Hidden Workforce of 116 Million at 50 MNCs: Trade Union Body

Davos: As the rich and powerful from across the world begin congregating here for their annual jamboree, global trade union body ITUC on Monday said just 50 MNCs have a "hidden workforce" of 116 million people in their global supply chains including in India. 

"The global supply chains of 50 companies employ only six per cent of people in a direct employment relationship, yet rely on a hidden workforce of 94 per cent," as per a new research report released on Monday by the International Trade Union Confederation (ITUC).

The report was released a day before the prestigious World Economic Forum (WEF) Annual Meeting of top global leaders, which begins here tomorrow. 

"Just 50 companies including Samsung, McDonalds and Nestle have a combined revenue of $3.4 trillion and the power to reduce inequality. Instead they have built a business model on a massive hidden workforce of 116 million people," said ITUC General Secretary Sharan Burrow, who is one of the co-chairs of this year's WEF Annual Meeting.

ITUC said the new report, titled 'Scandal: Inside the global supply chains of 50 top companies' exposes an unsustainable business model, with a global footprint that covers almost every country in the world and profiles 25 companies with headquarters in Asia, Europe, and the US.

"Sixty per cent of global trade in the real economy is dependent on the supply chains of our major corporations, which uses a business model based on exploitation and abuse of human rights in supply chains," Burrow said. 

As per ITUC research, the cash holdings of 25 companies of $387 billion could increase the wages in their combined hidden workforce of 71.3 million by more than $5000 for a year.

"The combined wealth of 24 companies in the US including Amazon, Walmart and the Walt Disney company, could buy Canada," it said.

Besides, nine companies in Asia including Foxconn, Samsung and Woolworths have a combined revenue of $705 billion, the equivalent value of the UAE, while 17 companies in Europe including Siemens, Deutche Post and G4S have a combined revenue of $789 billion, the equivalent value of Malaysia.

As per the report, Germany's Deutsche Post DHL Group subcontracts transport services in various countries to minimise costs, an approach that unions say leaves workers vulnerable.

"Following complaints from global union federations UNI and ITF about the treatment of workers in Turkey, India, Indonesia, Vietnam and other countries, the company has agreed to assess industrial relations in India and start bargaining in Indonesia.

"Despite this progress, issues in Hong Kong remain unresolved, and there are current allegations of injustices in India, including widespread mistreatment of staff," it said. 

About G4S, ITUC said: "The company has not committed to paying a living wage to its workforce.

"Unions have reported grievances such as poverty wages, wage cuts, underpaid overtime and excessive working hours in India and South Korea."

On Johnson and Johnson, the report said the company sources and manufactures a broad array of goods in Asia, particularly in China, India, Indonesia, the Philippines, Thailand and Vietnam. 

"J&J has shown a willingness to uphold workers' rights in its supply chain, but concerns remain around wages and its decentralised approach of leaving responsibility for human rights with its local suppliers in countries that typically have a bad reputation for this," it added. 

Other companies analysed in the report with employees in India included P&G and Tesco. Besides, the report also talked about children at work in India's gemstones industry. 

"Jaipur is the centre of India's gemstone industry, where thousands of children work to cut and polish rubies, opals, emeralds and other precious stones. Some are paid as little as $8 a month in an industry worth $39 billion a year," it said.

ITUC said profits are driven by low wages levels that people cannot live on and these profits risk safety with the result of indefensible workplace injuries and deaths and "these profits are increased by tax evasion or tragically linked to pollution of community land and water."

"When global business won't pay the moderate demands of workers for a minimum wage on which they can live with dignity, $177 in Phnom Penh, $250 in Jakarta, $345 in Manila - then this is knowingly condemning workers and their families to live in poverty. It's greed pure and simple," Burrow said. 

The ITUC has set out five recommendations for companies to address the scandal of global supply chains - know whom you contract from and publish this; inspect sites, fix hazards and recognise workers' right to safety committees; end short-term contracts; pay wages on which people can live with dignity; and allow collective bargaining for wage share and decent wages and working conditions.

Burrow said that the number of global framework agreements between multi-national companies and global union federations which address these problems are on the increase, but the governments too must not neglect their responsibilities.

Burrow and other labour leaders at the WEF Meeting here are expected to put forward a four-step plan to transform the business model of global companies and address inequality. 

This would include employers ensuring fair distribution of wealth through minimum living wages and collective bargaining, necessary safety standards, and governments prioritising the dignity of the social protection floor for their people.