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Al-Ahram Weekly 18 - 24 February 1999 Issue No. 417 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 18 - 24 February 1999 Issue No. 417
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Features Special Travel Living Sports People Time Out Chronicles Cartoons Letters Eat the poor
By Faiza RadyGlobal employment trends are going from bad to worse, according to the International Labour Organisation's (ILO) World Employment Report for 1998-99. The ILO estimates that a staggering one billion workers -- representing one third of the world's labour force -- were either unemployed or underemployed in 1998. The number of people who were actually unemployed according to the standard definition -- those who are seeking work without finding jobs -- reached 150 million last year. "In addition, 25 to 30 per cent of the world's workers -- or between 750 million and 900 million people -- are underemployed, i.e., either working substantially less than full-time, but wanting to work longer, or earning less than a living wage," explains the report.
Since the early 1980s, Northern countries, headed by the US, have successfully pushed for the globalisation of neo-liberal economic practices, prying open Third World economies by dismantling protective trade and tariff barriers, thus disrupting and ultimately destroying many national industries.
Meanwhile, transnationals have relocated their plants to the South, in search of cheap labour and an unregulated environment in which to maximise their profits. Following massive plant closures in the North over the last two decades, millions of workers have become "redundant" Ð further swelling the ranks of the poor and the unemployed.
Citing the 1997/98 market crashes in Asia as contributing to global unemployment levels, the report particularly focuses on conditions in Indonesia, Thailand and South Korea -- all countries where the situation is especially bleak.
In Indonesia, the ILO believes that real wages in 1998 fell by much more than the estimated 15 per cent fall in per capita Gross Domestic Product (GDP). Lay-offs in 1998 alone affected some 10 million workers.
Despite the official 12 per cent unemployment figures, the report warns that unemployment is in reality much higher, since rising underemployment tends to considerably deflate government statistics. Hence the ILO estimates that 40 per cent of Indonesian workers were already underemployed before the crisis hit the country.
In Thailand, the report estimates that at least six per cent of the labour force was unemployed in 1998 -- amounting to some two million jobless -- compared with only one to two per cent, or 400,000 to 700,000 workers, in 1996. However, as in neighbouring Indonesia, official unemployment statistics tend to disguise the real situation of underemployment, which the report describes as potentially much more drastic than the deflated figures project: "The reliance of many Thais on the traditional safety net of the extended family could trigger a four to five-fold increase in underemployment... [which] will impact far from the urban centres, as many people in the rural areas, especially the elderly, rely on remittances from working family members in Bangkok."
South Korea has witnessed a similar debacle. "Job losses have accelerated since early 1998, nearly doubling between November 1997 and February 1998 to over five per cent and reaching seven per cent in June of this year," states the report. While the Korean government says that some two million workers were unemployed in 1998, trade unions quote a conservative figure of four million -- and that is without including "flexible" jobs and part-time employment, which account for 45 per cent of total employment.
The labour market situation in sub-Saharan Africa is even bleaker. Despite rising economic growth rates across the continent, the formal sector has as a rule failed to create new employment opportunities. "With a labour force growth rate of almost three per cent and little job creation in the formal sector, most jobs are necessarily created in the informal sector, and in low-productivity agriculture," explains the report. With no union representation, no benefits, no job security and earning substandard wages, those African workers who have managed to carve out a niche for themselves in the highly unstable informal sector, lead a precarious hand-to-mouth existence. This systematic dismantling of the formal sector worldwide was denounced by Noam Chomsky in his 1996 book Powers and Prospects as the "most cruel crime", because it represents "the destruction of hope in a demoralised society, sinking into helplessness, misery and despair."
In most Central and Eastern European countries, the transition from socialist to market economies has resulted in spiraling unemployment levels -- surging from zero per cent under socialism to over nine per cent last year. "Despite the benefits enjoyed by a tiny minority, most people continue to suffer dramatic and painful declines in living standards," notes the ILO report. Even in Poland, the International Monetary Fund (IMF) and World Bank's (WB) sparkling showcase of economic deregulation, poverty has more than doubled since the reforms were instituted, while real wages have dropped by 30 per cent
In Chomsky's words, again, "Hungry people can appreciate the signs of sudden consumption, admiring the wedding gowns in the windows of elegant shops, the foreign cars with Polish licence plates roaring down the Warsaw-Berlin road, and the nouveau riche women with $1300 cellular telephones tucked in their pocketbooks."
Among Eastern European countries, the Russian Federation has witnessed the most dramatic rise in unemployment. Since the collapse of the Soviet Union, the Russian economy has been mired in a web of unpaid debts, paralysing the state and much of its moribund industrial base. For the last six years, production in the manufacturing sector has dropped by a massive 60 per cent -- a colossal fall, far greater than the 30 per cent drop in US production following the Great Depression. To make matters worse, the Moscow stock market has lost 60 per cent of its value since last January, and servicing the country's huge domestic debt now devours over a third of all state spending.
It is the Russian workers who have had to pay for the mess. "In the Russian Federation, rising economic turmoil has been accompanied by negative growth in real wages, now at less than 60 per cent of their 1989 level, or in a growing number of cases, non-payment of any wages whatsoever," explains the ILO report. Millions of public employees and workers in industries that depend on government contracts often go for months without any cash income. In 1997 nearly half of all Russian workers experienced some disruption in their wages, and one in four went without a paycheck for at least three months.
Despite the overall improvement in economic growth, the Central American economies are also plagued by high unemployment and dire poverty. Unable to find work in formal markets, where productivity is high and wages relatively acceptable, many workers have to squeeze into the informal market as a last resort -- working long hours in hard and menial jobs which barely allow them to survive, the report says, citing as examples of such last-ditch survival strategies, self-employment, domestic service and work in mostly underfunded and uncompetitive micro-enterprises.
In developed countries the report describes the employment situation as "uneven", at best. Although Japan, for one, scores relatively well among industrialised nations, joblessness has begun rising sharply as economic growth has stalled since the mid-1990s. In the European Union, 18 million workers are officially unemployed, and this figure does not account for the so-called structurally unemployed -- the despairing millions who have given up the search for a job, as well as those relegated to permanent part-time employment. "The long-term unemployed have poor prospects to find a job even if the overall macroeconomic environment improves," states the report, which goes on to warn that "the social dimensions of this problem are enormous."
Compared to the EU, the American employment profile would seem to be a success story. With a record low unemployment level of 4.7 per cent, the US alone appears to have bypassed the global labour market slump. Yet the picture in the real world is not as rosy as it seems. "The United States has seen real wage stagnation accompany an above-average increase in employment," notes the report.
Other sources, however, go further than the ILO. According to the US-based Economic Report of the President, "wage stagnation" is a euphemism, since the real wages of American workers have fallen dramatically since 1980, continuing their steady decline throughout the Clinton administration. "Poverty rates have reached double the level of other industrial countries; child poverty is particularly high... almost three times the average of any other industrial society."
Besides growing wage erosion and soaring poverty levels, the US has witnessed a marked rise in the financial assets of the rich. "There has been a spectacular redistribution of wealth, with inequality now far higher than any other country of the developed world," noted Chomsky. The US, unlike the rest of the globe, may boast of low unemployment levels. But it cannot conceal the fact that this has been achieved by depressing the minimum wage and slashing real wages through union-busting and a concerted corporate assault on American workers.
