Organisation for Economic Co-operation and Development

C/MIN(2024)18
English - Or. English
COUNCIL

Meeting of the Council at Ministerial Level, 2-3 May 2024

TUAC Statement to the OECD Ministerial Council Meeting (MCM) 2024
For a sustainable and fair economy

TUAC calls on OECD Members at the 2024 Ministerial Council Meeting to implement policies that
stimulate economic growth, a just transition, and address upcoming medium-term challenges. Hawkish
monetary and fiscal policies, which could very well trigger another economic recession, need to bereversed, while social dialogue must be strengthened to devise strong and effective policies concerning
the green and digital transitions, trade and investment, and the revitalisation of democratic institutions
and processes.
Furthermore, as the OECD embarks on an ambitious enlargement agenda, TUAC reminds its Membersof the value and necessity of involving trade unions and social partners in, and from the outset of, eachaccession process.

Veronica NILSSON, TUAC General Secretary (nilsson@tuac.org)

OFDE

This document, as well as any data and map included herein, are without prejudice to the status of or sovereignty over any territory, to thedelimitation of international frontiers and boundaries and to the name of any territory, city or area.

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Table of contents

1 Introduction

3

2 Just transition

5

3 Humans in control of artificial intelligence

7

4 Inclusive trade policy for resilient economies

95 OECD enlargement, workers’ rights and reinforcing democracy

11

6 References

13

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1 Introduction
1.
With the world economy underperforming, economies are facing multiple long-term
challenges.
2.
Global growth is expected to remain stuck at an average of 3% over 2023-2025 (OECD,
2024[1]), considerably lower than the 2000-2019 average of 3.8% (IMF, 2024[2]). Low expected
growth reflects monetary policy tightening on a scale and speed rarely seen, with lagged effects
from already-imposed interest rate hikes representing a further risk for the economy (OECD,
2024[1]). The latter, when combined with a return to restrictive fiscal policy (IMF, 2024[2]), does
not bode well for the economy, nor for working people.
3.
Addressing challenges such as climate change, digital transformation and ageing
requires consistent policy action over many years. Misguided policy choices will drag the
economy down in the short term and leave scarring effects in the long. Triggering an unnecessary
crisis by overtightening monetary policy will turn cyclical into structural unemployment(Stockhammer and Jump, 2022[3]). Keeping interest rates too high strongly disadvantages
economic activities that require major upfront capital investment or that depend heavily on future
cash flows. Many of the sectors that are urgently needed to expand (renewable energies, energy
efficiency, intensive research and innovative start-ups) are held back by the high cost of finance(Millard, 2024[4]) (Jordà, Singh and Taylor, 2023[5]) (Fornaro and Wolf, 2023[6]). Calls to develop
private sector involvement in the greening of the economy are undermined by high interest rates.
At the same time, a return to fiscal austerity, especially cuts in public services and social benefits,
will widen already high inequalities, further erode confidence in society and undermine
democracy by increasing political polarisation (Gabriel, Klein and Pessoa, 2022[7]).
4.
TUAC urges governments to recognise that the long term starts now. Mega challenges
cannot be disconnected from current economic policy choices. TUAC calls for:•••Central banks to fully respect their dual mandate of achieving price stability and highemployment, and for governments to adjust the mandate of monetary policy institutions
to reflect the urgency of climate sustainability goals. Policy interest rates to be cut deep
and fast to avoid an unnecessary recession and reduction in capital investment required
for the green transition.
New and balanced fiscal policy frameworks that combine the strategy of sustainable publicfinances with the objective of the ecological-social transformation of the economy and theneed to keep the economy operating close to full potential.
Fiscal policy strategies that shield that public spending which enhances social cohesion
and supports workers facing labour market transition. OECD members should work toachieve more equitable tax systems, encompassing capital and financial transaction
taxation, targeting rising profits to tackle growing inequalities and increase public
revenues. Workers should not be alone bearing the burden of fiscal consolidation.

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Close coordination of monetary and fiscal policy, involving social partners, to arrive at anequitable and balanced macroeconomic policy mix.

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2 Just transition
5.

If not managed carefully, the shift to low carbon economies will exacerbate inequalities
and fuel social unrest (OECD, 2021[8]) (Markkanen and Anger-Kraavi, 2019[9]). Countries may
face public opposition towards slowing down climate action if they fail to embrace a broader
agenda of social progress and well-being for all citizens (Martin, 2021[10]). To succeed, thetransition must be a “just transition”, ensuring that costs and benefits are equitably shared acrossall groups and territories (Rodríguez-Pose and Bartalucci, 2023[11]). Putting equity at the heart ofthe climate action requires not only strong redistributive policies, such as progressive taxationand carbon pricing, but also strategic pre-distributive measures, for instance by embedding
conditionalities in industrial policies to support the creation of quality green jobs (Mazzucato andRodrik, 2023[12]).
6.
While numerous assessments claim that the green transition will result in net job creation,these jobs will not entirely be in the same sectors and regions as those facing job losses (suchas coal-mining territories), nor will they require the same skills. Without just transition policies,
the green transition risks leading to significant direct and indirect income losses for workers andcould leave many of them and their communities behind. Trade unions are also concerned about
the quality of new jobs created, including in terms of wages, working conditions and employment
protection; in the renewable energy sector for instance, short-term contracts prevail despite
governments’ long-term commitment to invest in the deployment of clean energy (IRENA and
ILO, 2023[13]). Globally,1.2 billion jobs are in farming, fisheries, forestry, and tourism. According
to the ILO, “workers – especially those working outdoors – will be exposed to the impacts ofclimate change, biodiversity loss and pollution for longer durations and at greater intensities. Heat
stress alone is predicted to bring about productivity loss equivalent to 80 million jobs by 2030”(International Labour Conference, 2023[14]). Accelerating just transition policies with urgent
targeted measures and adequate resources is necessary to protect employment levels, as wellas human and labour rights, equity, peace, and social justice.
7.
To deliver a truly just transition in line with the Paris Agreement and the ILO Tripartite
Guidelines on a Just Transition adopted in 2015, and reaffirmed by all social parties in June 2023,
countries must protect the rights and livelihood of workers including by investing in social
protection and by actively promoting social dialogue at company, sectoral, national, and subnational levels. Collective bargaining is essential to advance the green transition by adapting
working processes, anticipating the expected adjustments from climate policy, helping design
appropriate policy responses and by fostering innovation and skills development (OECD,
2019[15]).
8.
Collective agreements have been concluded to protect workers’ health and safety in morehazardous working environments in some OECD countries, but the coverage is still limited, andgovernments should further support the promotion of social dialogue. Beyond adaptation toclimate change, collective bargaining is also key to design and implement adequate mitigation
policies at company or sectoral level. In Spain, an agreement was signed by the government,
trade unions and the Federation of Coal Mining Businesses to phase out coal production (ITJ,

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2022[16]). In France, a national interprofessional agreement was reached to encourage allcompanies to accelerate their green transition through social dialogue (ANI, 2023[17]).
9.
Platforms gathering governments, businesses and trade unions should also be set up toplan, design, and review domestic policies. The Just Transition Commission in Scotland,established by the Scottish Parliament in April 2022, along with the Canada Sustainable Jobs
Act introduced in June 2023, which aims to establish the Sustainable Jobs Partnership Council
with the participation of trade unions, both offer good examples on which OECD members should
build.

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3 Humans in control of artificial
intelligence

10.
The rapid advent of generative artificial intelligence over the past year has prompted lively
debate, sparking enthusiastic claims about its potential to improve productivity and spur
economic growth, as well as concern about the replaceability of human labour. While the net
effect is at this stage difficult to foresee, what is clear is the urgent need for action to shape its
trajectory and ensure it is one that leads to shared prosperity, rather than exacerbating
distributional divides. Recent analysis by the International Monetary Fund highlights the potential
for AI to exacerbate income and wealth inequality between countries (Cazzaniga et al., 2024[18]),
calling on governments to “proactively address [this risk] to prevent the technology from further
stoking social tensions” (Georgieva, 2024[19]).
11.
Generative AI adds another layer of complexity to the ways in which AI has been
impacting the world of work over the past few years. Artificial intelligence has the potential to
improve job quality in many ways, including higher wages stemming from improved productivity,
as well as the reduction of monotonous and, in some instances, dangerous tasks. At the sametime, the use of AI tools in people management – or “algorithmic management” – poses multiple
risks to workers. Research shows that the use of AI tools in people management frequently
results in increased pace and intensity of work; in the OECD AI surveys, 85% of respondents
working in finance and 76% of respondents working in manufacturing reported that AI had
increased the pace at which they performed their tasks (Lane, Williams and Broecke, 2023[20]).
This can lead to heightened stress, mental health concerns and risks to workers’ physical safety(OECD, 2023[21]).
12.
Movement and productivity tracking tools powered by AI have significantly expanded
employers’ monitoring and surveillance powers, enabling a massive amount of data andinformation to be collected from workers. The use of such tools – which has expanded since theoutbreak of the Covid-19 pandemic – raises serious issues of workers’ rights to privacy (OECD,
2023[21]). There are also documented instances of employers using AI tools to predict andinterfere with workers’ efforts to join or form a trade union, in breach of their right to freedom of
association (OECD, 2021[22]).
13.
Algorithmic decision-making carries the risk of exacerbating and further systematisingbias and discrimination (OECD, 2023[21]). Bias can be built into AI systems in the development
phase and occur at the various points of use of AI systems in the workplace, such as hiring,
performance evaluation and access to the workplace or workplace tools. The lack oftransparency in algorithmic decision-making makes discrimination difficult to detect, and, coupledwith the current grey areas regarding accountability, poses significant challenges for workers to
invoke the legal protections offered by existing non-discrimination laws (OECD, 2023[21]).
14.
These and other risks underscore the need for binding legislation to address the different
ways in which AI can affect rights at work. Soft law instruments – such as the growing number ofprinciples and standards published by technology companies – are insufficient to prevent

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potential harms to workers and guarantee a “human-centred approach” to AI, as the many casesof technology-driven human rights infringements show (JDSUPRA, 2021[23]) (Business & Human
Rights Resource Centre, 2022[24]) (Compa, 2022[25]) (United Nations High Commissioner for
Human Rights, 2023[26]). As AI continues to develop and be integrated into workplaces at speed,
it is crucial that governments do not let the push to promote innovation outweigh concerns
regarding human rights and democracy.
15.
There are additional concerns related to the interplay between AI and environmental
sustainability and market competition. The computing needs of AI data centres require extensive
energy and water consumption; hence their localisation can pose environmental risks for local
environments, which should be addressed, including through ESG reporting. As for market
competition, the exorbitant investment costs, and data requirements for building up AI technology
lead to further consolidation and market concentration in a sector – the digital one – where ahandful of operators have quasi-monopolistic power. This additional concentration of market
power with a few companies could hamper the just adoption of the technology and hurt workers
in the process.
16.
Giving workers a seat at the table through strengthened social dialogue and collective
bargaining is crucial to harness the benefits of AI and ensure these are equally shared (OECD,
2023[21]). Social dialogue and collective bargaining also play a key role in managing the risks toworkers and ensuring that AI is implemented in a way that improves job quality and is respectfulof human rights (OECD, 2023[21]). Research shows that facilitating and promoting worker input
on technology development and deployment yields positive impacts for both workers andcompanies (Jan et al., 2022[27]). More specifically, it has been found that workplaces using AI andhaving a form of worker representation are less likely to expose workers to unsafe working
conditions (OECD, 2023[21]). This is reflected in the OECD AI Principles, which explicitly call forsocial dialogue among the steps governments should be taking to ensure a fair transition forworkers as AI is deployed.
17.
Social dialogue and collective bargaining have a critical role to play by ensuring a fair
distribution of AI’s productivity gains, and that workers who are vulnerable to displacement aresupported and equipped to move into new, quality jobs. This needs to be recognised as the heartof the “human-centred approach” to technology being called for by the OECD and its member
countries, and essential to seize the opportunities of the AI “revolution.”

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4 Inclusive trade policy for resilient
economies

18.
International trade has come under considerable scrutiny in recent years. The COVID-19
pandemic, supply chain failures to provide basic medical goods during that time and meetbroader demand surges in its aftermath, later energy shocks and accrued geopolitical risks, havemade governments worry about their countries’ exposure to free trade.
19.
This comes after a prolonged period of stagnating growth and rising inequalities thatnegatively affected public view of the benefits of globalisation. In 2017 the OECD linked public
discontent to the global financial crisis and “some of the policies associated with globalisation”(OECD, 2017[28]). That year’s OECD Ministerial statement recognised that “globalisation has notbenefited everyone. In a significant number of OECD countries the income, wealth, employment
opportunities and social mobility of many people have stagnated, and some have even been
made worse off, whilst the situation for those at the top of the income distribution have continued
to improve” (OECD Ministerial Council Meeting, 2017[29]).
20.
Economic research has confirmed that trade liberalisation can maximise aggregate
welfare, but it impacts different sectors, industries, geographical regions, and groups of workers
differently, with winners and losers of free trade policies (ILO, 2023[30]).
21.
Direct competition with workers in non-OECD economies, characterised by lower levelsof job quality, wages and social protection systems, adds pressure on workers at home and cantrigger a race to the bottom in remuneration and standards (OECD, 2017[31]). While tradeliberalisation is not the only reason for increased labour income inequality and decline in
manufacturing jobs across OECD countries, it has often been used by employers as a tool toaugment their bargaining position and circumvent collective bargaining obligations with the threatof de-localisation.
22.
In response to these concerns, trade agreements with labour provisions have risen overthe past twenty years, from only 13 in 2000 to 115 in 20231. Yet, the tangible impact of theselabour provisions has been moderate, at best (Myant, 2022[32]). The UN 2030 Sustainable
Development Goals should be at the core of OECD countries’ action to renew trade policies andapproaches. Governments should ensure that social, labour, environmental and fiscal clauses
are enforceable with monitoring and sanction mechanisms to secure a level playing field, quality
jobs, social dialogue, and collective bargaining in importing and exporting countries, and support
just transition globally.
23.
Such agreements should be reached only pending the effective respect of theabovementioned clauses, before opening trade and investment to specific sectors/markets. In
2020, the revised North American Free Trade Agreement (NAFTA), labelled US-Mexico-Canada
Agreement (USMCA), introduced a rapid-response mechanism to investigate allegations and find1

Source: ILO Labour Provisions in Trade Agreements Hub. Last accessed: 13 February 2024.

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remedies to uphold workers’ rights of freedom of association and collective bargaining. Thismechanism has been successfully applied in more than one case and shows that labour clauses
can be effective if there is political will to use them (US Department of Labor, 2024[33]).
24.
More recently, the United States launched the Indo-Pacific Economic Framework for
Prosperity (IPEF), as part of a “broader strategy to make trade a race to the top”, including thepromotion of labour rights in supply chains (Cimino-Isaacs and Villarreal, 2023[34]). While itremains to be determined whether IPEF labour provisions will be binding, more multilateral efforts
to raise the bar in terms of labour standards should be encouraged and promoted, including by
the OECD.
25.
TUAC recalls that the revised 2023 OECD Guidelines for Multinational Enterprises on
Responsible Business Conduct clearly state that the responsibility of MNEs to guarantee the rightto collective bargaining and better working conditions is applicable not only to their employees,
but to workers and companies in their supply chains, at home and abroad.
26.
But this is not enough. TUAC urges governments to take decisive action to steer theprivate sector towards corporate sustainability. International government coordination is required
to raise workers’ rights and labour standards and ensure that the benefits of trade are sharedfairly with workers in all countries. Governments should lead by example and instruct all StateOwned Enterprises (SOEs) to apply the highest, ethical standards. The revision of the OECD
Guidelines on Corporate Governance of SOEs should make it clear that governments are free todecide how they organise their economic activities.
27.
Trade and investment should not be at the expense of workers. Governments muststrengthen labour institutions and domestic legislative frameworks, weakened by decades of
deregulation and globalisation, while respecting social dialogue and the remit of national
collective bargaining institutions, to tackle today’s record share of non-standard contracts and inwork poverty in OECD countries, and to raise working and living standards for workers in the
Global South. Companies that offshore employment, directly or indirectly, must guarantee humanrights and adequate working conditions throughout their supply chains.
28.
By ensuring that social and labour rights across the supply chain are respected,
governments can minimise the negative impact on workers at home and abroad, reduce everrising inequalities, and address mounting concerns about globalisation.

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5 OECD enlargement, workers’ rights
and reinforcing democracy

29.
Reaching out to non-members and enhancing cooperation with other multilateralorganisations is vital to find common ground and common solutions to the challenges discussed
in this paper. TUAC welcomes OECD enlargement and the ongoing accession process with
Brazil, Bulgaria, Croatia, Peru, and Romania, as well as the most recent opening of accession
discussions with Indonesia, but insists that candidate countries must demonstrate theircommitment to shared values before they can join.
30.
The 60th anniversary Vision Statement of the OECD (OECD, 2021[35]) reaffirms that
OECD members are “a like-minded community committed to the preservation of individual liberty,
the values of democracy, the rule of law, and the defence of human rights.” Yet, in many
countries, democracy is weakening and workers’ fundamental rights to freedom of associationand collective bargaining are under attack, including in the OECD and countries seeking OECDmembership.
31.
Accession to the OECD must be on condition of candidate countries demonstrating theirrespect of labour rights and their support for quality industrial relations systems based on
inclusive collective bargaining, as stipulated by the OECD in the roadmaps. A survey by TUAC
with trade unions in accession countries shows major obstacles to the freedom of workers toorganise and to collectively bargain. These include excessive representativity requirements;
labour law with a bias against higher-level bargaining; public sector workers excluded from theright to bargain collectively; lack of a robust institutional framework to support collective
bargaining (mediation, arbitration) and social dialogue; limited access of workers to wellfunctioning legal recourse systems; and legal obstacles to the right to undertake collective action.
Robust reforms strengthening the respect for fundamental labour rights and promoting inclusive
collective bargaining should be required before joining the OECD.
32.
There is compelling evidence that inequalities exacerbated by austerity policies have a
direct impact on political polarisation and the tendency to turn to populist, simplistic and divisive
political alternatives. Much more needs to be done to tackle the root causes of the lack of trustin public institutions, which is linked to socio-economic factors.
33.
The role of trade unions in creating vibrant, democratic societies is not always recognised.
Trade unions represent the interests of workers and function as platforms where workers discussand decide on a range of workplace and national issues and are central to active citizenship.
They are critical to the economic and social fabric of society, and are key to tackle inequalities,
foster social inclusion and ensure more equitable labour market outcomes. They also play anessential role in sustaining the democratic and participative infrastructures of society more
broadly. Unions have also been instrumental in supporting democratic transitions. Today,
countries that are considered to be more democratic tend to be those with more robust industrial
relations systems and with a strong culture of social dialogue.

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34.
It is urgent that OECD Members step up action to protect and promote workers’
fundamental rights, as enshrined in the ILO Conventions and the UN Covenant on Economic,
Social and Cultural Rights. The OECD and its members should build on the Reinforcing
Democracy Initiative and the next edition of the Global Forum on Building Trust andStrengthening Democracy to take this agenda forward and act in accordance with shared values.

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6

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