TUAC puts case for workers’ rights and bargaining power in development co-operation

The case for development cooperation to promote unionisation and collective bargaining is presented in a chapter of the OECD’s annual Development Cooperation Report 2024 launched at the UN High Level Political Forum.

Written by Veronica Nilsson and Martin Denis of TUAC, the chapter argues for an increased share of official development assistance for the promotion of labour rights.

TUAC argues that, in addition to investing in social protection, guaranteeing workers a fair wage and ensuring respect for their fundamental rights is the most systemic solution to extreme poverty and inequality that can be provided by Official Development Assistance (ODA) providers.

This was given a boost by OECD Secretary General Mathias Cormann who said at the launch of the OECD Development Cooperation Report at the UN that ODA should be paired with support for collective bargaining. He said “Official Development Assistance which supports the transition to formal employment can be a powerful force for poverty reduction by improving working conditions, enhancing coverage of social protection and encouraging higher wages, especially when paired with support for collective bargaining.”

Given that most people living in extreme poverty have a job, the authors demonstrate that labour productivity has increased more than real wages over the last four decades, in both developed and developing countries, and that the share of labour as a percentage of gross domestic product has been declining since the 1980s.

The chapter exposes the flawed narrative that labour market regulations and institutions are barriers to development and says that it has led to misguided calls for deregulation of the labour market and collective wage-setting institutions in development assistance programmes.

It shows that on the contrary

• Wage growth and decent work lifts people out of poverty and reduces inequality,
• Collective bargaining is the key to fair wages and better working conditions, and is central to foster a just transition to carbon neutral economies,
• Strengthening collective bargaining greatly contributed to reducing inequalities in developing countries, including for instance in Latin America in the 2000s,
• There are many positive examples of development co-operation supporting the advancement of worker’s rights.

“Collective bargaining also creates social cohesion” said Veronica Nilsson “and is an excellent tool to help implement all UN Sustainable Development Goals. Trade unions are and should increasingly be considered as partners in the design and implementation of development cooperation projects.”

The chapter gives positive examples of development assistance supporting unions to achieve higher wages for working people, including how South Africa’s trade unions campaigned for and won a national minimum wage with support from development co-operation.

The OECD’s Development Cooperation Report also:

• Shows that the impacts of climate change will fall disproportionately on the most vulnerable and threaten to push an additional 132 million people into extreme poverty.
• Set out political economy risks: elite capture of revenues generated by transitions are likely to exacerbate inequalities.
• Says that while OECD Development Assistance Committee members consider the reduction of poverty and inequalities as an explicit objective when allocating ODA, few monitor how much actually targets these objectives, and there is no common or comprehensive method for guiding and measuring ODA allocations to poverty and inequalities, the report finds.
• Less than one of every ten US dollars, or 9.5%, of DAC members’ bilateral ODA went to grants for poverty-reducing sectors in 2022, amounting to USD 19.6 billion. This was a decline from the 11.5% share in 2021. Shares of aid to gender, social protection and justice have declined since 2020.

It also discusses key policy responses to achieve the objectives of the Agenda 2030 for sustainable development in the context of climate change and the imperatives of a green and just transition.

See the full chapter by TUAC or see chapter 8 of the full OECD report at link below

See the full OECD Development Cooperation Report 2024