Wage Security in the Time of Financial Crisis

Apr 30th, 2009 | By admin | Category: Campaigns, Formal Economy, Wage Campaigns

Wages for workers, especially low-skilled and informal workers, have been eroded due to the financial crisis. The financial crisis is linked to the hike in fuel and food prices which further affect jobs and devalue wages. Working class families, migrant workers, informal sector workers feel the pinch most. Millions of workers have been retrenched with meager or no compensation at all. Workers are forced to accept wage cuts due to reduced working hours and company closures. Wages globally have fallen 1.55 per cent for each extra1 per cent decline in GDP per capita.

Committee for Asian Women launches a regional wage campaign to unite voices of women workers in the formal and informal economy to demand wage security especially in these times of financial crises.

The global economic financial crisis although it did not begin in Asia is inextricably linked to all parts of the global economy dependent of the export market for growth. As consumer spending in developed countries abruptly declines demand for Asian exports dropped sharply. Witness the slashing production and unmistakable rise in factory closures. Free Trade Agreements (FTAs) have contributed largely to the crisis in Asia when they removed protection measures for local industries and job security. While employers are bailed out by large sums of stimulus packages, workers continue to fall victim to excuses to wage cuts and jobs losses.

It is estimated that the number of unemployed will rise by more than 23 million in Asia while vulnerable unemployment could grow by 60 million. There will be a dramatic increase in working poverty of more than 140 million by 2009. The impact of this on children who will be pulled out of school in order to work and support families cannot be underestimated.

The tremendous growth in Asia in recent years was not matched by equivalent in real wages. Instead there has been a sharp increase in inequalities in many Asian economies. The slow down in the economy will lead to and has lead too stagnant or falling wages. There will be an increase in incidences of wage related disputes.

The huge pay gap between genders makes the crisis a double burden for women. Women in Asia earned only about 70% to 90% of their male counterparts’ pay. According to ILO, the share of women in wage and salaried work was 45.5%, while the share in the employer positions was only 2% in 2007.

The informal economy predominately occupied by women, is expected to redouble in proportion as more workers lose their jobs and are not re-hired in formal work. Informal work, which is not covered by labour standards and laws, and informal workers such as migrant workers, domestic workers, agricultural workers, waste collectors, and home-based workers are not even covered by minimum wage legislations, let alone the demand for living wage.

Committee for Asian Women with a membership of 46 labour unions and labour groups in 14 countries believe that long-term solutions to any financial crisis should include the protecting of workers purchasing power, carefully designed minimum wage, effective collective bargaining systems and well designed social transfer programmes which include provision of relief measures to unburden them from the rising cost of living.

Committee for Asian Women demand that Asian governments:

Enforce labour laws and regulations to ensure job security as well as wage security to all workers.

Support workers in their struggle for decent wages.

Regulate prices of essential goods and services such as food and fuel, health and education, rents and basic utilities such as water, electricity and transportation.

Stop all free trade negotiations and privatisation of public services such as water, energy, health, education, and natural resources.

Recognise informal workers as workers covered by labour standards and legislation.

Protect the livelihoods of small farmers in developing countries and ensure food security for all.

Protect local plants and seeds, especially with medicinal properties, and preserve natural biodiversity.

No Excuses, Wage Security Now!