Thursday, July 21, 2016

Global exploitation

Global inequality has never been greater. For example, the wealth of the world’s richest 62 people, who between them have more wealth than half of the world’s population, rose by 44 per cent between 2010 and 2015. Over the same period the wealth of the bottom 50 per cent of humanity fell by approximately 38 per cent.

Very large numbers, perhaps the majority, of the world’s labour force is poor. In 2010 there were approximately 942 million working poor (almost 1 in 3 workers globally living on under US$2  a day). However, these figures are a significant underestimate.

The International Labour Organization calculates poverty using the World Bank’s ‘purchasing power parity (PPP)’ international poverty lines of $1 and $2 a day – where $1 a day represents ‘extreme poverty’ and $2 a day simply ‘poverty’. People who live above these poverty lines are held to be not poor. These poverty lines reflect the international equivalent of what $1 or $2 could have purchased in 1985 in the United States. Whilst the poverty lines have been updated since then, their purchasing powers hover around these symbolic figures. A moment’s reflection suggests that $1 or $2 a day in the U.S. in 1985 could buy hardly anything.

Apple’s profit for the iPhone in 2010 constituted over 58 per cent of the device’s final sale price, while Chinese worker’s share was only 1.8 per cent. In 2010, Foxconn, one of Apple’s principal Asian suppliers, employed around 500,000 workers in its factories in Shenzhen and Chengdu. It rose to infamy that year following reports of 18 attempted suicides by workers, 14 of which were fatal. Foxconn employs a military-style labour-regime. At the start of the day managers ask workers “How are you?” and staff must reply “Good! Very good! Very, very good!” After that they must work in silence, monitored by managers and with strict limits on toilet breaks. Pay is very low, and overtime is often the only way that workers can earn enough to live on.

A similar dynamic operates in the global garment industry where approximately 30 million workers are employed. There are regular media reports about abusive working conditions in these industries, ranging from extremely low pay, to child labour and forced labour. Most horrifically, in Bangladesh in April 2013 1,113 garment workers were killed and 2,500 injured following the collapse of Rana Plaza, an 8 story building in which textile factories operated. In his overview of the apparel sector across 17 countries John Pickles documents how, from the mid-2000s onwards, “wage levels were driven below subsistence costs.” In India, Bangladesh and Cambodia, for example, basic wages as a percentage of living wages are 26%, 19% and 21% respectively.

In Cambodia’s garment industry conditions are so harsh that workers regularly faint at work as a consequence of the intensity of the labour required of them. Overtime is a necessity as regular wages are insufficient to meet their daily needs. While the government limits overtime to 2 hours per day, this is not legally enforced and the economic pressures upon workers to exceed these hours are intense. Most workers in the large Cambodian textile factories work between 3 and 5 hours overtime a day.

The ‘choice’ facing workers in many of these burgeoning industries is to engage in very high volumes of health-damaging work in order to earn a subsistence, or live in very deep poverty.

Lead firm’s capture the lion’s share of value generated within global poverty chains because workers in these chains are ruthlessly exploited. Wealth concentration and mass poverty are two sides of the same coin of global capitalist development.