different learning opportunities.
Globalisation
16. It is significant that the communique contains a section on the
effects of globalisation on employment as this was not part of the formal
agenda of Ministers. Ministers recognised the "significant adjustments
in terms of the structure of production and employment" and warned
against the "real risk of a popular backlash against globalisation"
in the "current situation of high and persistent unemployment ...
and widening wage and income inequalities". The strategy that they
have adopted on paper is also in accordance with TUAC's views: "assisting
workers to move into high-productivity, high-wage jobs" as a response
to globalisation for that "workers worldwide be in a position to benefit
from its opportunities".
17. "Ministers reaffirmed their commitment to observe internationally
recognised labour standards" and in this context gave explicit support
to ongoing work in the ILO. But no new initiatives have been taken. Wider-ranging
demands by the U.S. Administration and a few other governments to follow
up the OECD's mandate to work on trade, investment and labour standards
given by Finance Ministers at the May 1997 Ministerial Council, did not
find sufficient support. Governments must now implement their commitments
in practice in the OECD negotiations on the Multilateral Agreement on Investment
(MAI), the debate inside the World Trade Organisation as well as in the
International Labour Organisation itself. Labour Ministers at least ascribe
the social partners a role "in finding economically viable and socially
acceptable solutions to the challenges of globalisation".
