The World of Labor - November 29, 2008



	THE WORLD OF LABOR — November 29, 2008 By Harry Kelber New ILO Report Warns About Workers’ Anger at Eroding Wages The International Labor Organization (ILO) issued a report this week, warning that “tensions” are rising among the world’s 1.5 billion wage-earners, who see the purchasing power of their paychecks being continuously reduced by rising prices. Economic security has become out of reach for most of the world’s workers, who are often subjected to irregular pay or non-payment of wages, and are victimized by employer restructuring plans and regressive social legislation. The ILO document says that while wage growth has lagged overall, even during economic upswings, it slowed more rapidly during economic downturns between 1995 and 2007. For each 1 percent decline in GDP, per capita average wages fell even further — by 1.55 percentage points. Highly volatile food and energy prices have become a dominant issue in collective bargaining for higher wages. Public anger at escalating prices for necessities are a principal reason for marches and other forms of protest. The report encourages governments to display a strong commitment to protecting the purchasing power of wage-earners by stimulating internal consumption. Volkswagen’s Brazilian Workers on Three Weeks of Paid Leave Volkswagen will put its Brazilian auto workers on a three-week extended vacation as car sales declined, the company said in a press release on Nov. 25. Brazil is one of VW's most important markets. The drop in recent car sales are due to tighter credit as Brazilian lenders respond to the global credit crisis. VW’s car sales fell by more than 19 percent in the first half of November 2008. The German carmaker said it was putting workers at its two Sao Paulo facilities on paid leave for from two to four weeks. It did not say how many workers it was placing on forced holiday and was not available for immediate comment. The temporary freeze in production would affect between 10,500 and 11,500 employees. Volkswagen is Brazil’s No. 2 car retailer, right behind Italy’s Fiat, with General Motors in third place. GM announced a similarly extended leave policy this week, with 10,200 employees on temporary leave for much of December. Violations of Worker Rights in Dominican Republic’s Export Zones Of the 57 companies operating in the export processing zones of the Dominican Republic, which employ 155,000 workers, the trade unions have only been permitted to organize in eight companies, according to local union officials. Workers are wary of discussing trade union activities in the workplace, even during coffee breaks, for fear of losing their jobs. The International Trade Union Confederation (ITUC) has denounced the country’s grave violations of the ILO’s eight core labor conventions: Violations of freedom of association, collective bargaining and the right to strike are commonly ignored. The government has been urged to bring its labor laws into compliance with the standards of the ILO, which it ratified, but so far to no avail. The exploitation of child labor persists, especially in tourist resorts, where the government makes little effort to fight it. The report also condemns the trafficking of women for sexual exploitation. It says that efforts to deal with the problem have been hampered by alleged corruption of civil servants. Workers Riot in South China over Job Loss Hundreds of workers fired from a toy factory in China clashed with police and smashed buildings on Nov. 26, authorities said, in the latest bout of violent unrest linked to rising unemployment. The riot broke out in Guangdong province, southern China’s export heartland, where similar protests have flared recently after about 2,000 workers gathered to demand severance pay, according to the local government. The riot occurred at the Kaida Toy factory, a company owned by a Hong Kong firm in Zhongtang, that is in the process of laying off workers. The Zhongtang government said that up to 500 workers were responsible for the riot, while 1,500 others “looked on.” The factory had been operating for more than 20 years and employed up to 6,500 workers, according to a government statement. China’s economy has slowed sharply in recent months amid the global crisis. The World Bank and has forecast growth of 7.5 percent for the next year, which would be the slowest expansion in nearly two decades. However, the Zhongtang government maintains that the layoffs at the Kaida Toy factory were not directly linked to the global economic downturn, but rather to the expiration of labor contracts. Zimbabwe Labor Leaders Call for Run on Banks Labor leaders on Nov. 27 called on Zimbabweans to demand more money for food and medication than they are allowed to take out of their bank accounts because of tight daily withdrawal limits. The cost of basic medicines, amid a cholera outbreak that has claimed hundreds of lives in Zimbabwe, has required the sick or relatives to stand in line for several days to draw enough cash. The labor leaders; protest call comes at a time when the United Nations warns that more than five million people in the country face imminent starvation. “Hundreds, if not thousands, have died of anything other than the imposed cash limits,” said Lovemore Motombo, head of the Zimbabwe Congress of Trade Unions, the country’s main labor federation. Zimbabwe, engulfed in an economic and political collapse, has by far the world’s highest official inflation of 231 million percent. The daily withdrawal rate of 500,000 Zimbabwe dollars — ($0.30) at the dominant black market exchange — does not buy a quarter of a loaf of bread, according to the labor federation. Critics blame President Robert Mugabe, who has been in power since independence from Britain in 1980, for the economic and political chaos in Zimbabwe. Labor leader Matombo says the bank protests are not illegal under the country’s sweeping security laws that prohibit demonstrations without police clearance, because “you don’t need permission to claim your own money.” Nationalizing Latin America’s Private Pension Funds Because its private pension funds in Latin America have suffered substantial losses as a result of the global financial crisis, Argentina has decided to nationalize its private pension funds. In Chile, Colombia and Mexico, there are voices urgently calling for reforms. Many of the private pension plans were created during the 1990s under the influence of neo-liberal free market reforms and structural adjustment policies. In 1993, Argentina adopted the private pension model without eliminating the parallel public system, which allowed workers to choose either one. But on Nov. 20, 2008, the Argentine Parliament eliminated the private pension funds, which were in a state of collapse. The nationalized pension plans will be part of the country’s social security system. According to the International Association of Latin American Pension Fund Supervisors (AIOS), the 10 Latin American countries that make up the Association had 76 million pension fund affiliates as of late 2007, but only 32 million — 37 percent of the economically active population — made regular payments. The AIOS also reported that private pension funds in the region held $275 billion, equivalent to 16 percent of the 10 member countries’ GDP. Check our web site: http://www.laboreducator.org

THE WORLD OF LABOR — November 29, 2008

By Harry Kelber

New ILO Report Warns About Workers’ Anger at Eroding Wages

The International Labor Organization (ILO) issued a report this week, warning that “tensions” are rising among the world’s 1.5 billion wage-earners, who see the purchasing power of their paychecks being continuously reduced by rising prices. Economic security has become out of reach for most of the world’s workers, who are often subjected to irregular pay or non-payment of wages, and are victimized by employer restructuring plans and regressive social legislation.

The ILO document says that while wage growth has lagged overall, even during economic upswings, it slowed more rapidly during economic downturns between 1995 and 2007. For each 1 percent decline in GDP, per capita average wages fell even further — by 1.55 percentage points.

Highly volatile food and energy prices have become a dominant issue in collective bargaining for higher wages. Public anger at escalating prices for necessities are a principal reason for marches and other forms of protest. The report encourages governments to display a strong commitment to protecting the purchasing power of wage-earners by stimulating internal consumption.

Volkswagen’s Brazilian Workers on Three Weeks of Paid Leave

Volkswagen will put its Brazilian auto workers on a three-week extended vacation as car sales declined, the company said in a press release on Nov. 25. Brazil is one of VW's most important markets. The drop in recent car sales are due to tighter credit as Brazilian lenders respond to the global credit crisis. VW’s car sales fell by more than 19 percent in the first half of November 2008.

The German carmaker said it was putting workers at its two Sao Paulo facilities on paid leave for from two to four weeks. It did not say how many workers it was placing on forced holiday and was not available for immediate comment. The temporary freeze in production would affect between 10,500 and 11,500 employees.

Volkswagen is Brazil’s No. 2 car retailer, right behind Italy’s Fiat, with General Motors in third place. GM announced a similarly extended leave policy this week, with 10,200 employees on temporary leave for much of December.

Violations of Worker Rights in Dominican Republic’s Export Zones

Of the 57 companies operating in the export processing zones of the Dominican Republic, which employ 155,000 workers, the trade unions have only been permitted to organize in eight companies, according to local union officials. Workers are wary of discussing trade union activities in the workplace, even during coffee breaks, for fear of losing their jobs.

The International Trade Union Confederation (ITUC) has denounced the country’s grave violations of the ILO’s eight core labor conventions: Violations of freedom of association, collective bargaining and the right to strike are commonly ignored. The government has been urged to bring its labor laws into compliance with the standards of the ILO, which it ratified, but so far to no avail.

The exploitation of child labor persists, especially in tourist resorts, where the government makes little effort to fight it. The report also condemns the trafficking of women for sexual exploitation. It says that efforts to deal with the problem have been hampered by alleged corruption of civil servants.

Workers Riot in South China over Job Loss

Hundreds of workers fired from a toy factory in China clashed with police and smashed buildings on Nov. 26, authorities said, in the latest bout of violent unrest linked to rising unemployment. The riot broke out in Guangdong province, southern China’s export heartland, where similar protests have flared recently after about 2,000 workers gathered to demand severance pay, according to the local government.

The riot occurred at the Kaida Toy factory, a company owned by a Hong Kong firm in Zhongtang, that is in the process of laying off workers. The Zhongtang government said that up to 500 workers were responsible for the riot, while 1,500 others “looked on.” The factory had been operating for more than 20 years and employed up to 6,500 workers, according to a government statement.

China’s economy has slowed sharply in recent months amid the global crisis. The World Bank and has forecast growth of 7.5 percent for the next year, which would be the slowest expansion in nearly two decades. However, the Zhongtang government maintains that the layoffs at the Kaida Toy factory were not directly linked to the global economic downturn, but rather to the expiration of labor contracts.

Zimbabwe Labor Leaders Call for Run on Banks

Labor leaders on Nov. 27 called on Zimbabweans to demand more money for food and medication than they are allowed to take out of their bank accounts because of tight daily withdrawal limits. The cost of basic medicines, amid a cholera outbreak that has claimed hundreds of lives in Zimbabwe, has required the sick or relatives to stand in line for several days to draw enough cash.

The labor leaders; protest call comes at a time when the United Nations warns that more than five million people in the country face imminent starvation. “Hundreds, if not thousands, have died of anything other than the imposed cash limits,” said Lovemore Motombo, head of the Zimbabwe Congress of Trade Unions, the country’s main labor federation. Zimbabwe, engulfed in an economic and political collapse, has by far the world’s highest official inflation of 231 million percent.

The daily withdrawal rate of 500,000 Zimbabwe dollars — ($0.30) at the dominant black market exchange — does not buy a quarter of a loaf of bread, according to the labor federation. Critics blame President Robert Mugabe, who has been in power since independence from Britain in 1980, for the economic and political chaos in Zimbabwe. Labor leader Matombo says the bank protests are not illegal under the country’s sweeping security laws that prohibit demonstrations without police clearance, because “you don’t need permission to claim your own money.”

Nationalizing Latin America’s Private Pension Funds

Because its private pension funds in Latin America have suffered substantial losses as a result of the global financial crisis, Argentina has decided to nationalize its private pension funds. In Chile, Colombia and Mexico, there are voices urgently calling for reforms. Many of the private pension plans were created during the 1990s under the influence of neo-liberal free market reforms and structural adjustment policies.

In 1993, Argentina adopted the private pension model without eliminating the parallel public system, which allowed workers to choose either one. But on Nov. 20, 2008, the Argentine Parliament eliminated the private pension funds, which were in a state of collapse. The nationalized pension plans will be part of the country’s social security system.

According to the International Association of Latin American Pension Fund Supervisors (AIOS), the 10 Latin American countries that make up the Association had 76 million pension fund affiliates as of late 2007, but only 32 million — 37 percent of the economically active population — made regular payments. The AIOS also reported that private pension funds in the region held $275 billion, equivalent to 16 percent of the 10 member countries’ GDP.

Check our web site: http://www.laboreducator.org