Modern Slave Work

Picked up in Weitzenegger’s newsletter. To read many interesting news and articles, go to ‘The website for International Development Cooperation‘, and its (english) Newsletter.

Also published on Corporate Social Responsibility, March 2007, by Alejandro Calvillo Unna and Álvaro de Regil Castilla.

Periodically, The Jus Semper Global Alliance TJSGA publishes commentaries of relevance for The Living Wages North and South Initiative (TLWNSI). This commentary clearly exhibits the absolute impossibility of sustaining the current North-South system of exploitation, of quasi-slavery in which the South’s role is, essentially, to supply labour at a cost that perpetuates it in servitude and to surrender its natural resources to the global corporations of the institutional investors. It also shows us how, despite the official rhetoric that states that the decent work concept has led to the international consensus that productive employment and decent work are key elements to achieving poverty reduction, everything remains the same …

… The disappearance of the Welfare State and, subsequently, the weakening of the Regulator State have run concurrently and are the consequence of the accelerated emergence of corporations; a sort of gradual coup d’état, where big corporations and financial groups have overtaken power. The Reagan-Thatcher era with legislative deregulation against monopolistic practices, with the elimination of governmental regulation, with the thinning and/or privatisation of public services, redirected tax revenue to finance directly and indirectly these power groups and not the people suffering from the inequalities generated by the market. Corporate culture has changed dramatically. In the Welfare State ethos, thirty years ago, many multinationals felt a genuine responsibility for their employees. Many industries were regulated, and competition was not as brutal as today.

Ruthlessness began when business was deregulated, and governments stopped, in classical neoliberal style, performing their balancing act. With this kind of competition, massive layoffs began as a measure of last resource during hard times, when a company was struggling to survive. Yet, years ago, massive layoffs became a measure of first recourse, primarily to strengthen shareholder value, as analyst Davan Maharaj comments: For many corporations, downsizing has become a strategy that is used in good times and bad. Senior managers, under considerable pressure from stockholders to increase profits, often take the easiest way by cutting employment costs [Maharaj: 1998] …

… At the beginning of the sixties, the development of slave work began in a limited way in Southeast Asia through the implementation of an economic paradigm based on the supply of very cheap labour for labour-intensive manufacturing in Hong Kong, Singapore, Taiwan and South Korea. Subsequently, in-bond plant areas began to emerge, not just in Southeast Asia but also in China, Brazil, Mexico and Eastern Europe [Michel Chossudovsky: 2002]. Large corporations moved part of their production to these regions. Until that moment sectors that based part of their manufacturing in the overexploitation of workers in other countries cannot be pin pointed. The change of dimension comes with the entrance of China in the market, to turn “modern slave work” into a generalised labour feature in big corporations in a wide diversity of manufacturing sectors. The economic reforms that began in China in 1978 took a great leap forward in 1995-98, by putting at the disposition of global corporations hundreds of millions of people under miserable wage conditions and under strict State control that blocks the use of the most basic labour rights, such as the right to freedom of association and collective bargaining to demand improvements in labour conditions and wage remuneration. Anywhere between ninety and one hundred million Chinese have moved from the rural fields to the cities in the last few years and it is expected that another hundred will also move in the present decade [China S.A., Ted C. Fishman]. Corporations relocated to these low-wage regions and, better yet, where the State would guarantee labour control. This is how “modern slave work” emerged massively and as a core production element in most manufacturing sectors. Southern countries’ labour dropped to servitude costs. The in-bond plant sector is the most evident but this occurs in all economic sectors …

… This is the North-South system of exploitation of quasi-slavery –dictated by the big corporations: the institutional investors– in which the role of the South is essentially to supply labour at a cost that perpetuates it in serfdom and to surrender its natural resources to the global corporations of the institutional investors. This is an absolutely unsustainable paradigm in the long term, for it is a net generator of poverty, of inequality and of environmental decay. There is no greater factor of inequality, imbalance and planet decay than human exploitation. It is estimated that the misery wages paid in the South subsidise 25 to 40% of the North’s real wages [Hoogvelt, 1997]. Just as it is expressed in the Decent Work Agenda of the International Labour Organisation, albeit everything has remained rhetoric, the decent work concept has led to an international consensus that productive employment and decent work are key elements to achieving poverty reduction, and we add, and also to procure a more fair and sustainable society. (full text).

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