Conclusions

This book has compared advances in the regulation of work, asking what can be learned for purposeful institutional change elsewhere in the world. Chapter 10 concludes by recapping the overlapping dynamics of informalization that reoccurred in the case study chapters. These include: mass migration and circulation of labour within countries and between countries; large scale macro-economic and institutional liberalization; integration of previously separate economic systems as socialist and capitalist systems were combined following the fall of the Eastern bloc and the opening to global trade; new ways of organizing production resulting in the vertical disintegration of productive units (firms) and the expansion of supply chains; the explosion of new, non-employment forms of work; the complexity and scale of production outstripping national labour regulation systems; and lack of transnational orchestration in labour regulation resulting in gaps in the scale of labour regulation. The book concludes by imagining a future in which action is not taken to promote a global living wage.

Complementary or Functional Rival? Labour Regulation of Garment Industry Workers in Cambodia by Better Factories Cambodia

Chapter 7 explores the formalisation of the Cambodian garment industry and the factors that have shaped and constrained the effectiveness of the combination of the US–Cambodia Bilateral Textile Agreement and the International Labour Organization’s Better Factories Project. Unlike the Mathadi Boards examined in Chapter 4, a great deal has been written about efforts to improve working standards in the Cambodian garment industry. The Chapter makes two important interventions in the already abundant literature on Better Factories Cambodia. Firstly, it focuses on the role of the trade agreement that led to the establishment of Better Factories Cambodia, as preferential treatment in trade played a critical part in encouraging investment in formal enterprises. It argues that trade incentives were just as important as the BFC in improving the labour standards of participating enterprises. Secondly, it examines the initiative in the context of Cambodia’s political economy showing how the Hun Sen government has used the initiative to its advantage and avoided investing in its own labour inspectorate. For this reason, the chapter asks whether Better Factories Cambodia has become a functional rival to the state labour inspectorate.

Displacement of Traditional Labour Laws

This chapter tracks the creation of a highly successful model for regulating the performance of head-load work in the Indian state of Maharashtra. The work normally consists of loading, unloading, carrying, shifting, weighing, tapping, and stacking goods. This is harsh physical labour, often undertaken in extreme heat. Following a concerted campaign in the 1960s, a tripartite regulatory system was introduced to overcome many of the problems historically faced by the mathadi workers, such as a lack of job security and access to social security. The study is a fruitful site of regulatory learning because India’s legislatures have been more active in regulating informal work, particularly in the domain of providing social security, than perhaps anywhere else in the world. The Indian state has used various mechanism to do this, the best-documented of which are the Welfare Boards of Kerala. In contrast to the Welfare Boards, there is very little written about the Mathadi Boards of Maharashtra, which have a broader regulatory reach and have arguably been far more successful.

How Can Regulation Help?

Chapter 2 explores how regulation might help to alleviate the burden on poor workers and reduce the incidence of informal work. Informal work is understood in this study as a regulatory problem or conundrum. The chapter explores insights and concepts from the regulatory literature in order reflect upon the reason why labour regulation is failing so many workers around the world, leaving them stranded in a state of informality. The chapter proposes, first, that traditional state-based labour law is not responding to the various forms of work that have proliferated in recent years. Second, it is not responding to advances in the structures of production and relations of distribution that work occurs within. Third, it is not employing tools that are appropriate to or effective in regulating new working relationships. And fourth, it is not creating incentives for compliance which overcome the countervailing disincentives which arise from private and informal regulation, culture, and informal institutions. Having established the problem, it then draws on various literatures to set up the conceptual framework for examining how institutional change could occur so that a more responsive labour regulation could be generated.

Four Experiments in Reducing Informality

Chapter 8 compares the four innovations described in the case study chapters (Chapters 4–7) and draws out lessons about the way that institutional change occurs. None of the models entail comprehensive reform of the way work is regulated in a nation. Nor do they fundamentally challenge the international institutional arrangements, which have altered and undermined the power of national institutions to regulate work, and which were seen to be at play in each of the case studies. They have instead sought solutions which were politically feasible and improved the conditions of a specific group of workers—homeworkers, head-load workers, and garment workers. They arose out of particular political moments and institutional trajectories. The initiatives have in common that they (a) expand or sidestep the employment relationship so as to encompass broader forms of work (with the exception of the Cambodian initiative); and (b) increase the strength of regulation in order to push against countervailing pressures which lower working conditions. However, each initiative has achieved this in different ways and to different extents. This chapter compares these different methods and explores why some levers are stronger than others.

Expansion and Layering of Labour Regulation

Workers in developed economies have not been immune to the dynamics of global trade and economic liberalization that have stranded vulnerable workers in poorer countries. This chapter tracks the informalization of apparel production in Australia throughout the 1980s and 1990s, asking how national and international factors converged to leave a migrant group stranded, without the employment conditions and protections that Australia prided itself on providing to its working population. It then examines the subsequent attempts to re-formalize work by the creation of innovative legislation and ethical initiatives that add levers and regulatory agents. This study is important because Australia’s novel regulation combines market and non-market forms of regulation, with a successful ethical labelling system at the heart of the model.

New Approaches to the Study of the Regulation of Work

This book attempts to implement a novel approach to the study of the regulation of work in order to generate new insights into the ways that regulation can help to improve the lives of workers. It adopts historical institutionalism and political economy approaches to build a comprehensive picture of the varied dynamics that contributed to the growth of a precarious, informal workforce in four very different countries. The first section of Chapter 3 describes the overarching case-study methodology employed in this book. The second section describes the primary approach deployed in the case studies: historical institutionalism. The third section describes additional methods and disciplines used to put together stories that span macro and micro scales.

Expansion of Labour Laws in Bulgaria

By 2006, seven years after the transition to capitalism began, informal work in Bulgaria constituted somewhere between 20 per cent and 35 per cent of overall work. It was an entrenched feature of the Bulgarian economy. The aim of this chapter is, first, to track the way that national and international factors converged in the 1990s to create dramatic social change, leaving at least a third of the working population in Bulgaria stranded in informality. It is, second, to assess the expansion of the contract of employment as a means to achieve formalisation. In 2011, Bulgaria’s labour law underwent reform, following a successful campaign for the extension of employment laws to cover home-based workers. The state’s expansion of employment law was in part, a reflection of Bulgaria’s desire to demonstrate adherence with European Union (EU) recommendations as part of its integration into the EU.

A Long-Term Vision

This chapter canvasses a long-term vision for improving the lives of poor and precarious workers who work in informal conditions. It proposes a bold, transnational initiative that aims to promote a global living wage and regulate supply chains. The chapter puts forward three interrelated regulatory pathways out of informality. First, the promotion of Global Living Wages through a multilateral instrument such as an International Labour Organization (ILO) Convention or United Nations treaty, which would also establish an International Living Wage disputes mechanism for enforcement of these minima; second, the setting up of National Living Wage Tribunals empowered to hear disputes concerning non-payment of living wages due to supply chain dynamics and to hold parties in the supply chain responsible for non-payment; third, the fostering of local pathways out of informality.

Introduction

This introductory chapter begins by telling the story of Elena, a Bulgarian women who found herself without employment following the privatization of the garment factory she had worked in her whole adult life. It explains how she survived the transition to a market economy by scrounging together informal work of various types. This book is centrally concerned with what regulatory strategies can best improve the working standards and lives of Elena and workers like her around the world. It goes without saying that employment creation policies and those that foster industrial growth are crucially important for improving Elena’s well-being. This book is not aimed at addressing these types of policies, however. It is concerned with the realm of regulation—hard laws, soft initiatives and other institutions that shape behaviour and set incentives in particular directions. The chapter describes the prevalence of informal, low paid work worldwide and defines core terms. It concludes by summarizing the outcome of the global search conducted in this book for realizable policy responses to this persistent problem.