Impact of Globalization on Trade Unions in the Philippines: Rationalizing Labor Exploitation through the New International Division of Labor

ANTO COMETA

In the Context of the Modern World System

Modernization had such extensive and varied effects on the both world economic markets and its societies. The core section of the paradigm of the modern world system and the division of labor incorporates high standard of technology which results in finished products distributed in both domestic and foreign markets. Due to the nature and how its market operates, most of its workers belong to the formal sector, thus providing an elevated standard of living in contrast to those in the exterior sections – semi peripheral and peripheral segments.

The geographic expansion of the capitalist world economy (particularly industrialized or developed countries) not only altered political systems but also changed the labor conditions wherever it has penetrated. The functioning of the world economy has brought mounting disparities between economies as well as with the abovementioned sections.[1] It has brought distorted growth and development in which social inequalities between the sections of the world economy have increased rather than imparting prosperity for all.

In the Context of Globalization

The new trend called globalization has now replaced the old paradigm of modernizing the world system. Globalization has outlined the economic process which was an outcome from the changes in technology, investment and production and distribution. It is in the framework of globalizing the economies of countries in order to utilize and maximize the resources and economic potential of a specific nation. Foreign investments and its leveraging of resources as well as relocation of its business operations across borders particularly to third world countries has greatly affected the Philippine industrial relations as well as the country’s economic structure.

The new paradigm of the international division of labor states that less developed (or underdeveloped) countries are made to specialize on labor-intensive, low-technology export commodities while those considered to be more developed focuses on capital intensive, high technology products of the multinational companies as well as transnational corporations.[2] In the Philippines, the most evident effects or trends with reference to globalization both on firm and industry levels are, trends toward labor flexibilization, trends toward the informalization of labor, trend toward an HRD strategy. These in turn have an effect on the workers as well as trade unions at it poses threat on job security which could increase the country’s unemployment and underemployment conditions, restriction on legislation matters, base reduction for union organizing and difficulty in collective bargaining.[3] Such effects create greater instability in the Philippine Industrial Relations System as it already is. The outcome illustrates the weakening power and influence of the labor sector which could result in the ineffectiveness of the country to deal with such crisis.

Globalization to a certain extent pushes workers in the formal sector to the other end. The future of unionism cannot be isolated from the future of the workers in general. The determination of that future will be a product of many procedures associated with an integrating world. These include economic restructuring, market-driven policies, technological change, the degree of government intervention in labor markets and industrial relations, flexibility in the way work is organized and growing diversity of work, and the increasing dichotomy in terms of employment and income opportunities between workers from both formal and informal sectors. [4]

Economic growth brought about by globalization is advantageous as it could facilitate in the development of the country. However it should also be taken into account the negative consequences that could be incurred by having such since effects of these could bounce back and have an effect on the state of the country’s economy. It is without a doubt that economic needs of a country could not be disregarded and consequently, compromises are inevitable. It is imperative to emphasize that is not just austerely optimizing the conditions of the market but to reconcile the interest of the workers with the welfare and economic needs of the society as whole.[5] Trade unions play a major role in the representation and formulation of certain socio-economic policies concerning not only those in the formal labor sector but also for those classified as informal. It must be taken in great consideration in order to adjust suitably to the changing trend in the world economy and landscape in the Philippine Industrial Relations System.

Globalization has taken its socio-economic toll in the exploitation of the labor sector, primarily those located in third world countries such as the Philippines. The old model of the international division of labor has been replaced by a more exploitative paradigm having direct effect on those that belongs in the working class and its trade unions. Addressing the economic needs by adapting to the changing conditions brought about by globalization is essential for the country’s survival. However, interests of workers in the formal labor sector should also be taken into consideration to fully capitalize on the changing trend in the economy.

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[1] Wallerstein, I. 1974 The Modern World System: Capitalist Agriculture and the Origins of the European World Economy in the Sixteenth Century, New York: Academic Press

[2] Ofreneo, R. 2000, WTO and Globalization: Trade Union Issues and Challenges in the Asia Pacific, p.4

[3] Ofreneo, R. 2000, WTO and Globalization: Trade Union Issues and Challenges in the Asia Pacific, pp. 11-13

[4] Bitonio Jr, B. Unions on the Brink: Issues, Challenges and Choices Facing the Labor Movement in the 21^st Century,

[5] Weiss, M. Globalization: Challenges and Opportunities for Philippine Industrial Relations in the Next Millennium, J.W. Goethe University, Frankfurt (Germany)