Thursday, October 30, 2014

Inequality: A Void For Youth

Inner-contradictions riddle capitalism. The system's hunger for profit prefers youth workforce as it tastes fine to swallow: young muscles, comparatively, bear more burdens, young brains easily adopt new technology, muscle and brain of the youth is lucrative for capital to exploit. But capital deprives the youth, pushes it out from job market.
“Over the four years since the onset of the crisis, young people (aged 18 to 25) suffered the most severe income losses … Across the OECD countries, average household disposable income fell in real terms by around 1% per year among youth ….” (OECD (2014), "Income Inequality Update - June 2014 ”) In Greece , Iceland and Ireland , the youth found significant income losses. Spain , Estonia , Portugal , Hungary and the Netherlands also found large declines in the area. (ibid.)
On the other hand, the older group was relatively hit less hard. “These differential patterns of income growth are reflected in the evolution of the income-poverty risk, i.e. relative to the total population”. (Figure 1) (ibid.)
Figure 1: The risk of poverty has shifted from the elderly to the young
Relative poverty rate of the entire population in each year = 100, mid-1980s to 2011, OECD average
Source: OECD (2014), "Income Inequality Update - June 2014”. © OECD 2014
Note: OECD un-weighted average for 18 OECD countries for which data are available from the mid-1980s: Canada, Denmark, Finland, France, Germany, Greece, Israel, Italy, Japan, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Sweden, Turkey, the UK, the US. 2011 data for the UK are provisional.
Earlier “OECD reports highlighted that over the past 25 years youth replaced the elderly as the group experiencing the greater risk of income poverty. The recent crisis has accentuated this trend. By 2011, people aged 66 to 75 faced a risk of poverty that was 25% lower than the population average, and which was … the lowest among all population groups. Prime-age adults show lower poverty rates than the entire population.” (ibid.)
The system thus excludes that part of labor, which is hard working, and which is trained with latest education/knowledge although the system requires hard working labor equipped with latest knowledge and modern training as it prefers a horse instead of a human if the horse works harder, if it's more educated, more knowledgeable and more efficient than a human, and if the cost for propagation of similar horses is less than that of a human. Capital's character is anti-human.
It appears capitalist crisis is “kind-hearted” to the older people. But actually, it's the system's inefficiency. It can't distribute properly; it can neither protect its productive force nor is it benevolent to any group. Otherwise, the older population would have experienced easy and dignified life in all capitalist lands.
Hostile market required intervention
Markets that the world capitalist system has built up for the youth are harsh and hostile. The financial/banking/debt crisis made the market more hostile to the youth. Italy , Portugal , Spain and Greece experienced high youth unemployment. (Italian National Institute of Statistics, “Employment and unemployment: provisional estimates”, July 2013, & Eurostat, “Unemployment rate by age group”, 2013) “Although they were close to the EU average in 2006, both youth and adult unemployment rapidly increased during the Great Recession in Spain . Youths in particular were strongly affected by employment loss after the financial and debt crisis and the bust of the real estate bubble. As a result, unemployment rates of 15- to 24-Year-Olds soared from 18% in 2006 to 56% in 2013.” (Francesco Berlingieri, Prof. Dr. Holger Bonin & Dr. Maresa Sprietsma, Youth Unemployment in Europe, Appraisal and Policy Options , Robert Bosch Stiftung, Stuttgart, August 2014) In Portugal , the youth are “very vulnerable to job losses in case of a recession. Moreover, an average youth can expect to wait more than four years before finding a permanent job after leaving school which is the longest duration as compared to the other countries considered.” (ibid.)
Youth unemployment has a broader picture. The issue “is not a recent phenomenon that can be ascribed only to the Great Recession. Most European countries have faced difficulties in integrating youths in the labour market for many years, and youth unemployment rates are generally higher than adult unemployment rates.” (ibid.) “A particularly alarming feature of some youth labour markets [is] the high rates of young people that are disconnected, as they are neither in education, employment or training. In Italy , the proportion of such disconnected youths has ranged between 15 – 20% since 2000…” (ibid.) To many, these youths “are referred to as a ‘lost generation'” (Dr. Ingrid Hamm, “Foreword”, ibid.)
The precarious situation the youth faced during the recent crisis forced them to leave their countries. A reverse stream it was. The Wall Street Journal in a report headlined “Exodus of Workers From Continent Reverses Old Patterns” ( January 14, 2012 ) informed: “Economic distress is driving tens of thousands of skilled professionals from Europe , and many are being lured to thriving former European colonies in Latin America and Africa , reversing well-worn migration patterns. Asia and Australia , as well as the US and Canada , are absorbing others leaving the troubled euro zone. … The toll is mounting in Spain and Portugal , countries losing skilled workers to their former colonies. More people are emigrating from Spain , Portugal , Ireland , Slovenia and Cyprus than are moving to those countries, and in Greece officials worry that a similar trend is taking hold there. The European Union has no overall data on migration, but concern about the impact of severe budget cuts is growing in the U.K. , France , Germany and Italy , all grappling with losses of top research talent.”
Citing Spain 's National Statistics Institute the WSJ report said: in 2011 “ Spain became a net exporter of people for the first time since 1990”. Some 55,626 more people left the country in the first nine months of 2011 than arrived. “Spaniards are scattering to better-off European countries and beyond, particularly to Latin America . Of the estimated 37,000 Spanish citizens who left the country in 2010, nearly 60% emigrated to countries outside the European Union.” (ibid.)
Of Portugal , the WSJ report cited the government-backed Emigration Observatory in Lisbon : In 2011, at least 100,000 of the country's 11 million citizens left the country. Angola absorbed 70,000 Portuguese since 2003. In the 18 months through June 2011, the number of Portuguese in Brazil on work-related visas shot up by 52,000.
Citing Brazil 's Justice Ministry the report said: In the first six months of 2011 alone, the number of foreign residents in Brazil on temporary work and related visas rose by nearly half, to 1.46 million people, nearly 330,000 of them from Portugal and 60,000 from Spain .
Spain and Portugal encouraged job seekers to leave the countries. Portuguese prime minister urged teachers failing to find jobs in Portugal to move to one of its former colonies. Germany and Spain signed an agreement in 2011 under which German companies would offer jobs in Germany to out-of-work Spaniards, mainly in engineering, health care and tourism. Columnist Concha Caballero, writing in El PaĆ­s , called the emigrants “‘a new wave of exiles' whose departure bleeds the country of people who would otherwise create wealth, start companies and pay taxes.” The destinations of the new exiles are not only Brazil , Germany and Angola . China , Japan , Chile , Peru , the Netherlands and Belgium are also in the list. (ibid.)
About 18 months later, BBC in an article headlined “Jobs crisis: Europe 's great migration” said: “[T]ens of thousands of young Europeans are on the move in search of work. They are part of a great migration .… with unpredictable consequences for the countries they leave behind.” ( June 26, 2013 ) The article by Gavin Hewitt, BBC 's Europe editor, said: “The president of the European Investment Bank, Werner Hoyer, spoke of unemployment undermining the trust of a whole generation.”
“For many,” said the article, “ Germany is the land of opportunity and jobs. In 2012, 45,000 Italians moved to Germany . The Spanish were not far behind, with 37,000 heading in the same direction; 35,000 Greeks also left for Germany .” It cited a harsh fact: “It is … often the best and brightest who are emigrating. In the year up to April 2012, 87,000 people left Ireland . Many moved to Australia and New Zealand . Most of them had achieved high levels of education. … Tens of thousands of Portuguese are seeking work in places like Angola and Mozambique , countries which were former colonies. … [M]ore than 100,000 Spanish graduates have already left a country …”
Mighty market, the “panacea” prescribed by the status quo-economists, required intervention in the face of the situation it created with its bubble: Europe's leaders exercised with a billions-euro youth scheme and Germany invested 1bn euros ($1.3bn) in funding apprenticeships for young people in places like Spain and Portugal to help them find work in Germany. (ibid.) The billion-euro German apprenticeship, training, investment tells: capital needs trained humanpower to exploit, and labor will pay back with more than the invested money.
Thus, on the basis of the incidents not from the backward, under-developed economies, but from the advanced capitalist economies and once colonial powers, appears a system, which is old and matured enough to plunder lands, and is always looking for ways to maximize appropriation of labor but inefficient in using the younger and talented part of the productive force it controls. The system even can't use teachers. The economy, to say sarcastically, is ungrateful to its proponent-economists, who are always busy with hymns of “merciful” hands of market as the economy exposes the proponents' false theories by requiring intervention. The proponents, probably, are not owners of even shreds of shame as they courageously continue with marketing of their market-theory while market creates a void for the youth. The salesmen have sold out everything including their sense of shame in the market, their place of worship.
The old in the old economy
The world system old, conservative and efficient in devouring other lands doesn't show consideration to the old citizens.
In terms of number, the old citizens are not insignificant. “The global population of people ages 60 and older is more than 500 million (close to 8 percent of the total).” (UNDP, Human Development Report 2014 , New York )
“Today”, ILO says, “the majority of the world's older persons live in developing countries, where retirement is a privilege of public and private sector workers who are fortunate to work in the formal economy. Globally, the broad majority of older persons do not benefit from publicly provided minimum income guarantees, have to work as long as they are physically able to for their survival, and have to rely on kinship and charity which are often insufficient to provide even basic income security. This situation stands in sharp contrast with the global social contract embodied in human rights instruments and international labour standards, under which everybody has a right to at least minimum income security in old age.” ( World Social Protection Report 2014/15 , Geneva ) “‘[R]etirement' from economic activity in old age … is rare in developing countries.” (Robert Holzmann, David A Robalino, Noriyuki Takayama, eds. Closing the Coverage Gap, The Role of Social Pensions and Other Retirement Income Transfers , World Bank, 2009) Capital doesn't allow commoners rest in their life! For most people, savings and assets “are usually not sufficient to guarantee an adequate level of income security until the end of their lives.” (ILO, op. cit.) Till death, insecurity doesn't depart from the lives of overwhelming majority of people.
The tough reality faced by the aged citizens is further narrated by UNDP: “Poverty and social exclusion are problems for those who are ageing, especially because roughly 80 percent of the world's older population does not have a pension and relies on labour and family for income.” (op. cit.) About four years ago, citing HelpAge the World Social Security Report 2010/11 WSSR ] informed: “[T]wo-thirds of older people receive no regular income, while 100 million live on less than US$1 a day. Coverage by old-age pension schemes around the world, apart from in the developed countries, is concentrated on formal sector employees, mainly in the civil service and large enterprises.”
The overview provided above is enough to assume the condition of the old in the old economy: (1) Retirement is available in the so-called formal economy, and the size of the formal economy in the so-called developing world exposes the “privilege” of “retirement” the old citizens can avail; and (2) the “broad majority of the older persons” have to dependent on charity and kinship, or they have to rely on labor, sell self to capital. A cruel reality emerges: Sell labor as long as you can, it doesn't matter how old you are, or, in other words, labor is squeezed out by capital as long as there it is.
Condition in old age is not free from poverty. “Poverty in old age is more often chronic, since the lack of economic opportunities and security during earlier life accumulates into vulnerability in old age.” (UNDP, op. cit.) The WSSR also said: “The main risk when one reaches old age is poverty or income insecurity …” The world system fails to give income security to the old, who produced wealth for the system.
In OECD-countries, UNDP informs, “the old-age poverty rate is higher than the average for the whole population (13.5 percent versus 10.6 percent), and older women are more likely than older men to be poor. The situation is similar in many developing countries.” (op. cit.) The system is “efficient” enough: no discrimination between the OECD- and many developing-countries.
In this world system, poverty of the old is “blessed” with disability and abuse, violence and mistreatment. “With ageing comes a higher probability of living with a disability. Worldwide, more than 46 percent of people ages 60 and older live with a disability, and whether living with a disability or not, 15 – 30 percent of older people live alone or with no adult of working age.” (ibid.) Abuse faced by the older citizens is quite extensive. Forty-three percent of them fear, a 2011–2012 survey of 36 countries found, violence and mistreatment. (ibid.) At the same time, while “new, modern technologies and new goods and services changing the lives of more affluent groups in society” older persons with pensions not fully adjusted to inflation find their “absolute purchasing power … deteriorates and they are pushed into poverty.” (ILO, op. cit.) And, “[a]ccess to income security in old age is closely associated with existing inequalities in the labour market and in employment.” (ibid.) The powerful inequality doesn't allow the old to have a life free from inequality.
In the face of physical- and poverty-violence, what income security coverage do the old have in this system? Answer to the question is in the following paragraph:
“Nearly half (48 per cent) of all people over pensionable age”, ILO found, “do not receive a pension. For many of those who do receive a pension, pension levels are not adequate. As a result, the majority of the world's older women and men have no income security, have no right to retire and have to continue working as long as they can – often badly paid and in precarious conditions.” (op. cit.) “In low- and middle-income countries, only one in four people over 65 receive a pension.” (HelpAge International, Global AgeWatch Index 2014 , London ) And, “[d]espite an impressive extension of pension coverage in many countries, significant inequalities persist.” (ILO, op. cit.) Persistence of significant inequalities despite impressive extension tells the situation: Worse than now, before the “impressive” extension.
In low- and middle-income countries, contributory pension “schemes are not meeting the needs of a large proportion of their citizens” as “most people work in the informal sector where jobs are precarious and they do not have access to formal pension schemes. Incomes are often too low to save for old age. For the growing ‘fragile middle' of people who have escaped extreme poverty, few are likely to be able to save for a pension.” (HelpAge, op. cit.) WSSR found: “Incomplete coverage is a widespread phenomenon; it is seen not only in developing countries but in industrialized countries too.” It also found “a significant gender gap … everywhere: in nearly all countries …”
Helplessness of the aged citizens is part of the reality in which markets limit government's sovereign power. “Pressures of tax competition and global financial markets limit governments' ostensibly sovereign power to introduce increases in social security contributions and taxes where necessary to prevent benefit cuts.” (ILO, op. cit.)
As usual pattern in the world system, private capital extends its powerful hands. “Lobbying by the international financial services sector was successful in pushing for large-scale privatizations of social security pensions …” (ibid.) What not is handed over to private capital? Even pensions for the old are not spared. Private capital, thus, profits from even the old.
The system, thus, creates a void for the youth, fails to engage part of productive force and neglects the aged citizens. In a system based on wealth, the reality creates inequality.
It's part III of an essay on inequality.
Errata : The source in the paragraph just above Figure 1 in part I ( Countercurrents.org , October 19, 2014), is “ OECD (2014), “Income Inequality Update - June 2014” ” instead of “ibid.”; the last sentence in paragraph 4 in part II ( Coutercurrents.org , October 23, 2014), will be “ Unpaid work, whether it's in home or in agriculture field, goes to the account of surplus value produced in an entire society, and capital appropriates it. ” instead of “ Unpaid work, whether it's in home or in agriculture field, goes to the account of surplus value an entire society produces and capital appropriates. ”, and in the last sentence in paragraph 2 in the same part, the “ is ” preceding “ can ” will get omitted.

Thursday, October 23, 2014

Inequality: The Unaccounted Surplus Value Women Produce

More burdens are put on women than men as exploiting women has been made easier in the present world system. The tricky arrangement, a make-belief “universal” fact, is part of status quo. Advanced capitalist economies fail to discard the arrangement as the surplus value women produce is a lot, at times and in lands it's trillions of dollars.
This leads one to the finding: Even, advanced capitalist economies, many of those are matured bourgeois democracies also, deprive women. This old fact has been confirmed by the Organisation for Economic Co-operation and Development (OECD) and others from mainstream. “[O]n average, in OECD countries, women earn 16% less than men, and female top-earners are paid 21% less than their male counterparts.” (OECD, Gender Equality in Education, Employment and Entrepreneurship: Final Report to the MCM(Meeting of the OECD Council at Ministerial Level) 2012 , May 2012) In Australia , women were among the worst affected as recent reports on poverty in the country found. In that continent-country, women were more likely to experience poverty than men – 14.7 percent compared to 13 percent in 2011-12. ( Poverty in Australia 2014 , Australian Council of Social Service) In backward countries, in societies without accountability and transparency, condition of women is can easily be assumed if women in the OECD-countries experience the deprivation.
However, deprivation of women doesn't deprive capital from getting service from women. “Companies”, the OECD found, “with a higher proportion of women in top management do better than others.” The fact stands as: You're paid less as you serve me better. It's the logic of capitalism!
The OECD report said: “[W]omen are doing more unpaid work than men, regardless of whether they have full-time jobs or not. Among couples where both partners work, women spend more than two hours per day extra in unpaid work, and even among female-earner couples men only do as much housework as women. The types of housework also differ: men tend to garden or engage in house maintenance, while women are more likely to cook and clean.” Unpaid work, whether it's in home or in agriculture field, goes to the account of surplus value an entire society produces and capital appropriates.
It thus stands: capital profits at the cost of women, and capital exploits not only in manufacturing plants, but in homes also. In Australia , women's higher possibility of experiencing poverty than men “is due to the fact that women tend to have lower employment outcomes and wages, and are more likely to be in unpaid caring roles, and have lower investment incomes in retirement”. ( Poverty in Australia 2014 ) The report cited She works hard for the money: Australian women and the gender divide by Rebecca Cassells, Riyana Miranti, Binod Nepal and Robert Tanton. (National Centre for Social and Economic Modelling, Canberra , 2009) What the women in the Third and Fourth Worlds (TFW) countries experience in terms of wage, etc.? Imperialism has made the TFW a sanctuary for its capital with the regimes it has installed and with the retrogressive economic forces it has befriended in these two worlds. These “contribute” to generating surplus value in immense amount.
Women earning less are equal to higher exploitation of women, and that means the more vulnerable the more exploited. Even, at the top level, women face the inequality. At the lower level, in factories and farms, at construction sites and the so-called informal sector, in the TFW-countries, the inequality is harsher. It appears a beast. The reality exposes capitalism's anti-women character.
Crisis in the world system aggravated the situation related to women. In the context of the recent financial and economic crisis, ILO found, “29 million net jobs lost during the global economic crisis have not been recovered.” ( Global Employment Trends for Women 2012 , ILO, Geneva , December 2012) The crisis was boosted by the Eurozone crisis and the “fiscal cliff” threat in the US . These were followed by austerity measures – the mechanism to put the burden of crisis on people, and to reap profit from the crisis – in 2011-12. The impact hit women hard.
“From 2002 to 2007, the gender gap in unemployment was constant at around 0.5 percentage points, with the female unemployment rate higher at 5.8 per cent, compared to male unemployment at 5.3 per cent (with 72 million women unemployed compared to their global employment of 1.2 billion in 2007 and 98 million men unemployed compared to their global employment of 1.8 billion). The crisis raised this gender gap to 0.7 percentage points for 2012 …” (ibid.) The crisis, the ILO found, eliminated 13 million jobs for women. Women were thus forced to join the reserve army of labor that capital uses to boost its profit and power. Joining the reserve army of labor weakens labor's bargaining power. Capital thus weakened women.
Moreover, the ILO report said “the crisis saw a reversal in the historically higher employment growth rates for women, lowering them below those for men by 0.1 percentage points …” (ibid.) Capitalist crisis increases inequality. There is nothing to get astonished as the system is really a bonafide exploiter from head to toe.
The entire system, not only the system's crisis, doesn't give up women from exploitation. It not only turns women into commodity, it pays women less also. The fact exposes capital's brute face as paying women less than men means paying women less for necessary labor, which means either considering women lesser than average human being or putting extra burden on women for sustaining her body and soul, which capital needs for its regeneration.
A broader “picture” makes the system's face more brute. All over the world, women's labor is underpaid and unpaid. Women's work at home is unpaid. For sustaining labor, an essential for capital, work at home – food preparation, rearing up children, etc. – is required, and that goes unpaid. So, the fact comes out as capital extracts from women at home.
“Women contribute substantially to economic welfare through large amounts of unpaid work, such as child-rearing and household tasks, which often remains unseen and unaccounted for in GDP.” (Katrin Elborgh-Woytek, Monique Newiak, Kalpana Kochhar, Stefania Fabrizio, Kangni Kpodar, Philippe Wingender, Benedict Clements & Gerd Schwartz, Women, Work, and the Economy: Macroeconomic Gains From Gender Equity , IMF staff discussion note, September 2013) It's actually theft as labor is used but unpaid.
Inequality women face turns stark if women's unwaged/under-waged work is considered. Citing the ILO Lena Graber and John Miller write: In 1990, women carried out two-thirds of the world's work for 5% of the income. (“Wages for housework: the movement & the numbers” in Amy Gluckman, John Miller, Bryan Snyder, and Chris Sturr (ed.), Readings in Macroeconomics , 28 th edition) In 1995, the UNDP's Human Development Report estimated that women's unpaid and underpaid labor was worth $11 trillion worldwide, and $1.4 trillion in the US . The share of the advanced economy is more than one-tenth. The amount tells capital's gains from women. Capital knows the secret: Wealth is in the hands of a goddess named Laxmi.
As example of hours spent by women in household work Lena and John refer to a set of data related to the issue: In Australia , 2 hours and 27 minutes were spent for child care per day in a household by a woman in 1997. In the UK in 2000, it was one hr. and 26 min. while in Nepal , in 1996, it was two minutes more than that of the UK . In Norway , it was 42 min. in 2000 while in Japan it was 24 min. in 1999. Time spent for food preparation was: Australia – 1 hr 29 min., Norway – 49 min., the UK – 1 hr. 8 min., Nepal – 5 hr. 30 min. Time spent for water and fuel collection in Nepal was 1 hr 10 min while in Norway it was 1 min. Time was also spent for cleaning and shopping. The total time spent was: Australia – 3 hr. 39 min., Japan – 3 hr. 34 min., Norway – 3 hr. 56 min., the UK – 4 hr. 55 min. (op. cit.)
What do these hours and minutes mean? Citing Rosemarie Tong's Feminist Thought: A More Comprehensive Introduction , (1989, Westview Press) Lisa Healy writes: “In essence, women's domestic labour is a vital contribution to the production of marketplace commodities, as it permits the capitalist to extract surplus value in the marketplace and can hence, be construed as unpaid labour ‘performed for the capitalist'.” (“Capitalism and the Transforming Family Unit: A Marxist Analysis”, Socheolas: Limerick Student Journal of Sociology , vol. 2(1), November 2009, University of Limerick ) Mariarosa Dalla Costa and Selma James claimed that women's work inside the home generates surplus value. (cited in Rosemarie)
Further facts render more startling picture: “Canadian women performed 65% of all unpaid work, shouldering an especially large share of household labor [….] In Great Britain […] unpaid labor hours are high for an industrialized country […], far greater relative to GDP. […W]hen valued using the opportunity cost method, unpaid work was 112% of Britain 's GDP in 1995! With the specialist-replacement method, British unpaid labor was still 56% of GDP — greater than the output of the United Kingdom 's entire manufacturing sector for the year. In Japan […] women perform over 80% of unpaid work […] The Japanese Economic Planning Agency calculated that counting unpaid work in 1996 would add between 15.2% (generalist-replacement method) and 23% (opportunity-cost method) to GDP. Even at those levels, the value of unpaid labor still equaled at least half of Japanese women's market wages.” (Lena & John, op. cit.)
With increased crisis, financial or ecological, the workload on women increases. In areas in Bangladesh , rural women's time spent for collecting fuel and firewood increased many fold due to degradation of their immediate ecology. (Farooque Chowdhury, “Scarce fuel: Growing scarcer” and “Notes from the field”, People's Report 2002-2003, Bangladesh Environment , vol. I, UNDP sponsored) Micro credit targeted at women at household level increases debtor women's workload and working hour/day to the level of inhuman cruelty. (Farooque Chowdhury, “Metamorphosis of the micro credit debtor”, Micro Credit: Myth Manufactured , 2007) It's almost impossible to find mainstream's study on the working hour of women debtors of micro credit, and a comparison between incomes by micro credit “enterprise” and other economic work. One has to depend on inquiry at personal level to get the answer regarding micro credit debtors. These, data and information provided by Lena and John, and the People's Report, and the argument related to women-debtors of micro credit, are a part of a picture that help comprehend the labor women are compelled to spend in the service of capital.
The data and argument above tell the huge amount of wealth women produce and the extent of deprivation they “earn”. What's the total work day women spent all over the world for years and for generations, and what's the total amount of wealth they produce? It's unimaginable. Is it less than the labor required for building the Taj Mahal or the pyramids? Nazrul Islam, the Rebel Poet of Bengal, said: Half of the world's great creations are made by women, men's contribution was not the whole. The world system appears illogical if one compares the amount of money the system wastes by manufacturing arms, waging wars and invasions, organizing assassinations and hatching conspiracies while it doesn't pay women's so much labor.
But, “[t]here is ample evidence that when women are able to develop their full labor market potential, there can be significant macroeconomic gains. … [R]aising the female labor force participation rate (FLFPR) to country-specific male levels would, for instance, raise GDP in the United States by 5 percent, in Japan by 9 percent, in the United Arab Emirates by 12 percent, and in Egypt by 34 percent. …In rapidly aging economies, higher FLFP can boost growth by mitigating the impact of a shrinking workforce. … Better opportunities for women to earn and control income could contribute to broader economic development in developing economies …. Equal access to inputs would raise the productivity of female-owned companies. … The employment of women on an equal basis would allow companies to make better use of the available talent pool, with potential growth implications. (Katrin Elborgh-Woytek, et al, op. cit.)
Questions obviously will follow the facts cited above: Why (1) women are not allowed to develop their full labor market potential? (2) FLFPR is not allowed to increase? (3) better opportunities for women to earn and control income are not allowed? (4) women are not allowed to have equal access to inputs? (5) employment of women on an equal basis is not allowed? And, what are the obstacles or the interests that create the obstacles?
The last question virtually questions, and exposes the status quo. The obstacles are in the interests that dominate entire societies, not only women. Other questions simultaneously expose the dominating system's tact and incapacity.
The status quo is incapable of developing full potential of all the productive forces in society. The crude act of the system that gets exposed is: the system tries to increase reserve army of labor by keeping women in a corner, by making them appear useless. Increasing reserve army of labor benefits capital.
Gender wage gap increases capital's power for bargaining with labor. The gap in the same occupation makes capital's power crudely exposed. The IMF staff discussion note finds “there is a significant wage gap associated with gender, even for the same occupations.” (op. cit.)
Self-employment, so-called informal sector, is the evidence of a system's incapacity to provide employment, discarding of responsibility regarding employment. It's a failure of the system. The system fails to use all its productive forces. At the same time, with this sector, the system increases the size of reserve army of labor. The gender gap doesn't leave even the sector. “The gender gap in earnings”, the IMF staff discussion note says, “is even higher in self-employment than in wage employment.” (op. cit.) Despite losses the system sustains gender gap in the labor market. GDP per capita losses attributable to gender gaps in the labor market have been estimated at up to 27 percent in regions. In regions it varied: 15 and 23 percent. (Cuberes, D & M Teignier, “Gender Gaps in the Labor Market and Aggregate Productivity,” Sheffield Economic Research Paper 2012017, June 14, 2012 version) The cruelty of the system – weaken labor to increase profit – thus gets exposed.
Despite potential with female labor force participation, the IMF staff discussion note finds: “Average FLFP remains low at around 50 percent, with levels and trends varying across regions. … Variations in the gender gap are significant even among OECD countries.” (op. cit.) Doesn't the system require a better FLFP? Is it the incapacity of even the OECD countries? The system reveals its anti-women position with its incapacity.
State is a machine in the system. States in the global system propagate their responsibility to ensure basic necessities and rights. But, the IMF staff discussion note says: “In many countries, the lack of basic necessities and rights inhibits women's potential to join the formal labor market or become entrepreneurs.” (op. cit.) How can one reject findings mentioned in an IMF staff discussion note? Doesn't the finding say: states don't care about women?
States' anti-women position is further exposed as the IMF staff discussion note says: “In many advanced economies, tax systems impose strong disincentives for FLFP through high tax wedges on secondary earners.” (op. cit.) And, tax system in any system serves dominating interests/elites.
Thus, the inequality that women face shows the world capitalist system's incapacity, crude trick to exploit women, and an “output” of the system's acts to increase the size of the reserve army of labor. The system hinders potential while tries to gain more strength to bargain with labor.

Sunday, October 19, 2014

Inequality And Imperialism

Capitalism can't surmount inequality as the system itself creates the curse that humanity struggles to defeat. And, inequality, with imperial power and incapacities, affects societies in far flung areas distorting their economic-social-cultural-political development. Moreover, inequality with its political manifestations and ramifications threaten the system. But the system nourishes inequality. A seemingly strange, but inherent contradiction within the system!
Advanced capitalist economies, the economies that have fattened themselves by bleeding the poor in every corner of the planet, are bearing inequality in spheres of income, well-being, health care and education. It's not possible for the system to break down barriers to equality, the dream humanity nourishes in its heart. This takes away all logic for the existence of capitalism while connections of capitalist crisis are exposed.
200 years
The sharp rise in income inequality across the world is one of the most worrying developments of the past 200 years, said the Organisation for Economic Co-operation and Development (OECD) in a recent report. “It is hard not to notice the sharp increase in income inequality experienced by the vast majority of countries from the 1980s. There are very few exceptions to this”, said the report How Was Life? Global well-being since 1820 (van Zanden, J. L., et al. (eds.) (2014) OECD Publishing, doi: 10.1787/9789264214262-en)
“The enormous increase of income inequality”, the report said, “on a global scale is one of the most significant – and worrying – features of the development of the world economy in the past 200 years.” The report tracked wellbeing in eight world regions over two centuries.
About three years ago OECD Secretary-General informed: “Income inequality in OECD countries is at its highest level for the past half century.  The average income of the richest 10% of the population is about nine times that of the poorest 10%  across the OECD, up from seven times 25 years ago.” He was presenting Divided We Stand: Why Inequality Keeps Rising , an OECD study report, in December 2011. The Secretary-General said: Inequality increased further in the US , Germany , Denmark , Sweden , Israel . It has “fallen in Chile and Mexico , but in these two countries the incomes of the richest are still more than 25 times those of the poorest.”
The world capital blesses the rich: from seven times to nine times within 25 years, and more than 25 times of the poor!
Despite many countries' recovery from the Global Economic Crisis, the OECD finds, “the distribution of “market income” (gross earnings and capital income) kept widening … Measured by the Gini coefficient (which is 0 when everybody has the same income and 1 when one person has all the income), market income inequality rose by 1 percentage point or more in 20 OECD countries between 2007 and 2011/12.” (OECD (2014), " Income Inequality Update - June 2014 ”)
Inequality is behaving in an “amazing” way: Hardest the hit largest the increase. “The largest increases”, according to the OECD, “occurred in those countries hit hardest by the crisis: Spain , Ireland , Greece , Estonia and Iceland ”. France and Slovenia have the same experience. “In Spain and Greece , inequality of market income widened considerably in the aftermath of the crisis, and kept increasing more recently as the crisis persisted: compared to 2010, it increased by another 1.5 and 3 percentage points, respectively, in 2011. Market income inequality also increased by more than 1 percentage point in 2011 in Germany , Luxembourg and Portugal , compared to 2010.” (ibid.)
In Australia , poverty is on the rise. More than one million Australians are in severe poverty, with access to less than 30 percent of national median income. More than 2.5 million people, and one in six children, are struggling to fulfill their daily basic needs. More than 600,000 children, and one-third of children in single parent families, lived below the poverty line. A significant number of Australians remained in “deep and persistent” poverty for extended periods, often for more than five years. More than 40 percent of all people on social security benefits fell below the poverty line. More than 100,000 persons are homeless. Adult working-age Australians are more likely to be homeless than any other age group, constituting 44% of all homeless persons nationally. Children have the second largest representation among those classified as homeless, with more than 1 in 4 homeless, children. (Cassells, R., Dockery, M., and Duncan , A (2014), Falling through the cracks: Poverty and Disadvantage in Australia , Bankwest Curtin Economics Centre and Poverty in Australia 2014 , the Australian Council of Social Services)
The ACSS report cited the Australian Bureau of Statistics Household Income and Expenditure Survey that asked people about their actions because of a shortage of money. Actions taken by the respondents over the last year due to a shortage of money included “Pawned or sold something”, “Sought financial help from friends/family”, “Unable to heat home”, “Went without meals”, “Could not pay gas/electricity/telephone bill on time”. Do these sound “actions” by the poor in Third and Fourth Worlds (TFW)?
Australia , it was claimed during the Great Financial Crisis (GFC), was not facing the crisis. The economy was happily cashing on coal export. But the coal power, along with casino and prostitution, has powered poverty also.
Crisis not only generates inequality and poverty in capitalism. Crisis also aggravates inequality-situation although the system fattens with profit.
During the last 200 years, as the OECD compares, the world found capitalism gaining strength to strength, conquering heights after heights, plundering land after land, waging wars for loot, abusing science and technology for maximizing profit. Over the last 200 years capitalism has gradually and forcefully entrenched its world system. Two world wars ravaged the world during the last 200 years. The last World War and its aftermath put extra wealth and power in pocket of capitalism. The Korea and Vietnam Wars brought more money to capitalism. Multinational corporations made huge investments and made huge profit during the period. Capitalism's “golden age” was during the last 200 years.
Capitalism has ensured its control not only with its economic dictatorship, but has also imposed its political, information, cultural and ideological order, dictatorship, over the entire planet. It's imperialism. Post-revolutionary societies' efforts to reduce inequality set a few examples as the societies tried to break the chain of the imperialist world order. But those efforts faced disasters. A number of new examples are now emerging in a part of the planet. But still capitalism, the system owning enormous wealth, is the order of the day, and inequality dominates the capitalist system. Condition of the poor around the world is the evidence.
Poor: lost more gained less
Gains the poor made in the capitalist world disclose capitalism's capacity and incapacity, capacity to deprive many and benefit a few, and incapacity to initiate a fair distribution among many. “Lower income households”, the OECD finds, “either lost more during the crisis or benefited less from the recovery. Across the OECD countries, real household disposable income stagnated, and the income of the bottom 10% of the population declined from 2007 to 2011 by 1.6% per year (Figure 1). Focusing on the top and bottom 10% of the population in 2007 and in the latest year available shows that, on average across the OECD, the drop in income was twice as large for the bottom 10% compared with the top 10%. Out of the 33 countries where data are available, the top 10% has done better than the poorest 10% in 19 countries.” (ibid.)
Figure 1: Poorer households tended to lose more or gain less Annual percentage changes
in household disposable incomebetween 2007 and 2011, by income group
Source: OECD (2014), "Income Inequality Update - June 2014”. © OECD 2014
Note:
1. Data for 2007 refer to 2006 for Chile and Japan ; and 2008 for Australia , France , Germany , Israel , Mexico , Norway , New Zealand , Sweden , and the US . Data for 2011 refer to 2009 for Japan ; 2010 for Austria and Belgium ; and 2012 for Australia , Finland , Hungary , Korea , Mexico , the Netherlands and the US . For Hungary , Mexico and Turkey data on market income inequality are not available. There is a break in the series in 2011 for the UK , and results are not strictly comparable. 2011 data for Ireland and the UK are provisional.
2. The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.
3. ( ? ) in the legend relates to the variable for which countries are ranked from left to right in increasing order.
Disposable income also experienced inequality. Spain , France , Hungary , Slovak Republic had larger increases in disposable income inequality. Following a few years of stable inequality in disposable income Germany and the US , the two significant economies in the world capitalist system, found a significant increase in 2011 and 2012. In Finland , Korea , the Netherlands , Poland and Portugal , the slight decrease in disposable income inequality continued in 2011. (ibid.)
Most of the OECD-countries (Oc) are in the First and Second Worlds. What happens to the poor in non-OECD-countries, most of which are in the poor TFW? In most of the Oc, transparency and accountability in the ruling mechanism is better than the countries in the TFW. What the poor in the TFW face everyday in the present world order if the poor in the Oc benefited less and lost more?
The TFW-countries are not only home to backward economies; these countries are also (1) victims of the world capitalism that mercilessly exploits all the resources of these countries; (2) home to crude ruling elites that openly plunder the people and the nature in respective countries, ruthlessly dominate entire societies, and lumpenize political process; and (3) victims of imperialist intervention, which is carried out not only with armed forces, but also with other forces that include aid, finance, science and technology, and diplomacy and politics. This reality of invasion increases inequality in the TFW-countries.
Lumpenizing political process is a single example of many acts and processes that increase inequality. Functions lumpenized political process carries out include snatching away minimum rights based on which people can get mobilized, voice issues related to inequalities, infrastructure and essential services, demand wage rise, protest wage cut and destruction of nature, environment and ecology.
“With the tightening of class lines and the increasing severity of social conflict”, Sweezy writes, “parliament becomes more and more a battle ground for contending parties representing divergent class and group interests. … [P]arliament's capacity for positive action declines…” ( The Theory of Capitalist Development , MR Press, 1964) Sweezy's observation was on parliaments in capitalist economies.
In the periphery, the parliament-reality is different from those in the center. Moreover, the reality in the periphery is not only related to parliament. Its distortion/perversion is wider. “In the periphery … efforts to copy the bourgeois institutions of the center … either produced empty faƧades or were discarded by dominant classes … who saw in any concessions to the underlying population a dangerous threat to their continued rule.” ( Four Lectures on Marxism , MR Press, 1981) This reality of empty faƧade hurts people's efforts and struggles against inequality.
Now, it's an accepted fact that destruction of nature, environment and ecology hurts people, and the poor is hurt most. The world capitalism makes money by demolishing nature, environment and ecology while people get hurt – deprived – because of the demolition. And, today, imperialism is the army of the world capitalism that makes the onslaught on environment, etc.
Today's Iraq , Afghanistan , Libya , Syria are burning examples of increased inequality due to imperialist intervention. People in countries that turn into victim of imperialist intervention not only stand helpless in front of destruction and disruption of all arrangements and services essential for their survival; they also find institutions critical for survival either vanished or vacant or pseudo. In lands invaded by imperialists, mere daily survival with barest provisions turns out the only fact of life as the first and only concern of the peoples there in those lands is insecurity/security of life. Uncertainty compounds insecurity in the life of the people. All essential and basic provisions for sustaining life are hoarded in an imperial depot named dearth. Organizations required for voicing needs and waging struggle to attain essential provisions and services turn dysfunctional during and after invasion. The atmosphere that overwhelms an invaded land is hostile to people's organizations capable of organizing people's democratic struggle as only “good wishes” of victor, represented by an administrator or a commander or an ambassador, prevails there. The entire situation increases inequality.
Imposition of neo-liberal measures in countries is an example of imperialist intervention in the form of economy. The countries intervened are now not only the TFC, but countries in the Second World also. The regime change episode in Greece and Italy are examples.
The neo-liberal measures – selling out of public properties, utility services and infrastructure are only a few of those measures – increase inequality. Neo-liberal measures are imposed by imperialism. Its power and organizations impose it.
The recent bombardment with austerity measures in Greece and other countries is another example of imperialist intervention. These countries are examples of rising inequality that the measures generated.
Imperialism, thus, emerges as one of the main actors behind inequality and its rise. Mainstream's discussions on inequality don't take into account the issues of imperialism and the world order that the imperialist powers run. It's mainstream's altum silentium , profound silence.