WORLD BANK: Workers should ditch minimum wage to compete with robot labor

London workers' rights protest A workers' rights protest march in London. October 2014.Getty Images

The World Bank has suggested employers should be able to opt out of paying minimum wage, in a draft report released Friday.
It recommended that labour markets should be further deregulated, creating more flexible employment.
Owen Tudor, Head of International Relations at the International Trade Union Committee said the World Bank could be spreading an “equality of misery” with the proposals.

LONDON — The World Bank has suggested that employers should be able to opt-out of paying minimum wage, and has recommended reduced worker rights to make humans more cost-competitive with machine labour.

The Bank’s World Development Report (WDR), released on Friday, outlines proposals for the future of work which have outraged international labour organisations who called them "bizarre” and “troubling".

The WDR calls for fewer labour rights and less “burdensome” regulations allowing companies to hire employees at lower cost. It will urge policy action from governments around the world upon its final release in the autumn.

Owen Tudor, Head of International Relations at the International Trade Union Committee (ITUC), told Business Insider that the bank’s proposals could spread an "equality of misery."

The organisation seems to be out of touch with working people and reality, Tudor said, adding, "It is bizarre that the World Bank is now doing this… The world needs a pay rise and taking away workers rights is not the way to do that."

Proposals in the WDR include:

Allowing employers to opt out of paying minimum wages, if they introduce a profit-sharing schemes for their workers.
Employment contracts with greater flexibility which allow companies to hire and fire employees more easily.
Advocacy of UK style zero hour contracts.

"High minimum wages, undue restrictions on hiring and firing, strict contract forms, all make workers more expensive vis-à-vis technology," the WDR draft said.

"[The report] almost completely ignores workers’ rights, asymmetric power in the labour market and phenomena such as declining labour share in national income," Peter Bakvis, Washington representative for the International Trade Union Confederation told The Guardian.

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