Technology and the race to the bottom

Posted on July 24, 2011


In 1996 when the internet was still in its infancy, the world congress of the International Confederation of Free Trade Unions noted: “Our movement is now under attack on a global scale and with an intensity never before experienced in its history.” That attack has not let up — and South Africa is no exception as the blame game of big business targets organised labour.

But, because of modern technology, what happens in one corner of the earth can be known within seconds almost everywhere. And although perceptions — and the tactics flowing from them — may differ and confusion is often rife, the clash between employers and their organised employees has become intense.

Propaganda is very much part of the battle, and the labour movement is finding it particularly galling that business is now trying to play a role as the job creating champion of the poor and disadvantaged. We saw examples of this earlier in the week as local business again jumped onto the bandwagon of special export zones (SEZs).

These low-wage, “deregulated “ zones, usually sited around ports, are for export production, and have drawn the wrath of the international labour movement. “We are totally opposed to such zones where employers are exempt from the laws that protect workers’ rights,” says Cosatu spokesperson Patrick Craven, summing up the attitude of the global movement.

The SEZ promotion came from Ann Bernstein, head of the Centre for Development and Enterprise (CDE) in a national radio interview. In a newly released booklet, the CDE — known among trade unionists as the Centre for Downsizing and Exploitation — lays much of the blame for unemployment on high wages and the legislative environment.

As such, Bernstein regards the “job creating” wages paid by the controversial Newcastle clothing factory bosses as an example to be emulated while the unions see this an example of crass exploitation.

“Most of the workers in the Newcastle factories are women, many are single mothers and they are paid as little as R175 a week,” responds Fahmy Abrahams spokesperson of the South African Clothing and Textile Workers’ Union. “Yet they pay no less for bread or anything else.”

The union also sees it as significant that South African bosses are now pushing hard to reduce wages. “It is at the same time that Chinese workers are refusing any more to be treated as slaves and are pushing up their wages,” says Abrahams.

In the labour movement view, this is a classic case of leap-frogging national boundaries in a continuous “race to the bottom” in which often the self-same owning elite continues to exploit workers wherever they are. “It just acts against any decent work agenda,” says National Council of Trade Unions general secretary, Manene Samela.

That Bernstein and other representatives of “the tiny business elite” maintain that they are helping the army of the unemployed “in the national interest” by arguing for low wages and deregulation has also infuriated many trade unionists. “They represent the interests that caused this crisis internationally in the first place,” says Castro Ngobese, the spokesperson of the National Union of Metalworkers.

This union view is summed up by Irish writer Fintan O’Toole, in an adaptation of a poem by the great satirist, Jonathan Swift:

We used up all the wealth we had
To build a ship for fools and mad
And, knowing it proof against all shocks,
Steered it blithely towards the rocks.

O’Toole’s book, Ship of Fools, details the corruption that created and then crashed the “Celtic Tiger” economy. Like South Africa, the Irish example also featured a “revolving door” between politics and and business that was criticised yesterday on this page by Jeremy Cronin.

The Irish experience has led to radical economist Terrence McDonough of the national university in Galway last month advancing proposals to deal with the crisis. These have stirred interest within the global labour movement.

He suggests defaulting on debt — a “we’ll pay you back what we can, when we can” approach — launching a public bank to allow reorganisation of the banking system while providing a jobs guarantee and nationalising the country’s major energy project.

Other economists allied to trade unions are also groping towards suggestions to at least ameliorate, if not transform, the global economy along with, perhaps, international politics. At the heart of this is who or what is responsible for the crisis.

Blaming organised workers is a common refrain and Greece is a classic example. The myths surrounding what has been labelled the “Greek disease” are legion: lazy, overpaid Greek workers being among the most common.

The facts tell a different story: Greek workers work for longer and for less pay than the European average. Before the present crisis struck, with pay cuts and massive layoffs, the average working week in Greece was 44.3 hours, against a European average of 41.7 hours. Greek wage levels were also just 73 per cent of the Eurozone average.

According to the Greek unions, the Greek government fell prey to the speculation of the financial markets. It was like a township family, regarded as “bad risks” by banks, that buys goods and services on credit and then, at a time of some financial difficulty, has to go to the loan sharks — the mashonisas — to borrow money at exorbitant interest, to maintain debt payments.

The deeper the debt trap, the greater the interest charged. It is a mad merry-go-round propelled by, and to the profit of, financial speculators.

This is a vicious cycle that many African countries have had to put up with for decades. And when the financial crunch comes, the demand is for austerity. This simply means lower wages, more unemployment, less money spent and, the unions argue, results in fewer goods being sold and produced, with consequently lower tax revenues putting greater pressure on governments to borrow more.

At least, courtesy of modern communications technology, these arguments are now being aired globally. And from such debate may come the answers needed to end a system prone to crises.