In the 1980s, the economies that had dominated the world in the postwar era entered a period of far-reaching transition away from state participation to private sector dominance. The conversion process was not uniform: in some cases the shift to market control occurred gradually through the withdrawal of state subsidies for social welfare, and in other instances a radical shift away from public welfare was imposed all at once, in what came to be known as shock therapy.
In the Global South, where most states had limited social welfare nets, economic liberalization converged on privatization of state production and market integration into the global capitalist economy. While twentieth-century industrialization in the capitalist and socialist economies of the North typically took place in the context of social welfare states, in the South, massive industrialization was carried out without provision for healthcare, adequate food, child care, housing, education, unemployment insurance, and old age pensions for workers and their families.
Promoting Foreign Investment for Export Production
In manufacturing, foreign direct investment (FDI) is concentrated in special zones such as special enterprise zones (EPZs) where workers have few rights. Finance capital has become dominant over production decisions, on the basis of criteria that have largely regulated wages and working conditions. Finance capitalists profit by investing in contractors that pay workers the lowest wages (in other words, super-exploitation). Industrial contractors are subservient to foreign multinational investors: if they fail to meet profit expectations financiers withdraw support and shift to lower-cost producers. Even in the mining and petroleum industries, capital reinvests in new forms of extraction when labor costs rise and threaten profits. The threat of disinvestment compels producers to restructure their operations to lower costs and restore high levels of profitability.
Developing countries seek to attract foreign capital by establishing separate governmental regions and enclaves such as EPZs, following a model developed in Mexico and China in the 1980s, as a way of generating investment in manufacturing. In addition to private local producers, labor contractors and real estate firms, the primary beneficiaries of EPZs are multinational brands that provide specifications on production standards and designs for contractors. Profits are guaranteed by the lower production costs achieved through the great disparity between wages available in EPZs in the South, and those prevalent in the North. By setting the price of goods, in most cases multinational brands can in effect set low wage rates. Foreign brands typically maintain agreements with contractors in several countries and regions, which provide multiple production options in the event of labor disputes between contractors and workers.
Just like water, finance capital flows to the lowest level in the Global South. Profits are guaranteed through compliant national ruling classes that seek to keep wages down, prevent workers from organizing into unions, and frequently use armed police forces to put down unauthorized wildcat strikes.
EPZs provide a government partnership to ensure the abundant availability of compliant low-wage labor to foreign export production firms. To achieve this objective EPZs must:
Draw in an oversupply of low-wage workers
Support the capacity of producers to exploit workers through the removal of labor regulations governing wages and working conditions
Promote a union-free environment to warrant continuity in low-wage labor and prevent the possibility of worker stoppages and strikes that potentially interrupt production.
Thus the EPZs extract a high price from the working class of developing countries in exchange for the foreign currency revenues that flow from manufacturing for export. EPZs are managed by government and corporate-appointed authorities to regulate the operation of the entire region. A primary characteristic of the EPZ is to establish an environment that promotes the development of infrastructure facilitating foreign investment in logistics, including regional and international transportation networks, energy and power grids, and that supports the development of social services and accommodation for a compliant labor force to work in the manufacturing industries.
Police and security forces employed to guard against crime in EPZs are also, more importantly, used to prevent and impede worker mobilization and organizing against foreign firms in the Global South. The security apparatus in SEZs and in foreign firms includes surveillance and CCTV systems to monitor worker organizing and identify rank-and-file leaders.
Migration and Proletarianization
The industrialization of Europe and North America in the nineteenth and twentieth centuries depended heavily on the availability of migrant labor. European migrant laborers were employed in the American garment, steel, auto and electronic manufacturing industries, which largely excluded and marginalized Black, Mexican, Asian and unfree workers. In a similar manner, but to a far greater extent, today’s industrialization in the Global South depends on laborers who migrate from rural regions into industrial zones where they are often marginalized.
Hiring migrant workers is a corporate strategy to increase the size of the reserve army of labor and reduce wage rates. Migrant workers are preferred because as newcomers they are not organized into traditional trade unions, allowing employers to maintain authoritarian control over the workplace. The vast majority of workers in new industrial zones are young people from rural areas who are unfamiliar with their rights and typically isolated from other workers. As the dominant force in the workplace, employers can entirely control wage rates and the labor process: they can discipline workers with impunity by avoiding collective bargaining, seniority systems and formal grievance procedures; and they can relinquish social responsibility to workers while continuing to rely on the abundant reserve army that is unable to survive in rural areas, and so is desperate for any paid work.
In India’s industrial zones, the career of an industrial worker may not last more than five or six years, and by the age of 25 workers are considered old and replaceable. As a consequence of the oversupply of labor and the relatively short working lives of these migrant laborers, capital depends on informalization and job insecurity to rotate workers out of the system. Those workers who do have permanent positions are forced into precarious jobs, and in some cases encouraged to return to the countryside. However, as Jan Breman shows, urban informal work is becoming the norm in South Asia, and industrial workers cannot return to survive in rural areas because the commodification of land has destroyed their former way of life.
Citizenship Rights and Living Conditions
In the last decade industrial workers in the Global South frequently live in dormitories managed by contractors or regional commissions established to deliver basic services to migrant laborers. Arriving as newcomers in transient municipalities, most laborers have few social bonds with long-term residents, and more often are reliant on fellow workers from rural areas and family members who have accompanied them. As new residential zones, SEZs are typically isolated from the political and social arena, and provide workers with few social contacts outside the workplaces and living quarters.
Although social isolation may preclude migrant worker contact with trade unions and community allies, it frequently creates stronger links with fellow factory workers, who are also exposed to continuous danger on the job and under threat from replacement by new workers. Marx’s depiction of an alienated and estranged workforce in the nineteenth century can be applied to the condition of workers in the Global South today:
We have seen how this absolute contradiction between the technical necessities of modern industry, and the social character inherent in its capitalistic form, dispels all fixity and security in the situation of the laborer; how it constantly threatens, by taking away the instruments of labor, to snatch from his hands his means of subsistence, and, by suppressing his detail-function, to make him superfluous. We have seen, too, how this antagonism vents its rage in the creation of that monstrosity, an industrial reserve army, kept in misery in order to be always at the disposal of capital; in the incessant human sacrifices from among the working-class, in the most reckless squandering of labor-power and in the devastation caused by a social anarchy which turns every economic progress into a social calamity.
Living in new communities on the margins of major cities, migrant workers often lack the citizenship rights and residency privileges enjoyed by those living in the region and are officially documented and entitled to government services. Spouses and families are prohibited from joining workers; no formal education is provided for children; few rights to health care services exist outside the factory; casualization of the workforce allows employers to dismiss workers at will for any reason, and set permanent workers against an informal and temporary workforce; and young women are often subject to the highest level of exploitation as informal and temporary workers.
Working-Class Militancy in the Global South
The central issue confronting the development of a militant workers’ movement today is to identify and surmount the inequities arising out of the hierarchical system of international value transfer that inflects the global capitalist order, which relies on the super-exploitation of the working class in the Global South.
The modern global system of production and accumulation is shaped by the historical dependence of capitalism on global imperialism to expand profitability, and by more than 250 years of class struggles. A distinct feature of contemporary capitalism is the emergence of foreign capital investment in firms that directly exploit land, resources, technology and markets, but also low-wage labor employed in the export-production industries of the Global South. In the mines and mills of the Global South, the disruptive and isolating working conditions that produce alienation and estrangement also activate militancy comparable to that, which has developed among low-wage undocumented migrant workers employed in major cities of the Global North.
Trade unions emerged in the twentieth century to represent a Northern working class that has not survived into the present era. In the South most established trade unions are an inheritance from labor movements immersed in anti-colonial struggles, and have few connections to the contemporary working class. Even ACFTU, the Chinese labor federation, is a legacy from the past. An array of unions was formed, and these continued into the period of formal independence, and have in various ways defended the rights of workers. Like those in Western Europe, unions in the South were formed in periods of struggle and labor exploitation, often acting to oppose colonialism and pave the way for independence.
Most existing labor configurations in the Global South today are descended from earlier worker mobilizations and have formed within party systems that have defined the scope of trade activity and power in the postwar era. These regimes delineate the limits of official trade unions and reveal the boundaries for the expression and development of unauthorized working-class militancy. It is always an open question whether existing labor unions can contain the concrete development of independent working-class organizations. The examples of China, India and South Africa reveal that industrial workers are engaged in direct action against institutionalized exploitation in various arenas, and are making demands that are reshaping traditional unions.
The Chinese model of industrialization, which took root in the late 1980s and has matured in the 2010s, is founded on the ability to produce quality products for export at the lowest possible cost. A large reserve army of labor was generated by establishing industries in strategic geographic logistical hubs and by forcing the rural peasantry off the land, creating inequality in urban areas. Extensive industrialization and modernization has significant ramifications for class relations and the evolving class conflict. To promote FDI the public sector was reorganized and free markets established, causing major protests in older urban industries of the Chinese northeast.
The Communist Party of China (CPC) and the labor confederation ACFTU dominate the landscape and prohibit the formation of all independent organizations; workers were typically seen as subservient and incapable of organizing independently. However, the expansion of legal protection covering migrant workers in new export promotion industries has ignited a militant workers’ movement that has witnessed a wave of strikes in the foreign-dominated export sector between 2010 and 2015. Without official unions and intermediaries, and without laws defining the precise terms of work stoppages, workers are free to strike over a range of grievances on a local level and increasingly these have been articulated in public protests and mass strikes that extend beyond local factories. In new export industries, women workers who have recently migrated are emerging as important participants in resistance against contractors.
While ruling out the formation of organizations that may be controlled by foreign non-governmental organizations (NGOs), the CPC and ACFTU have expanded labor law to protect migrant workers and their families, and have urged local governments to respond to worker demands for higher wages, benefits and living conditions. Chinese rank-and-file activists operate outside of the traditional ACFTU structures and recognize that militancy can be successful without establishing a competing party or union, but through direct struggle on the job and within communities.
Despite compulsory membership in the ACFTU, striking workers in wildcat strikes have gained the capacity to push the federation and the state to represent and enforce their interests. Industrial workers in export industries are expanding the scope of strikes and are benefiting from the initiation of labor laws that place the migrant workers who have dominated the industrial working class in the same position as other members of the union. In a growing number of cases, rank-and-file committees have been effective in advancing worker interests when local unions fail to represent their members.
Since independence in 1947, trade union federations affiliated with political parties have represented public and private sector workers primarily through parliament in a system that confers standing and provides legitimacy. In the post-independence era, trade unions in India have been unable to end the system of contract labor, which allowed industrialists to employ contract laborers alongside permanent workers, and to use the caste system to maintain employment segregation and thereby divide the workforce.
Following the introduction of free-market reforms in the 1990s, Indian employers and the state have sought to diminish the influence of trade unions in the industrial sector as a means to attract foreign capital. With foreign investment flowing into the non-union private sector, the government withdrew economic support for the unionized state-owned sector, decreasing membership and the influence of trade unions in electoral politics. Independent unions established on a plant-by-plant basis are unable to negotiate national agreements and rely primarily on strikes and direct action to improve wages and workplace conditions. The wave of sit-down strikes in India from 2012 to 2014 has been met with harsh violence by corporate security and state police, but the strikes are nevertheless becoming ubiquitous in the EPZs.
By rejecting the contract system and demanding equal status for all employees, the Maruti-Suzuki Workers Union in Gurgaon has challenged the Indian model of production that rests on accentuating worker divisions. Solidarity served the interests of all the workers: full-timers would not be threatened by a subservient workforce and informal workers would gain equal rights and wages through a union that did not distinguish between workers on the basis of their status. The state responded with mass repression, violence and imprisonment.
On the whole, the nature of established unions remains unchanged. As a consequence unions are losing membership and over 90 percent of all Indian workers are employed in the informal sector and do not have union representation. The independent Bigul Mazdoor Dasta (BMD) has been at the cutting edge of worker mobilization and strikes. BMD was crucial in mass strikes in India, including the Wazipur iron and steel factory in North Delhi. It mobilizes the informal majority of footloose workers within urban slums, where the vast majority live. Thus far, government-recognized national unions have not challenged the contracting system in India. Worker organizing continues to involve only the full-timers, which exposes it to challenges from independent labor organizations. These will become the center of struggle in the years to come.
Unlike the BMD, which has gained growing prominence in 2015 and 2016 by organizing mass walkouts, the dominant unions are unable to solve crucial issues facing workers for a number of reasons: unfamiliarity with the conditions of workers in India’s burgeoning urban slums; the expansion and the perpetuation of a contract system for the vast majority of workers, often on the basis of caste, gender and age; and fierce opposition to unionization by capital and the state. In response to the obstacles to joining existing unions, workers are forming independent unions to represent their interests.
In the late 1980s the pivotal factor motivating the South African government to end the apartheid system was the need to join the global capitalist economy. Trade sanctions were restraining economic growth in its major industries, minerals and auto manufacturing. By 1990, however, the South African economy was shifting toward export promotion and becoming increasingly interdependent with the world economy. The post-apartheid government conferred political rights on South Africa’s black majority without granting them equivalent economic rights. Moreover, the government put off significant wage increases to the industrial working class in the very mining and manufacturing industries that were crucial to the South African economy. Poverty, unemployment and inequality have increased.
In South Africa the corporatist system has failed to represent the interests of the working class, especially workers in the mining and manufacturing sectors. COSATU, South Africa’s leading trade union federation, is controlled by the Tripartite Alliance, which has dominated the political sphere in the post-apartheid era. The Alliance has not opposed the government’s neoliberal policies, which permitted labor-contracting arrangements to create multi-tier wage systems.
South Africa has witnessed the emergence of the AMCU, a wholly new union in the mining sector that has arisen in response to the unwillingness of the NUM to represent mine workers against multinational mining companies, and that opposes government cooperation with management. Worker self-organizing expanded across South Africa’s mining sector from 2009 to 2014, culminating in a five-month nationwide strike of platinum miners against mining conglomerates.
The worker insurgency spread to the auto and electronics industries, where the main union, NUMSA, recognized the need to represent the interests of excluded workers or risk the same fate as the NUM. In November 2014, NUMSA distanced itself from the position of the ruling African National Congress in support of multinational capital and mobilized workers in key industries. The union was expelled from the COSATU labor federation. In May of this year, NUMSA has joined forces with 17 other unions to form an independent federation of workers to fight against concessions and multinational corporations, which dominate the South African state.
The Future of Trade Unions
Today trade unions in the Global South are at a historic crossroad that will determine their future viability. We are deafened by the mantra that all unions need to do is grow larger so they can advance worker interests. In fact, capitalist globalization constrains the capacity of unions to adapt to changing conditions in the contemporary era. Trade unions are becoming outmoded under neoliberal capitalist industrialization across the South. While unions are under attack by the state and capital, they are also losing their credibility with workers. Given the origin of unions within the political and legal frameworks of independence and anti-capitalist struggles, it remains an open question whether specific unions will survive and even perhaps thrive in the future.
As in previous eras, poverty and inequality are related to gender, race, ethnicity, caste, religion and other social divisions. Wage inequality and job insecurity have increased in the North since the 1970s, but poverty and inequality are far higher among workers in the modern manufacturing industries of Asia, Africa and Latin America. In the South, newly proletarianized workers labor in factories, mines and plantations, typically with little or no job security, and in many cases are represented by unions that are unable to negotiate for contract or temporary labor.
Meanwhile traditional trade unions, an inheritance of twentieth-century European and North American models, contribute to the marginalization of workers in the Global South, by supporting their incorporation into dominant bureaucratic state structures where at best union leaders are relegated to a subordinate and consultative position, and more typically they are ignored. Furthermore, traditional unions are committed to preserving and improving the wages and conditions covered by past agreements for a privileged few members, while ignoring the majority of workers who are not core members.
Workers can no longer rely on bureaucratic union leaders to defend them. Authentic worker struggles proceed from industrial workers themselves, who are both building independent unions and, where the workers’ organizations they build are not officially recognized, challenging existing labor unions to represent their interests. It is the development of worker radicalism that will shape the form and survival of decaying traditional unions. In the absence of recognized unions, the results of these rank-and-file struggles are mixed—but the empirical evidence drawn from research in China, India and South Africa demonstrates that these movements are gaining traction and are achieving real wage gains and improvement in conditions.
The evidence drawn from the Global South is that a profound movement is emerging among workers demanding action on grievances outside the system of established unions. Workers’ movements are operating within the interstices of existing trade union structures, with or without the sanction of the unions. Rank-and-file workers in industries are forming independent associations and compelling existing unions to represent their interests.
To build on these struggles, workers will need a disciplined and strong class-based organization. It is in the interest of capital to undermine trade unions of any form. Eventually the worker mobilization that is taking place both inside and outside established structures will cohere into disciplined organizations. But each of the struggles demonstrates that the time when workers can be taken for granted or ignored is over. Workers’ movements are emerging, and will expand to contest the legitimacy of capital, the state, and existing unions.