Labor Standards and International Competitiveness:
A Comparative Analysis of Developing and Industrialized Countries
Working eight hours per day, earning minimum wages and taking rest on labor’s day – is it a good perspective for anyone? Really doubtful. If no changes in labor standards were provided, the abovementioned ones would be hardly suitable for any contemporary worker. The given article discusses how the labor standards have been changed over a century and how ILO (International Labor Organization) affects industrialized and developing countries in the absence of regulatory power to force its members to adopt those standards.
Labor standards differ from one country to another. Usually, they are based on country’s economic and trade conditions. For example, in many industrialized countries workers protested against job losses and slowdowns in creation of new jobs. Actually, it may be viewed as a result of exploitation of workers which ensure lower costs for investors when moving their capital to developing countries. Indeed, the working conditions in developing countries are more favorable to employers.
If then, are there any means or policies to abolish exploitation of employers in developing countries? Raynauld suggests two ideas. The first is to limit the mobility of capital if the reason for moving is to save wages costs. The second is the use of international trade agreements which will force employers to adopt certain labor standards, so that the workers in developing countries would be protected and provided with equal rights as workers in industrialized countries. Generally, mobility of capital to developing countries aims at seeking cheaper labor force. Exceptions are present, but they are too rare. Further, movement of companies’ capital to developing countries should be limited. It is possible, since ILO has the closest characteristics that can function as international trade agreements. But the problem is that ILO fails to force anyone to adopt their labor standards, though its main task is to develop and define labor standards for all countries of the world.
Furthermore, Raynauld enumerates ILO conventions such as human rights, employment policies, industrial relations, working conditions, health and safety in the workplace and social security. He also analyzes which countries are more likely to voluntarily ratify ILO’s conventions. The results appeared unexpected. According to Table 1.1 and 1.2, most OECD countries ratified ILO’s conventions except the U.S. and Canada. Raynauld argues that one of the reasons why some countries ratify many numbers of ILO conventions and others don’t is that supporting legislation is not available in some countries.
How about developing countries? Observing workers’ conditions, it becomes obvious that developing countries don’t have supporting legislation for ILS’s labor standards. In case they have they wouldn’t provide uncomfortable working condition, such as low-wages, too many working hours in negative working environment. Also, if ILO gains regulatory power to force its member to adopt labor standards, there will be no more cheap labor which attracts mobility of capital to developed countries. Moreover, exploitation in developing countries global job crisis would be prevented as well.