Saturday, January 7, 2012

Restoring competitiveness by even "working for free"!

Capitalism, as we've already discussed, is a system the workers have to compete against each other in order to get picked by the employers.

In today's environment, employers usually prefer the Asian workers, as they work ridiculously long hours for ridiculously low wages - that makes them more competitive than everyone else, except maybe the German workers, who may be "expensive", but they are also more productive/efficient.

So, apart from a few exceptions, the western workers "must" become more competitive, so that the employers will start picking them again in the labour market. After, all, who cares about poverty and inequality? The only thing that matters is maximizing your own personal profit, right? So, the workers need to be productive, obedient and cheap. And that's where "austerity" comes in:

A lot of people, especially the Social-Democrats, criticize austerity because it reinforces the recession and inhibits growth. This is true, but it also misses "the big picture". The capitalists are not stupid, or at least they are not that stupid - they know that these austerity measures inhibit growth, and even if they didn't know, they must have noticed it by know. And yet they persist, because this policy may inhibit growth on the short term, but it will also create a new generation of workers that will work longer hours for less money. So, in the long run, the capitalists will make a profit, even if they have to take some short-term hits as well (some businesses are going bankrupt because of austerity - they are "necessary sacrifices" in order to create a better future for the capitalists, at the expense of the workers). Here's how it works:

As unemployment keeps rising, the workers become desperate, as they have no money to sustain themselves and their families. This situation is very similar to a castle siege - the attackers would cut the supply lines of the people inside the castle, and these people would either starve to death (as they had no food), or they would be forced to surrender. The workers face a similar choice, as they have no job, and the employers will only offer them a job if they agree to give up their demands of an 8-hour day or of a "decent" wage, healthcare benefits, etc.

So, unless the workers fight for a system without employers, a system in which the workers are in charge of themselves, they will eventually be forced to accept working in poverty. The employers have all the labour force they need in Asia, at extremely low prices - so as long as they are in charge of production, they will keep picking the cheaper workers, forcing everyone else to accept similar conditions of poverty, or face unemployment and starvation. They even call today's generation "a lost generation", as a lot of them will not get "picked" for work, and they will be left to starve, in order for the next generations to accept working for pennies.

So how is this strategy working out for the capitalists? Actually, it's working great! Sure, there are some protests, but on the other hand a lot of workers have already accepted working for (a lot) less, and some of them have even accepted working...for free! That's something that even the slaves of the Dark Ages didn't accept, as they masters would at least give them food and water, in order to keep them alive so that they can continue to exploit them for as long as possible.

Today, as it turns out, there are some cases where you don't even have to do that - and I'm not talking about China or Africa or anything like that. I'm talking about the West:

Unpaid jobs: The new normal?
With nearly 14 million unemployed workers in America, many have gotten so desperate that they're willing to work for free. While some businesses are wary of the legal risks and supervision such an arrangement might require, companies that have used free workers say it can pay off when done right. [yeah, sure, it can pay off if you look at it from the capitalist's point of view - my note]

"People who work for free are far hungrier than anybody who has a salary, so they're going to outperform, they're going to try to please, they're going to be creative," says Kelly Fallis, chief executive of Remote Stylist, a Toronto and New York-based startup that provides Web-based interior design services.
In the last three years, Fallis has used about 50 unpaid interns for duties in marketing, editorial, advertising, sales, account management and public relations. She's convinced it's the wave of the future in human resources. "Ten years from now, this is going to be the norm," she says.
Cassie Johnson, a 27-year old in San Marcos, Calif., lost her job as an enrollment adviser for an online university in 2009 and was receiving unemployment benefits for a year before finding an assistant manager position at a Starbucks (SBUX) that's so far from her home she spends most of her pay on gas. Since starting a public relations internship in February, she feels a renewed sense of purpose.

"I'm learning a lot and I feel really good about it. I'm happy. I feel relevant. I'm not making any money, so it's tough, but I feel it's setting me up for a career," Johnson says. "I only have $1.50 left in my checking account right now but I'm living with my boyfriend and he's been really good about supporting me." [meanwhile, even the Chinese workers make more money that she does - but at least she's "relevant" - my note]

All work and no pay – the rise of workfare
As consumers, we may all be guilty of ignoring the poverty wages paid by companies such as Primark in their factories abroad. But how many of us are aware of the exploitation going on in the UK, as workfare schemes allow such companies to profit from free labour?

Karina’s story is not uncommon. More and more people are being compelled to work without pay on threat of losing the poverty income of £67 per week (if you’re over 25) that jobseeker’s allowance (JSA) provides.

Karina was mandated to work in Primark under New Labour’s Flexible New Deal. She had been sent to a private ‘welfare to work’ provider whose regime included putting claimants to work without pay in businesses, charity shops and public sector workplaces. Although regulations meant that she could only be obliged to work for up to 12 weeks without pay, she worked for 24 weeks, fearing she would have her benefits stopped if she did not agree. She had signed up to and paid for a college course that would help her find work but she had to give it up to do the placement: ‘They told me they would stop my JSA, so I stopped my English course.’ 

The younger generation of workers is the one suffering more - some graduates in England are even paying to get get a job (instead of getting paid for it)!

Graduates paying to work for free
When Roz Tuplin graduated in 2010 she thought that a post-graduate degree in English Literature would be good grounding for a job in the media. She knew she would have to gain work experience, but after a year of trying to get a placement, she has decided to pay employers £65 a day to let her through the door. "It seems to be the way things are going," she said.
Ms Tuplin, 23, from Wirral, will be paying £260 for a four-day work experience placement with a TV production company in London. Access to internships, many said to have been arranged through well-connected parents, has been an area of controversy.

"The government's own lawyers have warned work without pay is often illegal and HMRC should be investigating companies which offer unpaid and paid-for internships." 

And it just keeps getting better and better:

Hundreds of Thousands of Lower-Wage Workers, Many of Whom Worked for Decades, Would Be Denied Unemployment Insurance Under Provision Now Under Consideration
A provision that congressional negotiators will consider for legislation to extend the payroll tax cut through the end of 2012 would deny unemployment insurance (UI) to hundreds of thousands of lower-wage workers who worked for years or even decades, effectively paid UI taxes while they worked, and then were laid off.
Unemployed Portuguese told to 'just emigrate'
Hounded by the economic crisis that shows no signs of letting up and by political leaders of all stripes, Portugal's conservative Prime Minister Pedro Passos Coelho sent out an unprecedented message to his fellow citizens: Emigrate.

A wave of indignation was triggered when Passos Coelho, in the face of the growing unemployment that is hitting young people and educators extremely hard, suggested to teachers on December 18 that as an alternative they could move to Portuguese-speaking countries like Brazil or Angola.

Meanwhile, back in "Plutocracy Land":

Since 2009, 88 Percent Of Income Growth Went To Corporate Profits, Just One Percent Went To Wages
“Between the second quarter of 2009 and the fourth quarter of 2010, real national income in the U.S. increased by $528 billion. Pre-tax corporate profits by themselves had increased by $464 billion while aggregate real wages and salaries rose by only $7 billion or only .1%. Over this six quarter period, corporate profits captured 88% of the growth in real national income while aggregate wages and salaries accounted for only slightly more than 1% of the growth in real national income. …The absence of any positive share of national income growth due to wages and salaries received by American workers during the current economic recovery is historically unprecedented.”

No wonder the people are out on the streets - it took them long enough. They are of course in the very early stages of a process that could -and should- lead to a revolution, a revolution that should end this system where almost all the economic and political power is concentrated at the hands of a few oligarchs, who don't seem to mind when a lot of suffer, if that suits their interests...

This article from the Huffington Post describes a trend that will probably grow, as the people start opening their minds to alternative ways of organizing our societies. It would be premature, if not foolish, to talk about a socialist revolution in the West, as there is no preparation for such an event, at least not in the near future. But we should start discussing this possibility, as capitalism can only lead us to mass poverty, if not war:

 Young People More Likely To Favor Socialism Than Capitalism: Pew
Young people -- the collegiate and post-college crowd, who have served as the most visible face of the Occupy Wall Street movement -- might be getting more comfortable with socialism. That's the surprising result from a Pew Research Center poll that aims to measure American sentiments toward different political labels.

The poll, published Wednesday, found that while Americans overall tend to oppose socialism by a strong margin -- 60 percent say they have a negative view of it, versus just 31 percent who say they have a positive view -- socialism has more fans than opponents among the 18-29 crowd. Forty-nine percent of people in that age bracket say they have a positive view of socialism; only 43 percent say they have a negative view.

And while those numbers aren't very far apart, it's noteworthy that they were reversed just 20 months ago, when Pew conducted a similar poll. In that survey, published May 2010, 43 percent of people age 18-29 said they had a positive view of socialism, and 49 percent said their opinion was negative.