A broad range of feminist organizations and allies have expressed opposition and concerns over the World Bank’s recent recommendations in the World Development Report 2019, which focuses on increasing labor flexibility and delinking corporate accountability on respecting labor rights. Such recommendations come in the context of the report’s argument that automation is about to replace workers on a large scale, and so it is necessary for labor regulations to adapt to the changing world of work.
While the report suggests that the role of the state be stepped up in terms of providing more progressive social protection, it also proposes that private companies should not be burdened by the “rigidities” of labor regulations. The report argues that the emerging “gig economy” such as ride-hailing platforms and e-commerce will create more jobs, while disputing concerns that this kind of work will lead to a race to the bottom and ignoring the breadth of evidence on how it has led to even more precarious work.
The report also claims, in contrast to widely available evidence, that global inequality is not worsening but rather becoming better, while ignoring the role that the World Bank itself has had in creating those inequalities.
The report proposes that governments should finance inclusive social protections through regressive tax measures such as value-added tax and reducing subsidies, while evidence shows that such measures have gendered impacts and hurt the poor the most.
While the report makes the commendable proposal to close down tax havens, the World Bank Group itself is known to have supported companies that use tax havens. The report also proposes that regulations such as fixing minimum wages and affecting employee retention and dismissal should be done away with to allow for “flexicurity” in the labor market.
In a world where the richest 1% received 82% of the wealth created last year, and where women’s labor has already been deregulated to maximize corporate profits, such recommendations would only worsen the working and living conditions of workers and increase inequalities
This is not the first time the World Bank has advocated for measures to water down labor regulations for decent work and wages. But in a world where the richest 1% received 82% of the wealth created last year, and where women’s labor has already been deregulated to maximize corporate profits, such recommendations would only worsen the working and living conditions of workers and increase inequalities.
The working women of the world are often concentrated in precarious, informal, unregulated and low-wage jobs such as domestic work, service sectors and the bottom end of the global value chain. The global economy is currently functioning through women’s underpaid and unpaid work.
If corporations are freed from any obligation to provide workers with decent, non-discriminatory and safe working conditions with the excuse of improving their adaptability, it will disproportionately affect female workers and promote a race to the bottom, with women at the bottom.
State human-rights obligations include providing a living wage and decent work and living conditions as well as obliging corporations to respect human rights, particularly labor rights.
The World Bank argues that increasing regulations would lead to more informalization of work. This is a myth, and states can and must actively introduce and increase access to social protections, living wages and decent working conditions according to international labor standards and end any form of precarious, informal work.
Likewise, instead of putting pressure on the poor to finance public services, governments, as well as international financial institutions, should support the implementation of direct and progressive taxes such as corporate and capital taxes as well as strengthening global tax cooperation through establishment of a global tax body. As immediate measures, we strongly suggest that all transnational corporations start country-by-country public tax reporting to advance tax transparency.
We are deeply concerned about the World Bank’s recommendations encouraging governments to contravene their human-rights obligations. We reiterate the recommendations of the Independent Expert on the promotion of a democratic and equitable order addressed to the World Bank and International Monetary Fund that there are no “human-rights-free zones” and that the Bank must stop promoting labor-market deregulation.
We call on the World Bank to:
- Refrain from making recommendations that would further undermine rights and protections and surrender the Bank’s mandate to promote international human-rights standards and norms.
- Engage in open discussions and an inclusive and meaningful participatory process with rights holders, trade unions and diverse groups of civil society.
- Support the implementation of direct and progressive taxes as well as strengthening global tax cooperation through establishment of a global tax body.
This article was co-written with Daisy S Arago, the focal person of the Asia Pacific Forum on Women, Law and Development‘s Labor Program. She is the executive director of the Center for Trade Union and Human Rights based in Manila. She has decades of experiences organizing workers and advocating for women’s rights, labor rights and intersection between development and climate justice.