How Abusive Employers Combined With Job Insecurity Lead to Suicides

http://www.nakedcapitalism.com/2016/08/how-abusive-employers-combined-with-job-insecurity-lead-to-suicides.html

Posted on August 22, 2016 by Yves Smith

Yves here. It’s hardly a secret that employers have become more abusive towards employees because they can get away with it. The difficulty of finding new employment, particularly for mid and senior level jobs, combined with the fact that most workers (even comparatively well paid ones) are only a paycheck or two away from financial desperation, means bosses have tremendous leverage over workers. And more and more firms embrace coerciveness as a virtue. In the past, it’s more often taken the form of cultishness, which is a very effective business model, as Goldman and Bain attest, but more recently, outright mistreatment is becoming common. For instance, Amazon has so successfully cultivated a “culture of fear” that the overwhelming majority of employees cry at work.

Note the claim in the article about elevated suicide rates at Apple supplier Foxconn is contested; some contend that statistically, its rate of suicides is no higher than for other employers. However, many of the dorms apparently had mesh canopies to prevent suicides, so one wonders if direct comparisons are apt.

By Sarah Waters, a Senior Lecturer in French Studies, University of Leeds and Jenny Chan, a Departmental Lecturer in Sociology and China Studies, University of Oxford. Originally published at The Conversation

A Paris prosecutor recently called for the former CEO and six senior managers of telecoms provider, France Télécom, to face criminal charges for workplace harassment. The recommendation followed a lengthy inquiry into the suicides of a number of employees at the company between 2005 and 2009. The prosecutor accused management of deliberately “destabilising” employees and creating a “stressful professional climate” through a company-wide strategy of “harcèlement moral” – psychological bullying.

All deny any wrongdoing and it is now up to a judge to decide whether to follow the prosecutor’s advice or dismiss the case. If it goes ahead, it would be a landmark criminal trial, with implications far beyond just one company.

Workplace suicides are sharply on the rise internationally, with increasing numbers of employees choosing to take their own lives in the face of extreme pressures at work. Recent studies in the United States, Australia, Japan, South Korea, China, India and Taiwan all point to a steep rise in suicides in the context of a generalised deterioration in working conditions.

Rising suicides are part of the profound transformations in the workplace that have taken place over the past 30 years. These transformations are arguably rooted in the political and economic shift to globalisationthat has radically altered the way we work.

In the post-war Fordist era of industry (pioneered by US car manufacturer Henry Ford), jobs generally provided stability and a clear career trajectory for many, allowing people to define their collective identity and their place in the world. Strong trade unions in major industrial sectors meant that employees could negotiate their working rights and conditions.

But today’s globalised workplace is characterised by job insecurity, intense work, forced redeployments, flexible contracts, worker surveillance, and limited social protection and representation. Zero-hour contracts are the new norm for many in the hospitality and healthcare industries, for example.

Now, it is not enough simply to work hard. In the words of Marxist theorist Franco Berardi, “the soul is put to work” and workers must devote their whole selves to the needs of the company.

For the economist Guy Standing, the precariat is the new social class of the 21st century, characterised by the lack of job security and even basic stability. Workers move in and out of jobs which give little meaning to their lives. This shift has had deleterious effects on many people’s experience of work, with rising cases of acute stress, anxiety, sleep disorders, burnout, hopelessness and, in some cases, suicide.

Holding Companies to Account

Yet, company bosses are rarely held to account for inflicting such misery on their employees. The suicides at France Télécom preceded another well-publicised case in a large multinational company – Foxconn Technology Group in China – where 18 young migrant workers aged between 17 and 25 attempted suicide at one of Foxconn’s main factories in 2010 (14 of whom died).

The victims all worked on the assembly line making electronic gadgets for some of the world’s richest corporations, including Samsung, Sony and Dell. But it was Apple that received the most criticism, as Foxconn was its main supplier at the time.

Labour rights activists argue that corporations such as Apple and their contracted suppliers should be jointly responsible for creating the working conditions and management pressure that might have triggered workplace suicides. Extensive interviews with one of the Foxconn survivors, a woman called Tian Yu who was 17-years-old when she attempted suicide, detailed a harsh production regime. She said she had to work 12-hour shifts, skipped meals to work overtime and often only had one day off every second week.

Apple published a set of standards for how workers should be treated in the aftermath, but its suppliers continued to be dogged by accusations that these were breached. In December 2014, for example, the BBC ran a documentary called “Apple’s Broken Promises” which showed how the company had failed to improve working conditions four years after the crisis. Undercover filming showed exhausted workers falling asleep on 12-hour shifts and workers being yelled at repeatedly by managers at new supplier, Pegatron Shanghai, where the latest iPhones are assembled.

Pegatron said in response to the BBC investigation that it would investigate the reports and take necessary action if any deficiencies were found in their factories. Apple maintains that it does do all it can to monitor its supplier’s practices with its annual supplier responsibility reports. Meanwhile, labour rights activists and researchers continue to allege abuse of workers in the company’s supply chains.

Writing at the end of the 19th century, French sociologist Emile Durkheim suggested that suicide was a kind of mirror to society that revealed the fundamental nature of the social order at a given historical juncture. France Télécom and Foxconn are at different ends of the globalisation spectrum – one employs white-collar workers in high-tech service occupations and the other recruits young rural migrants to work on the assembly line. Yet suicides in these two places reveal the common face of a global economic order that too often allows profit to take precedence over all else.

Meanwhile it continues to be business as usual for many of the richest multinational corporations in the world. But it’s high time that all corporations across the spectrum took responsibility for their own abuses.

How Bill Clinton Waged a War on Welfare Mothers Instead of a War on Poverty

Posted on Aug 22, 2016

By Robert Scheer

http://www.truthdig.com/report/item/20060829_robert_scheer_clinton_welfare

To hear Bill Clinton tell it, his presidency won the war on poverty three decades after President Lyndon B. Johnson launched it, having changed only the name. Unfortunately, however, for the mothers and their children pushed off the rolls but still struggling mightily to make ends meet even when the women are employed, the war on welfare was not the same battle at all.

Clinton masterfully blurred the two in a recent New York Times opinion column, as did most others on the 10th anniversary of the passage of the Personal Responsibility and Work Opportunity Reconciliation Act, writing as if getting mothers and their children off the welfare rolls is the same as getting them out of poverty. In the absence of any evidence that poverty is tamed, he celebrates a “bipartisan” victory, which was good for his image but not necessarily for those it claimed to help.

The ex-president gloats over the large decrease in the number of welfare recipients as if he is unaware of the five-year limit and other new restrictions which made it inevitable. Nor does he seem bothered that nobody seems to have thought it important to assess how the families on Aid to Families with Dependent Children fared after they left welfare. The truth is we know very little about the fate of those moved off welfare, 70% of whom are children, because there is no systematic monitoring program, thanks to “welfare reform” severing the federal government’s responsibility to help the nation’s poor.

The best estimates from the Census Bureau and other data, however, indicate that at least a million welfare recipients have neither jobs nor benefits and have sunk deeper into poverty. For those who found jobs, a great many became mired in minimum-wage jobs—sometimes more than one—that barely cover the child-care and other costs they incurred by working outside the home.

Yet, in rather the same way that President Bush likes to follow sentences about Sept. 11 with the words “Saddam Hussein” to imply a connection unsupported by facts, Clinton follows his boasts about welfare “reform” by announcing that “child poverty dropped to 16.2 percent in 2000, the lowest rate since 1979” as if that proves a causal relationship.

But if crushing welfare is such a boon to poor children, the effects should be snowballing the further we get from the bad old days, right? Well, no: The same census data Clinton cites for 2000 also records a 12% increase in childhood poverty over the four subsequent years.

Of course, Republican funding cuts to various poverty-related programs have no doubt played a role in this sad stat, as has a bitter resistance to raising the federal minimum wage, which, in real dollars, is now at its lowest point in a half-century. But it is ridiculous to imply, without evidence, that welfare reform is responsible for declines in poverty but is unrelated to increases in poverty.

What we do know unequivocally is that real wages have been declining for workers, both lower- and middle-class, despite increases in productivity. As the New York Times reported on Monday, “wages and salaries now make up the lowest share of the nation’s gross domestic product since the government began recording the data in 1947, while corporate profits have climbed to their highest share since the 1960s.” These numbers are even more depressing when we realize that the top 1% of wage earners, beneficiaries of Bush’s feed-the-rich tax breaks, now earn an outsized 11.2% of the nation’s total wages.

Now, Clinton knows full well that the playing field is neither level nor fair, so it is unconscionable to have singled out the minuscule welfare program for a big propaganda campaign to improve government efficiency. The overly examined welfare program costs $10 billion a year while the $300 billion already spent on the Iraq war is rarely raised in discussions of taxpayer burden and fiscal responsibility.

The sad reality is that “ending welfare as we know it” was championed by Clinton because it made him appear to be a “new Democrat” and not because it would improve the lives of poor kids. Otherwise, he would not dare boast in his column that “as a governor, I oversaw a workfare experiment in Arkansas in 1980,” because that program was a failure.

In Arkansas today, fully half the children are described in Census Bureau data as “low income,” while 1 out of 10 live in a situation that researchers call “extreme child poverty,” meaning that a family of four survives on less than $9,675 per year.

Yes, Clinton all but ended welfare. Unfortunately, child poverty is again on the rise in Arkansas and throughout the nation.

The Politics of Negative Interest Rates

Yanis Varoufakis

https://www.project-syndicate.org/commentary/negative-interest-rates-reveal-politics-of-money-by-yanis-varoufakis-2016-08

ATHENS – Objects of desire come at a cost. Only bad things, like toxic waste, have a negative price, the equivalent of a fee payable to anyone willing to make them disappear. Does this mean that negative interest rates embody a new perspective on money – that it has gone “bad”?

In market economies, money is the measure of the value of goods and services. And the interest rate is the price of that metric – of money itself. When the price is zero, it makes no difference whether money is kept under a mattress or lent, because there is no cost to holding or borrowing cash.

But how can the price of money – which, after all, makes the world go round, or, as Karl Marx put it, “transforms all my incapacities into their contrary” – be zero? And how can it possibly ever become negative, as it now is in much of the global economy, with the world’s moneyed people “bribing” governments to borrow from them more than $5.5 trillion?

The answer can only be of a type that economists loathe: philosophical, political, and thus irreducible to neat positivist explanation. In other words, the answer must concern the essence of money.

In a farmers’ market, sellers with many unsold potatoes start dropping the price until a level is reached (possibly very low, but still positive) at which all of the potatoes are bought. In contrast, since the 2008 global financial crisis, every time the price of money has been reduced, demand for it falls and excess savings rise. Clearly, money is not like potatoes or any other well-defined “thing.”

To understand how money can be our societies’ supreme good while fetching a negative price, it helps to start with the realization that, unlike potatoes, money has no intrinsic private value. Its utility comes from what its holder can make others do. Money, to recall Lenin’s definition of politics, is about “who does what to whom.”

Imagine you are an entrepreneur with money in the bank, or have a bank eager to lend large sums to invest in your business. You spend sleepless nights wondering whether you should invest in a new product – that is, whether you should exploit your access to money to cause an array of others to work on your behalf. In our current Great Deflation, what worries you most is your customers’ future purchasing power and sentiment. Will they be able and willing to buy your new product at high enough prices and quantities?

Suppose that, sleep-deprived, you then switch on the radio or TV only to hear that US Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi are considering reducing interest rates further. Will you rejoice at the prospect that your financing costs will fall? Will you be motivated to invest your own money now that it earns lower (perhaps even negative) interest?

No and no. Your reaction is most likely to be one of alarm: “Oh, my God! If Janet and Mario are considering another interest-rate cut, they must have good reason to believe that demand will remain low!” So you abandon your investment plan. “Better to borrow money at almost no cost,” you think, “and buy back a few more of my company’s shares, boost their price, earn more on the stock exchange, and bank the profits for the rainy days that are coming.”

And so it is that the price of money falls, even as the supply of it burgeons. Central bankers who never predicted the Great Deflation are now busily trying to find a way out with economic and econometric models that could never explain it, let alone point to solutions. Unwilling to question the political dogma that central banks must be apolitical, they refuse to think of money as more than a “thing.” And so they continue the search for a technocratic fix to a problem crying out for a philosophically astute political solution.

It’s a futile quest. Once the price of money (interest rates) hit zero, central banks tried buying mountains of public and private debt from commercial banks to give them an incentive to lend freely. The ECB went so far as to pay banks to lend to business while, at the same time, punishing them for not lending (via negative interest rates for excess reserves).

But bankers and businesses, viewing these measures as desperate responses to self-fulfilling deflationary expectations, went on an investment strike, while using the central-bank money to inflate the prices of their own assets (stocks, art, real estate, and so forth). This did nothing to defeat the Great Deflation; it only made the rich richer, an outcome that somehow reinforced central bankers’ belief in central bank independence.

Not all central bankers, thankfully, are incapable of responding creatively to the Great Deflation. Andy Haldane, Chief Economist at the Bank of England, has courageously suggested that all money should become digital, which would permit real-time negative interest rates to be imposed on all of us, thus forcing everyone to spend at once. John Williams, President and CEO of the Federal Reserve Bank of San Francisco, recently argued that the Great Deflation could be beaten only by targeting the price level and nominal national income simultaneously – a New Deal-like approach featuring joint action by the Fed and the government.

What separates these central bankers from the herd is their readiness to jettison the myth of independent monetary policy, to accept that money is the most political of commodities, to challenge the sanctity of cash, and to concede that defeating the Great Deflation requires a progressive policy agenda.

Simone Weil once said, “If you want to know what a man is really like, take notice of how he acts when he loses money.” Likewise, if we want to know what our societies are really like, we must take notice of how they react to negative interest rates.

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