Essential Action   >>Campaign Against the IMF, World Bank and Structural Adjustment

How Structural Adjustment Hurts Workers

The structural adjustment policy package -- including privatization, slashing of government spending, trade liberalization and opening to exploitative foreign investment -- is, at its core, anti-worker.

For poor countries, the IMF and World Bank's emphasis on exports is to a considerable extent an entreaty to exploit cheap labor as a "competitive advantage." But with countries around the world all forced to follow the same strategy, relying on cheap labor becomes a race to the bottom -- with countries forced into a de facto race to the bottom to offer foreign investors the lowest wages and least substantial labor protections.

Other elements of the structural adjustment package reflect especially the IMF's contempt for workers.

As outgoing World Bank economist Joseph Stiglitz says, the IMF views labor as just another commodity. One of the IMF's emphases has been on promoting "labor flexibility" - meaning making it easier for workers to be fired. The Fund has supported regulatory changes throughout the developing world to remove restrictions on government and private employers firing or laying off workers.

The IMF has actively promoted government downsizing, even though in many countries the government is the major employer and there are few prospects for alternative employment.

The IMF has also viewed many worker benefits as too costly (if they are provided by the government) or too inefficient (if required of private employers). It has urged major scaling back of government pension programs throughout the world. And it has even called for the roll back of minimum wages in countries like Haiti.

Respect for workers' right to organize is not included in the IMF's structural adjustment policy.