Sunday, February 8, 2009

Unemployment continues to Grow in US as employment slumps

Lisbeth Latham

Figures released by the US Bureau of Labor on February 6 indicate that the US economy has continued to shed jobs during January as the US economy continued its decline. In the third consecutive month, more than half a million jobs being shed the US lost 598 000. January’s job losses take the total figure lost since December 2007 to 3.6 million, with 1.8 million shed since September 2008.

Jobs were again lost across all sectors of the US economy with the exceptions of health, education and government employment. The heaviest hit was manufacturing where total employment fell by 207 000, the largest monthly fall since October 1982. While 111 000 jobs were lost in construction and 121 000 in professional and business service.

Unemployment has continued to grow to 11.6 million and an unemployment rate of 7.6%, up from 11.2 million and 7.2% respectively. Over the past 12 months, total unemployment has increased by 4.6 million. While long-term-unemployment (over 12 months jobless) remained stable in January at 2.6 million it has increased by 1.3 million over the last 12 months.


Monday, February 2, 2009

Can wage restraint save jobs?

Lisbeth Latham

In the last month, Australian mine workers and mining communities have been rocked by layoffs and mine closures as mining companies have moved to reduce production in response to collapsing commodities prices.

In this context it is understandable and important for workers and their unions to explore solutions that will protect their communities from the devastation of closure. Two weeks ago, workers at Alcoa, who are members of the Australian Manufacturing Workers Union, decided to defer a four percent pay rise they had won in 2008 until 2010 in exchange for Alcoa not sacking workers.

This decision was made following Alcoa’s January 6 announcement that it would be shedding 15,200 jobs, or 13% of its global workforce, although no announcement had been made of job losses in Australia.

While the willingness of the workers to collectively share pay cuts is a significant display of collective solidarity, it is highly questionable that it will be effective in avoiding job losses and could result not only Alcoa workers but other workers losing more.

The Alcoa workers’ decision follows an ongoing push from the federal government, business and the media that workers should sacrifice wages now in order protect jobs.

No guarantees

While the workers are specifically offering pay cuts in exchange for no job losses, there is nothing to guarantee this is what will happen in the present circumstances: the offer to defer wage is not tied to Alcoa not proceeding with job cuts in Australia. Even if such an agreement was made, it would not guarantee that Alcoa would not conduct sackings in the future, as Alcoa would be able to blame any subsequent deterioration in the company’s financial situation for the job losses.

Previous experience shows that when companies are successful in gaining concessions (whether from workers or governments) they are quick to demand even greater concessions, with jobs ultimately being shed anyway. This should come as no surprise. Capitalism operates on a relentless drive to increase profits: if companies are able to secure an agreement that provides wage cuts under the banner of “saving jobs”, there is an incentive.

A central component of contract negotiations between the US United Auto Workers and US car manufacturers since 1978 has been the union making concessions in the wages and conditions of workers in order maintain the competitiveness of the automakers and preserve autoworker jobs. Despite ongoing promises that concessions would result in jobs being saved, employment at General Motors alone had fallen from 450,000 in 1978 to 73,000 in 2007.

In addition to the logic of concessions within a single company, workers giving up conditions at one company will encourage other companies to seek the same concessions — irrespective of whether they are in need of those concessions — in order to remain competitive.

Following the conclusion of the 1998 waterfront dispute between the Maritime Union of Australia and Patrick’s Stevedores, where the MUA agreed to a range of concessions in exchange for its members being allowed to return to work — including increased casualisation and reduction in staffing cranes — the other major Australian stevedore, P&O, moved to include the same conditions in its next enterprise agreement with the MUA.

It is also important to recognise that job losses have no direct link to either the wages that workers earn or the profits that companies make. Over the past two decades, thousands of bank workers have been made redundant across Australia during periods of high profits. In 2005, the National Australia Bank announced 2000 redundancies immediately following a quarter in which it made a record profit.

A more important factor influencing employment levels is the question of the amount of work to be performed; if this is reduced then capital will look to sack the workers that it deems to be unnecessary. Given the collapse in Alcoa’s revenue is a consequence of both declining commodity prices and declining demand, which has resulted in Alcoa moving to reduce production, Alcoa can be expected to reduce its workforce with the new levels of production that it is looking to achieve.

The only mechanism to avoid this would be to insist that working hours of workers be reduced in proportion with any reduction in production. However wages should be maintained by increasing the hourly rate by the same proportion.

Alcoa’s exact financial situation

A significant factor contributing to further threats of job losses is that company financial figures are not readily available to workers and their unions. This makes it possible for companies to manufacture a financial crisis in order to justify calls for concessions or job losses.

An important factor in Alcoa’s decision to shed workers globally was its poor performance during the December 2008 quarter, when it lost US$929 million. While this did reflect the impact of halving alumina prices between July and December, $708 million of the loss was a consequence of restructuring carried out by Alcoa.

This makes it important that unions have access to a companies’ books to have a clearer indication of their financial situation.

Who should pay?

Calls for workers to defer wage rises in order to limit job losses reflect an outlook that workers should bare the burden of the financial crisis. No such sacrifice has been made by Alcoa’s management or shareholders.

On January 23, Alcoa announced that it would pay a dividend of 17 cents per share, the same payment as had been made for the previous nine quarters. Over the same period of time, Alcoa had made profits totalling $4486 million. These massive profits should now be being used to offset the current losses being made by the company, rather than forcing workers and their communities to suffer.

Workers who sacrifice today to offset the declining incomes Alcoa and other companies are experiencing during the current downturn will not be reimbursed for their sacrifices in the future. Instead, everything given up today will have to be fought for again, as companies attempt to maintain any concessions that they are able to extract.

Unlike Alcoa, workers’ living costs are not going to be reduced during the economic downturn — indeed crucial costs of living such as rent are likely to continue to increase over the coming year. The only way workers can avoid seeing their incomes decline, and the flow-on effects to the rest of the community resulting from declining purchasing power, is for workers to continue to receive the pay rises that they have already won and that they are able to win in the coming years.

Originally published in Green Left Weekly #781


Sunday, February 1, 2009

Workers Occupy Waterford Crystal Factory

Lisbeth Latham
Angry workers at the Waterford Wedgewood's crystal factory in Kilbarry, Ireland have begun an occupation of the factory, following the announcement by the receiver on January 30 that the factory would be closed. The closure means that 480 of the 800 workers employed at the factory would immediately loose their jobs. More than 200 workers are involved in the occupation with more than 100 workers at given time occupying the factory’s visitor’s centre at any given time.

The company went into receivership on January 5, following five consecutive years of losses. The factory had remained open as administrators looked for potential buyers. On Friday, the receiver David Carson announced that the money borrowed to keep the factory operating had run out and production would cease. According to Sinn Fein workers rights spokesperson Arthur Morgan TD, the previous day during a meeting with potential investors, Carson had made a commitment that the factory would not be closed while there were people interested in investing the company.

Emergency talks occurred between officials from Unite, which organises 90% of the workers, and David Begg, Irish Congress of Trade Unions General Secretary, met with Carson and Dermot McCarthy, Secretary of the Department of The Taoiseach. Prior to the meeting UNITE regional organiser Walter Cullen said the only way the stand-off would end would be if the receiver reversed the decision to shut down manufacturing.

More than 2000 people attended a rally on January 31 to support the occupying workers. Union officials addressing the rally called on the government to intervene in the dispute and allow the company to continue trading for at least a week while potential buyers are spoken with again. Sinn Fein has call on the government to stop the receiver from closing the factory.


French workers demand that capital pay the price of the crisis

Lisbeth Latham

French cities and towns were filled with protesting workers on January 29 as unions called a general strike to demand that the government of President Nicholas Sarkozy protect workers rights. The protests were in response to a new €26 billion financial bailout package aimed at increasing infrastructure investment, but doing nothing for workers faced with job losses and falling buying power. It was the first joint action by France's eight union confederations since Sarkozy was elected in 2007.

Both police and media have attempted to down play the strikes, the CGT and Force Ouvriere claim that 2.5 million people participated in the mobilisations. The Strike involved a quarter of the public sector; more than half France's education sector participated in the strike. Striking transport workers forced cancellation of services across France including the cancellation of 40 percent of high speed train services; 60 percent of regional train services, 25 percent of Paris metro trains and 10 percent of flights from Charles-de-Gaul airport. Strikes also occurred at Renault and Peugeot Citroen factories.

The general strike reflects widespread anger at the failure of the government to act to protect people from the impact of the economic crisis as France moves towards recession and unemployment is expected to exceed 10 percent. Despite insisting at the beginning of its term that the coffers were empty and social spending had to be cut back, the French government has delivered three large bailout packages, in October the banks were bailed out with €320 billion ($424 billion) in loan guarantees. Two months later, in December, the government announced it would provide €22 billion in aid to small- and medium-sized businesses hit by the downturn and approved a €26 billion economic stimulus package focused mostly on infrastructural investments. Unions are calling for an end to public sector job losses, increased wages and greater efforts to both protect and create jobs. Sarkozy's total failure to respond to the social impact of the crisis meant that the strike received widespread support, with a poll conducted on January 25 indicating 69 percent support for the strike including 54 percent of voters for Sarkozy's Right Wing government.

Following Thursday's strikes the government indicated that while it had heard the message, there would be, as Raymond Soubie, Sarkozy's social affairs adviser, told RTL radio, "No change of direction, Sarkozy will maintain his economic and social policies". However Labour Minister Brice Hortefeux did attempt to provide a sop, indicating that there would be a further response, "but not in an immediate, inarticulate way".

The leaderships of France's unions are expected to meet on February 2 to discuss the direction of the campaign. They have called for a concrete response from the government within 10 days. The French left is pushing to unite the growing struggles in France. Olivier Besancenot, a spokesperson for the Revolutionary Communist League which is moving to disolve itself to form New Anti-Capitalist Party on February 4-6, said on January 29, "there is a torrent of industrial disputes and social protests, but they all remain separate from each other. What we need to do is bring all this together in one massive movement of dissent." In the lead up to the general strike, at the initiative of the NPA, 10 French left parties including the French Communist Party issued a joint statement which declared "the various plans for here and around the world, have only one objective: to maintain the profits of major capitalists. The crisis is a crisis in Europe and worldwide. In this context, we need to mobilize for a social Europe, which is ecological, democratic and feminist".


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Revitalising Labour attempts to reflect on efforts to rebuild the labour movement internationally, emphasising the role that left-wing political currents can play in this process. It welcomes contributions on union struggles, internal renewal processes within the labour movement and the struggle against capitalism and imperialism.

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