Avoiding Economic Collapse: Complementary Currencies
As the Cyprus fiasco focuses attention once again on the faltering Euro, the public is finally questioning the value of the money in their wallets and bank accounts. But as the issue of monetary reform gains currency amongst the public, a vast array of complementary currencies are already helping people facilitate transactions without the central bank administered fiat money.
Find out more in this week’s GRTV Backgrounder on Global Research TV with host James Corbett.
One Million Children in Iraq Impacted by Landmines and Cluster Bomblets
Nearly one million Iraqi children are affected by the presence of landmines with hundreds having been maimed or killed by exploded cluster bomblets since 1991, a UN statement acknowledged.
A statement issued by the United Nations mission to Iraq on the International Day for Mine Awareness and Assistance in Mine Action calls for more progress to eliminate the threat of landmines to the people of Iraq.
“It is tragic and unacceptable that children continue to have their lives forever damaged by the presence of landmines,” stated Dr. Marzio Babille, UNICEF’s Representative to Iraq.
“With determined effort, all landmines and unexploded ordinance in Iraq can be eradicated; we call on all actors – the Government of Iraq, international community and private sector – to coordinate to permanently eliminate this threat from the lives of Iraqi children and their families.”
The most recent Iraqi child victimized is a twelve year old boy who lost one eye and both his hands from a munition that exploded when he was herding sheep near Basra in March, 2013.
Iraq continues to be one of the most contaminated countries in the world with more than 1,730 square kilometers of its lands is polluted with landmines and unexploded ordinance, affecting 1.6 million people in around 4,000 communities across the country.
Mr. Martin Kobler, the Special Representative of the United Nations Secretary-General for Iraq said that “landmines and unexploded ordinance continue to terribly affect Iraqis, restricting their access to essential services and, in the worst case, maiming and killing them”.
“Efforts must be scaled-up to heal the wounds of past wars and remove this menace, once and for all, from the lives of Iraqis,” added Kobler.
Due to a shortage of funding, the UN’s Mine Action Program will come to an end by mid-2013. As a result, the UN appeals the Government of Iraq to urgently fund humanitarian mine action activities, such as demining and mine risk education, to improve the living conditions of Iraqis affected by landmines.
On October 2012, Kurdistan’s State Demining Organization announced that 10 people killed and 40 others wounded during the year.
The southern Iraqi province of Basra considered one of the most contaminated areas in the world because of the fact that its territory used as military firewalls during the country’s wars.
It is worth to mention that an average of two Iraqis were killed or injured weekly by mines during 2009, according to international statistics.
North Korea or the United States: Who is a Threat to Global Security?
North Korea lost thirty percent of its population as a result of US led bombings in the 1950s.
Most people in America consider North Korea as an inherently aggressive nation and a threat to global security.
Media disinformation sustains North Korea as a “rogue state”.
The history of the Korean war and its devastating consequences are rarely mentioned. America is portrayed as the victim rather than the aggressor.
North Korea lost thirty percent of its population as a result of US led bombings in the 1950s.
US military sources confirm that 20 percent of North Korea’s population was killed off over a three year period of intensive bombings:
“After destroying North Korea’s 78 cities and thousands of her villages, and killing countless numbers of her civilians, [General] LeMay remarked, “Over a period of three years or so we killed off – what – twenty percent of the population.”
It is now believed that the population north of the imposed 38th Parallel lost nearly a third its population of 8 – 9 million people during the 37-month long “hot” war, 1950 – 1953, perhaps an unprecedented percentage of mortality suffered by one nation due to the belligerence of another.” (See War Veteran Brian Willson. Korea and the Axis of Evil, Global Research, April, 2002)
Official South Korean government sources estimate North Korean civilian deaths at 1,550,000
During The Second World War the United Kingdom lost 0.94% of its population, France lost 1.35%, China lost 1.89% and the US lost 0.32%.
During the Korean war, North Korea lost 30 % of its population. In the words of General Curtis Lemay:
There are no innocent civilians. It is their government and you are fighting a people, you are not trying to fight an armed force anymore. So it doesn’t bother me so much to be killing the so-called innocent bystanders. (emphasis added)
Reflect for a few minutes on these figures: If a foreign power had bombed the US and America had lost thirty percent of its population as result of foreign aggression, Americans across the land would certainly be aware of the threat to their national security emanating from this unnamed foreign power.
Now put yourself in the shoes of the North Koreans, who lost 30 percent of their population as a result of 37 months of relentless US bombings.
From their standpoint, the US is the threat to Global Security.
Their country was destroyed. Town and villages were bombed. General Curtis Lemay acknowledges that “[we] eventually burned down every town in North Korea anyway, someway or another, and some in South Korea too.”
There is not a single family in North Korea which has not lost a loved one.
Everyone I talked with, dozens and dozens of folks, lost one if not many more family members during the war, especially from the continuous bombing, much of it incendiary and napalm, deliberately dropped on virtually every space in the country. “Every means of communication, every installation, factory, city, and village” was ordered bombed by General MacArthur in the fall of 1950. It never stopped until the day of the armistice on July 27, 1953. (See War Veteran Brian Willson. Korea and the Axis of Evil, Global Research, April, 2002)
For the people of North Korea, in their inner consciousness as human beings, the aggressor, which inflicted more than two million deaths on a country of 8-9 million (1950s) is the United States of America.
These facts continue to be concealed by the Western media to sustain the “Axis of Evil” legend, which portrays North Korea as a threat and “rogue state”, to be condemned by the “international community”.
Genocide is defined under the 1948 United Nations Convention on the Prevention and Punishment of the Crime of Genocide (CPPCG) as the
“the deliberate and systematic destruction of, in whole or in part, of an ethnic, racial, religious, or national group”. Article 2 of this convention defines genocide as “any of the following acts committed with intent to destroy, in whole or in part, a national, ethnical, racial or religious group, as such: killing members of the group; causing serious bodily or mental harm to members of the group; deliberately inflicting on the group conditions of life, calculated to bring about its physical destruction in whole or in part; imposing measures intended to prevent births within the group; [and] forcibly transferring children of the group to another group.”
What is at stake is an act of genocide committed by the US. During the Korean War an entire civilian population was the target of deliberate and relentless bombings, with a view to destroying and killing a national group, which constitutes an act of genocide under the UN Convention on the Prevention and Punishment of the Crime of Genocide.
Iran’s Alleged Nuclear Weapons Program: Are More Economic Sanctions in the Works?
Nuclear Talks Fail in Kazakhstan
Nuclear talks between Iran’s negotiating team led by Supreme National Security Council secretary, Saeed Jalili and diplomats from the United States, France, Germany, China, Russia and Britain in the Kazakh city of Almaty has reportedly failed.
A senior U.S. administration official earlier this week told CNN “As long as Iran does not take concrete steps to address the concerns of the international community about its nuclear program, the dual-track process continues. And that pressure only will increase if Iran does not begin to take concrete steps and concrete actions.” It means that Iran will have more sanctions imposed by the West if negotiations fail, which they did.
There is still a chance for more talks on Saturday if both sides agree to meet again. The Guardian reported that ‘Iran nuclear talks in Kazakhstan stumble’ it stated that “A day of talks over the future of Iran’s nuclear program has run into trouble, with diplomatic sources speaking of a “gulf” between the Islamic republic and the world’s six major powers.” Iran remains committed to its right to uranium enrichment and wants the West to lift its sanctions that has caused severe damage to its economy affecting millions of Iranians. The West wants Iran to close all of its enrichment facilities and stop uranium enrichment altogether. Expect the negotiations to fail by this weekend. This comes at a time when US Secretary of Defense John Kerry visits the Middle East on April 8th and 9th to talk to Israeli Prime Minister Benjamin Netanyahu. He will also visit the Palestinian territories and Turkey, but the main focus will be Iran’s nuclear program. According to The Guardian’s report:
Iran’s response to the offer from the group fell short of what the six wanted and instead amounted to a reworking of proposals it made last year at negotiations that ended in stalemate, according to a source privy to the talks. He said the two sides remained a “long way apart on substance.
Tensions will increase with the US, Israel and Iran as negotiations yield no progress between both sides. The US and Israel are intent on preventing an Iranian Nuclear program, although it is for peaceful purposes. The BBC reported that “Saeed Jalili told an audience at Almaty university on Thursday: “We think our talks… can go forward with one word. That is the acceptance of the rights of Iran, particularly the right to enrichment.” Iran would not give up their right on principal since they signed the Nuclear Non-Proliferation Treaty allowing them to enrich uranium as other members who signed the NPT. “We are talking about peaceful nuclear energy,” he stressed, accusing “a handful of countries” of trying “to deny this right to others,” according to BBC.
With the Korean Nuclear crises, would Israel strike Iran’s nuclear facilities in order to prevent a Middle East crisis? Not anytime soon since the US is involved in numerous military adventures. The Israeli media is sure trying to take advantage of the situation. The Israeli newspaper Haaretz published an article on April 4th, 2013, a day before the nuclear talks in Kazakhstan called “What Iran has learned from the Korean crisis” by Anshel Pfeffer who writes in a section called The Axis as in the “Axis of Evil” a term used by former US President George W. Bush. Pfeffer wrote:
The two nations indeed have a lot in common, aside from their deep hostility toward the U.S. Both hold rigid ideologies that grow stronger against the international sanctions and isolation (consider Juche, the Korean national belief in self-reliance and the Iranian radical interpretation of Shia Islam). Both have succeeded for years in maneuvering between the superpowers, taking advantage of Russian and China’s hostility to American hegemony. Both maintain a balance of terror with their U.S.-backed neighbors – South Korea and Japan, Saudi Arabia and Israel.
Tensions will increase between Iran and the West including Israel in the coming months ahead. Expect more sanctions and more Israeli hostility towards Iran. Is there war on the horizon? Not anytime soon. Syria is the primary target for Western intervention which is another reason the Secretary of Defense John Kerry is visiting the Middle East next week.
Worse than the Great Depression: Mass Unemployment, 100 Million Americans Live in Poverty
By Fred Magdoff and John Bellamy Foster
Global Research, April 03, 2013
Monthly Review 1 March 2013
Theme: Global Economy, Poverty & Social Inequality
Workers in the United States are in a very difficult situation—one made significantly worse by the Great Recession and the very slow “recovery.” The latest data as we write this (available for January 2013) indicates that although the unemployment rate has declined from its peak and is now at 7.9 percent, when those working part time but wanting full-time jobs and those who have given up looking for work are added in, 14.4 percent of the labor force currently needs full-time employment.1
To give some idea of the meaning of such a large percentage needing full-time jobs, this represents 22 million people, compared to total nonfarm private-sector employment of about 113 million. Given the large portion of workers in part-time positions, there are currently less than 100 million full-time-equivalent jobs left in the private sector.2 With the public sector hiring few if any workers for the foreseeable future, and no New Deal-type works program in the cards, the private sector will be the source of whatever job increases occur.
As if the current employment situation is not bad enough, there has also been a long-term decline in the relative power of the working class, with capital increasingly gaining the upper hand. One crucial indication of this is the stagnation or decline over decades of real wages (corrected for inflation). For a while workers’ lost ground with respect to wages was compensated for by more women entering the labor force so that households increasingly had two earners, helping to maintain household income. However, over the last decade there has even been a downward trend in median family income—decreasing from $54,841 in 2000 to $50,054 in 2011 (both in 2011 dollars).3 The financial impact of the Great Recession has had a devastating effect on many people—with millions declaring bankruptcy, losing homes to foreclosure, or being forced “underwater” (owing more than the worth) on their homes.
Although there were numerous other factors at work, President Reagan’s 1981 firing of striking air traffic controllers, replacing them with nonunionized workers, was a turning point in the class war, leading to the decline of workers’ power. This action set a tone for private business that made it “acceptable” to break strikes by bringing in scab labor. Labor legislation protecting workers’ right to organize was weakened. The various unanswered attacks on both private- and public-sector labor that took place helped reverse the generally favorable view of unions on the part of the public. Consequently, the number of unionized workers has decreased dramatically, with public-sector workers providing now most of the total union membership, and attacks on unions increasingly focused on the public-sector. Total union membership dropped by 2.8 percent in 2012 to 11.3 percent of the workforce, the lowest in the entire post-Second World War period, with more than half the union-membership loss occurring in government jobs. Both the number of strikes and the workdays lost due to strikes have plummeted over the last four decades.4
Among the arsenal of tools at capital’s disposal that added to the decline of working-class power, perhaps the most important was the ability of bosses to outsource a portion of the work or actually move entire factories—first to low-wage parts of the United States and, more recently, offshoring jobs to Asia and elsewhere to take advantage of low wages and lax environmental laws. Even the mere threat to move factories and jobs to lower-wage areas has frequently been enough to subdue labor—and understandably so. With employment growth anemic at best, workers have been concerned that if they lost their jobs they might not be able to find new ones—or ones as good. In the words of a recent New York Timesheadline, the “Majority of New Jobs Pay Low Wages.”5
Another long-term trend that has weakened labor has been the increasing use of part-time employees—anyone working from 1 to 34 hours per week is officially considered part time. Since the 1970s there has been a general increase in the use of part-time labor, which now makes up approximately 20 percent of all employed workers. During the Great Recession when more than 11 million full-time jobs were lost, there was actually a gain in part timers—so that the reported net loss of jobs, 8.7 million, did not give a full picture of what was happening.6 Many part-time workers are in especially difficult work environments, with new computerized scheduling programs able to tell bosses the number of workers needed during different days of the week—and even at different times during the day. As a result, many part-timers, especially in retail sales, do not have fixed schedules that they can count on. This makes it more difficult to work at a second part-time job. An additional problem for labor in the current environment is that, of the workers hired during the “recovery” from the Great Recession, over 750,000 of these jobs were supplied by temporary help services, leaving these employees with a precarious hold on their jobs.7
James K. Galbraith examined the “squeeze on wages from the 1950s–1990s,” discovering that the wage and salary share of personal income declined every decade on average throughout this period.8 Recently, a number of studies by quite “reputable” sources have appeared—especially one by staff at the Cleveland Federal Reserve Bank and one by the Congressional Budget Office—showing the decline in the share of the economy going to labor seen in the last half of the twentieth century has continued into the present century.9 Using different assumptions and approaches they developed three different calculations, all of which indicated that labor’s share has been declining for some time.
Determining labor’s share of the pie obviously raises a number of methodological questions, as there are various ways to calculate this. Labor’s share of income can be estimated on the basis of either (a) wages and salaries received by workers or (b) total compensation. The latter includes, in addition to wages and salaries, benefits provided by employers—both legally required insurance entitling the employee to benefits in the event of ill-health, unemployment, disability, and old-age retirement, and also voluntary benefits such as paid leave and life insurance. These benefits differ considerably. Some, such as Social Security and Medicare, are genuine social insurance programs. Others, such as the Health Management Organizations (HMOs) in which workers are enrolled by their employers, are private insurance programs, where workers are required to pay a large and increasing portion of the cost, generating high profits to insurance companies and offering diminishing use-value per benefit dollar to employees.10
It is important to recognize that benefits received by employees—distinguishing total compensation from mere wages and salaries—are very unevenly divided in the U.S. economy. They vary by (a) whether the worker is full time or part time—benefits represent 31 percent of total compensation for private sector full-time workers but only 21 percent for part-time employees; (b) union or nonunion—benefits are approximately 41 percent of all compensation for unionized goods-producing employees versus 31 percent for nonunion employees doing similar jobs; and (c) job type—for example, benefits represent 34 percent of total compensation for full-time “information” employees versus 29 percent for full-time service employees.11
Depending on the nature of the question, then, one may wish to emphasize either total compensation or wages and salaries in analyzing labor’s share, comparing them alternately to GDP (or some other national-income indicator) or to private-sector output. In all cases, however, the general trends are very similar. Movements of total compensation and wages and salaries generally rise and fall together. This means, according to The State of Working America for 2012, “that analyses…that focus on wage trends” alone as opposed to total compensation “are using an appropriate proxy for compensation, at least on average.”12
Here, we shall look separately at the shares of GDP represented by total compensation and wages and salaries. The upper line in Chart 1 shows the total compensation of all employees receiving wages and salaries—workers and managers in the government and private sectors—as a percent of GDP, while the lower line is restricted to total compensation of private-sector employees as a percent of GDP. Comparing the two lines, we can see that after a brief rise in the late 1960s a plateau emerges in the labor share of GDP for all employees (upper line), persisting through much of the 1970s, followed by a downward trend to the present. In contrast, the labor share of GDP for private sector employees alone (lower line) exhibits no increase in the 1960s, and a decline from the 1980s to the present. The slight rise in the labor share for all employees in the late 1960s along with the plateau for much of the ‘70s can therefore be attributed almost entirely to the increase in government employment in these years. This corresponded to the Vietnam War, the Great Society, and the Nixon Family Assistance Program, and to state and local government hiring to staff new schools and expand police and fire departments in the burgeoning suburbs. In the second half of 1966, during the big buildup of the Vietnam War, military expenditures accounted for half of the total increase in GDP.13 Overall, there was a huge increase in civilian government employees—federal, state, and local—in this period with civilian government employment as a percentage of all nonfarm employment rising from 15.6 percent in 1960 to its post-Second World War peak of 19.2 percent in 1975.14
Chart 1. Total Labor Compensation as a Percent of GDP
Sources: “All employees” is government plus private sector employee. Compensation for government employees from Table 1.13, “National Income by Sector, Legal Form of Organization, and Type of Income,” National Income and Product Accounts (NIPA), Bureau of Economic Analysis (BEA); Compensation for private sector employees, is from unpublished Bureau of Labor Statistics (BLS) data; “Gross Domestic Product” (GDP), St. Louis Federal Reserve (FRED Database), http://research.stlouisfed.org/fred2. BLS data for private sector compensation provided by personal communication from the Supervisory Economist, Office of Productivity and Technology Division of Major Sector Productivity.
Not surprisingly, this period was one of relative prosperity for workers. The average rate of real growth of the U.S. economy was higher in the 1950s and ‘60s than in the ‘70s. But even in the 1970s the economic growth rate exceeded that of the three decades that were to follow.15
Chart 1 shows that total compensation of both all employees and private sector employees as a percent of GDP continued a downward slide for most of the 1980s, ‘90s, and the first decade of this century. However, a brief bump up was experienced in the second half of the 1990s. The temporary rise in the compensation share at that time was mainly a product of the dot-com financial boom, which turned into a bust in 2000. The bursting of the dot-com bubble led to a sudden drop in the compensation share, which was given an added downward push by the Great Recession less than a decade later.
Wages and salaries, as distinct from total compensation, are especially important for workers at the lower-income levels, since this is the basis of their everyday consumption, constituting their means of subsistence. As with total compensation—only more so—wages and salaries exhibited a strong downward trend as a percentage of national output of goods and services (Chart 2). Similar to what we observed in the case of the total-compensation share, a brief, cyclical increase in the wage share is evident for all employees in the late 1960s and early ‘70s (upper line). But just as we saw with respect to total compensation, this short-term increase in the wage share disappears once we look at the wages and salaries of private-sector employees as a percent of GDP (lower line). Hence, the rising wage share for all employees in these years is once again explained primarily by the expansion of government employment, and subsequently eroded along with the decline of government consumption and investment as a percent of GDP beginning in the 1970s.16 It was not until the late 1990s dot-com bubble that one again sees significant employment gains, as well as modest increases in wages and salaries, resulting in a very brief increase in the share of wages and salaries in GDP—though never approaching its previous peaks, and plummeting thereafter.
Chart 2. Wages and Salaries as a Percent of GDP
Sources: Salary and wages for all employees and private sector employees from Table 1.12, NIPA, BEA; GDP, FRED Database.
Overall the decline in real wages (corrected for inflation) since the 1970s has been sharp. As David Gordon observed in 1996 in Fat and Mean, by the early 1990s the real hourly spendable earnings of private nonproduction/nonsupervisory employees in the United States had fallen “below the level they had last reached in 1967…. Referring to these trends since the early 1970s as ‘the wage squeeze’ is polite understatement. Calling it the ‘wage collapse’ might be more apt.”17 While the real hourly wage for all nonfarm private workers has declined, weekly (or annual) wages and salaries have fallen even faster. In the early 1970s the average earnings of nonfarm private workers was over $340 per week (in 1982–1984 dollars). Earnings of these workers declined rapidly to less than $270 per week in the early 1990s, rebounding to $294 per week by 2011—still close to 15 percent less than in 1973.18 The decline in real income per week was the product of two trends: (1) stagnating and declining real hourly wages and (2) the decline of hours worked per week. As more people worked part time, the average hours worked in private sector nonfarm jobs declined from 38.6 hours in 1965 to 33.6 hours in 2011.19 It was this combination of declining real wages and fewer hours worked that left workers poorer and in more precarious positions.
A Look at Class Divisions and Wages
The labor share of income as depicted above in terms of both total employee compensation and wages and salaries as shares of GDP is of course a very crude indicator of what is happening to the working-class income, downplaying the actual fall in working-class wages and salaries as a share of GDP. This is because the aggregate data also includes the compensation going to CEOs and other upper-level management, which ought to be counted as income to capital rather than labor. The wages and salaries (and benefits) of higher management positions have been rising in leaps and bounds in recent decades while workers’ wages at the bottom have lost ground. Consequently, the actual decline in wages as a share of GDP is much sharper where the working class itself is concerned. An examination of real hourly wages 1979–2011 by income decile (up to the 95th percentile) shows that the real hourly wage of the bottom decile shrank in absolute terms over the period, while that of the top decile increased by more than 35 percent.20 Thus, although the wage share of income has sharply dropped in the U.S. economy, this decline has not been shared equally, and applies mainly to what is properly called the working class, i.e., the bottom 80 percent or so of wage and salary workers.
We should add, parenthetically, that the term “working class” is hardly used in the dominant discourse in the United States today. Many workers conceive of themselves as part of the “middle class” because they have come to think of their income as providing them with a “middle-class lifestyle”—and because they consider themselves above “the poor,” who have been converted in the ruling ideology into the entire lower class (or underclass), leaving out the working class altogether. Nevertheless, from a perspective that focuses on class as a power relation the working class rightly includes all those who work for wages or salaries and are not in a management or predominantly supervisory position—and who are also not high-level professionals, such as doctors, lawyers, and accountants. Some members of the working class might be paid very well, but they still have the same basic relationship of worker to capital or “the boss.”21
There is no routine collection of statistics on the entire working class. The closest that the official statistics come to in this respect is in the standard private-sector reporting category called “production and nonsupervisory” workers, which includes “production workers in the goods-producing industries and nonsupervisory workers in the service-providing industries.” Although comprising some 90 million employees (about 80 percent of private-sector workers), it is a very rough approximation of the U.S. working class, leaving out many who should be counted.22 The residual group of private-sector employees not considered in this category, which we refer to in this article as “management, supervisory, and other nonproduction employees,” undoubtedly includes many employees who might well be considered part of the working class. Moreover, the production and nonsupervisory workers category applies only to the private sector and thus leaves out all government workers, many of whom, such as those who work in the post office, public schools, and local police, should be included within the total working class. So while the data tells us a lot, we must recognize its inadequacies. Still, it is the best statistical basis available for looking at the working class as a whole, as inadequate as it may be.
Chart 3 provides data related to production and nonsupervisory employees. While the share of the GDP going to the wages and salaries of all private employees has, as we have seen, decreased dramatically (lower line in chart 2), the drop in the wage income of production and nonsupervisory workers as depicted here has been even more startling. Chart 3 shows that private-sector production and nonsupervisory workers have remained a fairly constant percentage of all private employment from the mid–1960s to the present. (See the top line in the chart, indicating that these workers represented around 83 percent of all private sector workers in both 1965 and 2011.) Nevertheless, the share of production and nonsupervisory workers in the total private sector payroll dropped from over 75 percent in 1965 to less than 55 percent during the Great Recession, and has only risen slightly since.
Chart 3. Number and Payroll of Production and Nonsupervisory Employees as a Percent of Total Private Sector
Sources: Number of private sector production and nonsupervisory employees from BLS Series CES0500000006; Total private sector employees from “All Employees: Total Private Industries” (USPRIV), FRED database; Annual payroll of production and nonsupervisory is calculated from weekly aggregate payroll, BLS Series CES0500000082; Aggregate payroll of all private employees from Table 1.12, NIPA, BEA.
The implication of this, of course, is that the management, supervisory and other nonproduction employees at the top, representing around 17 percent of private employees, receive more than 40 percent of private sector wage and salary income—and this share is rising.
We see the contrasts even more clearly when we look in Chart 4 at the shares of GDP going to the two separate groups that make up private employees—production and nonsupervisory employees versus what we have labeled as management, supervisory, and other nonproduction employees. Wages and salaries received by the upper levels of private employees actually increased from 1965 to the present as a share of GDP. At the same time, those of the over 80 percent of private-sector workers in the production and nonsupervisory worker category saw their wages and salaries decline dramatically, from over 30 percent of the GDP to about 20 percent in 2011. Hence, the rapidly declining wage share in the monopoly-finance-capital period since the mid–1970s stagflation crisis fell entirely on the backs of working-class employees.
Chart 4. Wages and Salaries of Private Sector Employees as a Percent of GDP
Sources: Same as Chart 3, with share of GDP to “Management, supervisory and other nonproductive employees” calculated by subtraction of wages and salaries of “production and nonsupervisory employees” from wages and salaries of all private sector employees.
Given this background of high unemployment, lower-wage jobs, and smaller portions of the pie going to workers, it should come as no surprise that, according to the U.S. Census Bureau, nearly 50 million people in the United States live in poverty (with income in 2011 below $23,021 for a family of four) while another 50 million live between the poverty level and twice the poverty level—one paycheck away from economic disaster.23 Thus, the poor (those in poverty or near poverty), most of whom belong to the working poor, account for approximately 100 million people, fully one-third of the entire U.S. population.
Writing more than a decade ago, Bill Moyers commented on the plight of labor as follows: “Our business and political class owes us better than this. After all, it was they who declared class war 20 years ago, and it was they who won. They’re on top.”24 However, the way the system works, the ruling class does not owe workers anything aside from wages and salary earned and legally required benefits. And the attack on labor—its unions, wages, working conditions, social programs, and even legally required benefits—continues to this day.
Wage repression and high unemployment are the dominant realities of our time. A vast redistribution of income—Robin Hood in reverse—is occurring that is boosting the share of income to capital, even in a stagnating economy. Is it any wonder, then, that for years on end polls have shown a majority of the population agreeing with the statement that the United States is on the wrong track and not headed in the right direction?25
Fred Magdoff is professor emeritus of plant and soil science at the University of Vermont.
John Bellamy Foster is editor ofMonthly Review and professor of sociology at University of Oregon. They are the coauthors of The Great Financial Crisis(2009) and What Every Environmentalist Needs to Know About Capitalism (2011)—both published by Monthly Review Press.
- ↩ U.S. Bureau of Labor Statistics, Economic News Release, Alternative Measures of Labor Utilization, Table A-15,http://bls.gov.
- ↩ Ninety-six million full time equivalent private sector workers calculated assuming a forty hour work week and using actual hours worked per week from Average Weekly Hours Of All Employees: Total Private (AWHAETP) and number of private employees from All Employees: Total Private Industries (USPRIV), from St. Louis Federal Reserve FRED database, http://research.stlouisfed.org/fred2/, December 30, 2012.
- ↩ U.S. Census Bureau, Historical Income Tables: Households, Table H-6. Regions—All Races by Median and Mean, http://census.gov.
- ↩ Melanie Trottman and Kris Maher, “Organized Labor Loses Members,” Wall Street Journal, January 23, 2013,http://online.wsj.com.
- ↩ Catherine Rampell, “Majority of New Jobs Pay Low Wages, Study Finds,” New York Times, August 30, 2012,http://nytimes.com.
- ↩ St. Louis Federal Reserve, FRED database, Employed, Usually Work Part Time (LNS12600000), January 4, 2013, http://research.stlouisfed.org.
- ↩ Bureau of Labor Statistics database, Employment, Hours, and Earnings from the Current Employment Statistics survey (National), Employees Temporary Help Services (series ID CES6056132001), http://data.bls.gov.
- ↩ James K. Galbraith, Created Unequal (New York: The Free Press, 1998), 82–83.
- ↩ Margaret Jacobson and Filippo Occhino, “Behind the Decline in Labor’s Share of Income,” Cleveland Federal Reserve, 2012, http://clevelandfed.org; Congressional Budget Office, What Accounts for the Slow Growth of the Economy After the Recession? (see Figure 7, p. 14), 2012, http://cbo.gov. Galbraith’s data here shows that direct income to capital in the form of interest, dividends, and rent increased from 10 percent of personal income in the 1940s to 17 percent in the 1990s.
- ↩ Data on total compensation also includes “other compensation” such as bonuses and stock options mainly applying to upper-level management. It does not, however, include capital gains which are the main source of the increasing wealth of the capitalist class.
- ↩ Bureau of Labor Statistics, U.S. Department of Labor, “Employer Costs for Employee Compensation” database,http://bls.gov.
- ↩Economic Policy Institute, The State of Working America, 12th edition (Ithaca, NY: Cornell University Press, 2012), 182.
- ↩ Michał Kalecki, The Last Phase of Capitalism (New York: Monthly Review Press, 1971), 110.
- ↩ Bureau of Labor Statistics, Current Employment Statistics Survey, http://bls.gov.
- ↩ John Bellamy Foster and Fred Magdoff, Great Financial Crisis (New York: Monthly Review Press, 2012), 129.
- ↩ On government spending (government consumption and investment) as a percent of GDP over the post-Second World War period, see John Bellamy Foster and Robert W. McChesney, “A New New Deal Under Obama?,”Monthly Review 60, no. 9 (February 2009): 4–5.
- ↩ David M. Gordon, Fat and Mean (New York; Free Press, 1996), 19–20.
- ↩ Calculated from Table B-47 of the 2012 Economic Report of the President, http://gpo.gov.
- ↩ Table B-47, Hours and earnings in private nonagricultural industries, 1965–2011, 2012 Economic Report of the President, http://gpo.gov.
- ↩ Economic Policy Institute, The State of Working America, 12th edition, 186. The data goes up to the ninety-fifth percentile and does not include the income of the top 5 percent of the population.
- ↩ See Michael Zweig, “Six Points on Class,” in Michael Yates, ed., More Unequal (New York: Monthly Review Press, 2007), 173–82. In a larger sense the working class also can be seen as including many of those on public assistance and who have retired as well, along with dependents. But we are dealing here only with the working class as a component of the officially designated labor force.
- ↩ From St. Louis Federal Reserve FRED database, Production and Nonsupervisory Employees: Total Private (CES0500000006), updated January 1, 2013, http://research.stlouisfed.org.
- ↩ Carmen DeNavas-Walt, Bernadette D. Proctor, Jessica C. Smith, Income, Poverty, and Health Insurance Coverage in the United States: 2011, United States Census Bureau, 2012, http://census.gov.
- ↩ Bill Moyers, “Which America Will We Be Now?,” The Nation 271, no. 16 (November 19, 2001): 11–14.
- ↩ “Right Direction or Wrong Track: 35% Say U.S. Heading in the Right Direction,” Rasmussen Reports, January 23, 2013, http://rasmussenreports.com.
‘No to War of Aggression in the Korean Peninsula’
by Liham sa Patnugot
Map of the Korean Peninsula
We are individuals and migrant workers organizations in South Korea who are greatly alarmed and concerned on the possibility of eruption of war of aggression in the Korean Peninsula. We, in the strongest terms oppose and resist any attempt from the contending countries and states to start a direct armed confrontation and the use of both conventional and high tech war armaments including nuclear weapons to achieve their political-military and economic ends.
The provocations through the Joint US-ROK military exercises should be stopped now. The DPRK responses to the provocations, as we understand them are all on the defensive, for since the Armistice of 1953, the US-ROK joint military exercises have always intended to overthrow the government of the DPRK.
We recall that on March 11, 2013 the Joint US- ROK began its annual “Key Resolve” and “Foal” war games. These, and the “Ulchi” games that took place in August 2012, rehearse invasions of North Korea for several months each year. Far from creating security in the region as those governments claim they do, these games deliberately provoke and stir up animosity towards the Democratic Peoples’ Republic of Korea (DPRK), extend the state of civil war, and promote war as a solution to a conflict instigated and perpetuated by US imperialism with the support of other imperialist countries. This heightened tension has reached an alarming level and people are anticipating at anytime war will broke out, but it seems that the ROK and the diplomatic communities in Seoul are just waiting to evacuate their nationals and are remained silent over the critical situation in the Korean Peninsula.
Very recently, on the first day of April, the advanced, radar-evading F-22 Raptors were deployed to Osan Air Base, the main US Air Force base in the ROK, from Japan to support ongoing bilateral exercises, the US military command in the ROK said in a statement that the DPRK to restrain itself. On Thursday, March 28, the US flew two radar-evading B-2 Spirit bombers on practice runs over the ROK. They flew from the US and back in what appeared to be the first exercise of its kind, designed to show America’s ability to conduct long-range, precision strikes “quickly and at will”, the US military said. Upon knowing of this Kim Jung-Un, leader of the DPRK, responded swiftly by signing the plan on technical preparations of strategic rockets of the Korean People’s Army, ordering them to be on standby for fire so that they may anytime strike the US mainland, its military bases in the operational theatres in the Pacific, including Hawaii and Guam, and those in the ROK,” media sources have disclosed.
Since coming into power in 2009, the ruling Senuri/Grand National Party US subservient government of the ROK has been undoing all the progress to reunify the peninsula and bring about peace worked out by the previous liberal governments, by churches, NGOs and communities. Continuous war games in recent years have caused an escalation of tensions. They have caused the DPRK to hold underground nuclear tests. This year, in fact, the persistent engagement in war exercises has prompted the DPRK to renounce the July 1953 Armistice Agreement and stand ready to make a counter-attack at any time as of March 11. The situation today is therefore extremely volatile.
We call on the governments of the sending migrant’s workers and the Republic of Korea as sovereign states to make a resolute resolve and appropriate actions to stop the war games and de-escalate the tensions in the Korean Peninsula.
We call on the government of the United States of America (USA), President Barack Obama, the Congress and Senate to act upon new foreign policies that are based on lasting justice and peace and prevent the US political-military institutions in pursuing military solutions to problems around the world, but rather put the basic humanity of peoples and nations as the top priority.
We support a just and peaceful resolution of the present crisis in the Korean Peninsula by ending the Korean War once and for all with a peace treaty, removing of the United States military from the region, and reunification through dialogue and political process.
We call on all justice and peace loving members of the global community to raise their voices against the war of aggression of the United States and other imperialist countries and to support all efforts and actions to evolve a new, just and peaceful world.
Federation of Filipino Workers Association in Korea
Southern Tagalog Organization
Association of Filipino Workers
Osan Migrant Center
01 April 2013
North Korea declares ‘state of war’ vs South
30-Mar-13, 8:14 AM | Agence France-Presse
North Korea could ‘spin out of control’, Russia warns, as Pyongyang declares ‘state of war’
30-Mar-13, 9:23 AM | Agence France-Presse
‘So what else is new?’: South Korea plays down North’s ‘state of war’ declaration
30-Mar-13, 10:29 AM | Agence France-Presse
As Pope Francis washes the feet of two Muslims, hopes for Christian-Islamic ties are refreshed
30-Mar-13, 11:26 AM | Agence France-Presse
GALLERY | In Bulacan, festive atmosphere on Good Friday despite the bloody details
30-Mar-13, 8:36 AM | Photos by Bernard Testa | Lifestyle Section, InterAksyon.com
North Korea declares ‘state of war’ vs South
By: Agence France-Presse
March 30, 2013 8:14 AM
This video grab from North Korea’s official website, Uriminzokkiri.com shows a scene from the four-minute video titled ‘A Short, Three-Day War.’ (AFP/Uriminzokkiri.com)
The online news portal of TV5
SEOUL – (UPDATE 3 – 10:05 a.m.) North Korea announced Saturday that it had entered a “state of war” with South Korea and would deal with every inter-Korean issue accordingly.
“As of now, inter-Korea relations enter a state of war and all matters between the two Koreas will be handled according to wartime protocol,” the North said in a joint statement attributed to all government bodies and institutions.
“The long-standing situation of the Korean peninsula being neither at peace nor at war is finally over,” said the statement carried by the official Korean Central News Agency.
South Korea downplayed the statement, saying it carried nothing “new”, but the United States said it was taking North Korea’s declaration “seriously”. Washington added that it was ready to protect South Korea and its other Asian allies. In December 2012, a North Korean rocket – officially declared as launched in line with a satellite test – landed just off the Philippines’ northern Luzon.
Russia, in a statement, said it was concerned that the situation in the Korean peninsula could “spin out of control”.
The two Koreas have always technically remained at war because the 1950-53 Korean War concluded with an armistice rather than a peace treaty.
The North had announced earlier this month that it was ripping up the armistice and other bilateral peace pacts signed with Seoul in protest against South Korea-US joint military exercises.
Voiding the ceasefire theoretically opened the way to a resumption of hostilities, although observers noted it was far from the first time that North Korea had announced the demise of the armistice.
The armistice was approved by the UN General Assembly and both the United Nations and South Korea have repudiated the North’s unilateral withdrawal.
Saturday’s statement also warned that any military provocation near the North-South land or sea border would result “in a full-scale conflict and a nuclear war.”
Most observers still believe this will remain a rhetorical rather than a physical battle, but the situation has now become so volatile that any slight miscalculation carries the potential for rapid escalation.
Both China and Russia asked for all sides to cooperate to prevent the situation worsening on Friday, with Russian Foreign Minister Sergei Lavrov voicing particular concern.
“We can simply see the situation getting out of control, it would spiral down into a vicious circle,” Lavrov told reporters at a news conference.
His warning came after North Korean leader Kim Jong-Un ordered missile units to prepare to strike US mainland and military bases, vowing to “settle accounts” after US stealth bombers flew over South Korea.
US Defense Secretary Chuck Hagel stressed that Washington would not be cowed by Pyongyang’s bellicose threats and stood ready to respond to “any eventuality”.
The high-stakes standoff has its roots in North Korea’s successful long-range rocket launch in December and the third nuclear test it carried out in February.
Both events drew UN sanctions that incensed Pyongyang, which then switched the focus of its anger to the annual joint South Korea-US military drills.
As tensions escalated, Washington has maintained a notably assertive stance, publicising its use of nuclear-capable B-52s and B-2 stealth bombers in the war games.
North Korea on Friday responded by ordering rockets readied for a “merciless strike” on the US mainland if necessary.
The long-distance deployment of both sets of aircraft out of bases in Guam and the US mainland were intended as a clear signal of US commitment to defending South Korea against any act of aggression.
While Hagel stressed that Washington was taking the threats from the North “very seriously,” US military intelligence noted that Pyongyang’s combative rhetoric has not, so far, been matched by any overtly provocative troop build-up.
And analysts have underlined that the threats and counter-threats have increasingly stressed a conditional element of the other side acting first.
Cuba creates four anti-cancer vaccines, media ignores it
Monday, February 25, 2013
By Jo MacLean
That Cuba has already developed four vaccines or inoculations against different types of cancer is without doubt important news for humanity. The World Health Organisation says each year about 8 million people die from this illness.
However, the international mainstream media have almost totally ignored this news.
Last year, Cuba patented the first therapeutic vaccine against advanced lung cancer in the world, called CIMAVAX-EGF. In January, the second one, called Racotumomab, was announced.
Clinical testing in 86 countries shows that these vaccines, although they don’t cure the illness, do managed to reduce tumours and allow for a stable stage of the illness, thereby increasing hope and quality of life.
The Molecular Immunology Centre of Havana, a Cuban state organisation, is the creator of all these vaccines.
In 1985 it developed the vaccine for meningitis B, the only one in the world, and later others that fight hepatitis B and dengue. For years, the centre has been conducting research to develop vaccines against AIDS-HIV.
The other Cuban state-run centre, Laboratories LABIOFAM, has developed homeopathic medicine for cancer such as VIDATOX, created from the blue scorpion’s venom. Cuba exports these medicines to 26 countries, and takes part in joint companies with China, Canada, and Spain.
All of this goes against the well-enforced stereotype, reinforced by the media silence regarding advances achieved by Cuba and other global south (so-called Third World) countries, that vanguard medical research takes place only in so-called developed countries.
Undoubtedly, the Cuban state obtains an economic benefit from the international sale of these pharmaceutical products. However, its philosophy of investigation and commercialisation is diametrically opposed to the business practices of the large pharmaceutical industry.
Nobel Prize for Medicine winner Richard J Roberts recently denounced the pharmaceutical industry for orienting its research not to curing illnesses, but to developing medicine for chronic ailments, which is much more economically profitable.
Roberts suggested the illnesses that are particular to poorer countries, because of their low profitability, simply are not researched. That is why 90% of the budget for research is aimed at illnesses suffered by 10% of the world’s population.
Cuba’s public medicine industry, even though it is one of the main sources of foreign currency for the country, is guided by radically different principles.
In the first place, its research is aimed at, in a large part, developing vaccines that prevent illnesses and as a consequence, reduce the population’s spending on medicine.
In an article in the prestigious magazine Science, researchers from Stanford University (California), Paul Drain and Michele Barry, said Cuba has better health indicators than the United States, despite spending up to 20 times less on the sector.
The reason for this is the absence, in the Cuban model, of commercial pressures and encouragement by pharmaceutical companies, and a successful strategy of educating the population about preventative healthcare.
Furthermore, traditional and natural therapies, such as herbal medicine, acupuncture, hypnosis and many others — practices that are not very profitable for the makers of medicine — have been integrated into the free public health system of the island for years.
Also, in Cuba, medicine is distributed via the national public hospital network as something that is either free or highly subsidised, thanks to the income from exporting it.
The Cuban medicine industry also barely assigns any of its budget to publicity. In the case of the multinationals, publicity spending is higher than what they invest in actual research.
Finally, Cuba promotes the production of generic medicine. These are made available in other poor countries and to the World Health Organisation at much lower prices than those offered by the global medicine industry.
But these measures, removed from market rules, generate a lot of pressure from the pharmaceutical industry.
Recently, the Ecuadorian government announced it would buy a large number of medicines from Cuba in exchange for scholarships for Ecuadorian students to study in Cuba and for the support provided by Cuban specialists in .
Protests against the move by the Ecuadorian Association of Pharmaceutical Laboratories were immediately converted into a media campaign, spreading the message of the supposed bad quality of Cuban medicine.
On the other hand, many analysts see the international pharmaceutical industry as being behind the coup in Honduras in 2009. The elected government of Manuel Zelaya, in the framework of agreements made within the Cuba- and Venezuela-founded Bolivarian Alliance for the People of Our Americas to which Honduras then belonged, aimed to substitute Cuban generic medicine for imports from multinationals.
The US blockade against Cuba imposes big obstacles to the international commercialisation of Cuban pharmaceutical products, but it is also directly detrimental to US citizens. For example, each year the 80,000 diabetics in the US who suffer the amputation of their toes don’t have access to the Cuban vaccine Heperprot P, which would prevent such amputations.
The Chemistry Nobel Prize winner Peter Agre recently said: “Cuba is a magnificent example of how scientific knowledge and research can be integrated.”
Irina Bokova, general director of UNESCO, said she was impressed by Cuba’s scientific achievements and her organisation is willing to promote them to the rest of the world.
The inevitable question is, will she count on the essential collaboration of the international mainstream media to spread this information?
[Original can be found at www.cubainformacion.tv. Translated for Green Left Weekly by Tamara Pearson.]
– See more at:http://www.greenleft.org.au/node/53426#sthash.
stop samsung – no more deaths!
International Campaign for Health and Labour Rights of Samsung Electronics Workers
February 27, 2013 by stopsamsung
<On Feb. 27, 2013, the South Korean police released CCTV footage of hydrofluoric acid gas leaks at Samsung. The leaks, caused on Jan. 27-28 by gaskets that were in use beyond replacement time, killed one worker and injured four. >
The chronic safety negligence that led to chemical leaks, and ensuing cover-ups of the incidents that resulted in one death and four injuries, were not sufficiently serious for the South Korean government to pursue criminal charges against top executives at Samsung Electronics Co., Ltd.
On Feb. 27, the South Korean police said it would criminally charge seven individuals for negligence in the hydrofluoric acid leaks of Jan. 28-29 at a Samsung chip plant in Hwaseong, about 70 kilometers south of Seoul.
Among the seven individuals, a 34 years old contract worker identified by his last name of Park, died of exposure to the leaks. The other six include three employees of STX, Samsung’s contractor, and three mid-level managers of Samsung.
The negligence charges were indeed a slap on the wrist, given that the world’s largest semiconductor maker has been not only routinely violating safety regulations but also been aggressively covering up its run-ins with the law.
Following are new findings collected from the police’s announcement and media reports:
New Fact 1. Samsung Used Key Components Past Expiration Dates
The police pointed to the neglected seals and old gaskets of the gas tank as reasons for the first leak on Jan. 28. The gaskets had been used and reused past their scheduled replacement dates.
The second leak was preventable, according to the police, had new seals between the tank and the pipe been completed by the workers.
A simulation test by the police put the amount of leakages at a maximum of seven liters per hour during the first leak on Jan. 28. The government could not estimate the volume of the second leak for lack of data; a gauge collecting data of gas flows had been out of order.
Poorly maintained equipment and rushed repairs are commonplace at Samsung. Many occupational disease victims profiled by SHARPS said machines in a state of disrepair posed constant hazards.
New Fact 2. Samsung Released Fatal Gas Out Of Its Factory
The police confirmed earlier unattributed press reports that on Jan. 28, around 6:00am, Samsung and STX workers used huge ventilation fans to remove hydrofluoric acid leaks from the central chemical supply system, or the CCSS, where leaks took place.
Samsung has to date denied the fatal gas had filtrated through the CCSS. A group of environmental volunteers found residue of hydrofluoric acid in the soil around the Hwaseong plant, which is ringed by housing compounds.
New Fact 3. Samsung Effectively Turned Off Sensor Alarm
According to the police, though the sensor in the CCSS was fully functional during the leaks, the volume of its alarm was reduced to inaudible levels. Samsung allowed STI employees to replace the corroded gaskets on Jan. 27 at 2:11pm, about four hours after the contract workers requested a replacement from a Samsung supervisor.
It wasn’t until 6:08pm, about 16 hours after the leak, when a Samsung security officer showed up at the CCSS.
On March 15, a multi-agency taskforce will announce its findings.
Bringing Factories Back to the City
The ‘Factory of the Future’ will be greener, leaner and an integral part of tomorrow’s cities.
Oct. 19, 2012Steve Minter | IndustryWeek
By 2025, the number of megacities (cities with populations over 10 million) will grow from 23 to 36, the United Nations forecasts, and the population in the top 600 cities in the world will grow by 500 million. In the near future, Hans-Jörg Bullinger told the World Manufacturing Forum Tuesday in Stuttgart, Germany, two-thirds of the world’s population will live in megacities.
Countries such as Germany won’t have such massive urban areas, but Bullinger, president of research institute Fraunhofer-Gesellschaft, warned it would be a “big mistake” for manufacturers in export-dependent Germany to ignore this demographic change.
“Our cars which we develop here will be mostly driven in megacities. We have to choose products and services which fit into the specific demands of those megacities,” he told the gathering of some 400 political and business leaders examining policy issues facing manufacturing nations and companies.
Germany is sponsoring research to develop a High-Tech Strategy for dealing with six global challenges arising from such massive demographic and technological changes: health and nutrition, safety and security, mobility and transportation, information and communication, energy and living, and production and environment.
To meet these challenges, researchers are envisioning what a “city of the future” will look like and the technologies needed to deal with a more resource-constrained future. With energy, for example, Bullinger said Germany now produces 20% of its electrical energy from renewable resources. Wind farms are being planned for the relatively shallow North Sea to boost electrical production, he noted, but transmission lines will be needed to bring that power to cities such as Stuttgart and systems built to store it. “We will want to rebuild nearly the entire power system,” he said.
In a smart future city, he said, part of the energy answer will be to create a more decentralized power system. Homes will become individual power sources, with solar panels on the roof and a heat pump in the basement.
Factory of the Future
Manufacturing makes up 24% of Germany’s economy and researchers plan for a significant role for the sector in the country’s future. But manufacturing, Bullinger said, must be smarter and more efficient. He noted that in the past, factories moved to areas outside cities because they were noisy and polluting.
But now, he said, many factories are cleaner and could have a new place in the urban environment. Moving them back into the city would provide a “higher quality of life,” he said, by allowing employees to walk to work rather than commute in cars. Urban factories would be closer to populations of skilled workers, suppliers and technical and research centers.
In Germany, Bullinger pointed out, industry consumes almost half of the nation’s electrical power. He said manufacturers need to become both more energy and materials efficient. For example, companies save 20% in energy cost by using recycled aluminum rather than primary aluminum. Increasing the use of recyclable materials and bringing recycling facilities closer to factories could reduce energy and material demand.
When a manufacturer purchases a machine tool, the purchase price of the tool accounts for only 20% of the lifecycle cost of the machine. The other 80% is consumed with operational and maintenance costs. He said energy costs and cooling lubricant account for more than one-third of the cost of that machine over a 10-year period. So energy efficiency would have a dramatic impact on reducing manufacturing costs.
By making machining processes more accurate, he said, manufacturers benefit not only through reduced waste in the form of less scrap material but also save on the energy used to produce the scrapped product.
Energy efficiency extends not just to operational costs but to the design of products. Producing green automobile powertrains, for example, could result in not only the use of less material but also improved operating efficiency and the production of 20% less CO2.
“This is the vision we have for the cities of tomorrow zero CO2 emissions, energy efficient, even higher quality of life, smart cities built on intelligent networks, resource efficient,” Bullinger concluded.
A Tale of Two Shores – a 2012 Retrospective
The rising consumer market in Asia makes a dramatic resurgence of U.S. manufacturing problematic.
Jan. 7, 2013Ron Keith, Chief Executive Officer, Riverwood Solutions
- Despite rising costs, Chinese manufacturing remains extremely attractive for many products
- There is no massive rush to repatriate jobs to the U.S.
- Many OEMs are looking for alternatives to expensive coastal areas of China
- Increasingly attractive consumer markets are developing in Asia
- Much of the outsourced manufacturing to China is done without an analysis of total costs
Keith: ‘The explosive growth of the emerging market consumer in Asia has more than made up for the slightly diminished attractiveness of China as a new or incremental outsourced manufacturing demand of western OEM’s.
There was so much noise coming out of Washington in 2012 about the fiscal cliff, budget deficits, taxes and especially jobs that these topics became the primary conversation at many a holiday cocktail party. Over the past few weeks I’ve been asked about the current state of offshoring vs. onshoring at least a half a dozen times. Some of the inquisitors have come from a reasonably informed perspective, while others have attempted to cloak the issue of onshoring in some form of sociological or moral high ground related to the U.S. workers’ entitlement to jobs. While pondering the complex issues around outsourcing/offshoring this holiday season, I could not help but think of a few apropos, although completely unrelated, words from Charles Dickens.
It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity……
Despite the occasional high profile example, or smoke and mirrors-laced press releases in 2012 from the likes of Dell and others, the general state of, and trajectory for, manufacturing in the U.S. today is not appreciably different than it was a year ago. Major shifts in industrial production patterns tend to follow long-term, secular economic trends, and are only influenced marginally around the edges by short-term changes and political issues. Yes, there is a bit more talk of late in the U.S. about nearshoring and onshoring of manufacturing; but the outlook for a dramatic resurgence of domestic production in 2013 driven by a massive repatriation of offshored manufacturing is something Dickens also addressed quite eloquently.
…. it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before U.S., we had nothing before U.S., we were all going direct to Heaven, we were all going direct the other way…….
Many of the people I talk to about reshoring production are quick to point out the dramatic rise in labor costs and other factor input costs in China as a giant catalyst for manufacturing repatriation. The rise in costs in China over the past decade have been considerable – especially in U.S. dollar terms as the yuan has appreciated considerably against the dollar since the summer of 2005. At a gross country level, the average wage of all employed persons in China has risen by about 260% over the past decade, while the equivalent macro number for the U.S. is about 26%. All of this talk among manufacturers about rising costs in China needs to be taken in context. The average employed person in the U.S. still makes more than eight times what the average employed person in China makes. When viewed relative to U.S. wages and the rate of change of U.S. productivity, Chinese manufacturing is still extremely attractive for many products despite the headline wage inflation.
Figure 1: Comparison of average wage of all employed persons
China, like most geographically large countries, exhibits a pretty broad range of wages across regions and provinces. This pattern is not entirely dissimilar from the pattern that we see in the U.S. where wages tend to be higher on the coasts. Arguably the geographic variation in wages is significantly broader in China than the U.S., but this gap will likely close dramatically over the next decade or so. Many OEM’s and manufacturing services firms that are heavily invested in offshore manufacturing are starting to look for alternatives to the more developed and more expensive areas of China. But most of these firms are looking to either Western/Central China, or lower cost locations in Southeast Asia and not the U.S. 2012 was a year where some production returned to U.S. shores from China, but this represents jut a very tiny fraction of total offshore production. There is no massive rush to repatriate manufacturing jobs back to the U.S. and 2013 – 2015 will not look appreciably different in this respect.
Figure 2: Sample of minimum wages in various manufacturing locales in China
China Offers More Than Cheap Labor
But wages are just one part of the manufacturing equation and in more and more cases, wage differentials and labor arbitrage is no longer an import factor. China has emerged as the world’s electronics factory over the past 15 to 20 years, and has positioned itself well to defend its dominance with far more than just cheap labor. Those of you that follow me on Twitter (thanks mom) will know that next year China will become the world’s largest user of industrial robots. The country has also developed an incredibly diverse and robust supply base for virtually all of the components and raw materials that go into today’s modern electronic products and an increasingly skilled and experienced technical workforce to support these activities. Today an individual company’s consideration of possibly re-shoring widget production back to the U.S. is complicated by the fact that most of the components for their widget are built in China.
I asked Mark Mondello, Jabil’s long tenured COO, and recently appointed CEO, for his thoughts on rising costs in China and how they are influencing manufacturing strategy for his company and its clients. Mondello said “Clearly costs in China have risen over the last five years and we see that trend continuing, but for each and every product, each and every customer, and each and every end market served, there are a multitude of variables that need to be considered when deciding on global supply chain solutions. These are complex issues that we model every day and that impact customers very differently.” The number of interrelated variables impacting manufacturing location decisions does indeed make this a complex issue and one that is influenced by a number of different macro trends.
Perhaps the most influential counter-trend to a dramatic reshoring of production to the U.S. is the emergence of increasingly attractive consumer markets in Asia. It is very true that the size of the cost reductions to be realized by outsourcing production to China has slowly and steadily contracted over the past seven years; but during that same period the attractiveness of Chinese production to satisfy Chinese consumption has steadily and dramatically increased. Over the past five years or so, the U.S. consumer has become somewhat tapped out while the consumer in China has been doing some serious consuming. From 2007 to 2010, total U.S. household spending rose less than the rate of inflation (it contracted in real dollar terms), while household spending in Vietnam, Indonesia, and Malaysia all grew in the double-digits. During that same period, the world’s largest consumer base in China grew household spending by more than 25% (see bubble sizes in figure 2). To put this into a geo-economic perspective, in three years’ time, both Malaysia and China each expanded household consumption by an amount roughly equivalent to the entire household consumption of Austria.
Figure 3: Household Consumption Expenditure (HCE – bubble size) of emerging Asian markets
U.S. Remains Attractive Market
The explosive growth of the emerging market consumer in Asia has more than made up for the slightly diminished attractiveness of China as a new or incremental outsourced manufacturing destination for western OEMs. Hungry for both top line growth and gross margin expansion, more OEMs are starting to look at the opportunity to service highly attractive emerging markets as part of their calculus around where they will place their outsourced manufacturing. This is not to say that U.S. manufacturing is finished, or even that the exodus of manufacturing jobs from the U.S. will continue unabated – this is just not the case.
I asked Mondello for his observation on U.S. manufacturing jobs and reshoring, figuring a guy with 140,000 manufacturing employees in 20 countries probably has some pretty good insights here. On the topic of reshoring Mondello said “…some manufacturing jobs are coming back to the U.S. ever so slowly. This will continue for the coming years and may possibly accelerate depending on cost curves, politics, and trade relations. Today we see the United States as a primary player for innovation, engineering creativity, logistics solutions, and leadership – we see China as the primary player for manufacturing. China still has the most efficient indigenous supply chain, especially when considering electronic hardware.” The innovation engine that is the U.S., the sheer size of our not quite flat world, and our 308 million consumers insure that there will always be a meaningful manufacturing base in the U.S.
Despite anemic growth of late, the U.S. is still a pretty darn attractive market. The tapped out consumer households in the U.S. still consume four times more dollar value of goods than the households of China, despite that country having a population well over four times that of the U.S. And despite the prevalence, and in some sectors the outright dominance, of outsourcing as a model for production, much of the manufacturing being outsourced to China today is clearly done so without a comprehensive analysis of the total costs of so doing. Every day my firm sees OEMs that have outsourced production offshore only to perpetually struggle with managing their outsourced supplier. In many cases companies realize a six to 10 point reduction in Cost of Goods Sold (COGS) on paper, which very quickly gets offset by a two to three point increase in Other Cost of Goods Sold (OCOGS) and the “peanut butter” spreading of another couple of points in ever expanding Opex. Despite all the advances in tools and systems for communication and collaboration, managing production half a world away from sales, product development and product line management functions can still present significant challenges – none of which are without cost.
2012 was clearly a year where the offshore/onshore debate was a tale of two shores. But much like the tale of those two cities chronicled by Dickens more than 150 years ago, the contrast between the two is very much in the eye of the beholder. So what did I say over a few cocktails to those holiday party goers looking for my seemingly informed opinion on the “shoring” and manufacturing jobs debate?.Hey, how about those 49er’s!!
Contributing Editor Ron Keith is chief executive officer for Riverwood Solutions, a supply chain consulting and managed services firm.
China’s Looming Worker Shortage Threatens Economy
China’s working-age population, defined as 15-59, fell 3.45 million last year, official data showed earlier this month — the first decline since 1963.
Feb. 3, 2013Agence France-Presse
BEIJING — China’s demographic timebomb is ticking much louder with the first fall in its labor pool for decades, analysts say, highlighting the risk that the country grows old before it grows rich.
The abundant supply of cheap workers in the world’s most populous nation has created unprecedented cost efficiencies that underpinned its blistering economic expansion over the past 35 years, propelling the global economy forward.
But now the inexorable consequences of the one-child policy imposed in the late 1970s are beginning to appear, and threaten to impact its future growth.
China’s working-age population, defined as 15-59, fell 3.45 million last year, official data showed earlier this month — the first decline since 1963, after tens of millions died in a famine caused by the Great Leap Forward.
The immediate effect may be small in a nation of 1.35 billion people, but the cumulative effects will accelerate over the coming decades.
The number of people aged between 15 and 64 will drop by around 40 million between 2014 and 2030, said Wang Guangzhou, a researcher with the Chinese Academy of Social Sciences (CASS), a government think-tank — more than Poland’s entire population.
“The population is aging so fast that we are running short of time to deal with it,” said Li Jun, also of CASS, adding the family planning policy had exacerbated the problem.
China’s proportion of over-65-year-olds is projected to double from seven to 14% over only 26 years — a key demographic measure that took the United States 69 years to complete.
“Undoubtedly it will substantially slow down China’s potential growth rate,” said Yao Wei, an economist with Societe Generale in Hong Kong.
An ageing population not only means fewer people available to employ and higher labor costs, but investment — a key driver of China’s growth — will be harder to maintain as families spend their savings on health care, she said.
Chinese authorities maintain that controlling its population growth has been key to increasing its prosperity.
But while China has risen to become the world’s second-largest economy, on a per capita basis it still lags far behind the U.S. and other developed countries.
Industrial disputes have become more common in recent years, as workers demand higher pay and better working conditions on the back of growing awareness of their rights and the shortage of skilled staff.
Multinational companies are looking to other developing economies with lower wages for further expansion, with some already moving production bases out of China to rivals such as Indonesia and Vietnam.
In a survey of 514 Japanese manufacturers by the Japan Bank for International Cooperation last year, the number of respondents voting China as the top destination for overseas business fell by more than 10 percentage points on 2011.
Economists said China must look to speed up the transformation of its economic model and move up the value chain.
“The golden period of the manufacturing industry, particularly those depending on exports, has gone,” said Yao.
At the same time, she said, the country was woefully underprepared to meet the burden of caring for the elderly. “The fiscal situation is not prepared and the social security network is not complete,” she said. By around 2060, every three Chinese workers will have to support two people above 60, compared with a ratio of five to one now, according to Li’s projections.
It is a crucial challenge for the ruling Communist Party, said Ren Xianfang, a Beijing-based analyst with research firm IHS Global Insight. “Delivering growth and delivering social security to the general public are the key things for the state to (maintain) its legitimacy.”
Analysts said the medical services are increasingly expensive and hard to access, while the country’s flagship public pension plans are crippled by problems including insolvency risks, difficulties in expanding coverage and mismanagement.
-Fran Wang, AFP
Copyright Agence France-Presse, 2013
The Death of the 8-Hour Shift
The 8-hour shift may be an industrial mainstay, but the author argues it also is costly, inflexible and overdue for a change.
Oct. 17, 2012John Frehse
The manufacturing industry has dramatically advanced in areas of inventory control, workforce management technology and supply chain strategy. However, we’re still using the same labor strategies from the early days of the Industrial Revolution, therefore limiting the success of all other advances.
Having read the title of this article, you may be wondering how it is possible that the eight-hour shift is no longer alive and well, considering it is the shift length your employees currently work. While it may not be gone yet, the eight-hour shift is definitely on the decline.
As North American manufacturers struggle to keep a population of shift workers instead of offshoring the work, management teams must be more aggressive in finding the most profitable work solutions. Those solutions must be balanced with palatable options for an increasingly demanding workforce. It’s time to retire the eight-hour shift and consider other possibilities for work that can reduce costs and help companies hire and retain the best talent.
The manufacturing industry has dramatically advanced in areas of inventory control, workforce management technology and supply chain strategy. However, we’re still using the same labor strategies from the early days of the Industrial Revolution, therefore limiting the success of all other advances.
Changing schedules can be disruptive, so it is understandable that many companies shy away from such a task. However, to remain competitive on the operations side and to keep employees happy with new work options that support a better work/life balance, it’s time to question whether these eight-hour shifts still make sense.
As we look at alternatives to eight-hour shift schedules, there are many possible options, and there is no single right answer. Every facility has its own operational requirements, employee preferences and health/safety needs. A move to 12-hour shifts could be one way to demonstrate some of the potential advantages of defining new work options.
The right answer for your operation is likely somewhere in the middle, and all potential options should be explored to find the shift plan just right for your company and your staff.
Although the number of people required to cover a 24/7 operation is the same whether a company is working eight- or 12-hour shifts, the actual labor costs are different.
The staffing ratio is 4.2:1 in most cases, meaning that if employees work 40 hours each, it will take 4.2 people to cover each key position over the course of the 168 hours in a week (4.2 x 40 = 168). However, other costs begin to separate eight-hour shifts from others.
There are several factors that play a role in the death of eight-hour shifts. Some factors are strictly business issues related to increased labor costs. These include:
• Shift-change inefficiency and downtime
• Lack of schedule flexibility
• Poor management practices (weekend warrior)
Other factors relate more closely to employee preferences and are equally, if not more, important:
• Turnover/low employee morale
• High absenteeism
• Increased cost to the employee
-Lucent Says Job Cuts to Exceed 5,000
Telecommunications-equipment manufacturer says workforce reduction will help company trim $1.6 billion from annual costs.
Oct. 18, 2012Agence France-Presse
Telecoms equipment maker Alcatel-Lucent (IW 1000/227) has informed unions that it plans to cut a total of 5,490 jobs worldwide as part of a cost-cutting drive unveiled in response to sliding profits.
The job losses, from a total workforce of 78,000, are designed to help Alcatel trim 1.25 billion euros (US$1.6 billion) from its annual costs by the end of 2013, and shares in the company leapt higher in Paris trading on the announcement.
The rationalization was announced in July after the company revealed a second- quarter loss of 254 million euros ($309 million).
The job losses confirmed Thursday are slightly higher than the total of 5,000 the company indicated in July. French union officials said 3,300 jobs would go in Europe, including 1,430 in France where Alcatel has 9,000 people on the payroll.
Since Alcatel and Lucent merged in 2006, the group has carried out several restructuring plans that included heavy job losses.
In 2006, the company eliminated 20,000 positions worldwide, followed a year later by 12,500, union sources said.
In 2008, an additional 4,000 jobs were cut, with 1,000 more in 2009, although the total numbers did not necessarily decline by that amount owing to the acquisition by Alcatel-Lucent of other activities in the meantime.
On Thursday, Alcatel-Lucent shares showed a strong gain of 6.5% to 0.852 euros in afternoon trading, while the CAC 40 index was down by 0.16% overall.
Copyright Agence France-Presse, 2012
Toyota Workers Strike for Bonus in South Africa
Union says employees will not return to jobs until all workers receive retention pay.
Oct. 17, 2012Agence France-Presse
Workers at Toyota South Africa Motors will go on strike from Wednesday for a bonus of 1,500 rands (US$172) after a court blocked an injunction bid by the company, their union said.
A labor court gave the workers permission to down tools from Wednesday, the National Union of Metalworkers of South Africa (NUMSA) said in a statement late Tuesday.
“The workers will be embarking on a protected and indefinite strike action demanding a retention bonus of 1,500 rands for all workers in the plant,” the union said.
The company has only given some workers the bonus and the others will strike until everybody receives the benefit, the union said.
The court’s blocking of the interdict “is a victory for our members at Toyota … and we will definitely halt production at this plant until workers get their retention bonus demand,” said NUMSA regional secretary Mbuso Ngubane.
A strike halted production at the company’s plant in Durban in the east of the country early this month.
The firm, which produces 120,000 vehicles a year, is the seventh biggest distributor ofToyota (IW 1000/8) vehicles outside Japan, according to the company.
Strikes have rocked Africa’s largest economy, with 100,000 people downing tools starting in the platinum mining sector, then spreading to other mining industries, transport and manufacturing. Demands have focused on wage hikes.
Copyright Agence France-Presse, 2012
In the 2012 Campaign, the Factory Floor Becomes a Star
Midwest battleground states make manufacturing a central issue in presidential and Senate races.
Nov. 13, 2012 IW Staff | IndustryWeek
More than 975,000 mentions were made in presidential TV advertising about jobs, outsourcing, and trade generally or specifically involving China, as well as Mitt Romney’s involvement with Bain Capital, according to a report released today by Kantar Media’s Campaign Media Analysis Group (CMAG) conducted for the Alliance for American Manufacturing (AAM).
The new report analyzed the broadcast TV advertising airtime devoted to the presidential race as well as key Senate races in four industrial states: Indiana, Ohio, Pennsylvania and Wisconsin. The analysis was based on advertising tracked in all 210 U.S. media markets as well as on 11 national broadcast networks and more than 80 national cable networks.
“Even in today’s service-and-dotcom economy, one of the most popular images in 2012 political advertising was the American factory,” said Elizabeth Wilner, vice president of Kantar Media’s Campaign Media Analysis Group. “Whether depicted as desolate through chained gates or shot from a brightly lit, busy floor, the factory starred in an air war dominated by debate over the American economy.”
According to AAM Executive Director Scott Paul, “Both the Democratic and Republican candidates spent a stunning amount of money on television advertising to convince voters that they could best represent the interests of America’s manufacturers and their workers. Obviously they latched on to the right issues because jobs and outsourcing are absolute, top-of-mind issues. Across the partisan spectrum, these issues move voters.”
Wilner’s analysis showed the factory owed its prominence not only to geopolitics but also to “the widespread view among voters of America as a country that makes and builds,” which helped explain why “the factory visual continues to strike a chord.”
In the presidential race, Democrats spent $57 million in TV advertising attacking Gov. Romney’s former firm, Bain Capital, for its alleged practices of shipping jobs overseas or eliminating them altogether. The Obama campaign also devoted substantial advertising to the outsourcing angle, including an ad suggesting that, under Romney’s leadership, Bain laid off workers and destroyed livelihoods.
While the anti-Bain ads received enormous media attention, more money—$68 million—actually was spent to advertise about trade. The two sides spent roughly the same amount on ads mentioning trade, about $34 million, but all the Republican spending went toward ads specifically mentioning China trade. The Romney campaign in particular used ads to accuse the President of not being tough enough on China trade and currency manipulation.
Some key findings of the report:
- Republicans outspent and out-aired Democrats on jobs. In all five races, Republicans spent more money and had higher spot count rates than Democrats on advertising that mentioned “jobs.”
- Democrats’ ads about jobs focused on businesses that sent jobs overseas and laid off workers, which explains why the two sides’ spending and spot-count levels on jobs were closer to parity in the Presidential contest but much further apart in the Senate races. While Bain Capital’s business practices were a major theme of advertising in the race for the White House, the issue was exclusive to that race.
- Despite being outspent and out-aired, Democrats’ messaging on jobs proved more effective. The Democrats used their ads about outsourcing and firing workers to distance the Republican candidates from the voting blocs they needed to win, often punctuating them with taglines such as, “He’s not for us anymore,” and “If [he] wins, the middle class loses.”
- Republican mentions of “jobs” tended to increase, and Democratic mentions tended to decrease, around the release time of the monthly jobs reports.
- “Jobs” was the most-mentioned issue in 2012 advertising by far, not just in the five races but in federal races overall.
Walmart Workers Say Protest was a Success
The protest, supported by the UAW, was for ‘decent pay, regular hours, affordable healthcare and respect.’
Another prominent supporter was Robert Reich, labor secretary under president Bill Clinton, who saw the debate over conditions at Walmart, owned by the multi-billionaire Walton family, as reflecting deeper problems in U.S. society.
Saying their walkout on ‘Black Friday’ had shown the world’s largest retailer their determination to fight against all odds, Walmart workers hailed their wage protest Saturday.
Hundreds of protesters targeted Walmart stores across the United States on Friday, the busiest shopping day of the year, accusing the bargain superstore of ripping off its own employees.
The protests were designed to disrupt the Black Friday shopping frenzy, after Thursday’s Thanksgiving holiday, when deep discounts pull in waves of customers.
“Today’s protests at Walmart stores across the country are a reminder of the enormous power of working people uniting to demand a better future with a living wage, affordable healthcare and respect on the job,” said Mary Kay Henry, president of the 2.1 million-member Service Employees International Union (SEIU).
Her optimism was shared by Colby Harris, a Walmart sales associate who walked off his job in Lancaster, Texas late Thursday.
“Our voices are being heard,” said Harris. “And thousands of people in our cities and towns and all across the country are joining our calls for change at Walmart. We are overwhelmed by the support and proud of what we’ve achieved so quickly and about where we are headed.”
The main force behind the wage protest, the Organization United for Respect at Walmart (OUR Walmart), said it was pressuring for “decent pay, regular hours, affordable healthcare and respect.”
Italian Steel Workers Occupy Plant
ILVA said it would shut down the Taranto plant, the biggest in Western Europe, due to a dispute over pollution.
Hundreds of striking Italian steel workers occupied offices at the ILVA plant in Taranto on Tuesday, a day after thecompany said it would shut down due to legal action over massive pollution.
The Taranto plant in southern Italy produces nine million tons of steel a year, or around a third of the country’s production, and the closure of the mill as well as other ILVA plants is estimated to affect 7,000 jobs directly.
Thousands more jobs in the Italian steel industry could be impacted.
Around 1,500 ILVA workers also staged a march in the port of Genoa in northern Italy, blocking a local motorway with heavy industrial machinery.
The government has called a meeting for Thursday at which the environment ministry is expected to insist on keeping parts of the Taranto plant open while the company works on cleaning up the area after decades of heavy pollution.
“We are working with (Prime Minister Mario) Monti and the other ministers for a solution,” Environment Minister Corrado Clini told reporters.
ILVA said on Monday it would have to suspend operations after prosecutors seized its production and issued seven arrest warrants for managers.
The plant, the biggest in western Europe, has been running at reduced capacity since magistrates ordered parts of it closed in July after an inquiry into damning environmental reports which showed high cancer rates in the area.
The company has denied any link between its activities and the cancers.
The dispute has pitted workers fighting to keep their jobs amid high unemployment in a recession economy despite possible health hazards against environmentalists and prosecutors who want the site cleaned up immediately.
The environment ministry is also in a stand-off with local prosecutors as it tries to find a middle ground that would keep jobs and ensure a clean-up.
The employers’ federation Confindustria meanwhile warned that closure of ILVA facilities in Taranto could cost the state some 1.0 billion euros (US$1.3 billion) a year in welfare and redundancy payments.
“The closure of the plant could put Italy’s manufacturing production on its knees, with a heavy impact also on buyers,” Confindustria said.
Copyright Agence France-Presse, 2012
Union Battle Strikes at Heart of US Labor
Michigan’s Republican governor prepares to sign ‘right-to-work’ legislation.
Dec. 11, 2012Agence France-Presse
Michigan Governor Rick Snyder insists the law is necessary “to maintain our competitive edge” and attract new jobs, especially after neighboring Indiana became the 23rd state to enact right-to-work legislation earlier this year.
A decades-long battle to cripple unions in the United States has shifted to the heart of the labor movement as Michigan’s Republican governor prepares to sign “right-to-work” legislation.
Unions are a key source of financial and grassroots get-out-the-vote support for President Barack Obama’s Democrats, and he was quick to slam the controversial bill in an appearance at an auto plant in the state on Monday.
“You know, these so-called right-to-work laws — they don’t have to do with economics. They have everything to do with politics,” Obama told the cheering crowd of unionized workers.
He added that Republicans are “trying to take away your rights to bargain for better wages and working conditions,” in a move that undermines the American dream.
“You only have to look to Michigan, where workers were instrumental in reviving the auto industry, to see how unions have helped build not just a stronger middle class but a stronger America,” Obama said.
The Michigan measure would weaken unions by allowing workers who get the same wages and benefits as union members to decline to pay any dues.
Currently, the state operates a “closed shop” policy that requires workers who profit from collective bargaining to pay fees but does not make it mandatory for them to become union members.
Michigan Governor Rick Snyder insists the law is necessary “to maintain our competitive edge” and attract new jobs, especially after neighboring Indiana became the 23rd state to enact right-to-work legislation earlier this year.
French Court Stops Peugeot Job Cuts
Court suspended 8,000 job cut as union talks begin.
Jan. 29, 2013Agence France-Presse
The decision was taken as French automakers and trades unions sat down for what promised to be tough talks on plans presented as crucial for the companies’ futures.
PARIS — A French appeal court has suspended a restructuring plan involving 8,000 job cuts at carmaker Peugeot Citroen (IW 1000/43) as sought by the CGT union at parts subsidiary Faurecia, the lawyer for the workers Fiodor Rilov said on Tuesday.
The decision was taken as French automakers and trades unions sat down for what promised to be tough talks on plans presented as crucial for the companies’ futures.
The CGT union had argued before the court that PSA Peugeot Citroen executives had not fulfilled their legal obligations to inform staff representatives and in particular the European works committee of plans that would affect the future of employees.
But a spokesman for PSA, which has announced the closure of a factory, said that “the project was not suspended today because we are in a negotiating phase” which included a meeting scheduled on Tuesday with staff representatives.
“The only obligation is that Faurecia must consult its works committee,” he said.
Meanwhile, French rival Renault, which plans to eliminate 8,260 jobs by the end of 2016, was also gearing up for talks with trades unions on how to make it able to compete better on global markets. The company has warned that the future of two production sites could be at stake.
Surplus production capacity, especially in Europe where auto markets have slumped heavily, is a major challenge for French auto manufacturers.
Unions want Renault to redistribute the amount of work done at plants in France, Romania, Spain and Turkey, and workers downed tools at a plant in Douai, northern France to press such demands.
“They want these sites to compete against each other, that’s sick,” said FO union representative Jean-Marie Ravry.
He accused Renault executives of “blackmail” with threats to close down factories and lay off workers, some of whom blocked access to a plant in Flins, west of Paris.
Renault also wants workers to be ready to move from one plant to another, to set a standard of 1,603 hours of work per year in all factories, and to reform time allowed for training and early retirement.
Another meeting took place at PSA’s headquarters in Paris on how to preserve jobs at two plants and on an additional 3,600 positions threatened by restructuring plans.
One union put some distance between itself and the militant CGT union which has lead shut-downs at an historic PSA factory in Aulnay-sous-Bois, north of Paris, which the automaker has said will be closed as part of the plan.
“Negotiate not block: that is in the worker’s interest. We will give away nothing and continue with unions (excluding the CGT),” tweeted Tanja Sussest of the SIA union which claims the most number of members at the Aulnay site.
But CGT representative Jean-Pierre Mercier said that almost 450 workers had declared themselves on strike there, and called for a demonstration in front of the PSA headquarters.
One of their demands is to extend holiday time for senior workers so those who have been with the company the longest can retire.
Copyright Agence France-Presse, 2013
In an Effort to Lure Skilled Workers, Porsche to Cut Working Hours but Maintain Pay
Porsche’s executive board and its works council have ‘agreed on appropriate measures for increased flexibility and productivity,’ the company said.
Dec. 13, 2012Agence France-Presse
Sportscar maker Porsche, a unit of Volkswagen AG, on Thursday said it will gradually trim working hours without any cuts in pay, in an effort to attract highly skilled workers.
FRANKFURT, GERMANY — Sportscar maker Porsche, a unit of Volkswagen AG (IW 1000/10), on Thursday said it will gradually trim working hours without any cuts in pay, in an effort to attract highly skilled workers.
“Porsche is looking to improve competitiveness and attractiveness as an employer even further,” the automaker said in a statement.
Porsche’s executive board and its works council have “agreed on appropriate measures for increased flexibility and productivity,” the company said.
The group’s more than 17,000 employees therefore will see their working hours cut gradually between now and mid-2013 from 35 hours to 34 hours “with full compensation,” it said.
“It is proving ever-more difficult to find well-educated people on the labor market,” said Porsche CEO Matthias Mueller. “The demographic development is exacerbating this problem significantly. This is a major challenge not just for Porsche, but the entire German automotive industry.
“Overall, higher flexibility and productivity will strengthen our competitiveness considerably.”
Copyright Agence France-Presse, 2012
Despite reported high growth, unemployment in PH worst in Southeast Asia
Reference: Mr Sonny Africa (IBON executive director) | The Philippines’ average economic growth is reportedly higher than some Southeast Asian countries but at the same time, it also has the worst unemployment rates in the region. According to research group IBON, this only further highlights the exclusionary character of the country’s growth.
In reporting the second quarter growth of the country’s gross domestic product (GDP), the government reported that this was higher than the preliminary average growth of the region (at 4.7%) and faster than that of Malaysia (5.4%), Thailand (4.2%), Vietnam (4.4%), Singapore (2.0%), although lower than of Indonesia (6.4%) and China (7.8%).
The latest full year data however show that Philippine unemployment, even according to underestimated official figures, is the worst in Southeast Asia and more than double the regional average. The country’s unemployment rate of 7% in 2011 was more than double the regional average of 3.2% and higher than in Indonesia (6.6%), Myanmar (4.0%), Malaysia (3.1%), Singapore (2.7%), Brunei (2.6%), Vietnam (2.0%), Cambodia (1.7%), Lao (1.4%) and Thailand (0.7%).
According to IBON, the country’s unemployment crisis will remain unresolved without a genuine thrust to develop Filipino manufacturing and domestic agriculture. Unfortunately the government persists in promoting low employment and low value-added sectors such as business process outsourcing (BPO), mining, tourism, enclave manufacturing for export, and cheap labor export. These are sectors where foreign investors and economies benefit disproportionately more than Filipinos, IBON said. (end)
IBON Foundation, Inc. is an independent development institution established in 1978 that provides research, education, publications, information work and advocacy support on socioeconomic issues.
Amid GDP growth hype, jobs situation in PH worsens
The jobs situation has worsened because the Aquino government has not changed the failed economic policies of past administrations, which have already resulted in over a decade of jobless growth in the country
The reported 6.6% growth in the gross domestic product (GDP) in 2012 being played up has not improved the jobs situation in the country, which even worsened last year. According to research group IBON, the number of unemployed and underemployed Filipinos increased to 11.9 million in 2012.
IBON estimates that the number of unemployed Filipinos increased by 48,000 to reach 4.4 million and the number of underemployed by 349,000 to reach 7.5 million in 2012 – for a total of 11.9 million unemployed and underemployed. The unemployment rate remained at 10.5% while the underemployment rate increased significantly to 20.0% from 19.3% the year before. These figures are based on IBON’s estimates on official data correcting for the change in methodology that now underreports unemployment.
The official government unemployment figure for 2012 is 7.0% but which is also unchanged from the year before. As it is, the Philippines still has the worst unemployment in East Asia compared for instance to Thailand (0.6%), Singapore (1.7%), Malaysia (3.0%), Korea (3.0%), China (4.1%), Taiwan (4.3%), Vietnam (4.4%), and Indonesia (6.5%).
According to IBON, the jobs situation has worsened because the Aquino administration has not changed the failed economic policies of past administrations, which have already resulted in over a decade of jobless growth in the country. The last decade has seen the fastest growth in the post-Marcos era, yet has also seen record joblessness and increasing numbers of poor Filipinos aside from severe inequality.
The government’s hype is meant to create an appealing image of the Philippine economy for foreign investors, even if the growth figures are meaningless to the ordinary Filipino. The group stressed that jobs and higher wages are the best mechanisms for inclusive growth, which can only be achieved with well-developed Filipino industry and equitable agricultural development. Sustainable job generation and poverty reduction requires active and responsible state intervention to build Filipino industry and develop local agriculture, IBON said. (end)
ANTI-PEOPLE NEOLIBERAL DOGMA IN G20 SUMMIT
MEANS AGGRAVATION OF GLOBAL ECONOMIC CRISIS
By Prof. Jose Maria Sison
International League of Peoples’ Struggle
27 October 2011
The G20 summit is to be held in Cannes, France on November 3 and 4. Assisted by their finance ministers and heads of central banks, the heads of governments of the world’s twenty largest economies are supposed to confront once more the global economic and financial crisis and seek solutions.
As in previous summits, they will fail to solve the crisis, bound as they are by the laws of motion of capitalism and imperialism and by the neoliberal dogma. They are driven by the profit-making interest of the monopoly bourgeoisie and financial oligarchy and continue to pass the burden of the crisis to the broad masses of the people.
Public funds in trillions have been used to bail out the big banks and corporations from the crisis of their own making and to wage wars of aggression to please the military-industrial complex. They have brought about spikes and plunges in the financial markets but have not stimulated civil production and employment. As a result, public deficits and public debts have mounted. And now the public debt bubble is bursting in a number of the G20 member-countries, especially the US and certain EU countries.
Solving the crisis of overproduction and the extreme abuse of finance capital is beyond the purview of the G20 summiteers, especially because of their neoliberal blinders. They are now most concerned with the problem of debt defaults plaguing major capitalist countries, including the U.S. and those in the European Union, and still many others.
Apparently their main objective is to contain the threats of default by further pushing austerity measures at the expense of the people. These measures, which include tax hikes for the people and tax cuts for the corporations and the wealthy, pressing down of wages, cutting back on pensions and social benefits, reducing social services and public sector employment and rising fees for social services, can only aggravate the economic and financial crisis.
We anticipate the G20 summit to come out with further plans to skirt the fundamental problems of capitalism and imperialism, to further exploit the people under the auspices of the IMF, World Bank and the WTO and thus to aggravate the crisis. The imperialist powers will impose themselves on the rest of the summitteers and defeat or coopt any contrary view from the BRICS (Brazil, Russia, India, China and South Africa).
The G20 summit is held at a time that the dominant imperialist powers are gloating over
their success at conquering Libya and taking over its oil resources with the use of barbaric air attacks in combination with their Libyan puppets and rabble brigades directed by NATO special forces. They are expected to dance over the graves of close to a hundred thousand Libyan people massacred by NATO bombs and puppet butchers under the pretext of humanitarian intervention and protecting civilians.
They are poised to claim the mass uprisings in the Middle East and North Africa.as the victory of their brand of democracy as well as the invincibility of capitalism. They will once more go through the ritual of shedding crocodile tears over Africa and all the impoverished and underdeveloped countries of the world now further brought down by global depression.
The US and other imperialist powers are carried away by their wanton use of financial means and hightech weapons of mass destruction to destroy the lives, homes and social infrastructure of peoples with impunity. They are oblivious of the fact that the world capitalist system is practically falling apart because of its grave crisis, bankruptcies, state terrorism and wars of aggression as well as the rising wave of people’s resistance driven by the needs and aspirations for national and social liberation.
We, the International League of Peoples’ Struggle, call on our member-organizations, all allied forces and the broad masses of the people to take up all the urgent issues against imperialism and reaction, further strengthen themselves organizationally, occupy the public squares and the major streets and undertake all other forms and means of mass mobilization. We must intensify resistance and build the movement for national liberation, democracy and socialism. ###
Globalising factory and informalising labour: an overview of Asia – Part 2
This essay concludes Chang’s article in the last issue of Asian Labour Update
3. Informalisation and its forms in Asia
Pathways to informal work
Informalisation takes different forms largely due to uneven capitalist development in the regions and countries. However, in most cases, those different paths to informalisation are interwoven. Informalisation with the growing informal sector is more explicit (A – the darkest area in figure 2) than informal labour in the formal sector (B: possibly that is why most observers ‘discovered’ the former first). Again in-fact informal labour in the informalising formal sector (C: the lightest area in figure 2) is more implicitly increasing within the existing regulatory framework than informal labour getting out of the regulatory framework. The growing ‘informal sector’ is more obvious particularly, but not exclusively, in poorer developing countries and ‘informal labour in the formal sector’ is more apparent particularly, but again not exclusively, in relatively more developed countries. The in-fact informal labour within the regulatory framework is prevalent both in developing and developed countries.
The distinction between ‘informal workers’ in the formal sector and ‘formal workers’ in the informalising formal economy is getting more and more vague. There is a fast growing portion of capitalist labour that is informal, the scale of which, according to the ILO definition, cannot be fully captured. This portion of informal workers can be captured only as far as they go out of the framework of labour regulation. The vast majority of in-fact informal labour in the informalising formal economy, whose protection relies largely on the power relations between labour and capital, rather than the regulatory framework, cannot be grasped in this way.
Contract workers, agency workers, part-timers are perhaps good examples of in-fact informal workers since a large portion of them are subject to the regulatory framework in many countries but the multiple nature of their employment and high mobility of the workforce makes them in-fact informal workers by excluding them fromsolidarity-based protection of the labour movement. Indeed, in many countries, there are hidden barriers for contracted and agency workers to organise themselves although a large portion of these workers is still under the regulation of labour standard laws. However, the largest working population in the informalising formal economy may be found in developing countries, such as China, where even formal workers lack, almost completely, solidarity-based protection for job security either due to particular institutional arrangements, such as Export Processing Zones (EPZ), or the complete absence of independent democratic trade unions. It is also the case of migrant workers in the formal sector, whose solidarity protection does not exist and therefore cannot enforce the protection entitled by laws.
The lack of institutional labour protection, economic expansion without justice in the distribution of wealth, and most of all the forced integration of the population into capitalist social relations, which involves rural-urban migration, produces an increasing ‘informal sector’ where workers are fully open to market despotism and bullying of public authorities without any institutional protection either from unions or the state. This form of informalisation involves an increasing number of (often disguised) self-employed (or own-account) workers, including home workers, teleworkers, street vendors, other street service providers such as garbage pickers and shoe shiners, non-self-subsistence small-scale farmers and artisans, as well as workers in family businesses, domestic workers employed by households, and landless agricultural workers. The scale of this informalisation is largely, although not precisely, captured by the statistics of informal sector or small-scale industries. In India, the size of informal sector employment is reported to exceed 90 percent of all non-agricultural employment while more than 70 percent of Indonesia’s workforce is in the informal sector (LIPS 2004).
However, not only rural-urban migration contributes to this increasing informal sector; many laid off workers, once employed in the formal economy, dwell in urban areas in search for survival jobs and often cannot return to formal employment, the number of which is decreasing while the number of economically active population is increasing. Rather, they end up with invented jobs, self-employment, family businesses, or other forms of informal sector jobs. In China, there were massive lay-offs in the process of downsizing the state-owned enterprises (SOE) (Chang and Wong 2005). Most downsizing was through a particular process of laying off so-called surplus workers in SOEs, official named xiagang from 1997 (Zhang 2003). In theory xiagang workers are still employed by the firms, are paid basic and medical allowances, and offered three years of recruitment training in state training centres. Xiagang status lasts for three years and workers who cannot find work within the years become officially unemployed. According to the official statistics, there were 6.2 million workers with this status at the end of 2002, down from 7.4 million in 2001.
However, only 37.6 percent of the decrease was due to re-employment (China Labour Statistical Yearbook, 2003). By the end of 2002, there were 27 million SOE workers sacked through the xiagang project (Zhang 2002). Contrary to theory, many xiagang workers do not enjoy protection as the firms often ignore their entitlement and local government, which is supposed to supplement the cost, has no budget for it. Many of them end up in the informal sector either in rural or urban areas. This integration of laid off workers into the informal sector was particularly the case when the informal sector grew sharply in Southeast and East Asian countries in the aftermath of the Asian economic crisis. For example, in Indonesia, work opportunities in rural and urban formal sectors decreased 1,531,859 and 1,299,074 respectively in 2002 and 2003 (LIPS 2004, p. 11). Most of them are believed to have been absorbed by the informal sector. In Korea, the number of self-employed increased from 4,105,000 in 1996 to 4,413,000 in 2003 (a 7.5 percent growth, in comparison to a mere 3.5 percent increase between 1989 and 1996) partially reflects this phenomenon.
|Figure 2: Pathways to informalisation
A – B: Labour in informal economy: ILO definition
B – C: Informalising formal economy
Self-employment in the formal sector
The increase in self-employment in Korea shows the second path (labour getting out of the regulated labour framework) to informal work in Asian countries where formal industries are more or less established. Many functions and services previously handled directly by large-scale corporations have been transferred to the (usually registered) self-employed – without lessening corporate control over those functions and services. In Korea it is called ‘special employment’.
Except a few high-income freelancers, such as consultants or translators, most of the workers are involved in very small businesses. In many cases, the self-employed have certain employment relations. People in these forms of employment have been regarded largely as non-workers since the firms introduced freelance-like employment contracts in the early 1990s, to bypass regulation by labour standards laws. The private tutoring industry, which employs more than 100,000 teachers tutoring more than six million students by visiting their homes, is the biggest in this sector. Also, golf caddies, ready mixed concrete and other construction-related lorry drivers, and delivery service providers are not legally recognised as workers but self-employed although their commercial relations to the consumers in fact subject them to managerial authority in terms of pay, workload, hours and code of conduct. It seems that this informal labour in the formal sector is increasing through, often disguised, self-employment and this is prevalent in the taxi industry and other forms of transportation across Asia.
In the manufacturing sector, increasing informalisation in formal sector develops through contractualisation and agency work (also known as dispatched work or outsourced work in some countries) in most Asian countries, including the Philippines, Thailand, Indonesia, Taiwan, Cambodia, Korea, India and Malaysia. Although these forms of informalisation do not destroy formal employment relations as completely as self-employment does (therefore not as clearly informal as self-employment), they increase the number of informal workers in the formal sector by making the employment relation indirect and unstable, making them avoid the regulatory framework.
Contractualisation increases the number of short-term contract workers replacing permanent workers. Contract workers can be either employed directly by the user company or by the agency that then dispatches them to the user company. The latter case overlaps with outsourced (or dispatched) work. Although workers are employed on short-term contracts, total years working for the same employer can be 10 or more. It is designed primarily to prevent wage increases as service years grow; in many cases, whenever a worker renews a contract, s/he is considered to be a new worker. In India, thousands of highly skilled engineers are employed by well-known multinational companies on a monthly basis (Pandita 2004).
In Thailand, contractualisation was accelerated when the labour standard law was revised in 1998 in the aftermath of the economic crisis that legalised contracted workers. Ever since, a growing employment strategy is to dismiss full-time permanent workers or stop employing regular workers in vacancies due to retirement and fill the vacancies either by re-employing the sacked workers or employing new graduates as contract workers. According to the Thai Alliance of Democratic Trade Unions, it is estimated that contract workers in Thailand now account for around half the industrial workforce (AMRC 2006). In China, laying off workers through xiagang has been used, rather than to cut off surplus labour, to change employment relations by sacking permanent workers and employing non-permanent workers. For example, many firms employ migrant workers after laying off permanent workers; by doing so, they are able to cut indirect expenses such as benefits and allowances. There are also different forms of employment that means in fact contract workers. In the Philippines employers are known to set up different layers of job status that involves a year of training, another two years as apprentice and then promotion (!) to one- or two-year contract workers.
Probably the worst but not the newest form of contract work is in construction. A large portion of construction workers, up to 98 percent of many Asian countries’ workforces, are short-term and project-based, whose contracts automatically terminate as each project ends. Only a small portion of the workforce, such as engineers and supervisors, enjoy formal employment. Others, who call themselves ‘guerrilla workers’ (Guang 2005, Chang 2005c, p. 13) are organised as an informal team of five to 20 workers with skills needed for a particular construction function, usually living in the same area or from the same home town, led by a team leader whose job is chasing subcontract opportunities from major or higher level subcontractors. It is not abnormal for them to get no contract for months when economic conditions deteriorate.
At the bottom of subcontract chains largely for unskilled work are daily-hired workers, who suffer high levels of occupational safety and health problems and wages in arrears.
Agency or dispatched workers
In many cases contractualisation involves increasing agency work since almost all agency workers are on short-term contracts. However, not all contract workers are employed through agents. Firms increasingly utilise indirect forms of employment by affiliating small subcontract firms, which are in fact work agencies, the survival of which are entirely subject to yearly or monthly contracts with the mother companies. In many cases, large-scale enterprises (such as Samsung Thailand, Hyundai Motors in Korea) establish subcontract firms and work agencies. The spread of agency work is not confined to labour intensive industries. Even Toyota, one of the most cutting-edge automobile firms, utilises agency workers who now account for more than 50 percent of its Thai subsidiary workforce. Hyundai Motors in Korea also gradually increased agency workers who work on the same production lines as permanent workers. Now there are reports of more than 10,000 workers, dispatched from more than 10 work agents (disguised as subcontractors), working in Hyundai.1
The electronics industry shows the same trend both in the heartland and peripheral countries. In Taiwan, electronics manufacturers increasingly use agency workers, who were formerly permanent workers and took early retirement as recommended by the employers (Nichols and Çam 2003, p.24). A Korean electronics firm, where more than 50 percent of the workforce was replaced with agency workers between 1996 and 2002, shows it is becoming a trend in the electronics industry (Nichols and Çam 2003). Of course electronics firms in peripheral countries such as Thailand and Philippines are as aggressive as firms in Taiwan and Korea in employing agency workers. By making employment relations more indirect and untraceable, management can escape their legal obligations as direct employers and therefore can adjust the number of workers easily. Also, by putting regular and dispatched workers on the same production line, management intensify competition between them, thereby taming organised regular workers.
Outsourcing particular labour processes and services also contributes to the changing employment structure. As many processes that produce components for assemblers, particularly car-makers, have been given to small- and medium-size external subcontractors that rely heavily on cheap daily and temporary workers, the proportion of permanent jobs in mother companies is likely to decrease. Likewise, cleaning and catering are the most commonly outsourced services to manpower-only companies (work agencies), prevalent in both service and manufacturing sectors.
Another major group of informal workers, often completely neglected even by union statistics, is migrant workers, whose employment contracts are apparently and irreversibly temporary in all Asian countries. They often overlap with informal workers in developing countries where large numbers of foreign workers work in the informal sector such as fishing, domestic work, and unregistered micro enterprises. Even in places where they are protected by labour standards law, migrant workers’ right to stay in host countries is often attached to particular employers, and cannot change workplaces. Taking advantage of this, employers employ them with wages with well below minimum standards and abuse workers rights to the extreme (Arnold 2005). Once they move to another workplace seeking better wages and humane treatment, they become illegal workers. As a living reflection of the slavery-like labour contract system, there are increasing numbers of unregistered migrant workers in Asia. As disposable workforces in the most labour intensive sectors such as construction, fishing, and garment and textile, they have no rights to protect themselves and must tolerate being placed at the very bottom of the downward spiral of informal workers. Adding them to the number of informal workers, the proportion of informal workers in total workforces is much higher.
Formal workers in the formal economy in question: are they formal labour?
Many so-called atypical workers, such as part-timers and temporary contract workers, are not legally informal. Japan’s part-timers and temporary workers are such. Japan’s myth of traditional lifetime employment is being broken down. Between 1992 and 2001, the number in fixed-term employment doubled from 910,000 to about two millions while that of workers dispatched from manpower agencies tripled from 503,000 to 1.45 million (Hanami 2004, p. 9). Together with the growing number of part-timers, more than 13 million informal workers now account for 26 percent of total employees (Hanami 2004). Most of them, having fringe benefits and protected by labour standards law, are therefore not officially informal. However, barely any of them are under solidarity-based protection so that they are vulnerable to labour market fluctuations. It is questionable whether they are as formal as the permanent-full timers in the same workplace.
In Thailand, trade union recognition is given only to unions organising more than 20 percent of the whole workforce. Given the mobility of contract or agency workers, it is extremely difficult for unions to organise them. Therefore, contract workers remain unorganised.
In the Philippines, the situation is even worse since unions have to go through a union certification election where more than 50 percent of the workforce needs to recognise the union as their representative.
It is also highly questionable whether hundreds of millions of Chinese workers are formal. While SOEs lay off permanent workers, private sector workers seem to have no job protection, remaining vulnerable to unilateral decisions by management in terms of laying off. It is also the case in countries like Cambodia where a regulated labour market in fact never has existed. More than four million migrant workers in Japan, Korea, Taiwan, Singapore, Hong Kong, Thailand, and Malaysia, are also excluded almost completely from solidarity protection. Likewise, informalisation takes place in a matter of a day. The growing number of workers who are left behind run-away capital in fact worked within the regulatory framework of the formal economy. Yet what protected them? How can we call them formal workers when there is no solidarity action taken for workers laid off unilaterally by the management?
In most Asian countries, the role of government transformed from regulator to deregulator. Government is no longer regulator but rather a driving force of deregulation either lacking intention to regulate or aggressively deregulating labour by removing existing institutional worker protection. Therefore, it is not only informalisation within the regulatory framework but also changes in regulatory framework that increases in-fact informal workers (for legal reforms toward more deregulation by the governments in Asia, see appendix). Often workers themselves try to reduce solidarity-based protection as informal workers are considered as threat to formal workers. In Korea, the increasing conflicts between formal and informal workers have become one of the most difficult barriers for informal workers to be unionised (Chang 2002, 2004). Lack of protection for informal workers ultimately means that labour forces are individualised in relation to capital. Employment relations are literally individual relations between individual employers and individual employees without intervention by the state or collective union.
Conclusion: new struggle by new subjectivities
When capital moves, it involves changes in social relations as well as labour captured in the social relations. It puts people into a new set of social relations, turning employees into unemployed, partners of the unemployed into employees, farmers into factory workers, housewives into women workers, schoolgirls into migrant workers, and communities into ruins. The current movement of capital is making the whole of society into a factory and capitalist labour is transforming from labour in factories to more socialised labour. More than ever before, capitalist labour becomes the common in the livelihood of the Asian (and elsewhere) population. However, this means not only quantitative expansion of capitalist labour as labour is given a particular nature as well. It becomes commonly informal.
It should be emphasised that the boundary between formal and informal, or regular and irregular labour, is being blurred as informalisation develops as an overarching process. The informal nature of work is, therefore, neither a problem of certain groups of workers in specific sectors, nor that of developing countries.
The second important aspect is that informalisation takes diversified forms on the basis of differentiated development paths of capitalist economy. Therefore, in developing countries, it appears in the form of violent integration of working population into an ever growing informal ‘sector’ or sheer union busting by less advanced individual capitals. On the other hand, it takes a more subtle form in developed countries, silently undermining established labour rights with complicated human resource management. This implies an urgent need for the labour movement to develop a solidarity strategy against the overarching recomposition of global labour and at the same time differentiated tools of organising labour according to particular forms of informalisation predominant in certain economic or industrial sectors and countries. Workers’ response against the informalisation of capitalist labour is already visible, taking forms of either associations of informal labourers or struggles against the erosion of institutional rights of regular work. Informalisation is a great challenge to the existing form of the labour movement. However, at the same time, it offers the labour movement a great opportunity to rethink and regroup the movement of labour.
1 In theory, these forms of employment are supposed to be under strict regulation and allowed only for 26 particular forms of skilled-labour. However, dispatched labour are utilised in almost every industrial sector without regard to the nature of work because the Ministry of Labour does not monitor illegal dispatch.