Workers Rights

The weak bargaining position of workers in poor countries makes it unlikely that their negotiations with employers will secure decent compensation and safe working conditions. But their weak bargaining position is linked to their low productivity and skills. Today U.S. and European labor standards are much higher, and labor regulation enforced more rigorously, than was the case 50 years ago. The improvement is closely associated with workers’ increased skill and productivity. Even in the developing world, the better-off countries are more likely than the poorest to conform to ILO labor standards. In countries with per capita income of $500 a year or less, 30—60 percent of children between the ages of 10 and 14 work. In countries with per capita income of $500—1,000, just 10—30 percent of youngsters work. As productivity improves, so too will the bargaining position and wages of industrial workers. If history is any guide, national labor standards will improve as well.

The most reliable way to improve the condition of third-world workers is to boost their average productivity. Concerned voters in rich countries can help make this happen by pressing to open up their own markets to third-world products. Many low-income countries have a comparative advantage in manufacturing apparel, textiles, and footwear and in producing staple foods, fruits, and vegetables. Rich countries often impose high tariffs or quotas on these products, and nearly all provide generous subsidies to their farmers—thus denying third-world producers and farmers access to a huge potential market. The World Bank estimates that tariff and nontariff barriers, together with subsidies lavished on U.S. and European farmers, cost third-world countries more in lost trade than they get in foreign aid.

If we insist that developing countries meet immediately the labor standards that the richest countries achieved only gradually, we will keep some of them out of the world’s best markets. The poor countries that agree to abide by ILO standards will occasionally be challenged—sometimes by representatives of rich countries more intent on protecting their own workers from “unfair” overseas competition than on improving the lot of third-world workers. While the moral case for requiring our trading partners to respect labor rights is compelling, the case for removing trade barriers that limit the product markets and incomes of the world’s poorest workers is just as powerful.