Employment and social protection have for years been assigned a low priority in international economic policy and institutions. Policymakers must regain their historical appreciation of how effective worker protections and social insurance systems can further accelerate economic growth and make it more resilient by expanding domestic consumption. Fortunately, there already exists a diplomatic consensus on a major part of this agenda: the International Labor Organization’s Decent Work agenda.
The best hope for transcending the zero-sum game logic that characterizes much of the current trade debate is to elevate employment, social protection, and domestic demand growth to a top priority of international economic policy. Leaders should frame the Decent Work agenda steps as an equal and related companion of trade policy initiatives, including the Doha Round of multilateral trade negotiations and bilateral free trade agreements. They should reorder and integrate the priorities of the WTO, ILO, IMF, and development finance institutions in this fashion in order to make them more capable partners of countries wishing to expand domestic consumption and diffuse the gains from their economic growth more widely.
If trade agreements were repositioned as a means to an end rather than ends in themselves, by combining them with a big boost in institutional capacity assistance to help developing countries expand private sector employment, build social safety nets, and support improvement in wages, working conditions, and consumer purchasing power, this would enable political leaders to address popular fears over a race to the bottom in wages and working conditions much more concretely and credibly than they have managed to do thus far.
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