More unemployment and less security

The bad news is that the world’s number of unemployed workers and those with precarious employment is expected to rise during 2016 and 2017. The worse news is that the true number of those in these categories are probably significantly undercounted.

The International Labour Organization, a United Nations agency that just issued its “World Employment Social Outlook,” predicts that 200 million people will be unemployed in 2016, three million more than last year. This will be most acute in middle-income and poor countries, where unemployment is forecast by the ILO to increase by 2.4 million with a slight decrease in unemployment in the most developed countries. Brazil and China alone are expected to add 1.5 million to the unemployment rolls in the next two years.

(Mural by Ben Shahn)

(Mural by Ben Shahn)

Not that having employment is necessarily a marker of stability. The ILO report says that nearly half of the world’s workers — 1.5 billion people — hold “vulnerable employment.” This total includes subsistence and informal workers, and unpaid family workers. This vast cohort (the “reserve army of labor” although the ILO never uses such direct terminology) will not be getting smaller in the foreseeable future. All these factors add up to more inequality. Nor is it limited to any one part of the world, the ILO report says:

“The improvement in the labour market situation in developed economies is limited and uneven, and in some countries the middle class has been shrinking, according to various measures. Income inequality, as measured by the Gini index, has risen significantly in most advanced G20 countries. Since the start of the global crisis, top incomes have continued to increase while the poorest 40 per cent of households have tended to fall behind.” [page 4]

In one-third of the world’s countries, the “precariat” constitutes at least two-thirds of the total workforce. The percentages of those with precarious employment is much higher in developing countries than in the advanced capitalist countries, but in all parts of the world the labor force participation rate — that is, the percentage of those of working age who are employed — is slowly shrinking and is forecast by the ILO to continue to do so through the rest of the decade. Here it is the developed countries that have the lowest participation rate (60.5 percent in 2015), more than two percentage points lower than the global average.

The massive size of the precariat

A gloomy picture, indeed. A picture, however, that does not fully capture the bleakness of stagnation. The number of precarious workers is likely higher than what the ILO calculates. In their book The Endless Crisis, John Bellamy Foster and Robert W. McChesney estimate that the true size of the precariat is actually significantly larger than those with regular employment. They write:

“If we take the categories of the unemployed, the vulnerably employed, and the economically inactive population in prime working ages (25-54) and add them together, we come up with what might be called the maximum size of the global reserve army in 2011: some 2.4 billion people, compared to 1.4 billion in the active labor army. It is the existence of a reserve army that in its maximum extent is more than 70 percent larger than the active labor army that serves to restrain wages globally, and particularly in the poorer countries.” [page 143]

Capitalism is unable to create sufficient employment, and thus considers such people to be “excess population.” Mass migrations from Latin America to the United States, or from African and the Middle East to Europe, are consequences. In the 19th century, industrializing European countries had a safety valve in massive emigration (not so good for Indigenous peoples in the target countries of course), but there are no longer large areas into which capitalism can expand. Professors Foster and McChesney put this in stark terms:

“While such mass emigration was a possibility for the early capitalist powers, which moved out to seize large parts of the planet, it is not possible for countries of the global South today. Consequently, the kind of reduction in peasant population currently pushed by the system points, if it were effected fully, to mass genocide. An unimaginable 7 percent annual rate of growth for fifty years across the entire global South, [economist Samir] Amin points out, could not absorb even a third of this vast surplus agricultural population. …

“Aside from the direct benefits of enormously high rates of exploitation, which feed the economic surplus flowing into the advanced capitalist counties, the introduction of low-cost imports from ‘feeder economies’ in Asia and other parts of the global South by multinational corporations has a deflationary effect. This protects the value of money, particularly the dollar as the hegemonic currency, and thus the financial assets of the capitalist class. The existence of an enormous global reserve army of labor thus forces income deflation on the world’s workers, beginning in the global South, but also affecting the workers of the global North, who are increasingly subject to neoliberal ‘labour market flexibility.’ ” [pages 147, 149]

These trends become more acute as high unemployment persists. The true level of unemployment is approximately double official numbers across North America, Europe and Australia. The reason for this is that all those countries do not include discouraged workers, those employed part time but not able to secure full-time work and all persons marginally attached to the labor force (those who wish to work but have given up).

Less pay to go with less security

With all these factors working against them, wages for working people are stagnant while productivity continues to increase — the one percent is grabbing all the wealth created. This is a global phenomenon. Employees in the United States, Canada, Germany, France, Britain and Japan have seen their pay lag behind productivity gains and income inequality widen.

Thus it comes as no surprise that labor rights are under attack everywhere. How bad? In a 2014 study, the International Trade Union Confederation determined the degree to which five basic rights — fundamental civil liberties; the right to establish or join unions; trade union activities; the right to collective bargaining; and the right to strike — are upheld, and then assigned a numerical grade. Every country in the world had a ranking of below 50 percent. In other words, every country flunked when graded on respect for labor rights.

What to do about all this? The ILO offers these conclusions as part of its call for a “shift in economic and employment policies”:

“It is particularly important to strengthen labour market institutions and ensure that social protection systems are well designed, in order to prevent further increases in long-term unemployment, underemployment and working poverty. A rebalancing in reform efforts is also needed. In particular, financial reforms need to ensure that banks perform their role of channelling resources into the real economy and into investment for sustainable enterprise expansion and job creation.” [page 5]

We should be long past the time when it was possible to believe we could wag our fingers at bad policy-makers and expect they will see the light of day. The unceasing competition of capitalism, its relentless drive to enclose ever more human activity within its logic of profit at any cost, mandates the world we now live in. Drastic imbalances in power are inherent in capitalism; these can’t be legislated away. Thus the ILO’s prescriptions are meaningless. Reforms are possible with enough movement organization, but reforms are eventually taken back, as the past four decades has amply demonstrated.

Desires by industrialists and financiers to press their offensive against working people are behind “free trade” agreements that eliminate barriers to the movement of capital, encourage shifting of production to places with ever lower wages, and impose restrictions on the ability of governments to implement, or even maintain, laws safeguarding health, safety, labor rights and the environment. These are simply the expected outcomes under the logic of capitalism. No regulation can change that. Only a change of economic system can achieve that.

Inequality and the World Economic Forum

The world’s rulers are getting together at their biggest bash of the year, the World Economic Forum. Prime ministers and other high government officials will also be in attendance.

The theme for this year’s Forum, which began on January 20 at its usual home in Davos, Switzerland, is said to be “Mastering the Fourth Industrial Revolution.” As to what that might mean, the forum’s “jobs strategy” paper asserts:

“We are today at the beginning of a Fourth Industrial Revolution. Developments in previously disjointed fields such as artificial intelligence and machine learning, robotics, nanotechnology, 3D printing and genetics and biotechnology are all building on and amplifying one another. … Concurrent to this technological revolution are a set of broader socio-economic, geopolitical and demographic developments, with nearly equivalent impact to the technological factors.”

Two paragraphs later, the paper genteelly forecasts workforces will undergo “significant churn” due to these developments, which turns out to be an expected global loss of 7.1 million jobs between 2015 and 2020.

CEO vs. worker payAs to what is the cause of ongoing economic difficulties and vanishing jobs, the corporate elites who drive the World Economic Forum agenda wish to assure you that rising inequality, runaway financialization, the mad rush to move production to places with ever lower wages, corporate greed, and the subordination of all human and environmental needs to the plundering of all parts of the planet in pursuit of ever bigger profits have nothing to do with it. The Forum offers this explanation:

“The deceleration in long-term trend growth has been caused by two supply-side limitations: the big slowdown in labour force growth (in some cases into negative territory) and a sharp falloff in productivity growth. Since 2007, demand-side constraints have also been a problem. These include: debt and deleveraging in the developed world; the rapid decline in the pace of world trade; the excess-capacity-driven struggles in China’s construction, heavy manufacturing, and mining sectors; and distress in commodity-linked emerging markets and commodity industries.”

There is a lack of growth because the world is not growing. And it’s China’s fault for not buying so much raw materials and manufacturing equipment anymore.

Why, there surely is no agenda here, is there? Oh dear reader, please try to keep a straight face when reading the World Economic Forum’s description of itself:

“It is independent, impartial and not tied to any special interests. … Our activities are shaped by a unique institutional culture founded on the stakeholder theory, which asserts that an organization is accountable to all parts of society.”

Accountable to “society” — or financiers?

Well, let’s see just how “impartial” the Forum is. Or just how “accountable” to “all parts of society” it is. The Forum is a gathering of the world’s corporate elites where deals can be made and agendas can be set. As to who corporate leaders are accountable to, we need only remember the words of Milton Friedman, who put it plainly in an interview with author Joel Bakan in the context of a former BP chief executive officer suggesting (however disingenuously) the company would make environmental concerns more important:

“Not surprisingly, Milton Friedman said ‘no’ when I asked him how far John Browne could go with his green convictions. … ‘He can do it with his own money. If he pursues those environmental interests in such a way as to run the corporation less effectively for its stockholders, then I think he’s being immoral. He’s an employee of the stockholders, however elevated his position may appear to be. As such, he has a very strong moral responsibility to them.’ ”

Not that corporate executives don’t get in the action as well — CEO pay averaged 303 times that of the average worker in 2014. Although down from the 376-to-1 ratio of the peak stock-market bubble year of 2000, the current ratio is far bigger than earlier decades. Another way of putting all this in perspective is that CEO pay has risen 1,000 percent since 1979, while typical employee pay has risen 11 percent.

But don’t shed any tears for financiers. An International Labour Organization paper found that the financial industry’s share of corporate profits doubled over the course of the 1990s and 2000s, reaching 44 percent of all corporate profits in 2002.

The financial industry acts as both a whip and a parasite in relation to productive capital (producers and merchants of tangible goods and services). It is a “whip” because its institutions bid up or drive down prices, and do so strictly according to their own interests. The financial industry is also a “parasite” because its ownership of stocks, bonds and other instruments entitles it to skim off massive amounts of money as its share of the profits. Financial speculators don’t make tangible products; they trade, buy and sell stocks, bonds, currencies and other securities, continually inventing new instruments to profit off virtually every aspect of commercial activity.

Wages decline around the world

With all this in mind, it comes as no shock that the one percent is grabbing bigger pieces of the pie. Wages as a share of gross domestic product have declined since the 1970s in Britain, the eurozone, Japan and the United States. The long-term stagnation in wages has long been decoupled from any recent flattening of productivity gains — since the 1970s, productivity has soared while wages barely rose.

Wages as share of GDPBut perhaps nothing illustrates the world’s incredible inequality as well as the just released Oxfam report, “An Economy for the 1%.” Oxfam researchers calculate that the richest 62 people have as much wealth as the bottom 50 percent of humanity — 3.6 billion people! Among other conclusions, Oxfam reports:

  • The world’s wealthiest 62 people added US$542 billion to their net worth from 2010 to 2015, an increase in their composite wealth of 44 percent.
  • The bottom half of humanity in terms of wealth lost $1 trillion from 2010 to 2015, a drop of 41 percent.
  • The share of the global wealth increase since 2000 that has gone to the top 1% is 50 percent.

One of the most important reasons for this increasing disparity is the use of tax havens. One estimate of the amount of money that is stashed in tax havens was $7.6 trillion at the end of 2014 — more than the combined gross domestic product of Britain and Germany. Another estimate is $8.9 trillion. And this not limited to the global North — Oxfam calculates that Africa’s wealthiest have stashed $500 billion in tax havens:

“Almost a third (30%) of rich Africans’ wealth … is held offshore in tax havens. It is estimated that this costs African countries $14bn a year in lost tax revenues. This is enough money to pay for healthcare that could save the lives of 4 million children and employ enough teachers to get every African child into school.”

There is no alternative” we are supposed to believe. But if the capitalism to which there is supposedly no alternative works, why do such massive amounts of money have to be shoveled into it? Governments representing the United States, the European Union, Japan and China committed US$16.3 trillion in 2008 and 2009 on bailouts of the financiers who brought down the global economy and, to a far smaller extent, for economic stimulus.

The central banks of the United States, Britain, the eurozone and Japan have so far spent US$6.57 trillion on “quantitative easing” programs supposedly needed to kickstart their economies, although little was achieved other than inflating a stock-market bubble. (And lest we are tempted to wag a finger at, say, the Federal Reserve, we should be reminded that central banks are simply institutions of capitalism. If you don’t like the Federal Reserve, what you really don’t like is the capitalist system.)

“Let no billionaire be unheard” would seem to be a far more accurate slogan for the World Economic Forum to adopt.

A global working class in formation

With the rise of a working class rooted in the global South comes worker militancy in the same geographies. This is militancy that has yet to attract much notice in the advanced capitalist countries of the North.

One reason lies in the withering of labor movements across the North, and a belief in some circles, flowing from that withering, that the working class is shrinking and perhaps ceasing to be an instrument of social change. In part such viewpoints are due to a failure to see office workers in “white-collar” professions to be part of the working class. (Surplus value is extracted from them just the same.) In another part it is myopia — believing labor acquiescence in the North to be universally representative while failing to appreciate the rise of militancy on the part of super-exploited workers in the developing world.

Workers in the South, however, are developing new forms of resistance, and are now an integral part of a global working class, under-appreciated developments brought to vivid life in Southern Insurgency: The Coming of the Global Working Class* by Immanuel Ness. The industrial working class has not disappeared, but rather has been reconstituted in the South and in larger in numbers than ever before, in contrast to scholars on the right and left who “declared the working class dead.” In his book, Professor Ness argues:

“While the right wing declared the working class dead and a false construct, leftist scholars were also challenging the legitimacy of the working class as a force for social equality and transformation. Yet, more than 40 years after the onslaught of the economic, political, and intellectual offensive against organized labor throughout the world, the working class has a heartbeat and is stronger than ever before despite the dramatic decline in organized labor. … While it may be the case that the labor movements in Europe and North America are a spent force, it is their very defeats that have marginalized their existing supine and bureaucratic order and regenerated a fierce workers’ movement in the early 21st century.” [page 3]

Southern Insurgency coverThe percentage of formal-sector workers holding industrial employment in the South has grown from about 50 percent of the global total in 1980 to 80 percent. This increase is of course central to corporate strategy in the neoliberal era — as organized labor achieved successes, capital responded by moving production. This process has repeated, as Northern multi-national capital continually seeks out lower-wage Southern labor to exploit. That Northern capital has intensified its exploitation is demonstrated by the fact that profits being taken out of the South are rising faster than the inflow there of investment capital.

Southern traditional unions lost whatever militancy they may have once had through their co-optation into state and capitalist institutions. But in contrast to working people in much of the North, workers of the South have begun to build new types of organizations. Professor Ness writes:

“In more and more industries in Africa, Asia, and the Americas, this new proletariat is forming bonds of solidarity through independent organizations demanding improved conditions for all workers, pushing existing unions to represent members and non-members, and forming alliances within communities to improve the quality of life for all impoverished workers. The workplace and community demands that are now made by the new industrial proletariat reveal the motivations of workers rooted in solidarity, and a fundamental opposition to neoliberal capital, inequality, and poverty.” [page 58]

Migrant workers are the most vulnerable, and suffer particularly unsafe and exploitative working conditions and pay. Liberal theories of migration ignore the structural reasons for migration, Professor Ness notes — neoliberalism creates unemployment and inequality, forcing involuntary movements; forced displacement in turns leads to slums, poverty and exploitation. Capital needs these migrations, and immigration, to increase competition for jobs and thus make work more precarious. Guest workers tend to earn barely enough to ensure their own survival and don’t contribute to their home economies, in contrast to World Bank and International Monetary Fund propaganda.

Precarious labor in India

The core of Southern Insurgency are case studies of three of the largest Southern economies: India, China and South Africa. The intensity of exploitation in each of these countries is high and resistance ongoing despite the use of force on the part of both capital and government. The first of these case studies, India, represents “a leading example of neoliberal imperialism,” Professor Ness argues:

“The actions of the Indian state have been decisive for multinational capital and its local agents by facilitating foreign investment in new manufacturing industries, safeguarding foreign investments, and commonly using legal rulings against workers and unions and unions fighting for democratic representation at the workplace. Moreover, state police are readily available to intervene on behalf of multinational investors seeking to thwart labor organizations. In India, the state police and the criminal justice system are not impartial intermediaries but partisans in support of corporations against the working class as it seeks equity and humane conditions in the workplace.” [pages 105-106]

Only about one-quarter of Indian workers enjoy regular employment and are eligible to be in a state-recognized union; three-quarters of workers are “contract workers” who have no security, are prohibited from unionizing and are paid 25 to 50 percent of the low wages of regular workers, barely enough to eat and pay rent. Although Indian law has permitted unions since independence, labor law has been flouted since the early 1990s by the state, capital and sometimes even unions. With traditional Indian unions, who are aligned with weakening political parties, failing to defend workers, a new independent formation, the National Trade Union Initiative, is attempting to organize non-union and informal workers, although the government refuses to recognize it.

Splitting the working class is at the core of multi-national capital’s strategy in India, actively encouraged by the state. One example is a fierce fightback at a Suzuki auto plant in 1991. Workers there used hunger strikes and two-hour “tool-downs” to press their demands, which included an end to the contract system. Management responded with a lockout, enforced by a police blockade, and a demand that workers sign a draconian “good conduct” letter to be allowed to return. Ultimately, Suzuki restarted production with scabs, enthusiastically backed by the state.

When Suzuki opened a second plant, the same scenario repeated, but this time the company hired goons who instigated violence, leaving more than 100 injured but only worker leaders jailed. Organized resistance continues in India despite continued repression, Professor Ness writes, and organized fight-backs, which consistently include demands for equal pay and conditions, are building needed class consciousness.

Organizing beyond unions in China

Although Chinese workers face the strongest state among the three case-study countries, they are also making the biggest strides. The very weakness of the Chinese union federation, Southern Insurgency argues, may give workers there more space to act collectively outside the constraints imposed by union bureaucracies and labor law. The All-China Federation of Trade Unions has been the sole national federation since 1949, and because good benefits and security were the norm during the Mao Zedong era, member unions have little experience in negotiating. Local branches don’t function as active organizations but respond only to rank-and-file disruptions of production. Unions are subservient to capital and negotiate without member input, but this makes them little different from Western unions, Professor Ness argues:

“Most existing union models throughout the world do not want competition from independent unions, so why should the [All-China Federation]? Labor unions in liberal democracies that fail to represent members’ interests are thus a poor model for the Chinese working class.” [page 126]

Labor law is largely not enforced in China; in part this is due to enforcement being devolved to the city level. Struggles tend to be ignited by failures to pay wages and thus tend to be spontaneous single-factory actions. Ironically, because workers are circumscribed by an inability to revolt regionally, nationally or across industries, the number of local revolts is higher than it would be otherwise. Younger workers are becoming more assertive in demanding better pay and retirement benefits, and privatizations and layoffs at state-owned enterprises are also behind a rising number of strikes.

Workers in the heavily industrialized Pearl River Delta region, sometimes led by floor supervisors, have forced companies to pay back owed wages and retirement benefits. Police repression has been deployed outside plants but the state has also pressured companies to pay what they owe their workers. Throughout, workers have relied on self-organization as they have received no help from their unions.

Wildcat strikes are the standard model of Chinese workplace bargaining, Professor Ness writes, a “class struggle” unionism outside official channels. A future Chinese labor movement may be emerging from these battles.

State and capital vs. South African labor

Parallel to the contract-labor system of India and the hukou migrant-labor system of China, South Africa extensively uses contract and migrant labor at the behest of multi-national capital. Neoliberalism has an added bitter component there because harsh labor policies are enforced by the African National Congress (ANC), which granted political rights to the country’s oppressed Black majority but left economic relations untouched.

The largest South African labor federation, the Congress of South African Trade Unions (COSATU), formed as an ANC affiliate during the 1980s but became a “distinctly junior partner” to the ANC and the ANC-aligned South African Communist Party and began to lose credibility in the 2010s as it failed to oppose the harsh neoliberalism dictated by the International Monetary Fund. Working conditions are particularly poor for miners — mining is controlled by multi-national capital and is by far the country’s biggest industry.

COSATU and its National Union of Mineworkers affiliate have supported an increase in the use of informal labor because they can hold a dominant position by representing only regular workers and thus without the support of the majority of the workforce. When a wave of strikes nonetheless began in 2009, the unions declared the strikes “illegal” and backed management. In at least one case, the union called for a harsher punishment than management did!

Workers organized themselves, and asked a new union unaffiliated with COSATU, the Association of Mineworkers and Construction Union, to negotiate on their behalf, which in turn won much greater pay raises. The National Union of Mineworkers reached a new low in 2012, however, after striking workers left that union and joined the Association during a strike. When management obtained a court order against the strikers, the National Mineworkers sided with management and sent goons to join with company goons to impose a violent denouement; 34 were killed and scores injured in what became known as the Marikana Massacre.

A fresh wave of strikes commenced in 2014, with Association negotiators obtaining significant wage increases. In parallel, a metal workers union has called for more militancy and for nationalizations; in response, COSATU expelled it. Worker militancy continues to rise and with the fracturing of the union movement, a realignment seems to be coming. Professor Ness writes:

“While the future configuration of the unions remains to be determined, it is clear that rank-and-file workers are helping to build oppositional unions that are shaping a struggle against economic imperialism, insisting on ending the system of exploitation and inequality that remains a fixture in the post-apartheid era.” [page 178]

Strength in worker radicalism

Southern Insurgency concludes by asking if existing labor unions can contain the development of independent working-class organizations. The actions of Indian, Chinese and South African industrial workers are reshaping traditional unions, and workers can’t rely on bureaucratic unions leaders to defend themselves, the book argues:

“It is the development of worker radicalism that will shape the form and survival of decaying traditional unions. … [T]he results of these rank-and-file struggles are mixed, but the evidence … demonstrates that these movements are gaining traction, and achieving real wage gains and improvement in conditions.” [page 189]

This latest book by Immanuel Ness is a needed corrective to the false idea that resignation to neoliberalism is universal, and the examples of militancy that he presents are not simply a necessary corrective but demonstrate that improvements are only possible with organized, self-directed actions. In a world more globalized then ever, workers of the world truly do need to unite — a global working class can only liberate itself through a global struggle.

Immanuel Ness, Southern Insurgency: The Coming of the Global Working Class [Pluto Press, London 2016]

They make millions per employee and cry they don’t make enough

The amount of profits piled up by corporations dwarfs all reason, but the amount of money executives and speculators haul in at our expenses comes into stronger focus when we examine a different metric: Revenue per employee.

The 10 corporations that have the highest revenue per employee averaged US$5.8 million per employee. Each of these top 10, incidentally, is either a pharmaceutical or an oil and gas company. Topping the list is Phillips 66, which managed to haul in $11.5 million per employee. One suspects that the average employee sees no more than a minuscule fraction of that figure.

Examining the 100 largest corporations in the world by revenue, Expert Market, a business consultancy, ranked them by revenue per employee to see which were the most “efficient.” (It is quite possible that other, smaller corporations extract more revenue per employee.) The other oil and gas companies among the top 10 were PTT, Valero Energy, Exxon Mobil, Royal Dutch Shell, BP and Statoil.

Grangemouth oil refinery at sunset (photo by Steve Garvie, Dunfermline, Fife, Scotland)

Grangemouth oil refinery at sunset (photo by Steve Garvie, Dunfermline, Fife, Scotland)

Interestingly, two of these companies are government enterprises: PTT is majority-owned by the government of Thailand and Statoil is two-thirds owned by the government of Norway. So much for the idea that governments should never own enterprises; at least the profits from these companies can be used for public good. The public ought to own all energy companies considering the gigantic subsidies they receive — an estimated US$5.6 trillion per year, when environmental and health costs are added to the subsidies, foregone taxes and other expensive goodies handed out by governments.

The pharmaceutical companies among the top 10 are Amerisourcebergen Corp., Express Scrips Holding Co. and McKesson Corp. Amerisourcebergen and McKesson both distribute pharmaceuticals, and Express Scrips administers prescription drug benefits for tens of millions of health plan members. Each of these primarily operates in the United States, the only advanced-capitalist country without universal health coverage, and two also operate in Canada, where corporate pressure on the public health system is strong, in part due to its proximity to the U.S.

The pharmaceutical industry is immensely profitable in the U.S., and the industry’s layer of distribution and administration adds to the overall cost. Health care in the U.S. is designed to deliver corporate profits rather than health care, and these kinds of huge profits explain why health care costs in the U.S. are vastly higher than any other country while delivering mediocre results.

Technology companies squeeze somewhat less out of their employees. Apple ranks as the technology company with the most revenue per employee, at about $1.9 million. Google ranks second at $1.2 million. But how much profit does a company need to make? Apple’s products are produced through sweatshop labor outside the U.S., mostly in China, through an army of subcontractors that dwarf the size of Apple’s direct employees.

U.S. President Barack Obama once asked Apple’s chief executive officer, Steve Jobs, what it would take to bring those jobs back to the U.S., and Jobs replied, “They aren’t coming back.” Apple claims it can’t afford to pay higher wages. Yet Apple is sitting on an immense pile of money — $206 billion according to its own quarterly financial report.

Research by the Centre for Research on Socio-Cultural Change in Manchester, in 2012, found that the cost of manufacturing a 4G iPhone in China is $178 while the phone sells for $640 — a profit margin of 72 percent. The Centre calculated that if it were made in the U.S. by employees making $21 an hour, the production cost would be $337, a still robust profit margin of 46 percent.

At the end of the day, corporate executives and financiers expect those revenues to be converted into profits, and the higher the revenue that can squeezed out of each employees, the higher the profit is likely to be. From 1995 to 2005, profits per employee at the 30 largest companies by market capitalization (that is, the highest valuations set by stock markets) more than doubled, according to the business consultant McKinney & Company.

A more recent list, prepared by Bloomberg, shows 25 corporations with profits per employee higher than $400,000. Oil and gas companies are well represented here, with 10 making the list, including Exxon Mobil. Four biotechnology companies made the list, as did Apple with $573,000 net income per employee.

So if more is squeezed out of us, then there is less we are able to buy. Thus the “recovery” often blathered about in the corporate media is a recovery for the one percent. Of the eight recessions since 1960, consumer spending has increased less from the bottom of the recession than in any of the previous ones after the same period of time. If you don’t have it, you aren’t buying it, especially since so many people are trying to reduce their debt.

The flip side of this is that the massive profits corporations are raking in by not paying their employees, and squeezing more out of those who do have a job, is that record amounts are spent on buying back their stock, paying out higher dividends, on mergers-and-acquisitions or on bloated executive salaries. The corporations comprising the Standard & Poor’s 500 Index are on course to spend nearly $1 trillion on stock buybacks and dividends in 2015, or nearly equal to their total operating earnings for the year.

Cut back, cut back is the mantra. But have you noticed its always working peoples’ turn to cut back?

Increased deprivation of capitalism causes half-million deaths

The recent years of austerity and economic dislocation have taken their toll around the world, but this deterioration on top of the already existing harshness of life in the United States has taken a particular toll there. Nearly half a million excess deaths have occurred in the U.S. since 1999.

Specifically, these half-million excess deaths are among middle-aged White non-Hispanic United Statesians, according to a paper by two Princeton University researchers, Anne Case and Angus Deaton, published in the peer-reviewed scientific journal PNAS. Widening inequality is seen as a significant factor. This increase in the death rate, reversing historic trends, was limited to the U.S. among advanced capitalist countries and, within the U.S., limited to non-Hispanic Whites. The authors of the paper, “Rising morbidity and mortality in midlife among white non-Hispanic Americans in the 21st century,” write:

“This change reversed decades of progress in mortality and was unique to the United States; no other rich country saw a similar turnaround. The midlife mortality reversal was confined to white non-Hispanics; black non-Hispanics and Hispanics at midlife, and those aged 65 and above in every racial and ethnic group, continued to see mortality rates fall. This increase for whites was largely accounted for by increasing death rates from drug and alcohol poisonings, suicide, and chronic liver diseases and cirrhosis.” [page 1]

AlcoholFrom 1978 to 1998, the mortality rate for U.S. Whites aged 45 to 54 fell by 2 percent per year on average, matching the average rate of decline in five comparison countries (Australia, Britain, Canada, France and Germany). But although, from 1999, other industrial countries continued to see a decline in mortality rates for the middle-aged, the U.S. White non-Hispanic mortality rose by half a percent a year, an increase that is unique, Drs. Case and Deaton report.

The authors calculate that if the U.S. White non-Hispanic mortality rate remained at the 1998 level, 96,000 deaths would have been prevented; had the previous rate of decline continued, a total of 488,500 deaths would have been prevented. The increased mortality rates are accompanied by “a large and statistically significant decline” in those reporting excellent or very good health and a corresponding increase in those reporting fair or poor health. This is a population that had not previously had unusual health results:

“[T]he post-1999 episode in midlife mortality in the United States is both historically and geographically unique, at least since 1950. The turnaround is not a simple cohort effect; Americans born between 1945 and 1965 did not have particularly high mortality rates before midlife.” [page 2]

Deaths other than natural more frequent

A sign of this midlife change is that deaths due to poisonings, suicide, chronic liver disease and diabetes have all increased since 1999. At the same time, however, mortality rates among Hispanics and non-Hispanic Blacks have continued to decline; Black deaths continue to be higher than the rate for Whites but the ratio between the two is narrowing, mostly due to the increased mortality of Whites.

The authors do not speculate on the reason for White deaths to increase in contrast to the trend of minority groups, but we might reasonably conclude that People of Color have had deprivation and economic difficulty imposed on them in greater numbers and more intensely, and thus are experiencing less of a change in historic circumstances than are Whites. The economic downturn that the world has lived through since 2008 certainly hasn’t bypassed People of Color — far from it — but the decline has not spared Whites, a group not as hardened to lower living standards thanks to their privileges.

The authors do gingerly dip their toes into declining living standards and rising inequality. They draw this general conclusion:

“After the productivity slowdown in the early 1970s, and with widening income inequality, many of the baby-boom generation are the first to find, in midlife, that they will not be better off than were their parents. Growth in real median earnings has been slow for this group, especially those with only a high school education. However, the productivity slowdown is common to many rich countries, some of which have seen even slower grow in median earnings than the United States, yet none have had the same mortality experience. The United States has moved primarily to defined-contribution pension plans with associated stock market risk, whereas, in Europe, defined-benefit pensions are still the norm. Future financial insecurity may weigh more heavily on US workers, if they perceive stock market risk harder to manage than earnings risk, or if they have contributed inadequately to defined-contribution plans.” [page 4]

It is not only the middle-aged who are feeling these deprivations, however.

“[A]ll 5-year age groups between 30–34 and 60–64 have witnessed marked and similar increases in mortality from the sum of drug and alcohol poisoning, suicide, and chronic liver disease and cirrhosis over the period 1999–2013; the midlife group is different only in that the sum of these deaths is large enough that the common growth rate changes the direction of all-cause mortality.” [page 3]

Worse conditions leads to worse results

It would not be proper to put words in the mouths of Drs. Case and Deaton, but it is possible for us to go beyond the scope of their paper, which is to quantify a previously unnoticed increase in mortality rates and offer general commentary on the macro-economic trends behind it. If we do go further, it could be reasonably concluded that neoliberal austerity — the continual pushing down of living standards, increased deprivation, overwork for those still employed, and increased unemployment or more precarious employment for many others — is a policy that kills.

Wax vanitas, Europe, 1701-1800Contrary to the assertion of Drs. Case and Deaton, productivity did not slow in the early 1970s. Pay slowed. Productivity grew 65 percent between 1979 and 2013 while pay increased eight percent for employees in that period, reports the Economic Policy Institute, and that trend certainly hasn’t reversed itself the past couple of years.

The present capitalist era of neoliberalism, with its increasingly harsh doses of austerity, does not fall out of the sky, but is the logical consequence of the relentless competitive pressures of capitalism and the consolidation of political power by the holders of economic power: industrialists and financiers.

This is hardly the first example of capitalism literally killing — mortality rates in the Soviet Union and other communist countries sharply increased following the imposition of capitalism. Mass privatization in the former Soviet bloc — the “shock therapy” instituted as the imposition of capitalism — is calculated to have led to one million excess deaths, according to a 2009 study published in The Lancet. Alcoholism and poverty skyrocketed in Russia following the fall of the Soviet Union; no surprise due to the economy shrinking 45 percent.

For that matter, health results in the U.S. badly lag other industrialized countries because the U.S. health system is designed to generate profits for pharmaceutical, medical-device and insurance companies rather than deliver health care. The U.S. spends an extra $1.15 trillion per year beyond what it would otherwise in comparison to health care spending in Britain, Canada, France and Germany, yet is well below average in life expectancy and infant mortality. About 22,000 people die and 700,000 go bankrupt per year as a result of inadequate, or no, health insurance in the United States.

It should come as no surprise that when people have life made more difficult, when the weight of corporate power and the governments that do the bidding of that corporate power constantly press down, health and well-being deteriorate. We ought to draw conclusions.

Work harder to be born into the right family

If we were to believe the fairy tales of capitalism, we would have to believe that 500 multi-billionaires work harder than the entire population of Japan. OK, I know that sounds crazy, but that is nothing more than following capitalist ideology to its intended conclusion: The wealthy are wealthy because their worked harder than you.

The 500 richest people on Earth are worth a collective US$4.7 trillion, Forbes magazine breathlessly informs us, and that total is a little more than the gross domestic product of Japan, the world’s third-largest economy.

The 20 richest people alone are worth a collective $900 billion! There are only 16 countries on Earth that have a larger gross domestic product than that. Quite a feat — 20 people possess slightly more assets than what is produced in an entire year by the 250 million people of Indonesia or the 17 million people of the Netherlands, one of the most highly productive peoples among the world’s advanced capitalist countries.

So these billionaires must work awfully hard to accumulate such riches, right? Let us see.

Wells Fargo Plaza, HoustonAmong the 20 riches people on Earth we find six technology moguls who took advantage of the Internet and world wide web created by governments using public money; seven people who inherited their wealth; a monopolist who was handed his country’s telecommunications system by a president to whom he made a large donation; one who made a fortune from the fashion industry; another who made a fortune in luxury goods; and a casino magnate. Two of those who inherited a fortune and their fathers’ business, Charles and David Koch, spend fortunes (not for them, but it would be a fortune to almost anybody else) to counter all efforts to reverse the global warming and environmental devastation that their business interests requires. Four others, members of the Walton family, receive billions of dollars a year just for being born into the right family.

To zoom out to a bit to more of the tip of the pyramid, Credit Suisse’s Global Wealth Report 2015 reports that the richest one percent of the world’s population owns 50 percent of the world’s wealth, a higher percentage than the one percent owned at the start of the global economic downturn in 2008. The bottom 70 percent of humanity owns three percent. That the richest have so much more means that the rest of us have less. The global median wealth per adult has fallen from US$4,200 in 2007 to $3,200 in 2015. In a very rare concession in a report that otherwise dispassionately reports trends in wealth as if they are as part of the natural world as ocean tides, the Credit Suisse report said:

“Part of the decline is due to adverse exchange rate movement movements, but rising inequality is the principal reason why the global trend in median wealth has not followed the path of mean wealth per adult.” [page 20]

Exchange rates are referenced because the Credit Suisse report converts wealth holdings elsewhere into U.S. dollars for the sake of comparison, and most currencies of the world have lost value against a strong U.S. dollar, thereby rendering those holdings artificially lower than they actually are. But the main point here is average wealth increases but median wealth has been declining. The reason is this: Average measures the difference between the highest and lowest, while median is the point where half are higher and half are lower. As the joke goes, if Bill Gates walks into a bar, everybody there has become, on average, a millionaire.

Unfavorable exchange rates or not, it is no surprise that the U.S. in particular, and the global North in general, are home to a huge majority of the world’s millionaires. Centuries of one-sided extraction of natural resources, control of land and financial plunder have increased global inequality. This is hinted at in a 2009 paper written by Branko Milanović, then a World Bank researcher, who calculated that the standard measure of inequality, a statistic known as the gini coefficient, has increased greatly since the early 19th century. But, he wrote, most of the inequality of the early 19th century was due to differences among individuals within countries and less by difference in wealth between countries. In the early 21st century, by contrast, the author estimates that about 90 percent of global inequality is due to differences between countries and only a small percentage due to differences among individuals within countries. He concludes:

“[I]nequality between individuals is much higher today than 200 years ago, but—more dramatically—its composition has totally reversed: from being predominantly driven by within-national inequalities (that is, by what could be called ‘class’ inequality), it is today overwhelmingly determined by the differences in mean country incomes (what could be called ‘location’ or citizenship-based inequality).”

We wouldn’t expect issued by a World Bank economist, even a working paper that is “unofficial,” to acknowledge class differences. The implication that class differences have ceased to be relevant can easily be corrected every time we walk into our place of employment, both by the relations there and by who pockets the value created by the workforce. Not to mention the drastic and growing inequality within countries. Nonetheless, Dr. Milanović’s reference to differences between countries is of course true, and although the World Bank certainly wouldn’t use the term, we can call that international inequality by its name: Imperialism.

As they have needed to expand under the pressures of competition, the capitalists of the global North moved in to newer locations, from which they could ship massive profits back home while leaving the local populations destitute and forced to work for starvation wages. This process of primitive accumulation, not much different from the sort of primitive accumulation that occurred in England and elsewhere at the dawn of capitalism, kept local elites happy but, more so, fattened the wallets of the corporate elites who set up operations. This transnational profiteering, a process known as imperialism, primarily filled bulging corporate coffers, but inevitably some tiny amount of it filtered down for some working people in the North. Jobs for administrators, sales representatives, warehouse workers and others related to supporting exports as new markets are forced open would be a direct manifestation, and manufacturing jobs tied to the expansion of production destined for export are created.

But competitive pressures inevitably force production to be moved to countries with much lower wages — thus the age of buoying living standards through export of locally made products comes to an end, supplanted by corporate globalization that moves jobs overseas and drives down wages. The shipping of production to locations with ever lower wages and regulations, accelerated by multi-national corporations pressing governments to adopt ever more one-sided “free trade” agreements, although a new form of imperialism, is one that drives down wages in the global North and increases inequality.

Thus, the era of corporate globalization promises more inequality. In your next life, work harder to be born into the right family.

Turning national parks into corporate profit centers

Given the corporatization of ever more commons, we may yet be visiting Golden Arches National Park or Disneyland Dinosaur National Monument. Even if the most extreme right-wing plans to auction off public lands don’t ever come to fruition, ongoing neglect can only promise creeping corporate colonization of the United States National Park system.

Commercialization is still relatively minimal in national parks, but worrying signs are there. Infrastructure improvements in Glacier National Park in Montana, for example, have been accomplished through funds raised by the Glacier National Park Conservancy, which gets much of its funding through “business partners.” The list of businesses are mostly local and likely are motivated by a desire to maintain the park so as not to damage a tourism-dependent local economy. Such a motivation is not unreasonable, but if the underfunding of parks like Glacier gets more severe, the temptation of such private conservatories to reach out to bigger and more powerful national corporations is not likely to be avoided.

Giant corporations are likely to see “donations” to parks as a marketing ploy. Will we begin to see corporate logos in the parks? Outright corporate sponsorship of parks, in the manner of sports stadiums? Will the parks be expected to show a profit? This may sound outlandish, but we are talking about the United States here: A country in which governments ask for advertising dollars and borrow money rather than taxing corporations or the wealthy, and where pervasive corporate ideology insists that “private enterprise” runs everything better.

Aftermath of a fire in Yosemite Park (photo by Pete Dolack)

Aftermath of a fire in Yosemite Park (photo by Pete Dolack)

The idea that a park should generate a profit actually already exists. In New York City, the Brooklyn Bridge Park along the waterfront near downtown Brooklyn actually is expected to be profitable. This is not a joke: A high-rise luxury condominium building is being built inside the park to pay for its maintenance.

When the government runs something for the common good, it doesn’t need to generate a profit as a private enterprise does — privatization, or creeping “public-private partnerships,” inevitably make a good or service more expensive. And a favorite tactic of right-wing ideologues is to starve a government service of funds so it doesn’t work well, then demand it be taken over by a corporation (and usually sold at a fire-sale price).

Whatever the reasons may be, the neglect of national parks has gone on for so long that the backlog of deferred maintenance is now $11.5 billion. To put that figure in perspective, the entire fiscal year 2015 budget for the National Park Service is about $2.6 billion.

This neglect is bipartisan — the maintenance backlog reached $5 billion under Bill Clinton and ballooned to $9 billion under George W. Bush. The Bush II/Cheney administration instructed park superintendents to use language like “service-level adjustments” instead of “budget cutbacks” in public. The National Park Service budget suffered more cutbacks under Barack Obama — from 2010 to 2015, the National Park Service budget was cut 12 percent in inflation-adjusted dollars, including a reduction of more than 60 percent to the construction budget.

White House offers crumbs, Congress takes them away

The Obama administration is proposing an increase in parks funding for fiscal year 2016, in deference to the service’s 100th anniversary; an increase that would put nothing more than a small dent in the maintenance deficit. Unfortunately, this increase includes more money for a “private-public partnership” challenge — more corporate money. But Congress shows no sign of agreeing even to this modest funding increase. The House of Representatives Appropriations subcommittee that oversees park operations proposes to provide $680 million less than what the Obama administration asks and the Senate’s equivalent subcommittee proposes only $50 million more than the House.

So are we going to see corporate branding in our national parks to make up for such losses of funding? The signs are not good. In a commentary, Jim Hightower notes that opponents of public services want to convert the parks into “corporate cash cows.” He writes:

“First in line was Coca-Cola. In 2007, the multibillion-dollar colossus became a ‘Proud Partner’ with Park Service by donating a mere $2.5 million (tax-deductible, meaning we taxpayers subsidized the deal) to the Park Service fundraising arm. In return, not only did Coke get exclusive rights to use park logos in its ads, but it was allowed to veto a Park Service plan to ban sales of bottled water in the Grand Canyon park. Disposable plastic bottles are that park’s biggest source of trash, but Coke owns Dasani, the top-selling water, so bye-bye, ban. Public outrage forced officials to reverse this crass move, but the Park Service’s integrity has yet to recover.”

Nor has The Coca-Cola Co. or other bottled-water companies such as Nestlé S.A. given up. On their behalf, Republicans have slipped an amendment into a budget bill that would prohibit the National Park Service from instituting any prohibitions on bottled water, such as plans to provide spigots to re-fill bottles in place of buying new bottles. (No surprise there, as Nestlé’s chairman believes water should be a market commodity rather than a human right.)

Corporate sponsorship, however, is not the worst of it. Demands to allow more resource extraction on public lands, extraction that is a windfall for energy companies, continue to be insistent. Oil and gas royalties charged by the U.S. government are among the world’s lowest, unchanged since 1920, and are lower than any U.S. state charges for extraction on state-owned lands. Already, extraction sometimes comes right up the borders of parks. The National Parks Conservation Association, an advocacy group, notes that fracking is occurring right outside Glacier National Park. In its report, “National Parks and Hydraulic Fracturing,” the association wrote:

“[N]ational parks in relatively undeveloped regions have also seen fracking arrive at their doorstep: From Glacier National Park’s eastern boundary, visitors can throw a stone and hit any of 16 exploratory wells and their associated holding tanks, pump jacks, and machinery that is capable of forcing millions of gallons of pressurized fluids into energy deposits hiding thousands of feet beneath the earth. … Visitors heading east from Glacier National Park encounter road signs urging caution against the poisonous gases that fracking operations emit.”

Fracking and fires

Having just spent a week and a half visiting the park, I fortunately didn’t see that — perhaps a function of the smoky haze that filled the air for weeks there. (This smoke was a result of northwestern Montana being downwind from dozens of wildfires throughout the Northwest U.S., augmented by several local fires. There was no denial of global warming in my earshot; several Northwest cities have endured their hottest summer on record, and Kalispell, the nearest major town to Glacier, has suffered through its driest summer on record.)

The association reports that fracking wells near Grand Teton National Park increased from about 500 in 2008 to 2,000 by 2012. Unfortunately, perhaps not willing to upset its corporate benefactors or fearful of offending conservatives, the association shrinks from demanding an end to such incursions, instead offering liberalism of the weak-tea variety:

“National parks are managed under a precautionary principle designed to err on the conservative side of any potentially negative impacts. The same principle should be applied to fracking activities on lands adjacent to our national parks. At the National Parks Conservation Association, our goal is to prevent an unexamined embrace of an oil and gas extraction method that can have far-reaching consequences for America’s most cherished landscapes. Now is the time to investigate the impacts of fracking on America’s national parks.”

As fracking involves forcing a mixture of water, chemicals and sand into wells to create pressure to crack rocks, and results in polluted water supplies, human health problems, disruptions to agriculture and ruined roads from massive truck traffic — damage that adds up to billions of dollars in costs — more studies really aren’t necessary. Are such costs really worth whatever royalties might be collected?

The Good Nature Travel blog gives these grim results from energy extraction near two Western parks:

“Wyoming’s boom in natural gas and oil development is causing habitat fragmentation and the blocking of the pronghorn migration from the Upper Green River Valley near Grand Teton National Park. Concentrated drilling operations in the Pinedale area south of the park have been linked with regional ozone problems, with pollution levels high enough to cause respiratory problems. In Theodore Roosevelt National Park in North Dakota, oil rigs can be seen from several parts of the park, and natural gas flaring has punctured what was once one of the darkest night skies in the entire national park system.”

No parks, no problem

There is a corporate solution to this problem: Get rid of the national parks! I wish this were only a joke, but a Koch brothers-backed outfit calling itself the Property and Environment Research Center is advocating selling them. Reed Watson, the center’s executive director, argues that “land management agencies [should] turn a profit” by removing restrictions on timber and energy development.

To soft-peddle this extremism, the center calls for the selling off of other federal lands rather then openly advocating selling national parks — an immensely unpopular idea across the political spectrum — but that is where the logic of its extremism points. In a paper the center produced, “How and Why to Privatize Public Lands,” the group makes it intentions clear:

“Four criteria should guide reform efforts: land should be allocated to the highest-valued use; transaction costs should be kept to a minimum; there must be broad participation in the divestiture process; and ‘squatters’ rights’ should be protected. Unfortunately, the land reform proposals on the table today fail to meet some or all of those criteria. Accordingly, we offer a blueprint for auctioning off all public lands over 20 to 40 years.”

Note that it says “all” without qualification. And lest we chalk that up to the energy industry’s disdain for the environment, such ideas are being floated at the state level. In Kentucky, the Republican and Democratic candidates for governor both advocate selling of some of Kentucky’s 49 state parks — this in a state that spends a paltry $83 million on maintaining those parks. In Wisconsin, a private contractor operates the reservation system for state parks, forcing fees there higher than neighboring states. Gannett Wisconsin Media reports that a $9.70 reservation fee is added to regular fees, and of that $9.70, all but $1 goes to the private company.

Perhaps as a concession to the neoliberal times, park advocates often present their arguments in terms of economic benefit rather than making the worthy case that parks are a social benefit and necessary havens for wildlife, and a human responsibility to the environment. We really shouldn’t need any further arguments. Nonetheless, the National Parks Conservation Association argues that every dollar invested in the National Park Service yields nearly 10 dollars in economic activity.

A study published in PLOS Biology goes further. The seven authors of the study, “Walk on the Wild Side: Estimating the Global Magnitude of Visits to Protected Areas,” studied visitor records from more than 500 protected areas in 51 countries to determine the economic benefit of tourism to those areas. The authors conclude that $10 billion was spent maintaining these sites but more than $600 billion in economic activity was generated from them — a ratio of 60 dollars returned for each dollar spent.

Calculating such ratios is in reality more complicated, but the idea that parks generate income for local areas and thus — dare we say it? — are profitable in a broader surface economic calculation is hardly unreasonable. That has its own drawbacks, of course, as such areas are often overwhelmed by heavy traffic and environmental impact, associated costs that don’t appear to have been factored into the above calculations and which would therefore reduce those ratios. But, again, a civilized country ought to preserve wilderness and properly maintain parks as a value unto itself, outside any economic considerations.

That profit-and-loss calculations are made on something as basic to life as parks speaks volumes as to the brutality and mindless instrumentalism of capitalism.