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The Time Has Come for a Global Minimum Wage

As the International Labour Organization celebrates its 100th anniversary, it should embrace the chance to stop the global race to the bottom

A recent global poll from the International Trade Union Confederation found that an overwhelming 84 percent of all respondents judged their national minimum wage to be insufficient for a decent life. (Photo: SEIU)

A recent global poll from the International Trade Union Confederation found that an overwhelming 84 percent of all respondents judged their national minimum wage to be insufficient for a decent life. (Photo: SEIU)

The International Labour Organization (ILO) is celebrating its 100th anniversary this June. In the wake of a devastating world war, its mission was transformational: to realize social justice and the rights of workers everywhere.

But now, 100 years later, exploitative working conditions remain the norm, more people than ever live in poverty, and the richest 1 percent are on track to own two-thirds of all global wealth in a decade. While no single policy could solve these problems entirely, one in particular would be a decisive step forward.

At its centenary conference, the ILO should call for a global minimum wage.

A global minimum wage—not uniform across countries, but based on a common formula for a living wage—would raise millions out of poverty by ensuring all workers the resources necessary for a decent quality of life.

A recent global poll from the International Trade Union Confederation found that an overwhelming 84 percent of all respondents judged their national minimum wage to be insufficient for a decent life. A global minimum wage — not uniform across countries, but based on a common formula for a living wage — would raise millions out of poverty by ensuring all workers the resources necessary for a decent quality of life. But the real potential of a global minimum wage lies in its capacity to correct a dynamic that has, for decades, been eating away at the power and wellbeing of workers everywhere: the global race to the bottom.

Since the 1980s, a “neoliberal” model of globalization has empowered investors and corporations to cross borders at will in search of the most profit-friendly environments. Because capital is mobile while workers are not, nations are forced to compete to attract investment by slashing labor regulations, environmental protections, and wages. If workers in one country win improvements, mobile corporations simply move to another country where wages are lower.

A global minimum wage would set a floor to the downward spiral. Corporations could still leave for other reasons, but they would no longer have the option of moving to a country with less than livable wages. This would dramatically strengthen the position of labor around the world, allowing workers in individual countries to fight for wage increases with less risk of capital flight. If the global minimum wage formula is tied to median wages, it may even set off a climb to the top, as rising minimums in other countries provide further leverage for workers to push for gains in their own. In conjunction with stronger global regulations on tax havens and an alternative trade policy to protect workers and the environment, a global minimum wage might help end the race altogether.

Such a policy would benefit workers everywhere, not just those in low-income countries. For much of the 20th century, strong labor unions and a corporate class had little choice but to stay in the United States – which meant steady, middle-class manufacturing jobs with reasonable wages. With the suppression of labor rights and the rise of neoliberal globalization in the 1980s, corporations were suddenly free to leave for countries where wages were lower. This shift in corporate power is one of the major drivers behind the decline in American manufacturing. While a global minimum wage may not reverse the trend entirely, it would help stem the tide.

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Michael Galant

Michael Galant

Michael Galant is a recent graduate of the Master of Public Policy program at the Harvard Kennedy School of Government. He is interested in globalization and the Global Justice movement and can be found on Twitter at @michael_galant or by email at galant.michael.r@gmail.com.

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