Call it whitewashing or greenwashing, World Bank subterfuge doesn’t fool us

Every so often, the World Bank puts out a paper that calls for better social protection or at least a somewhat better deal for working people. The public relations people there evidently believe we have very short memories.

No, dear reader, the World Bank has not changed its function, nor have elephants begun to fly. Without any hint of irony, the World Bank’s latest attempt at selective amnesia is what it calls its “Social Protection and Jobs” strategy, in which it purports to advocate that the world’s national governments “greatly expand effective coverage of social protection programs” and “significantly increase the scale and quality of economic inclusion and labor market programs.” Hilariously, the World Bank titles its 136-page report fleshing out this strategy “Charting a Course Towards Universal Social Protection: Resilience, Equity, and Opportunity for All.”

In that report, the World Bank, with a straight face, writes that it “recognizes that the progressive realization of universal social protection (USP), which ensures access to social protection for all whenever and however they need it, is critical for effectively reducing poverty and boosting shared prosperity.” Furthermore, the report builds on a previous document that allegedly offers “an overarching framework for understanding the value of investing in social protection programs and outlined how the World Bank would work with client countries to further develop their social protection programs and systems.” The report asserts goals of achieving equity, resilience and opportunity for all people, especially the developing world’s most vulnerable, and “to create opportunity by building human capital and helping men and women to access productive income-earning opportunities.”

^{A demonstration in Oslo during the World Bank conference in June 2002 (photo by Vindheim)}

We arrive at that favorite set of code words, “human capital.” We’ll return to that shortly. But before we highlight the actual record of the World Bank and its role in imposing devastating austerity on countries around the world, at enormous human cost, let’s take a brief look at the International Trade Union Confederation response. The ITUC, which represents 200 million workers in 163 countries and has 338 national affiliates, says its “primary mission is the promotion and defence of workers’ rights and interests.” Readers may recall that the ITUC issues a yearly report on the state of labor, consistently finding that not a single country fully upholds workers’ rights.

In its four-page summary of the World Bank declaration, the ITUC said it agrees with the World Bank’s stated goals, and “agrees with the Bank that the lack of social protection for the majority of the world’s workers in the informal economy is a challenge that needs to be urgently addressed.” Nonetheless, the ITUC “has a number of considerable reservations to some of the policy messages” and disputes “the rigor of the analysis underpinning some of the policies proposed.”

The ITUC writes: “The Bank’s vision of universal social protection appears to prioritise the extension of targeted non-contributory social assistance at the expense of social security, when both forms of support serve distinct and complementary functions.” Further, it “disagrees with the Bank’s critique of social security schemes, especially pensions, as an undue burden on public finances and ‘regressive’ in nature.” The World Bank’s “solution” to make pension and social security systems sustainable “mainly involve reducing public subsidies to social security, strengthening the link from contributions to entitlements through defined-contribution schemes [retirement plans in which you pay into but have no guarantees as to payout], as well as strengthening the role of voluntary and private pensions.”

In other words, it’s work until you drop! That is already a long-term goal of right-wing ideologues and corporate interests not only in the United States but around the world.

Underneath the rhetoric, the usual right-wing prescriptions

And, true to right-wing form, the World Bank places the onus for unemployment squarely on individuals. The ITUC critique says: “the onus of addressing unemployment appears to focus on the individual, rather than on the broader structural forces at play. The [bank report] disregards in particular the measures that governments can take to create new, quality jobs, such as proactive industry planning, public sector job creation, and public investment – including in labour intensive sectors with strong social and environmental dividends, such as infrastructure, care and the green economy.” Finally, the World Bank claims that labor regulations are “excessive” and threaten employment, and advocates lowering already meager worker protections.

Once again, the World Bank has not forgotten its raison d’être; it has not suddenly changed its stripes. Elephants will continue to not fly.

Did we really expect otherwise? A look at the World Bank’s record provides all the evidence anyone could want of it being one of the world’s most destructive agencies, an organization dedicated to enhancing corporate plunder and imposing punishing austerity. A one-two punch with the International Monetary Fund. Both organizations do the bidding of the Global North’s multi-national corporations through playing complementary roles.

^{Three Gorges Dam, a project funded by the World Bank that displaced 1.3 million people (photo by Christoph Filnkössl)}

When I last checked in at the World Bank, in 2018, the bank was in the process of completing its “World Development Report 2019: The Changing Nature of Work,” which opened with quotes from Karl Marx and John Maynard Keynes. That was merely a feint. What we soon read in examining the report is that the problem is “domestic bias towards state-owned or politically connected firms, the slow pace of technology adoption, or stifling regulation.” Sure, jobs are disappearing, but that’s no problem because “the rise in the manufacturing sector in China has more than compensated for this loss.” Essentially, the World Bank was advocating that we become sweatshop workers in China. What else to do? “Early investment in human capital” — in other words, pay lots of money for advanced degrees you won’t be able to use — and “more dynamic labor markets,” which is code for gutting labor protections and making it easier to fire workers.

Elephants didn’t, after all, fly five years ago, either. 

The World Bank has even declared itself above the law. Unfortunately, at least one U.S. court agrees. A lawsuit filed in federal court in Washington on behalf of Indian farmers and fisherpeople ended with a ruling that the World Bank is immune from legal challenge. The bank provided $450 million for a power plant that the plaintiffs said degraded the environment and destroyed livelihoods. The court agreed with the World Bank’s contention that it has immunity under the International Organizations Immunities Act. The World Bank thus was declared the equivalent of a sovereign state, and in this context is placed above any law as if it possesses diplomatic immunity. Another suit, however, also filed by EarthRights International against the World Bank for its role in turning a blind eye to alleged systematic human rights violations by a palm oil company in Honduras for a project it financed, was allowed to proceed by the U.S. Supreme Court in 2019. That case, however, appears to yet be decided by the trial court. So the World Bank can sometimes be sued in the United States legal system but it remains to be seen if it will have to shoulder any responsibility.

The World Bank has a long history of ignoring the human cost of the projects it funds. The World Development Movement, a coalition of local campaign groups in Britain, reports that the World Bank has provided more than US$6.7 billion in grants to projects that are destructive to the environment and undermine human rights, a total likely conservative. To cite merely three of the many examples, the World Bank:

• Loaned an energy company in India more than $550 million to finance the construction of two coal-fired power plants. Local people, excluded from discussions, were beaten, their homes bulldozed and reported reduced food security and deteriorating health as a result of the power stations.
• An Indonesian dam, made possible by the World Bank’s $156 million loan, resulted in the forcible evictions of some 24,000 villagers, who were subject to a campaign of violence and intimidation.
• In Laos, a hydropower project made possible by World Bank guarantees displaced at least 6,000 Indigenous people and disrupted the livelihoods of around 120,000 people living downstream of the dam who can no longer depend on the rivers for fish, drinking water and agriculture.

A study of World Bank policies, “Foreclosing the Future” by environmental lawyer Bruce Rich, found that:

“Drawing on Bank studies, project evaluations and sectoral reviews, it is shown that the World Bank still suffers from a pervasive ‘loan approval culture’ driven by a perverse incentive system that pressures staff and managers to make large loans to governments and corporations without adequate attention to environmental, governance and social issues. In 2013, Bank Staff who highlight social risks and seek to slow down project processing still risk ‘career suicide.’ … [The bank] has continued to binge on enormous loans to oil and gas extraction, coal-fired power stations and large-scale mining generating environmental damage, forest loss and massive carbon emissions.”

Destroying the environment in the service of short-term profits

Want more? The World Bank has provided nearly $15 billion in financing for fossil fuel projects since the 2015 signing of the Paris Climate Accords. An October 2022 report by Big Shift Global, a coalition of 50 environmental organizations across the Global North and South, notes that despite World Bank claims that it would end financing for upstream oil and gas production, it has other avenues to promote fossil fuels. One of these methods is to send funds to a financial institution, which in turns sends the money to the fossil fuel project. Another is to provide non-earmarked funds but make the money conditional on instituting reforms encouraging fossil fuels.

The biggest fossil fuel funding, according to the Big Shift Global report, is $1.1 billion for the Trans-Anatolian Pipeline, a gas distribution project in Azerbaijan. Another $600 million went toward a gas storage project in Turkey and another eight projects were given at least $100 million by the World Bank. Projects that the World Bank has financed include expansion of coal. Other work by the World Bank includes $2.8 billion so that Ghana could move its energy mix from mostly hydropower to majority fossil fuels, and pressured Ghana to enter into gas contracts that causes it to pay $1.2 billion annually for gas it doesn’t use, which also has put a greater debt burden on the country. 

The World Bank also encouraged Guyana to use a Texas law firm that has Exxon as a major client to rewrite its petroleum laws, while providing money for oil and gas development in Guyana. That development will benefit Exxon as the fossil fuel multinational snagged a contract under which Guyana doesn’t receive any of the profits until the costs of the field are paid off. In other words, the Big Shift Global report says, “Exxon can continue to charge Guyana for every newly developed oil field. It could take decades before the money trickles down to the people.” 

^{Protest at the World Bank (photo by “Jenene from Chinatown,” New York City)}

The World Bank attempted the same whitewashing stunt with its fossil fuel funding, once issuing a report lamenting global warming while completely ignoring its role in worsening global warming. At the time of that whitewashing report, the bank was providing billions of dollars to finance new coal plants around the world. By any reasonable standard, the World Bank is a key organization in the concatenation of processes that has brought the world to the brink of catastrophic climate change. The policies of the World Bank and its sibling, the International Monetary Fund, have constituted non-stop efforts to impose multi-national corporate control, dismantle local democratic institutions and place decision-making power into the hands of corporate executives and financiers, the very people and institutions that profit from the destruction of the environment.

A trail of evictions, displacements, gross human rights violations (including rape, murder and torture), widespread destruction of forests, financing of greenhouse-gas-belching fossil-fuel projects, and destruction of water and food sources has followed the World Bank. It works in conjunction with the International Monetary Fund, whose loans, earmarked for loans to governments to pay debts or stabilize currencies, always come with the same requirements to privatize public assets (which can be sold far below market value to multi-national corporations waiting to pounce); cut social safety nets; drastically reduce the scope of government services; eliminate regulations; and open economies wide to multi-national capital, even if that means the destruction of local industry and agriculture. This results in more debt, which then gives multi-national corporations and the IMF, which enforces those corporate interests, still more leverage to impose more control, including heightened ability to weaken environmental and labor laws.

The World Bank compliments this by funding massive infrastructure projects that tend to enormously profit deep-pocketed international investors but ignore the effects on local people and the environment. The two institutions are working as intended, to facilitate the upward distribution of wealth, regardless of human and environmental cost.

It’s a clean sweep! Not one country guarantees workers’ rights

There is no respite from class warfare. Past annual Global Rights Index reports issued by the International Trade Union Confederation have invariably shown that there is no country on Earth that fully protects workers’ rights and the 2022 edition is not only not an exception but finds that repression of labor organizing is increasing.

The best any country scored for the 2022 ITUC Global Rights Index was “sporadic violations of rights,” and only nine countries, all in Europe, managed that. That’s down from the dozen classified at this rating two years ago. Capitalism, and its neoliberal variant now four decades old, is not becoming more gentle. It is doing what it must do, what the holders of capital must do to keep their party going.

Let’s take a look at a few general highlights before we highlight individual countries. Or should we say lowlights? Then again, they are “highlights” for industrialists and financiers.

• 87% of countries violated the right to strike.
• 79% of countries violated the right to collective bargaining.
• 77% of countries excluded workers from the right to establish or join a trade union.
• 74% of countries impeded the registration of unions.

In its executive summary, the Global Rights Index report says:

“Workers are on the front lines as they face the impact of multiple areas of crisis: historic levels of inequality, the climate emergency, the loss of lives and livelihoods from the pandemic, and the devastating impact of conflict. And workplaces are the front line in the fight for democracy. Brutal governments know how much this matters when four out of five countries block collective bargaining and one third of countries violently attack workers. Trade unionists have been murdered on every continent. Where people stand up for rights and social justice they are silenced with brutal repression.”

Lest we think these are problems only in undeveloped countries, there are Global North countries that score poorly in the index, including Australia, Belgium, Britain, Canada and the United States. Almost all trends are getting worse, in all parts of the world. Several indicators — including the right to strike, the right to establish and join a trade union, the right to trade union activities and the right to civil liberties — have steadily worsened since the survey’s annual reports began being issued in 2014. “The number of countries which exclude workers from their right to establish or join a trade union increased from 106 in 2021 to 113 in 2022,” the report said.

The Global Rights Index ranks the world’s countries from 1 to 5, with 1 the best category, denoting “sporadic violations of rights,” defined as where “Violations against workers are not absent but do not occur on a regular basis.” The nine countries given a rating of 1 are Austria, Denmark, Finland, Germany, Iceland, Ireland, Italy, Norway and Sweden. (These are green on the report’s maps.)

Rating 2 countries are those with “repeated violations of rights,” defined as where “Certain rights have come under repeated attacks by governments and/or companies and have undermined the struggle for better working conditions.” Countries with this rating include the Czech Republic, France, Japan, Netherlands, New Zealand and Spain. (These are yellow on the report’s maps.)

Rating 3 countries are those with “regular violations of rights,” defined as where “Governments and/or companies are regularly interfering in collective labour rights or are failing to fully guarantee important aspects of these rights” due to legal deficiencies “which make frequent violations possible.” Countries with this rating include Argentina, Britain, Canada, Mexico and South Africa. (These are light orange on the report’s maps.)

Rating 4 countries are those with “systematic violations of rights,” defined as where “The government and/or companies are engaged in serious efforts to crush the collective voice of workers, putting fundamental rights under threat.” Countries with this rating include Australia, Chile, Greece, Peru, Senegal and the United States. (These are dark orange on the report’s maps.)

Rating 5 countries are those with “no guarantees of rights,” defined as “workers have effectively no access to these rights [spelled out in legislation] and are therefore exposed to autocratic regimes and unfair labour practices.” Countries with this rating include Brazil, China, Colombia, South Korea and Turkey. (These are red on the report’s maps.) In addition, there are countries with a 5+ rating, those with “No guarantee of rights due to the breakdown of the rule of law.” Afghanistan, Libya, Syria and Yemen are among the 10 counties listed in this category, and are colored deep red.

The ITUC says it represents 200 million workers in 163 countries and has 332 national affiliates. It determines its ratings by checking adherence to a list of 97 standards derived from International Labour Organization conventions. Those 97 standards pertain to civil liberties, the right to establish or join unions, trade union activities, the right to collective bargaining and the right to strike.

Worth noting is the poor rating of the United States and Britain, the two countries that most like to scold other governments and present themselves as democratic beacons that the world should emulate (or else). The United States has consistently been given a 4 rating, including in 2020 and 2019. The 2022 report notes a myriad of union-busting offensives used by employers there. The United Kingdom, which has had 3 and 4 ratings in past years, has seen workers summarily sacked and replaced with agency workers at below minimum wage. 

Conditions are not appreciably better in those countries most eager to follow U.S. and British leads. In Canada, failures to comply with collective-bargaining agreements are a “common occurrence,” union leaders are prosecuted for participating in strikes and workers participating in strikes are fired. In Australia, criminal charges are filed against unions and union leaders as intimidation tactics, and governments not only allow employers to refuse to bargain with unions but intervene in disputes on the side of employers. Both countries are ranked worse than where they had been two years ago.

And so it goes, to channel Kurt Vonnegut. In its latest report on “the world of work,” the International Labour Organization (ILO) said “three out of five workers lived in countries where labour incomes had not yet recovered to their level prior to the crisis,” while inequality and the gender gap in pay remain large. A separate ILO report said “a return to pre-pandemic performance is likely to remain elusive for much of the world over the coming years,” with a global deficit of 52 million full-time equivalent jobs. Tens of millions of adults fell into extreme poverty during the Covid-19 pandemic.

These dismal results aren’t any surprise to anyone paying attention. The wealthy, and especially billionaires, have only gotten richer at everyone else’s expense during the pandemic. In just the first year of the pandemic, 2020, the world’s billionaires accumulated an additional trillion dollars. At the same time, corporations across the Global North enrich speculators and their top executives with trillions of dollars in dividend payments and stock buybacks and the world’s governments, through their central banks, handed out an astounding $10 trillion in free money to the financial industry through “quantitative easing” programs, the technical name for intervening in financial markets by creating vast sums of money specifically to be injected into them and thereby inflating stock-market bubbles. Despite these incredible sums of money, there is never more than crumbs for working people. It’s always austerity for those whose work actually creates the wealth that industrialists and financiers divvy up between themselves.

But central bank interventions are profitable for the financial industry, and that’s all that matters. The object of capitalism is to make the biggest possible profit, regardless of cost to employees, consumers, anybody else, the environment or the community; providing a useful product or service is incidental to the goal. Forcing down wages and working conditions through legal manipulation and outright force and violence is always prominent among capitalists’ methodologies to accomplish their goals. The International Trade Union Confederation’s sad results are not the result of some mysterious failure; they come standard with the system.

If you work in the U.S., you don’t know how bad you have it

It’s no secret that United Statesians are more ignorant of the world beyond their national borders than the peoples of other countries. That ignorance serves a purpose. How can you keep screaming “We’re Number One” and believing you have it better than the rest of the world if you are in possession of accurate information?

For example, most United Statesians remain blithely unaware that they have among the worst health care outcomes of any advanced capitalist country while paying by far the most money. A Commonwealth Fund report, for example, found that the U.S. “placed last among 16 high-income, industrialized nations when it comes to deaths that could potentially have been prevented by timely access to effective health care.” As one of the few countries on Earth without a national health care system, health care is a commodity for those who can afford it, not a right as it is almost anyplace else.

The U.S. also has one of the highest rates of inequality as measured by the Gini coefficient; among the countries of Europe only Bulgaria has worse inequality. The United States has the widest gap between pay and productivity gains among advanced capitalist countries and U.S. corporations haul in gigantic sums of money, sometimes millions of dollars per employee, but pay their employees minuscule percentages of their haul. Declining lifespans in the U.S. are considered a “silver lining” in corporate boardrooms because pension costs are lower. And thus it comes as no surprise that the Covid-19 pandemic has widened inequality still further, with the world’s industrialists and financiers adding literally trillions of dollars to their accumulated wealth during 2020.

That was a long introduction to yet more bad news. Not only are wages stagnant and living standards decaying, but working people in the U.S. are working longer hours. A study published in the peer-reviewed journal Socio-Economic Review found that, among 18 European and North American countries, the percentage of employees in the U.S. working at least 50 hours per week is the highest, at about 18 percent for the period 1990 to 2010. The paper, “Extreme work hours in Western Europe and North America: diverging trends since the 1970s” by Anna S. Burger, found that total rising — about 15 percent worked such hours for the period 1970-1989, a time frame in which the U.S. also had the highest rate.

^{(Author: CIPHR Connect)}

Nonetheless, it is not only in the U.S. that more people are forced to work at least 50 hours per week. The study examined Canada, Switzerland and 15 members of the European Union (including Britain, then a member) and in only one country, France, did the percentage of people working excessive hours decline from 1970-1989 to 1990-2010. France, Sweden and Switzerland had the lowest rates, each less than 5 percent. Canada was second to the U.S. at 17 percent and also showed the largest jump, from about 6 percent in 1970-1989.

Work more or else

European Union law is supposed to prohibit working more than 48 hours per week, but the study by Dr. Burger noted that several countries have adopted opt-out clauses. Working beyond 48 hours, even with the exemptions, requires the employee consent. But given the one-sidedness of working relations, an employee could find it difficult to refuse consent. Dr. Burger wrote:

“[T]he choice whether to work long hours is not entirely, or even mainly, left to the preference of the individual but is guided by policy and collective socio-economic institutions. Contrary to conventional wisdom, the most relevant work time tendencies of the past decades are shaped by liberalizing trends in labour market policies, industrial relations arrangements and labour market structures not only in the Anglo-Saxon world but also on most parts of Continental Europe, rather than by regime-conform developments.” [page 3]

Some of the people working excessive hours are high-paid professionals such as lawyers or investment bankers. But low-wage workers are increasingly forced to work long hours because they can’t survive otherwise.

“At the bottom of the skills scale, an increasing number of workers are becoming labour market outsiders who are in atypical, or precarious, employment or unemployment. … The practice of very long hours is particularly wide-spread among outsiders for two reasons. First, due to a lack of regulatory protection and high replaceability, outsiders are in a vulnerable position vis-à-vis their employers. Not complying with an employer’s request for overtime might result in an outsider’s immediate dismissal and replacement. Secondly, in many cases, outsiders consent to, sometimes even initiate, working very long hours in order for their income to reach subsistence level. In today’s increasingly unequal economies, an ever-larger number of low-skilled workers must compensate for their relatively low hourly pay by allocating more time to work. While this decision is formally voluntary, in substance it is not because the choice is strongly shaped by the restrictive political economy environment.” [page 8]

Working conditions in the EU are deteriorating, but employees in the U.S. have less protection and more meager unemployment benefits. The pressure to work long hours is more intense there than in Europe, and employers often find it more profitable to squeeze extra hours out of employees rather than hire someone to lighten workloads. Another product of the extreme individualist ideology U.S. capitalism fosters.

And although overall working hours have actually declined over the past half-century, the rate of that decline has been far slower in the U.S. than in the European Union. A paper by Robert J. Gordon and Hassan Sayed, “The Industry Anatomy of the Transatlantic Productivity Growth Slowdown,” found that for the period 1950 to 2015, there was a decline of 37 percent in average employee working hours for the 10 largest EU countries (a drop from 2,250 hours to 1,560 hours) as compared to a decline of only 12 percent for U.S. employees (2,020 hours to 1,780 hours). So much for John Maynard Keynes’ famous prediction that we’d be working 15 hours a week in the future.

U.S. working people work 220 hours per year more than do EU workers — that’s five and a half weeks of extra work!

That sobering comparison is no surprise when we make a comparison of mandatory paid days off. Among the 42 countries that are members of the OECD and/or the European Union, there is only one country with zero paid days of vacation or holidays under the law — the United States. Seven countries require workers be guaranteed 25 or more vacation days per year. Another 25 mandate at least 20 days. Each of those countries also mandate anywhere from eight to 15 paid holidays. Among the 42 countries surveyed, 34 legally require 28 or more days, led by Austria and Malta (38 each) and another half-dozen requiring 36. Turkey, with 12 days of mandatory paid time off, is next worst to the zero of the U.S.

Working conditions are not getting better

The pandemic may be making the above conditions worse. Working at home has led to a working day of two and a half hours longer for employees in the United States, Canada and Britain, according to a report by a business technology company, NordVPN Teams. The company, CNN reported, examined data sent via servers to calculate employee working hours. There were “no significant drop of business [virtual private network] usage at lunch time indicating potential short lunch breaks while working remotely.”

Other surveys have reached similar conclusions. A report by the U.S. staffing firm Robert Half said nearly 70 percent of professionals who work remotely because of the pandemic work on the weekends and 45 percent say they regularly work more hours during the week than they did before the pandemic. For front-line workers not able to work at home, stress and mental health difficulties have increased sharply, with problems particularly acute in the U.S. due to its inability to provide coherent responses to Covid-19 and the chaos triggered by extreme right operatives who created the “Tea Party” organizing the anti-science and anti-intellectual spectacles opposing measures designed to combat the Covid-19 pandemic.

Where does all this lead? To health problems and shorter lifespans. A study conducted by researchers at the World Health Organization and the International Labour Organization reported that excessive working hours led to 745,000 deaths from stroke and ischemic heart disease in 2016, a 29 per cent increase from 2000. The study found that, in 2016, “398,000 people died from stroke and 347,000 from heart disease as a result of having worked at least 55 hours a week. Between 2000 and 2016, the number of deaths from heart disease due to working long hours increased by 42%, and from stroke by 19%.”

Austerity and economic dislocation have taken their toll around the world, but the already existing harshness of life in the United States on top of austerity and dislocation takes a particular toll there. Nearly half a million excess deaths occurred in the U.S. from 1999 to 2015 from drug and alcohol poisonings, suicide, and chronic liver diseases and cirrhosis. A paper published in the peer-reviewed scientific journal PNAS found this increase in the death rate was limited to the U.S. among advanced capitalist countries.

We’re perhaps taken in more bad news than we can reasonably digest. It’s understandable to not wish to take in too much bad news at once. For readers with knowledge of the world, none of the statistics presented above make for a surprise. It is thus tempting to ask: Would the particularly toxic brand of nationalism practiced by millions of United Statesians continue as virulently were the above statistics widely known? Sadly, perhaps it would. If we were to summarize the discourse of U.S. nationalists, it would be: “We’re number one! We can kill more foreigners in less time than any other country! USA! USA!” Is being able to cheerlead for the world’s biggest military really worth working so many hours for such dismal results?

Class warfare intensifies as labor rights violated around the world

As bad as conditions have traditionally been for labor worldwide, 2020 has seen conditions deteriorate even more. As in past years, there is not a single country on Earth that fully protects workers’ rights. And although every country continues to violate labor rights, the extent of those violations grows, continuing a sad pattern of class warfare.

The International Trade Union Confederation has issued its annual Global Rights Index, and only 12 countries managed to be listed in the Index’s top ranking, the countries that are merely “sporadic” violators of rights. But those countries are hardly paradises (this is capitalism, after all). One of those dozen, the Netherlands, had no less than seven of its corporations listed among companies violating workers’ rights. Those were not necessarily isolated instances. The report said, “In the Netherlands, unions observed an increasing trend to shift from sectoral agreements to company agreements with the intent of minimising labour costs in return for employability. Companies often used the competitiveness and employability argument with their employees to incite them to accept lower conditions of work at the enterprise level. In addition, companies, including Ryanair, Transavia, Jumbo Supermarkets, Gall & Gall, Action and Lidl supermarkets, tended to circumvent collective bargaining with representative unions.”

If that represents the “best” of conditions for working people, the world is a mighty unfair place. Which it obviously is, given the ever more intense pressure bearing down on working people as the neoliberal era continues to make capitalism ever more miserable for those whose work produces the profits swelling the pockets of industrialists and financiers.

As in past years, the Global Rights Index report divides the world’s countries into five categories with increasing levels of rights violations. They are as follows:

• 1. Sporadic violations of rights: 12 countries including Germany, Ireland, Norway and Uruguay (green on map above).
• 2. Repeated violations of rights: 26 countries including Canada, France, Japan and New Zealand (yellow on map).
• 3. Regular violations of rights: 24 countries including Argentina, Australia, Britain and South Africa (light orange on map).
• 4. Systematic violations of rights: 41 countries including Chile, Mexico, Nigeria and the United States (dark orange on map).
• 5. No guarantee of rights: 32 countries including Brazil, China, Colombia and Turkey (red on map).
• 5+ No guarantee of rights due to breakdown of the rule of law: 9 countries including Libya and Syria (dark red on map).

Hypocritical finger-wagging

Consistent with past years of the Global Rights Index, the United States, which loves to hold itself up as an exemplar of democracy and civil rights, is among the lowest-ranking countries — the U.S. has consistently had a ranking of 4 for “systemic” violations. The International Trade Union Confederation, in supplemental materials discussing U.S. violations, noted that the National Labor Relations Board has made a series of anti-union rulings, including allowing retaliation against striking Wal-Mart workers, while U.S. law permits anti-union discrimination, restricts workers’ rights to form unions of their own choosing, and places severe barriers against union organizing. 

The United Kingdom, second only to the U.S. in regular scolding of other countries, is ranked in the middle of the pack, same as a year ago. The report’s discussion of Britain reported “the number of people employed on a stand-by basis, ‘zero-hour contracts,’ at between 200,000 to 250,000 which demonstrates the prevalence of underemployment in the UK. Under these contracts employees have to be available for work but are not guaranteed a minimum number of hours. These contracts create income insecurity for workers and also undermine family life.” Additionally, the report noted multiple barriers to British union organizing.

Canada, although ranked higher than Britain or the U.S., is no paradise despite the image its governments like to project. The report noted that in Canada there are many categories of workers, ranging from domestics to professionals, barred from organizing, and there are severe legal restrictions limiting the right to strike.

A Wal-Mart protester is led away during a Black Friday action in Sacramento, California. (Photo via Making Change at Walmart.)

Globally, the report states that violations of workers’ rights are at a seven-year high. Direct attacks on unions highlight the degradation:

“The trends by governments and employers to restrict the rights of workers through violations of collective bargaining and the right to strike, and excluding workers from unions, have been made worse in 2020 by an increase in the number of countries which impede the registration of unions — denying workers both representation and rights. … A new trend identified in 2020 shows a number of scandals over government surveillance of trade union leaders, in an attempt to instil fear and put pressure on independent unions and their members.”

The global pandemic has only made conditions worse:

“These threats to workers, our economies and democracy were endemic in workplaces and countries before the Covid-19 pandemic disrupted lives and livelihoods. In many countries, the existing repression of unions and the refusal of governments to respect rights and engage in social dialogue has exposed workers to illness and death and left countries unable to fight the pandemic effectively.”

Class warfare goes on and on and on

Some of the sobering statistics gathered by the International Trade Union Confederation tell a grim story:

• 85 percent of countries violated the right to strike.
• 80 percent of countries violated the right to collectively bargain.
• Workers were arrested and detained in 61 countries.
• Workers experienced violence in 51 countries.

The Confederation, which describes itself as a coalition of “national trade union centres” encompassing 332 affiliated organizations in 163 countries and territories, determines its ratings by checking adherence to a list of 97 standards derived from International Labour Organization conventions. Those 97 standards pertain to civil liberties, the right to establish or join unions, trade union activities, the right to collective bargaining and the right to strike.

The Confederation’s report is one more illustration of the race to the bottom. The International Labour Organization estimates that more than 470 million people worldwide were unemployed, underemployed or “marginally attached to the workforce” in a report issued in January 2020, with 2 billion people (61 percent of the global workforce!) informally employed. That report was issued just before the Covid-19 pandemic took hold, triggering a dramatic economic crash that had been overdue, thanks to the instability of capitalism that regularly causes downturns. Inequality and lower pay are endemic around the world, and the costs of housing, because it is a capitalist commodity, rises far faster than incomes. The continual imposition of austerity on working people contrasts dramatically with the trillions of dollars thrown at financiers and industrialists since the pandemic began.

Capitalism promises nothing but more one-sided class warfare. We’re long past due to try something different.

Capitalism’s triumph: Labor rights violated in every country on Earth

In what country are labor rights fully respected? The sad answer is: none.

Labor rights are routinely violated around the world, and the trend is only getting worse. The International Trade Union Confederation has again issued its annual Global Rights Index and the result is no better than in past years. It’s worse. For example, the number of countries that exclude workers from the right to establish or join a union increased from 92 in 2018 to 107 in 2019. Even in Europe, the region with the (relatively) best conditions for working people, half the countries exclude at least some groups of workers from freely associating by allowing “non-standard” forms of work such as zero-hour contracts, temp work or misclassifying people working through online platforms as “self-employed.”

Corporations ever on the lookout for ways to extract more from their workforce and, with government complicity, continue to press down. The Confederation, in its report, said:

“Worldwide, new technology has allowed employers to use various mechanisms to avoid paying minimum entitlements and exclude workers from labour laws. Recent technological leaps in the ways that work can be allocated and accessed has resulted in increased incidences of workers being denied rights under the guise of flexibility and as platform workers. Decent work is being affected and rights are being denied by companies avoiding rules and regulations. … More and more governments are complicit in facilitating labour exploitation or allowing the rule of law to be avoided because workers are forced to work in the informal sector of the economy.”

Rapid advances in technology, because they are controlled by corporations and repressive governments, are enabling continuing deterioration in working conditions. Not only does technology enable production to be moved to locations with ever lower wages and regulations, but it enables the weakening labor protections in new “high tech” wrapping.

In its report, the International Trade Union Confederation ranks countries from one to five, with one the least repressive and five the most. Only 12 countries — Austria, Denmark, Finland, Germany, Iceland, Ireland, Italy, the Netherlands, Norway, Slovakia, Sweden and Uruguay — are ranked as one. These are countries that are merely “sporadic” violators of rights. So there are no countries on Earth that do not violate labor rights. (There are several countries not given a rating, shown in gray in the map below.)

The International Trade Union Confederation labor rights rankings

Interestingly, the two countries most prone to wagging fingers at the rest of the world, Britain and the United States, once again fared poorly. Britain was ranked as a three, representing a country that has “regular violations of rights.” The U.S. was rated as a four, among countries determined to condone “systematic violations of rights.” There is nothing new here; the U.S. has consistently been scored as a four in these reports over the years. As recently as 2017, Britain was also ranked as a four.

In a country rated as a four, “The government and/or companies are engaged in serious efforts to crush the collective voice of workers putting fundamental rights under threat.”

So much for the so-called land of freedom.

The report’s rankings are as follows:

• 1. Sporadic violations of rights: 12 countries as noted above (green on map above).
• 2. Repeated violations of rights: 24 countries including France, Japan and New Zealand (yellow on map).
• 3. Regular violations of rights: 26 countries including Australia, Canada and Spain (light orange on map).
• 4. Systematic violations of rights: 39 countries including Argentina, Chile and Mexico (dark orange on map).
• 5. No guarantee of rights: 34 countries including Brazil, China, Greece and India (red on map).
• 5+ No guarantee of rights due to breakdown of the rule of law: 9 countries including Libya and Syria (dark red on map).

The Confederation, which describes itself as a coalition of “national trade union centres” encompassing 331 affiliated organizations in 163 countries and territories, determines its ratings by checking adherence to a list of 97 standards derived from International Labour Organization conventions. “The methodology is grounded in standards of fundamental rights at work, in particular the right to freedom of association, the right to collective bargaining and the right to strike,” the Confederation wrote in its report.

During the six years that the Confederation has issued its yearly reports, conditions have steadily deteriorated. Since the initial report in 2014, every region of the world has seen scores worsen. Summarizing this trend, the report says:

“In 2019, strikes have been severely restricted or banned in 123 out of 145 countries. In a significant number of these countries, industrial actions were brutally repressed by the authorities and workers exercising their right to strike often faced criminal prosecution and summary dismissals. Three regions — Africa, the Americas and [Middle East/North Africa] — all had an increase in the number of countries that violated the right to strike from last year.”

And thus it is no surprise that inequality is rising around the world, unemployment is endemic and far higher than official government statistics would have us believe and corporate tax dodging facilitated by government policies is widespread. The world’s working people continue to be on the losing side of one of the most one-sided wars in human history.

Big corporations pay no income tax, unlike you

Telling you that Donald Trump lied, or that the one percent continue to succeed in their incessant class warfare, ranks in the astonishment department with being told the Sun rose in the east this morning. Do we really need more evidence?

Necessary or not, more evidence continues to be delivered. The latest delivery comes courtesy of the Institute on Taxation and Economic Policy, which has found that 60 of the largest corporations in the United States paid no income taxes for 2018 despite earning a composite $79 billion in net income. Worse, these companies actually received $4.3 billion in tax rebates.

Had these companies paid taxes at the newly reduced corporate tax rate of 21 percent, these companies would have paid $16.4 billion in taxes. So we have a difference of more than $20 billion — quite a nice return on their lobbying expenses and donations to the Trump campaign.

Heading the list is none other than Amazon. Run by the world’s richest person and recently extracting billions of dollars in subsidies in a sweepstakes in which cities across the United States competed to give away the most money, Amazon racked up $11 billion in profits last year and not only paid no taxes but received a rebate of $129 million. A total of 26 companies, including Chevron, Delta Air Lines, Duke Energy, General Motors, Molson Coors and Prudential Financial, reported net income of more than $1 billion while paying no taxes.

Occupy Seattle rally at Westlake Park (photo by Joe Mabel)

President Trump claimed that his massive tax cuts for corporations would directly result in the average United States household getting an annual increase of $4,000 in wages. That magical figure came from his own Council of Economic Advisers, which further claimed that the $4,000 was a “conservative” estimate. The Council went on to claim that the average U.S. household might see a raise of $9,000.

The web site FactCheck.org, noting that the Council never said how it arrived at these magical figures, used old-fashioned math to reveal the lack of reality here. The site’s analysis of the purported $9,000 raise concluded: “That would amount to a $1.1 trillion annual income gain from simply reducing a corporate tax burden that is currently only $297 billion.”

Still waiting for that extra $4,000 in your paycheck, aren’t you?

Don’t hold your breath

Wages actually fell two percent, adjusted for inflation, from December 2017 to December 2018, reports the Economic Policy Institute. But it would have been fruitless to wait for the promised largesse. The Communications Workers of America made a gallant effort to get commitments for corporations to pass on the tax savings to their workers, to no avail, the Center For Public Integrity reports:

“Corporations balked at saying tax cuts would lead to higher wages because they didn’t want to be bound to a promise to increase pay, a lobbyist for the companies said. When the White House’s Council of Economic Advisers predicted hat a 20 percent corporate rate would hike average annual household income by $4,000, the Communications Workers of America, a 700,000-member union, asked eight major corporations to pledge to hike worker wages by $4,000 if they got the tax cut. The companies didn’t respond. That ‘shows you the difficulty they have, and not only in messaging but also why people don’t like them,’ said one lobbyist who asked to remain anonymous so as to be able to speak freely.”

This sort of class warfare is not new — wages around the world have fallen far below productivity gains over the past three decades, pay inequality has reached gigantic proportions and corporations have showered speculators with so much money that in some recent years the total of money paid to them in dividends and stock buybacks exceeded net income.

The Trump administration, however, has intensified these trends. Worldwide, financiers pocketed an astounding US$1.37 trillion in dividends for 2018, a total that has nearly doubled in less than a decade, and is predicted to be even bigger in 2019. Stock buybacks in the U.S. alone accounted for another $1.1 trillion last year. Putting their chief executive officer colleagues to shame, the top 25 “earners” among hedge-fund managers paid themselves a composite $15.4 billion in 2017, with four of them raking in more than $1 billion each.

In contrast, six percent of the tax cuts given to corporations went to employees in increased wages and in bonuses, while more than half went directly to stock holders.

The costs of poverty

This ever-mounting inequality has real costs. For example, almost 13 million children in the United States (20 percent of the country’s children) live in poverty. The Children’s Defense Fund pulls no punches in assessing the cost of that poverty:

“When we let millions of children grow up poor without basic necessities like food, housing and health care, we deny them equal opportunities to succeed in life and rob our nation of their future contributions. Poverty decreases a child’s chances of graduating from high school and increases her chances of becoming a poor adult. It makes her more likely to suffer illnesses and get caught in the criminal justice system. Beyond its human costs, child poverty has huge economic costs. Our nation loses about $700 billion a year due to lost productivity and increased health and crime costs stemming from child poverty.”

Don’t hold your breath waiting for the Trump administration to address any of these problems. Far from the magic fountains of money pouring into your paycheck and reductions to the federal budget deficit, the country’s accumulated debt is rising fast. The Congressional Budget Office estimates an additional $1.9 trillion will be added to the U.S. government’s budget deficit over the next 10 years thanks to a drastic decrease in corporate tax payments. For the first six months of fiscal year 2019 (which began with October 2018), corporate tax payments to the federal government declined $11 billion (a fall of 13 percent) compared to a year earlier, according to the Center For Public Integrity.

Bonuses as a share of compensation (graphic by the Economic Policy Institute)

How will this be paid for? Naturally, in cuts to the safety net. The Trump administration’s proposed budget for fiscal year 2020 calls for $845 billion in cuts to Medicare, $1.5 trillion in cuts to Medicaid and $84 billion in cuts to Social Security disability benefits. President Trump, you’ll recall, promised during his election campaign that he would make no cuts to those programs. Then again, what would we expect from a serial liar whose total of false statements since taking office has surpassed 10,000 — and who has a long history of failing to pay contractors who did work for his casinos and other businesses.

As historically weak as the so-called “recovery” from the 2008 economic collapse has been, all history points to the fact that we are now overdue for the next recession. Nor is the little bit of sugar high the U.S. economy received from the Trump tax cuts (in reality, a bump for the owners of capital but not those who work for a living) going to last.

In a CounterPunch commentary, economist Jack Rasmus explains that the rise in U.S. gross domestic product for the first quarter of 2018 was due to corporations building inventories to get ahead of the Trump tariffs and a temporary decline in imports (thus providing an artificial boost to the import-export ratio) stemming from the administration’s trade wars. Household consumption, the driver of the U.S. economy, is actually decreasing, Professor Rasmus said, which does not bode well for the future.

We are losing one of the most one-sided wars in human history.

World Bank solution for lack of jobs: Cut worker protections

The World Bank is in the process of completing its “World Development Report 2019: The Changing Nature of Work” and, surprisingly, the latest draft version opens with quotes from Karl Marx and John Maynard Keynes. Has the World Bank suddenly lost sight of its purpose and will now take up the cause of working people?

Well, you already know the answer to that question, didn’t you?

Only a few paragraphs down we begin to see where this paper is heading. After a bit of perfunctory hand-wringing over disruptions caused by robotics, we read the problem is “domestic bias towards state-owned or politically connected firms, the slow pace of technology adoption, or stifling regulation.” And although some jobs are disappearing, fear not because “the rise in the manufacturing sector in China has more than compensated for this loss.”

Oh, so we should all move to China to get new jobs.

Never mind that the highest minimum wage for Chinese workers, that mandated in Shanghai, is $382 per month. In some places the minimum wage is half that, if workers are fortunate enough to be paid regularly. And that millions of rural Chinese are being driven into cities to become sweatshop workers, so for now there won’t be enough work for the rest of the world. Then again, letting bosses have the upper hand is what the World Bank has in mind. No, its economists haven’t forgotten what the institution’s purpose is nor why it exists.

A Chinese-owned factory in Lesotho (photo by K. Kendall)

So what to do? The World Bank report does suggest not allowing corporations to dodge taxes to the degree that they do. Very well, but even if taxes were collected at the statutory rates, that would still leave corporations vastly under-taxed. No suggestion by the bank, of course, that corporations actually pay a fair tax rate. Corporations currently account for a paltry nine percent of U.S. tax receipts; in the 1950s, they accounted for 30 percent or more. Similarly, in Canada personal income taxes account for three and a half times more revenue than do corporate income taxes; these were equal in 1952.

There is much discussion of “investing in human capital,” a particularly favored mantra of the World Bank. What does that mean? Capitalists are likely to interpret such talk — rather common in NGO circles these days — to mean demanding more skills or degrees from prospective workers, but in the United States graduates with doctorate degrees are being forced to take jobs in academia as part-time adjuncts, and plenty of folks in other fields are “over-educated” already for the jobs they hold. This concept comes from the idea that the problem is that there aren’t enough skilled people for all those wonderful jobs that are out there, just over the rainbow. But in the real world, as opposed to Right-wing think tanks, that is not so.

A 2014 report issued by the National Employment Law Project found that higher-wage jobs were created at a much lower rate during the “recovery” from the 2007-08 economic collapse than had been lost; conversely, low-wage jobs (paying less than $13.33 per hour) were created twice as fast as they had been lost. In separate studies, the Economic Policy Institute found that long-term unemployment is elevated for workers at every education level (and was increasing at a somewhat higher rate for those with some college or a four-year college degree than the average), and that the so-called “skills mismatch” is a myth.

So we come to the real “solution” in the minds of World Bank officials: Cut worker-protection laws.

Aw, you really aren’t surprised, are you?

(Graphic by Real-World Economics Review)

Here’s a key passage in the report: “Rapid changes to the nature of work put a premium on flexibility for firms to adjust their workforce, but also for those workers who benefit from more dynamic labor markets.”

Dynamic for who? What we have here are code words meaning make it easier to fire people. And that’s the real takeaway message, no matter the lofty rhetoric about governments creating a new social contract. “Creating jobs” and “investing early in human capital” are two elements of the World Bank paper’s suggested new social contract. Unfortunately, there are no thoughts on how new jobs might be created when capitalists are in a frenzy of eliminating jobs to maintain their profit rates and survive relentless market competition. More schooling, which is what “investing early in human capital” amounts to, is fine by capitalists, as long as they don’t have to bear any of the costs. It’s up to students to take on more debt to create this new “human capital.”

Contrast this happy talk with the reality of the capitalist workplace. A report just issued by Democratic U.S. Representative Keith Ellison found the average ratio of CEO-to-median-worker pay is 339-to-1. That ratio among the 500 biggest U.S. corporations is as high as almost 5,000-to-1. Nope, I don’t think the boss works thousands of times harder than you do. At McDonalds, for example, the CEO’s annual salary could be used to pay the yearly wages of 3,101 workers making the chain’s median pay.

The sort of societal priorities and imbalances of power that enable such appalling inequality might be summed up by the uses to which money is put. In Los Angeles, a new football stadium is being built and the estimated cost of it is now estimated at $4.9 billion. That figure has risen considerably and likely will again. Given all the homelessness in Los Angeles, and all the other social problems, what could have been done with $4.9 billion?

The number of homeless people in California is estimated at 130,000. Doing something about that might be one way to “invest” in human development, and doing so might even save money. A Rand Corporation study carried out for Los Angeles County found that homeless people who are provided stable shelter make fewer trips to the emergency room and are arrested less frequently, to the extent that the cost of the housing is more than offset.

Oops, but that’s not profitable for the well-connected as throwing money at stadium boondoggles or cutting jobs. But if you earn enough degrees, perhaps you’ll fulfill the World Bank’s prophesy by landing a job at a Chinese sweatshop.