{"id":10301,"date":"2010-06-15T15:54:24","date_gmt":"2010-06-15T05:54:24","guid":{"rendered":"https:\/\/billmitchell.org\/blog\/?p=10301"},"modified":"2010-06-15T15:54:24","modified_gmt":"2010-06-15T05:54:24","slug":"trade-unionists-are-getting-murdered","status":"publish","type":"post","link":"https:\/\/billmitchell.org\/blog\/?p=10301","title":{"rendered":"The assault on workers’ rights continues"},"content":{"rendered":"

\t\t\t\tI have been trying to maintain a theme focusing on the absurdity of our economic systems and the way in which governments allow themselves to be held to ransom by a small group of largely unproductive financial traders and the associated institutions (credit rating agencies). I was reminded of this again today when I read a report on growing murders of trade union officials and the purging of working conditions in various countries as the economic crisis worsened. When you juxtapose this sort of news – about things that really matter – with the nonsensical antics of the financial markets in Europe you realise we have totally lost any notion of priority.
\n
\nIn finance, they refer to bond trading as investing but I prefer the definition of investment that you find in economics – the augmentation of productive capacity. It reflects my view that financial markets are mostly unproductive<\/a> and that what we should be focusing on are real things – employment, productivity, social protection etc.<\/p>\n

While it is clear that the fiscal policy interventions stopped the recession becoming a recession, the policies could have been much more focused on employment and social protection and less focused on handouts to the top-end-of-town. That might have prevented some of the now hysterical claims that fiscal policy is dead. For more on that, you can read this ridiculous article – Crisis puts nails back in Keynesian coffin<\/a> – from News Limited hack Michael Stutchbury, which really just paraphrases the article claims by Jeffrey Sachs the other day. Please read my blog – Who should be sac(k)ed?<\/a> – for my critique of the Sachs article.<\/p>\n

The news<\/a> that Moody’s had downgraded Greek government debt to junk status (that is, non-investment grade) was predictable but demonstrates the absurdity I am talking about. The decision will “further undermine demand for the debt-strapped nation’s assets as it struggles to rein in its budget deficit”. Bloomberg reports that Moody’s identified:<\/p>\n

\n… “substantial” risks to economic growth from the austerity measures tied to a 110 billion-euro ($134.5 billion) aid package from the European Union and the International Monetary Fund. The lower rating “incorporates a greater, albeit, low risk of default,” Moody’s said in a statement yesterday in London. The outlook is stable, it said.\n<\/p><\/blockquote>\n

Can you believe the circularity that is going on? First, Greece suffers a massive negative demand shock which drives its budget deficit up as a result of the automatic stabilisers and some discretionary bailout efforts.<\/p>\n

Second, the conservatives scream that the Stability and Growth Pact rules, which bear no relation to the reality these nations are in, have to be met.<\/p>\n

Third, the bond markets start to screw Greek debt issues.<\/p>\n

Fourth, a bailout package is implemented to ease the reliance on the bond markets but a nasty austerity package is imposed on the Greek government.<\/p>\n

Fifth, the austerity package is designed to damage economic growth.<\/p>\n

Sixth, Moody’s seeing the “substantial” risks to growth put the boot in.<\/p>\n

Seventh, stay tuned for the budget deficit rising, the bond markets getting nastier, the bailouts getting larger, although Moody’s and the other criminal rating agencies can’t downgrade Greek public debt much more.<\/p>\n

Another aspect of this absurdity is the increasing evidence that countries that have been mired in recession since 2008 are now facing diminished future growth paths. So not only have they failed to deal with the collapse in aggregate demand but, in failing to run large enough deficits, they have now damaged their supply capacity.<\/p>\n

For example, in the UK, the Office of Budget Responsibility<\/a> has just released the Pre-Budget Estimates<\/a> and they say that:<\/p>\n

\nOur best estimate is that the output gap was around -4 per cent at the end of 2009 … and that the current level of trend output is also lower than was estimated at the time of the March Budget. We also judge that the financial crisis will have a persistent effect on trend growth over the medium term. We estimate that trend output will grow at just over 2\u00bc per cent over the next three years, slowing to just over 2 per cent from 2014 as demographic changes reduce the growth of the potential labour supply. Taken together with the judgement that the output gap was around -4 per cent at the end of 2009, the projected level of trend output at the start of 2015 is around 3\u00be per cent below that implied by the assumption used for the March Budget economic forecast and around 2\u00bd per cent below that implied by the assumption used for the March Budget public finances forecast.\n<\/p><\/blockquote>\n

This is the point I discussed in the blog – My Sunday media nightmare<\/a>. The mainstream economists – central bankers etc – typically assume that the evolution of the “long-run” growth path of the economy is independent of how you get there. The hysteresis notion (upon which my PhD and early academic articles were based) tells us clearly that the future is path dependent. Where you are now is where you have been.<\/p>\n

To think that the evolution of aggregate spending has no impact on what our economy will look like in say 40 years time is ridiculous. A protracted recession such as we are experiencing now typically reduces the growth path and it takes years to work through the persistence and hysteresis that accompanies a recession.<\/p>\n

Investment falls and this in turn lowers the potential growth path. That is exactly what is happening at present.<\/p>\n

Then when the number crunchers start estimating structural deficits (which are based on estimates of potential output) they suddenly discover the deficits are “higher” than previously thought because the potential output is lower.<\/p>\n

Then the deficit terrorists go for broke and force the governments into more austerity and things get worse by the day! This is another aspect of the absurdity that is going on at present.<\/p>\n

But there is a real world out there …<\/strong><\/p>\n

So it is salutory to try to keep focusing on real things.<\/p>\n

The latest ILO Global Employment Trends<\/a> (careful: the file is 11.3 mbs) fully apprises us of how the crisis has undermined conditions in labour markets around the world.<\/p>\n

The public debate typically focuses on some summary labour market statistics – the official unemployment rate – the employment-population ratio – as indicators of the state of the labour market. The crisis has clearly led to significant increases in unemployment (particularly among the youth) – around 45 million workers have been pushed into unemployment since 2007. The employment-population ratios have plummetted by more than 1 per cent (which is huge when you consider the base). Labour force participation rates have fallen and hidden unemployment has risen.<\/p>\n

But the trends in the quality of employment are not often discussed in the financial news. The ILO define vulnerable employment as:<\/p>\n

\nVulnerable employment is often characterized by inadequate earnings, low productivity and difficult conditions of work that undermine workers’ fundamental rights …<\/p>\n

Workers in vulnerable employment, defined as the sum of own-account workers and contributing family workers, are less likely to have formal work arrangements, and are therefore more likely to lack elements associated with decent employment such as adequate social security and recourse to effective social dialogue mechanisms.\n<\/p><\/blockquote>\n

The ILO note that before the crisis “there were large deficits reflected in high rates of vulnerable employment and working poverty in most of the developing world.” But the trend was downward. <\/p>\n

The economic crisis has reversed the improvements made and:<\/p>\n

\nAt the global level, on the basis of currently available labour market information and the most recent revisions in GDP growth, the vulnerable employment rate ranges from 49.4 … to 52.8 per cent … in 2009, which is equivalent to between 1.48 and 1.59 billion vulnerable workers worldwide\n<\/p><\/blockquote>\n

It is likely that an extra 109.5 million workers have now been forced into vulnerable work which “implies a reversal to the year 2000”. So a decade of gain has been wiped out.<\/p>\n

Part of this increase is the result of an absence of social protection schemes for the unemployment in many developing economies. So when a worker becomes unemployed they take on “various forms of employment” which typically deny basic rights.<\/p>\n

The ILO also note that the working poverty rate – working below an accepted poverty line – has increased dramatically. This rate had also been declining prior to the crisis. But that estimates of the share of workers in extreme poverty, that is, on USD 1 a day:<\/p>\n

\n … suggest that up to an additional 7.0 per cent of workers were at risk of falling into poverty between 2008 and 2009 … This would translate into an additional 215 million workers, which is an alarming increase and would represent a setback of many years in reducing decent work deficits … At the USD 2 a day poverty line, it is estimated that up to 5.9 per cent of workers (185 million workers) were at risk of falling into poverty between 2008 and 2009.\n<\/p><\/blockquote>\n

The ILO conclude that economic growth “remains fragile and labour markets around the world remain distressed”. They note that the “the positive effects of government stimulus measures are counteracting the depressing effects of a still large problem of bad debts in the financial system, weak consumer demand and low levels of investment.”<\/p>\n

Noting the deterioration in unemployment, and, while “reflective of governments’ efforts around the world to mitigate the impact of the economic crisis on labour markets”, the ILO says:<\/p>\n

\nNevertheless, this rate represents an unprecedented increase in the number of unemployed. At the same time, the potential increases in vulnerable employment and working poverty are even more alarming, and are likely to affect larger numbers of workers, particularly in view of the decent work deficits that were
\nalready evident prior to the economic crisis.\n<\/p><\/blockquote>\n

So a pretty bleak picture being portrayed.<\/p>\n

In terms of policy issues, the ILO Report prescribes remedies which are in stark contradistinction to the policies that are now being implemented by governments around the world. At the time the Report was published (January 2010) they were supportive of the G-20 push for:<\/p>\n

\n… measures that protect the most vulnerable by expanding social protection, investing more in education and training and applying stronger labour market policies.\n<\/p><\/blockquote>\n

At that time, the G-20 overall was pushing for the continuation of the stimulus to underwrite growth. Times have moved on and the most recent G-20 meeting of finance ministers radically shifted their position and are now promoting full-on austerity as the way forward. In this blog – Amazing reversals – democratic repression<\/a> – I document this shift in G-20 sentiment.<\/p>\n

The ILO believe that it:<\/p>\n

\nIt is imperative to continue with stimulus measures to avoid a further deterioration of social and employment conditions, and increased precarious work, especially since true economic recovery will not be achieved without healthy job growth … A sustainable growth beyond recovery must be achieved by including social and environmental dimensions that encourage job creation. Furthermore, gender equality should be a key principle in any policy response, as the effects of the crisis go beyond the scope of women in the world of work, but impact on the overall stability of society considering the various roles that women play. Maintaining acceptable wage levels is also a concern since consumers need adequate purchasing power in order to support consumption.\n<\/p><\/blockquote>\n

So you match that policy perspective with the reality at present and you can guess that things are going to get much worse for workers in the coming years. It is clear that the imposition of austerity programs will damage the bottom end of the income distribution significantly while the top-end-of-town will be spared. In fact the latter will be able to buy up (steal) valuable public assets at bargain prices as the governments are forced by the IMF, the EU and their own stupidity to privatise them.<\/p>\n

As a result there will massive wealth shifts from the public to the wealthy end of the private sector.<\/p>\n

And, employment crisis undermining workers’ rights<\/strong><\/p>\n

In yesterday’s blog – The poet and the economist<\/a> – I suggested that the neo-liberals are using the crisis to advance their own agenda. In particular, I focused on the conservative push for austerity for which would make huge inroads into the welfare state and reduce the size of the public sector. <\/p>\n

But the neo-liberal agenda has also been on-going during the crisis. The International Confederation of Trade Unions (ITUC) has just released its Annual Survey of violations of trade union rights<\/a>.<\/p>\n

The Survey reveals:<\/p>\n

\n… a dramatic increase in the number of trade unionists murdered in 2009, with 101 killings – an increase of 30% over the previous year … [and] … growing pressure on fundamental workers’ rights around the world as the impact of the global economic crisis on employment deepened.\n<\/p><\/blockquote>\n

While the murders were in Colombia (48), Guatemala (16), Honduras (12), Mexico (6), Bangladesh (6), Brazil (4), Dominican Republic (3), Philippines (3), and one in India, Iraq and Nigeria; the Survey documents an “extensive list of violations suffered by trade unionists struggling to defend workers’ interests” across 140 countries. <\/p>\n

They also note that many “violations remain unreported, as working women and men are deprived of the means to have their voices heard, or fear to speak out due to the consequences to their jobs or even to their physical safety”.<\/p>\n

The Survey documents in excruciating detail a litany of “harassment, intimidation and other forms of anti-union persecution” in all the nations surveyed.<\/p>\n

While the worst atrocities occurred in the poor nations as you would expect, there are also extensive breaches of workers’ rights in advanced nations like the US. For example, the Survey says of the US:<\/p>\n

\nThe law does not adequately protect workers’ trade union rights, and provides the employers with vast freedoms. Union busting, anti-union campaigning and resistance to collective bargaining and bad-faith bargaining remain common practice amongst employers, this leading to double standards in foreign multinational companies such as Deutsche Telekom.\n<\/p><\/blockquote>\n

The Deutsche Telekom case is interesting. T-Mobile USA has been running a “systematic campaign to prevent employees from forming a union”. You can read all about they way the German company behaves in an excellent report – Lowering the Bar or Setting the Standard?<\/a> – published by the American Rights at Work Education Fund<\/a>. This organisation does great work in documentation atrocities against workers.<\/p>\n

This Report: <\/p>\n

\npresents overwhelming evidence that DT is guilty of operating by a double standard: The company respects workers’ rights in Germany, where it cooperates closely with unions, but mistreats workers in the United States and interferes with their right to organize.\n<\/p><\/blockquote>\n

You might also like to read this recent article (June 14, 2010) – New Outrage Exposes Obama’s Failure To Help Unions<\/a> – from the San Francisco alternative daily, Beyond Chron. It documents how Obama’s claim to be supportive of unionisation has not been delivered upon and that anti-union activities continue unabated in the US.<\/p>\n

Conclusion<\/strong><\/p>\n

These trends are consistent with my hypothesis that the neo-liberals are working hard to make this crisis count in their favour.<\/p>\n

I expect the workers to come out of this crisis in much worse shape than before and a high proportion will never recover the wealth and work entitlements that they had built up and fought hard for over the years.<\/p>\n

And a significant proportion of the next generation of adults will be poorer because we have allowed them to wallow in unemployment or inactivity when we could have easily provided all of them with Job Guarantee<\/a> position and kept them connected with the labour market.<\/p>\n

It is all very depressing really.<\/p>\n

That is enough for today!\t\t<\/p>\n","protected":false},"excerpt":{"rendered":"

I have been trying to maintain a theme focusing on the absurdity of our economic systems and the way in which governments allow themselves to be held to ransom by a small group of largely unproductive financial traders and the associated institutions (credit rating agencies). I was reminded of this again today when I read…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[18],"tags":[],"class_list":["post-10301","post","type-post","status-publish","format-standard","hentry","category-economics","entry","no-media"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/billmitchell.org\/blog\/index.php?rest_route=\/wp\/v2\/posts\/10301","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/billmitchell.org\/blog\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/billmitchell.org\/blog\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/billmitchell.org\/blog\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/billmitchell.org\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10301"}],"version-history":[{"count":0,"href":"https:\/\/billmitchell.org\/blog\/index.php?rest_route=\/wp\/v2\/posts\/10301\/revisions"}],"wp:attachment":[{"href":"https:\/\/billmitchell.org\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10301"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/billmitchell.org\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10301"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/billmitchell.org\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10301"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}