In partnership withJOBS, DEVELOPMENT AND CLIMATEACTION: DELIVERING THE 2030 AGENDA
AND PARIS CLIMATE AGREEMENT IN APERILOUS WORLD ECONOMY
TRADE UNION STATEMENT TO THE G7
ISE-SHIMA SUMMIT, JAPAN26-27 MAY 2016

Overview

Reducing Inequality

The G7 meets in Japan following two historic
agreements by the world’s governments in 2015,
and against the background of increasing risksof stagnating growth and stalled recovery as aresult of turmoil in world trade, emerging markets
and financial and currency markets. At the sametime, labour markets have still not recoveredfrom the “great recession” with some major
economic regions still experiencing historicallyhigh unemployment levels. Continually risinginequality and the spectre of deflation with its
dire implications in terms of rising real debt
burdens continue to confront the G7. 2016 isproving to be the most dangerous year for theglobal economy since 2009.

SDG 10: Reduce inequality within andamong countries…

The UN Sustainable Development Goals(Agenda 2030) and the Paris Agreement on
Climate charted a course for a world, wherezero poverty and zero carbon is possible. Unions
support these ambitions and call on the G7
Leaders to focus on key policy measures to both
confront the short term challenges for jobs andgrowth and achieve the long term objectives forinclusive growth and sustainable development.

“10.4 Adopt policies, especially fiscal,
wage and social protection policies, andprogressively achieve greater equality”.
Inequalities in global wealth are staggering andwith income inequality at record levels where
1% of the population holds equivalent wealthto that of the remaining 99% (Oxfam 20161).
This is both a social and an economic risk.
Recent OECD work2 indicates that income
inequalities across the OECD may be evenworse than previously thought and that, forexample, the mean income of the richest 10% is
not 10 times but 15 times higher than the mean
income of the poorest 10%, with some of theOECD members even having ratios whereby the10% richest have earnings that are 50 to 60 times
1.

An Economy For the 1%: How privilege and power in the economy drive extreme inequality and how this can be stopped(http://policy-practice.oxfam.org.uk/publications/an-economy-for-the-1-how-privilege-and-power-in-the-economy-driveextreme-inequ-592643)

2.

Who are the top 1% earners in Europe? OECD Economics Department Working papers no 1274 by Oliver Denk

higher than the 10% poorest. From its side, theWorld Bank in its recent World Development
Report3 points again to the fact that the shareof labour in national income is falling in many
countries. With drops as high as 12% points ofGDP in Poland or Mexico since 1975.
Reducing inequality requires a comprehensive
strategy that includes universal social protection, a minimum living wage and expanded
collective bargaining supported by strengthened labour market institutions.

Creating Employment andDecent WorkSDG 8: Promote sustained, inclusive
and sustainable economic growth,
full and productive employment anddecent work for all…
”8.5 By 2030, achieve full and productive
employment and decent work for all
women and men, including for young
people and persons with disabilities, andequal pay for work of equal value”;“8.7 Take immediate and effective
measures to eradicate forced labour,end modern slavery and humantrafficking and secure the prohibition andelimination of the worst forms of childlabour, including recruitment and useof child soldiers, and by 2025 end childlabour in all its forms”;“8.8 Protect labour rights and promote
safe and secure working environments
for all workers, including migrant
workers, in particular women migrants,
and those in precarious employment.”
In particular, for Youth, Goal 8 is
explicit:“By 2020, substantially reduce theproportion of youth not in employment,education or training”
and “8.b By 2020, develop andoperationalise a global strategy for youth
employment and implement the Global
Jobs Pact of the International LabourOrganisation”.

3. World Bank World Development Report, 2016, see Figure 0.15
page 21

Restoring Growth and Reducing
Unemployment
More than seven years after the onset of thecrisis, unemployment remains at historicallyhigh levels in too many economies, insecure or
irregular work is a reality for up to half of thosein formal employment with, and in addition,some 40% of the global labour force trappedin informal work and labour force participation
rates have been falling because of discouraged workers.
Economic policy must become pro employment. Investment in infrastructure, the green
economy and public services is critical. Monetary policy, however, has reached its limits. Fiscal
policy must take over and should grasp the opportunity of reducing future ‘net debts’ as public
investment can generate future benefits for theeconomy at a cost that is basically zero at thismoment.
Jobs must be quality jobs if decent work is
to be realised. Business must rise to the challenge and start viewing decent work and quality
jobs as an investment in future productivity andinnovation.
Simulations4 conducted for the ITUC andTUAC show that a coordinated mix of wage andinvestment policies could create up to 5.84%
more growth in G20 countries – compared tobusiness as usual. “A coordinated policy mix in
the G20 targeted to increase the share of wages
in GDP by 1%-5% in the next 5 years and public
investment in social and physical infrastructure by 1% of GDP in each country can create
up to 5.84% more growth in the G20 showing
the strong internal demand effects of wage-led
recovery offsetting any negative effects on net
exports or private investment.” We estimatethat this could halve the Jobs Gap in the G7
countries over five years.

Integrating Refugees and Migrants
into Societies
Managing the highest number of refugees
in modern history is both a challenge and anopportunity. Migrants contribute skills andincomes to host nations but are faced withhumanitarian and protection issues. There
were 1.5 million asylum seekers in OECD
countries in 2015 alone – almost twice as
many as in 2014. This calls for determinedaction from G7 governments to support their
4. Ozlem Onaran, University of Greenwich, “The case for a coordinated policy mix of wage-led recovery and public investment in G20”, L20 Working Paper, 2014

WWW.ITUC-CSI.ORG – WWW.TUAC.ORG | PAGE 2integration, both in coordination with eachother – especially on the question of resettlement to neighbouring countries based on clear
agreements – and by directing internationalorganisations such as the World Bank, theUnited Nations, the ILO and the OECD to workwith regional and national institutions. A rapid
process for obtaining an asylum/refugee statusneeds to become an integral part of humanitarian and refugee assistance. Absorbing 1.5
million refugees in Europe with a populationof 500 million is feasible. Lebanon for example
has taken in 1 million refugees and has a population of only 5 million.
Whole-of-government plans need to bescaled up to integrate migrants into the formal
economy with associated labour, social, political and cultural rights. This entails ensuring
the legal right to work and education, facilitating qualification recognition, providing
counselling and information sharing, and rapid
language training to meet individual needs.
Many skilled workers are among the refugees fleeing Syria and other conflict regions,
but lack proof of qualifications due to theconflicts. Social dialogue is key to mediate
between new arrivals and the establishedworkforce, as well as in determining broader
questions of labour market integration such as
identifying and matching skills, setting wages,
ensuring workers’ protection and establishingeducation and training programmes.
Refugee families should be supported inaccessing mainstream school classes, while
avoiding over-concentration and giving teachers
the training and resources needed to cope withthe situation. It is particularly important to introduce targeted programmes for unaccompanied
minors and young people in need of financial,
housing and psychological support as well astraining. Overall, funding for refugee needs andfor social protection programmes and services
in host countries needs to be raised to meet thechallenge.
We also ask G7 nations to recognise that withsome 80 million people displaced and only 20%
in developed economies there is a need toensure support for the poorer countries struggling to manage the issues detailed here.

Ensuring Decent Work in Global
Supply Chains
Ensuring decent work in global supply chainsmust also be a priority. Accounting for 60% ofproduction this dominant form of global trade
is contributing to inequality with low wages,

insecure and often unsafe work. ITUC research(Scandal Report 20165) shows that in 50 of thelargest MNEs only 6% of the workforce isdirectly employed. 94% of workers contributing
to the profits of these companies comprise a‘hidden workforce’.
The G7 in 2015 recognised the need tostrengthen rights in supply chains. Buildingon the Leaders’ Summit Conclusions,6 the G7
Labour and Development Ministers stated attheir October 2015 meeting that: “globalisation
should benefit people and support progress insustainable development worldwide. Working
conditions endangering the environment, occupational safety and health as well as fundamental principles and rights at work and otherhuman rights are not acceptable.7”
The Ministers established a “Vision ZeroFund” to work on accident prevention andsafety in supply chains. They must make sufficient funding to make available for the “Vision
Zero Fund” to make supply chains safe.
G7 leaders must also live up to their 2015
commitment to strengthen the National
Contact Points (NCPs) of the OECD Guidelines for Multinational Enterprises, including
by ensuring that G7 “NCPs are effective andlead by example8”. Trade unions are callingon all G7 governments to sign up for country
peer review, including Japan.9 G7 Leaders
should also ensure that adequate fundingis made available to undertake an intensive peer review programme (5 country peer
reviews per year) and to conduct peer learning.10
Under the UN Guiding Principles on Businessand Human Rights and the OECD Guidelines
for Multinational Enterprises, all enterprises
should conduct human rights due diligence,and provide access to remedy. The OECD iscurrently developing General Guidance on
Risk-Based Due Diligence for Responsible
Business Conduct. The ILO is holding a general
discussion on supply chains in June. G7 Leaders
should, building on their previous commitments, legislate to require due diligence bycompanies headquartered in G7 nations.
5.

http://www.ituc-csi.org/IMG/pdf/frontlines_scandal_en-2.pdf

6.

Leaders’ Declaration: G7 Summit, Schloss Elmau, Germany,
June 8, 20157.

Meeting of the G7 Employment and Development Ministers,
Ministerial Declaration, Berlin, 13 October 2015

8.

Leaders’ Declaration: G7 Summit, Schloss Elmau, op. cit.

9.

Japan was the first NCP to volunteer for peer review (in 2012)
but the OECD has since developed a model peer review
which it encourages all NCPs to follow.

10. http://www.bmz.de/g7/includes/Downloadarchiv/G7_Ministerial_Declaration_Action_for_Fair_Production.pdf

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Gender Equality
Goal 5: Achieve gender equality andempower all women and girls…
”5.4 Recognise and value unpaid careand domestic work through the provisionof public services, infrastructure andsocial protection policies and thepromotion of shared responsibility
within the household and the family as
nationally appropriate”.
Women still lag behind men in employment
and income. The G20 has recognised the needto increase women’s participation in the workforce by 25% by 2025. Increasing women’sparticipation in the workforce is a boost for
productivity but to enable women to choose towork. We need investment in the care economy;
in child care, aged care, health and education.
Investment in the care economy also drives jobs.
Research undertaken for the ITUC11 showsthat with an investment of 2% of GDP in the careeconomy, into social and physical infrastructure,
growth could result in 13 million new jobs inthe USA, 3.5 million in Japan, nearly 2 million
in Germany, 1.5 million in the UK, 1 million inItaly, 600,000 in Australia and nearly 120,000 inDenmark. As a consequence the employment
rate of women would increase by 3.3 to 8.2
percentage points across the 7 countries.

Environmental Sustainability
and Climate Action: both anSDG component and the subjectof specific commitments in theParis Agreement
SDG 7: Ensure access to affordable,
reliable, sustainable and modern
energy for all…
”7.a By 2030, enhance international
cooperation to facilitate access toclean energy research and technology,
including renewable energy, energy
efficiency and advanced and cleaner
fossil-fuel technology, and promote
investment in energy infrastructure andclean energy technology” and Goal 13,
Take urgent action to combat climatechange and its impacts…

”13.2 Integrate climate change
measures into national policies,
strategies and planning”.

The Sustainable Development Goals bring
together a strong, comprehensive list of objectives that link environmental sustainability
and social development, including Goal 7 onenergy, Goal 6 on water, Goal 12 on sustainable consumption and production, Goal 14 on
Oceans and Goal 15 on forests.
G7 governments must provide leadership byensuring their own implementation of thesegoals is done in coherence with the need forjobs and social justice, and putting in place thedialogue mechanisms to secure broad participation and engagement from all relevant actors,
including trade unions.
The Paris Climate Agreement committed toeliminate greenhouse gas emissions and keep
the temperature as far below 2 degrees aspossible. This will require industrial transformation that is deeper and faster than at any timein our history. Technology sharing, innovationand skills are at the heart of raising ambitions inevery nation.
Global leaders also made a commitment toensure that this transition would be a ‘just transition’.
Projected investment in infrastructure is some
$7 trillion per year. This creates jobs. However,there is also job displacement to be expected.
Handling this requires social dialogue to be inplace as well as developing just transition funds
to secure workers’ pensions, skills upgrading,redeployment and economic renewal in vulnerable communities.
Securing financing for developing countries
to accelerate their implementation of the SDG
and climate commitments is critical for meeting
global targets.
G7 governments must take the lead on
funding levels up to and beyond 2020 as wellas ambitious technology sharing arrangements
to ensure development based on a transition
to renewable energy at a pace and scale that
contributes to the commitments made at theCOP21.
G7 governments should also lead by example
by putting in place the dialogue mechanismsthat would ensure a just and democratic transition to a sustainable and climate-soundeconomy.

11. “Investing in the Care Economy - A gender analysis of employment stimulus in seven OECD countries”.

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