Trade Unions in Asia

John Benson, Ying Zhu, John Benson, Ying Zhu

• Publisher: Routledge
• Year: 2008
• ISBN:
  9781134129607
• Edition: 1
• Topic: Negocios y empresa
• Subtopic: Negocios en general

Offering a comprehensive account of the role of trade unions in Asia today, this book, put together by two editors who have published extensively in the areas of business and economics in Asia, covers all the important Asian economies: both developed and developing.Making a vital contribution to the very small amount of literature that has been pub

1 Trade unions in Asia

Organization, strategy and issues

John Benson and Ying Zhu

Introduction and key questions

Asia has undergone a rapid transformation over the past two decades as many Asian economies¹ have embraced the processes of globalization. Over this period the inflow of foreign capital into the region, the level of internal trade amongst these economies, and trade with other parts of the world have increased substantially. The ensuing economic growth has led to an improvement in living standards for many workers. This economic growth has attracted considerable attention and has resulted in a significant volume of research being undertaken that seeks to explain the rapid growth and also to assess the impact of this growth on society (see for example: World Bank 1993; Leipziger 1997; Mugtada and Basu 1997). Economic development in these economies has, however, been uneven and many workers have been excluded from the gains that have flowed from globalization. For these workers their lack of relevant skills and the intense competition for jobs has meant that low paid work or unemployment have become their only alternatives. Moreover, in many cases the impact of globalization has been beyond the control of workers and national economies. This was well illustrated by the events surrounding the 1997–8 Asian financial crisis (Asian Crisis) which highlighted the vulnerability of national systems that have fully embraced globalization (see McLeod and Garnaut 1998). The resultant unemployment and the social consequences of this unemployment in the Asian economies (see Benson and Zhu 2005) demonstrated the inherent weaknesses of the global economic system and the negative impacts of a development approach based solely on economic growth.

For Asian workers these negative impacts of globalization have been exacerbated by the lack of adequate legislative protection and institutional support systems (Rowley and Benson 2000). This has meant that trade unions represent one of the few institutions capable of achieving some measure of equity and social justice for workers. Trade unions can do this through workplace representation and bargaining and also through their capacity to play a wider role in influencing economic, legislative and social reforms. Yet, such a role is problematic as in many Asian economies trade union activities have been severely constrained. This raises the question of whether globalization has improved the potential of Asian trade unions to independently represent workers and whether their prospects are likely to improve in the future.

Whilst a considerable volume of research has been undertaken on trade unions and industrial relations in Asian economies, much of this research has focused on single economies and researchers have not sought to locate their findings within the context of trade union developments in the wider Asian region. This is understandable given the obstacles facing trade union researchers in many Asian economies. While some of these studies make reference to the earlier literature on trade union development in advanced industrial economies, this has not been the norm. As a consequence, the contribution of these studies to trade union theory has been limited, although again this is understandable given the criticisms of those who use Western theories as explanations for Asian phenomena. While much of this earlier research is rich in detail the rapid economic development in these economies has meant that much of what we know about trade unions may now be out of date. It is for these reasons that we sought to undertake the task of mapping out the development, organization and strategies of Asian trade unions. The attempt to add an Asian perspective to trade union theory, as well as provide a wider comparative analysis of trade unions in Asia, was the starting point for this book. Clearly such a task would be beyond the expertise of any one researcher, so we brought together leading researchers on trade unions in various Asian economies to write the individual case studies. Yet we realized that this would do little more than update the current literature while remaining silent on the issues raised above. To address this problem a workshop was held at the University of Melbourne in March 2006 where experts on Asian trade unions discussed these issues and debated what would constitute the most appropriate research framework.

The outcome of these discussions led to four key questions being adopted to guide the case studies of the various economies. First, how have Asian trade unions organized to represent workers? Second, what do Asian trade unions do? Third, what impacts have Asian trade unions had on workers and businesses? Fourth, how can the trajectory of trade unions in individual Asian economies be explained? By adopting a uniform approach, a comparative analysis can be undertaken both between the individual case study economies, as well as extending the analysis to accommodate a discussion that has the potential to contribute to the wider trade union literature.

Structure and framework

Twelve economies in Asia were chosen to investigate the questions underpinning this book. As trade unions are a product of industrialization, any analysis of trade unions in Asia must accommodate the various stages of economic development that exist in this region. One proxy for the level of development is the distribution of employment between the agricultural, industrial and service sectors. Where employment in the agricultural sector is low it can be reasonably assumed that the level of industrialization and economic development is higher. The economies chosen and the employment figures in each sector are presented in Table 1.1.

Table 1.1 Breakdown of employment in case study economies 2005

On the basis of sectoral employment, the developed economies are Japan, South Korea, Taiwan, Hong Kong and Singapore and Malaysia² while the developing economies are China, India, Sri Lanka, Vietnam, Thailand and Indonesia. In most of the developed economies the sectoral shifts towards services and knowledge work means that manufacturing, the traditional organizing base for trade unions, is in decline and this, coupled with attitudes of young workers, places pressure on trade unions to develop new strategies and avenues for the representation of their members. In all these economies, institutions and regulations have been developed to guide employment and regulate labour markets, and a degree of protection and support for workers exists. In contrast, in developing economies the shift from agricultural pursuits to manufacturing has been accompanied by governments placing severe restrictions on the formation and activities of trade unions in an attempt to be more competitive in a globalized world. This may mean that traditional forms of unionism may be less relevant. In these economies labour market institutions and regulations are poorly developed and little support is provided to unemployed workers. Within this group a further distinction can be made as China and Vietnam are socialist states that are in the process of transition towards market-based economies.

This breakdown by employment of the 12 economies is important if the strategies adopted by trade unions in the various economies are to be explained. The economic health of the 12 case study economies over the past decade varies significantly and cuts across the developed/developing divide. The three fastest growing economies over the period 1996 to 2005 – China, Vietnam and India (see Table 1.2) – are developing economies, whilst the next group of growth economies were mature economies at the start of this period (Singapore, Malaysia, South Korea and Taiwan). Moreover, although Thailand had only experienced modest growth over the past decade, its unemployment rate was low compared with those economies with higher economic growth. This case illustrates that the relationship between growth and unemployment is moderated by the sectoral shifts taking place in employment as economies move from an agricultural base to a more industrial and service structure.

It is important to recognize, however, that these broad economic parameters only tell part of the story. Trade unions in Asia have faced many challenges. Governments of all persuasions have sought to constrain their development and activities out of a fear that such an institution represents a serious political, economic and social threat. This has, in some cases, led to institutionalized violence against trade unions and their members. It may also mean that less efficient labour legislation may result (World Bank 1995:86). It is for this reason that we asked all contributors to this book to commence their study with a section on context and history, where many of these issues relating to the concept of trade unionism can be outlined and discussed.

The economies represented in this volume are typical of those that have undertaken or are going through significant economic restructuring and transition. Many of these economies have had periods of foreign occupation and some have maintained the institutions that were established during these times. Indeed, with the exception of China and Vietnam most ‘East Asian states have adopted, in broad outline at least, systems of labour law that reflect the form and content of the systems of Western countries’ (Cooney et al. 2002:3). On the other hand, all the economies considered in this volume have a set of unique conditions that underpin their political, social and economic systems, and which have led to a variety of approaches to trade unions.

Table 1.2 Real GDP growth and unemployment in case study economies, 1996–2005

The structure adopted for each case study consists of six sections. Each chapter commences with a brief introduction and relevant background information for the particular economy. This is followed by an overview of the economic and social context of each case study state, a historical outline of the development of trade unions and an overview of trade union membership. A third section explores union types and structure, which allows for a general description of the predominant union form to be presented, an assessment to be made of the degree of independence and some discussion on how workers are organized. This is then followed by a section that explores what the unions do, focusing both on processes, such as collective bargaining, and economic and non-economic outcomes. The fifth section of each chapter then attempts to explain the development, structure and strategies of trade unions within their national context. The final section of each chapter considers the future of trade unions and the challenges they face. This standardized format also extends to the information provided in each chapter, with a detailed table being included for each of the four substantial sections of the chapter. It should be noted, however, that we did not want to be overly prescriptive and so each chapter will have some variations around these themes.

Given the objectives of the book to contribute more widely to the trade union literature and to provide a comparative analytical framework, it was necessary to begin with a more conceptual chapter that would introduce the key issues. Chapter 2 therefore provides the justification for the chapter framework outlined above as well as providing the comparative analysis to link this text to the wider trade union literature. Chapter 2 begins with an overview of classical and contemporary trade union theories that have grown out of the study of trade unions in advanced industrialized economies. As pointed out by Gospel (Chapter 2), the ‘intention is not to impute Western notions to these countries, but rather to suggest a basis of ideas and comparison’.

This is followed by a section that challenges the traditional craft/occupational, industrial, general and enterprise categories and introduces other ways to view union structure and government. A third section then considers what trade unions do and how they do it; and a fourth section suggests a number of possible explanations for the development of trade unions in advanced industrial economies. Chapter 2 finishes by suggesting three tentative conclusions that may provide some ‘context for and stimulate questions about Asian countries’ and their trade unions.

The case study economies

The economic histories of the case study economies all followed similar trajectories, although variations occurred across time. When broken down by the developed/developing classification some clear similarities emerge. The developed economies all industrialized rapidly from the 1960s, although Japan was a little earlier and Malaysia somewhat later. High levels of GDP growth were achieved in this time and unemployment tended to be low. Much of this growth was driven by the manufacturing sector and only in the 1990s did this growth falter due to the Asian Crisis, as in the case of Korea, or the rationalization of production to offshore sites in the case of Taiwan. Japan’s fall was more complex and continued through much of the 1990s and the early part of the twenty-first century.

In contrast, the six developing economies have all experienced rapid growth for much of the past two decades. China and Vietnam undertook major restructuring of state-owned enterprises and moved to more market-based economies. The Asian Crisis had little long-term impact on these economies. In a similar fashion, Indonesia and Thailand instituted a series of economic reforms, deregulated their economies and promoted foreign direct investment (FDI) during this period. These economies suffered badly with the onset of the Asian Crisis, although it was only Indonesia that took some time to recover. Steady, although generally lower, economic growth is now occurring in these economies. The social, political and institutional contexts of these 12 economies did, however, differ and it is these aspects that will now be briefly considered.

Japan represents the most developed and economically successful of the case study economies, experiencing four decades of significant economic growth from the early 1950s. In the 1990s this pattern came to an end following the collapse of the ‘bubble economy’ in the late 1980s, the emergence of a number of Asian manufacturing competitors and the ‘hollowing out’ of Japanese domestic manufacturing. During this period unemployment more than doubled and was particularly high amongst the young and older workers. The ageing population has highlighted the plight of older unemployed workers who often do not have adequate pension cover and so rely on paid employment. As pointed out by Benson in Chapter 3 much of the decline in manufacturing has been taken up with employment in the services sector, although these jobs have often been temporary and part-time and so have presented a major challenge to trade unions.

South Korea represents a similar trajectory to the early post-war development of Japan. South Korea’s early success commenced with the manufacturing sector and the economy increasingly became integrated into world markets. This global integration was to take its toll with the onset of the Asian Crisis. The government was forced to turn to the International Monetary Fund for emergency credit which, in turn, imposed significant structural reforms on the financial, corporate and labour sectors. Unlike Japan, however, South Korea recovered quickly and unemployment has fallen significantly, although not quite to pre-Crisis levels. Nevertheless as Rowley and Yoo point out in Chapter 4, masking this rapid economic development has been a history of trade union repression.

Taiwan, in a similar fashion to South Korea, commenced its industrial development in the 1960s and enjoyed two decades of high economic growth accompanied by low levels of unemployment. By the late 1980s the growth rate of industrial production had commenced to fall, although much of the excess labour generated was absorbed by the growth in the service sector. Nevertheless, from the mid-1990s unemployment has steadily risen as Taiwanese companies rationalized their domestic production and relocated offshore, particularly to mainland China. Zhu, in Chapter 5, points out that this economic uncertainty coupled with the political instability in the relationship between Taiwan and mainland China has created an unstable operating environment for trade unions.

Hong Kong represents one of the leading laissez faire economies in the world. While officially re-integrated into China as a Special Administrative Zone in 1997, Hong Kong remains outside many of the controls of China. During the past two decades Hong Kong has de-industrialized and re-commercialized leaving many unskilled workers out of mainstream employment. This, according to Chan in Chapter 6, has placed pressure on trade unions to find ways to protect these workers and develop more job opportunities.

Singapore has been a high growth economy since the 1960s, although this growth had been more modest over the past decade. As Leggett points out in Chapter 7, with few natural resources the government has placed a strong emphasis on human resources, high levels of labour market participation and productivity. Singapore is essentially an ‘administrative state’ and this has proved a major challenge to the development of trade unions. Industrial relations was constrained and in the latter part of the twentieth century the emphasis was placed on human resource planning in an endeavour to improve Singapore’s competitive position within an increasingly globalized world.

Malaysia, like many of the developing economies represented in this volume, achieved substantial growth over the past two decades with a rapid shift away from agriculture. In thi...