Why Do Labor Standards Differ Across Muslim Countries?

Why Do Labor Standards Differ Across Muslim Countries?

Özge Kama Masala (Yıldız Technical University, Turkey) and Tolga Aksoy (Yıldız Technical University, Turkey)
DOI: 10.4018/978-1-5225-2008-5.ch001


International Labor Organization (ILO) has been encouraging countries to implement international labor standards since 1919. With the help of international labor standards, ILO aims to improve the quality of human life and dignity. In order to reach this aim, the ILO's 1998 Declaration on Fundamental Principles and Rights at Work sets out four core labor standards that are binding on all ILO member states. Although developed countries ratified many standards, developing countries and especially Muslim countries are lagging behind. In this paper, we attempt to document the labor standards in Muslim countries by using ILO's Information System on International Labor Standards and compare their position with the rest of the world.
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As the world gets more and more globalized, some regional/state issues like working conditions become matters of the international audience. Worldwide connections and increased information techniques have helped to increase individual awareness. Many developed countries have created different programs to encourage better working conditions for their citizens. The issue has been on the agenda of not only economists but also governments and non-governmental, humanitarian organizations for some time. There has been progress on the issue, partly by reason of International Labor Organization’s (ILO) endorsement of these labor rights as human rights thus the majority of countries have ratified the core labor rights throughout the last decade.

Concerns about the labor rights came into question for the first time in the United Kingdom during the Industrial Revolution. Recognizing rights and enforcing standards universally is crucial for achieving global social justice. Even though the need for an international organization to regulate labor rights was obvious no major steps were taken until the end of First World War. In 1919, ILO was established as a special branch of the United Nations, with an aim to establish internationally recognized human and labor rights, to persuade nations to recognize these rights and to resolve disputed issues regarding their implementation.

The issue of labor standards can be analyzed from different aspects. One aspect of studying labor rights is to relate labor rights with human rights. Implementation of basic rights surely helps to protect human dignity and promotes social justice, but it does so at the expense of an increase in labor costs. As the globalization expands to more countries, competition between and within countries intensifies in a great manner. The increase in competition puts workers in danger since labor is not as mobile as capital, and therefore regarded as the primary production factor whose costs could be diminished easily. This in return provides labor cost advantage/disadvantage to countries with weak/strong civil liberties since countries with better civil liberties tend to have higher labor standards. Considering the fact that labor standards may cause labor costs to increase, some developing countries tend to rule them out, and many of them race to the bottom to attract foreign direct investment (Davies & Vadlamannati, 2013).

Another line of research explores the relationship between labor standards and export performance (Felbermayr, Prat, & Schmerer, 2008; Hur, 2009; Duanmu, 2014). If labor standards are cost-push factors, then in countries where labor is well protected, export goods would be more expensive with respect to the countries where labor is less protected. Thus, the former group of countries would have a lower level of economic growth than the latter one. In addition, governments, especially in lower income regions of the world, might tolerate poor working conditions to attract foreign direct investment, stating another case of a race to the bottom.

However, labor standards are not necessarily linked only to cost-push factors. Considering especially the fundamental labor standards (FLS) which we discuss in detail below, can be accepted as the foundations of basic human rights. Since human capital is the engine of growth in modern economies, it is not reasonable to think that human capital accumulation can be achieved without protecting labor properly. Preventing and protecting child labor, for instance, is crucial for human capital development. Furthermore, human capital is an important production factor for both attracting (Blomström & Kokko, 2003; Noorbakhsh, Paloni, & Youssef, 2001) and reaping the benefits of foreign direct investments (Aksoy & Gönel, 2016; Xu, 2000). Hence a counter argument is that well-protected labor rights are, quite the contrary, a prerequisite for human capital development and long-run economic growth.

Key Terms in this Chapter

Discrimination: The practice of unfairly treating a person or group of people differently from other people or groups of people.

International Labor Standards: Standards refer to conventions agreed upon by international actors.

Labor Law: Those areas of law which appertain to the relationship between employers and employees and between employers and trade unions.

International Labor Organization: ILO is a United Nations agency dedicated to improving labor conditions and living standards for men and women.

Labor Union: An association, combination of employees who band together to secure favorable wages, improved working conditions and better working hours.

Child Labor: The employment of children in an industry or business, especially illegal or considered exploitative.

Forced Labor: Any work or services which people are forced to do against their will under the threat of some form of punishment.

Labor Rights: Are a group of rules pertaining to working people and their organizations.

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