Welcome to the United Nations
Cooperatives and Employment 15-19 May 2006, Shanghai, China
Organised by the Division for Social Policy and Development(DSPD) of the United Nations Department of Economic and Social Affairs (UNDESA) with technical support from the International Labour Organization (ILO) and the International Cooperative Alliance (ICA). The event is hosted by the All China Federation of Supply and Marketing Cooperatives (ACFSMC).
Aide-Mémoire
Background
The achievement of full and decent employment is a global concern that needs urgent attention. In 2005, it is estimated that out of 2.4 billion workers worldwide, 1.4 billion did not earn enough to lift themselves and their families above the US$2 a day poverty line. Of the 500 million working poor [1], almost 485 million did not earn enough to lift themselves and their families above the US$1 poverty line. In addition, of the 200 million jobless persons worldwide, roughly 90 million were young people aged 15 to 24. It is estimated that some 40 million jobs are needed annually over the next decade just to accommodate the growing workforce worldwide.
The fact that global unemployment is rising, despite the 4.3 per cent growth in global GDP in 2005, suggests that economic growth alone is insufficient to address global employment needs. Juan Somavia, Director-General of the International Labour Organization, has described the problem as “a global jobs crisis of mammoth proportions, and a deficit in decent work that isn't going to go away by itself” and concludes that “we need new policies and practices to address these issues."[2]
The challenge of promoting and generating full and decent employment faces policymakers everywhere and the problems of unemployment and underemployment cut across social, economic and geographical boundaries. Africa which has the highest incidence of poverty in the world, has a large number of working poor and high unemployment, particularly in Sub-Saharan and North Africa. It has been estimated that countries in Africa alone needs 8 million new jobs every year just to absorb the rising number of job seekers there.
The lack of decent and productive employment opportunities in many countries has led to the rapid growth of employment in the informal sector of the economy, where there is low productivity, low levels of technology and skills, and very low and irregular incomes. The informal sector typically employs about 50 to 78 per cent of the non-agricultural workforce in many countries in North Africa, Latin America and the Caribbean, Asia and Sub-Saharan Africa. Moreover, in developing countries, about 60 per cent of women who work outside agriculture are informally employed, and engaged in home-based work or street vending where they work long hours for low pay and under poor working conditions. Therefore, the need to adequately address employment in the informal sector is a major challenge for many policymakers.
The employment and decent work deficit is also of concern for persons from other disadvantaged or vulnerable groups. For example, young people who make up 25 per cent of the working-age population, are more than three times as likely as adults to be out of work at any given time. An important consequence of having large numbers of young people who are kept out of the labour market is the heightened risk that they can become socially excluded and, in the worst-case scenario, resort to socially undesirable activities and behaviour. At the other end of the age distribution, older people who face declining pension benefits, with the failure of pension schemes for example, may need to return to the workforce to augment declining incomes but are often unable to find suitable opportunities for work for a number of reasons, including discrimination and lack of skills.
The hope that globalization can provide opportunities for more and better jobs, particularly in poorer developing countries will depend on how the benefits of globalization are distributed and translated into employment opportunities around the world. There is a growing popular view that while many countries have availed themselves of the opportunities globalization has to offer, the benefits of this globalization have been unequally distributed within and between countries. For many of the world’s poorer countries, rapid globalization and trade liberalization without appropriate changes in the international trading system, such as reforming agricultural subsidies in developed countries and better access to developed country markets, have led to unfair competition, adverse terms of trade, job displacements, and worsening employment prospects.
Role of cooperatives in employment creation
The concept of decent work and the notion that there should be economic growth with social equity resonate well with the cooperative model of economic and social organization. It has been argued that cooperatives are well placed to mobilize social capital and can therefore bridge the economic and the social by providing employment, an equitable distribution of profits and above all, social justice. Typically, cooperatives place more emphasis on job security for employee-members and employees’ family members, pay competitive wages, promote additional income through profit-sharing, distribution of dividends and other benefits, and support community facilities such as health clinics and schools, than do private sector businesses.[3] They also address issues of concern such as the environment and food security. The cooperative model, therefore, offers an important employment creation opportunity in the face of the global unemployment and underemployment problem.
Currently, it is estimated that the global cooperative movement directly provides productive self-employment for several hundred million worker-owners of production and services cooperatives, as well as the non-member employees of these and other cooperative enterprises. An increasing number of worker-owned cooperatives worldwide provide employment to millions of worker-owners in diverse sectors as health and social services, public services, education, transport, and tourism. Cooperatives are also major sources of employment in large-scale enterprises providing food stuffs, services to consumers, and financial services. Financial cooperatives provide people with secure institutions for the deposit of savings which also encourage the formation of new enterprises and thus create new jobs. In Europe alone, cooperatives provide employment to more than 5 million individuals.
In the agriculture sector cooperatives can play a very significant role, in both developed and developing countries. Agricultural cooperatives create employment in areas such as production, marketing, credit, insurance and transportation. Given that 70 per cent of the world’s poor reside in rural areas, employment growth in rural areas should be strengthened by increasing agricultural productivity, and also through the creation of non-farm employment. With the increasing focus on the revival of the agricultural sector towards poverty reduction, policy-makers should take the opportunity to further promote the cooperative model as a mechanism for employment creation in this sector.
Cooperatives are also providing more quality job opportunities for youth, women, indigenous peoples, persons with disabilities and other marginalized groups. The ability of cooperatives to integrate women and youth into the workforce is particularly important, as these groups face discrimination and poor opportunities for employment. Early anecdotal evidence, now being increasingly supported by hard data, attest to the fact that appropriately designed cooperative enterprises and microfinance schemes, are particularly helpful for women; the women not only benefit greatly from the added security afforded by such group efforts but this form of social organization promotes the retention of economic gains accruing from their own initiative and innovation.
Indigenous peoples have also used the cooperative model to create viable economic enterprises while still sustaining their cultural identity and way of life. Cooperative efforts have enabled more efficient utilization and adaptation of local resources and production methods, while strengthening the capacities of indigenous groups in negotiating for fairer market conditions.
In light of the employment generation capacity of cooperatives, it becomes compelling for policy-makers at the local, national and international levels, to consider ways and means of mainstreaming the contribution of cooperatives to meeting the employment challenge facing the world today. In this regard, an important consideration is how the employment creation impact of cooperatives can be scaled up in order to massively generate new employment opportunities in those areas where public and private sector initiatives are weak or absent.
Mandates
The expert meeting will serve as a forum to follow up on the commitments made at the Social Summit in Copenhagen in 1995 to promote job creation and social inclusion as the basis for poverty reduction. On the occasion of the tenth anniversary of the Social Summit, member states reaffirmed that the promotion of full and productive employment should be a fundamental component of any development strategy and that macroeconomic policies should support employment creation. Furthermore, at the World Summit 2005, member states strongly resolved “to make the goals of full and productive employment and decent work for all, including for women and young people, a central objective of our relevant national and international policies…”
More recently, the General Assembly in its resolution 60/132 on Cooperatives and social development requested the Secretary-General to submit to the General Assembly at its sixty-second session a report “focusing on the role of cooperatives in promoting full and productive employment.” This meeting therefore focuses on the role of the cooperatives in generating full, decent and productive employment in order to review and consult with various stakeholders on the key substantive issues, and to develop a set of recommendations for consideration by the General Assembly.
Objectives of the Meeting
The Expert Group Meeting seeks:
- To identify and evaluate strategies to promote and reinforce the contribution of cooperatives to promote job creation and social inclusion as a means of reducing poverty.In this regard, the meeting will focus on the role of cooperatives in the following areas:(a) promoting employment creation and decent work in urban and rural areas, including the informal economy, and improving the working and living conditions of the working poor;
(b) addressing the employment challenges arising from rapid globalization and how to employ information and communications technology and biotechnologies to generate new and better jobs;
(c) providing equal employment opportunities to women, youth and indigenous peoples, including providing employment opportunities for older persons;
(d) promoting job creation in post-conflict and crisis situations. - To recommend policies to scale up sustainable employment initiatives and to creating conducive environments that will support and facilitate the implementation of cooperative employment initiatives and strategies at the local, national and international levels;
- To identify and explore options for future directions, activities and research in areas where the cooperative advantage can be exploited to provide sustainable employment opportunities.
In working towards its stated objectives, the expert group meeting will review, examine and document the experience of cooperatives with employment creation in different sectors worldwide. It will also discuss good practices and lessons learned by cooperatives in order to identify key elements and factors to successfully scale up the employment generation capacity of cooperatives.
The outcome of the meeting will provide inputs into the Report of the Secretary-General to the 62nd session of the General Assembly.
Organization of the Meeting
The Expert Group Meeting is organised by the Division for Social Policy and Development(DSPD) of the United Nations Department of Economic and Social Affairs (UNDESA) with technical support from the International Labour Organization (ILO) and the International Cooperative Alliance (ICA). The event is hosted by the All China Federation of Supply and Marketing Cooperatives (ACFSMC) and will be held in Shanghai, China on 15-19 May 2006.
The outline programme of activities is as follows:
- 15 May: Study Tour. There will be visits to cooperatives in the vicinity of Shanghai, China which have implemented successful job creation strategies. The study tour will be hosted by ACFSMC;
- 16-19 May: The Expert Group Meeting will take place in Shanghai. The first two days will be devoted to a discussion of the major policy issues; whereas the last two days will be devoted to a discussion of good practices and the consideration of policy recommendations.
An estimated 35-40 experts in cooperatives and employment from cooperative organizations, academia, research organizations, United Nations agencies, governments and civil society organizations will attend the meeting. There will be about 10 participants from the host country.
Documentation and language of the meeting
The documentation for the meeting will comprise of a commissioned background paper, concise contributions from invited experts (approximately 10 A4 pages), as well as relevant United Nations documents. Experts will be invited to submit their contributions in advance of the meeting (preferably before 20 April 2006) and to make brief presentations at the meeting. English will be the official language during the meeting.
Notes:
[1] ILO defines the working poor as “those who work and who belong to poor households … The individual is the basis for establishing the ‘working’ and ‘not working’ classification; and the household is the basis for establishing the ‘poor’ and ‘not poor’ classification”. See Nomaan Majid, The Size of the Working Poor Population in Developing Countries, Employment Paper 2001/16 (Geneva, ILO, May 2001), p. 2.
[2] ILO Press Release, 24 January 2006, ILO News, Geneva.
[3] Logue, J., Yates, J., “ Productivity in cooperatives and worker-owned enterprises: Ownership and participation make a difference!”, ILO, Geneva, Switzerland, 2005.