Saturday, November 8, 2008

“A global jobs crisis of mammoth proportions…”

Before this calamitous global economic unwinding, economists at the World Economic Forum in Davos in early 2006 expressed major concern about the growing crisis of unemployment around the world. “Growth of the past many years has not been translated into enough jobs in many countries…. Despite a robust growth of 4.3 per cent in 2005, the world economy did not deliver the 40 million jobs needed annually over the next decade for people entering the workforce.” The ILO report showed that in 2005, of the more than 2.8 billion workers in the world, 1.4 billion still did not earn enough to lift themselves and their families above the $2-a-day poverty line - just as many as 10 years ago…."Economic growth alone isn't adequately addressing global employment needs," said [the International Labour Organisation's director general Juan] Somavia. "We are facing a global jobs crisis of mammoth proportions. We need new policies." [1]

Two years previously Luke Exilarch wrote on the growing unemployment in the US associated with national economic ‘growth’:

"The number of men between 16 and 64 [in the US], ... was 93 million. . . Of those 93 million men, the government admits that 4.4 million of them are unemployed. And when I say unemployed, I mean utterly and completely inactive. The government considers someone “employed” if they work as little as one hour a week. People who do not even work one hour a week are still considered “employed” if they are “temporarily absent” from work.

But in addition to the 4.4 million men who are officially “unemployed” the government admits that 28.7 million men over 16 are “not in the labor force.” Subtracting from this 28.7 million the estimated 11.9 million men 65 and over belonging to that group, results in 16.8 million men between the ages of 16 and 64 who are “not in the labor force.” Adding the 4.4 million officially unemployed to the 16.8 million who are factually unemployed yields a total of 21.2 million unemployed men between the ages of 16 and 64....
" [2]

Why is this happening?

How much of this loss of global opportunity can be attributed to the alarming degradation and depletion of the world’s biosphere over the last few decades. The economic consequences of this wholesale rape were hidden from public scrutiny by fraudulent forms of cost-benefit analysis, worthy only of "a damning indictment” [3] and performed by mainstream economists.

Other factors:

Higher energy prices.

Global corporate conglomerates were able to use capital far more intensively.

The emergence and dominance of uneconomic forms of profit seeking such as the excessively-leveraged (private equity) buyouts of public corporations followed by the associated asset-stripping and rationalization of the workforce that are now unfolding into predictable bankruptcy or taxpayer-funded bailout. [4]

To what extent did the ‘recruitment’(often forced and incorporating land eviction [5], [6], [7], [8], [9] ) of an extra billion people into the global workforce have on rising global unemployment. [10]

It's hard to see this social crisis being addressed by a simple reduction in working hours. I agree with the sentiments of Mikhail Gorbachev as he expressed them this last month. We need "a serious reconsideration of the very foundations of our socio-economic model of modern industrial society"[11]...but that is another article.



[1] Global Trends by Martin Khor
Thursday 2 February 2006
Problem of “jobless growth” highlighted
http://www.twnside.org.sg/title2/gtrends90.htm

[2] The Real Unemployment Rate is 23%: How and Why Jobs are Vanishing from America
Luke Exilarch. March 20, 2005
http://www.exilemm.com/e-sub-realunemployment.shtml

[3] Rober F Kennedy Jr’s commentary on the book ‘Priceless: On Knowing the Price of Everything and the Value of Nothing’by Frank Ackerman and Lisa Heinzerling.

[4] The Bust of the Private Equity and LBO Bubble
Nouriel Roubini | Feb 22, 2008
http://www.rgemonitor.com/blog/roubini/245686#readcomments

[5] ‘Abahlali baseMjondolo: The South African Shack Dwellers Movement’
May/June 2008. The Body, the complete HIV/AIDS resource website
http://www.thebody.com/content/art47450.html

[6] Human Rights Watch 2006 Report on Indonesia, III. Background
http://www.hrw.org/reports/2006/indonesia0906/3.htm

[7] Special Exploitation Zones [India]
By Tejal Kanitkar & Puru Kulkarni. 18 October, 2006
http://www.countercurrents.org/ind-kanitkar181006.htm

[8] Inside China Today
Archive for the 'Forced Eviction' Category
http://insidechinatoday.net/category/forced-eviction/

[9] SOHNews Archive for the 'Forced Eviction' Category
http://sohnews.com/category/forced-eviction/

[10] This process was stepped up heavily in the 1980s in India, China and South America (in particular) and continues to present day.

[11] 'Mr Capitalism, tear down that immorality' Australian Financial Review, page 65. 31st October 2008.

10 comments:

Anonymous said...

Before this calamitous global economic unwinding,...

"We are facing a global jobs crisis of mammoth proportions. We need new policies."

Read more


Are you kidding? How could I, no cool hand Luke, read anything? --unless it was the manual on how to operate this Taser, in case any of those 4.4M men (uncountable women prolly!) decide that my canned goods are theirs?

Anonymous said...

You forgot to mention a too long work week - which has not been reduced since the introduction of the eight hour day

Anonymous said...

Under US law, at least, it's also a matter of where the incentives lie. Employ more people, pay more benefits (compared to employing fewer people for more hours), pay more taxes (FICA, unemployment insurance, everything linked to head count or first $X of wages), pay more in administrative costs. Employ more capital stock, get more tax benefits (depreciation, specialized tax credits and so forth). Labor has been treated the way carbon ought to be, so there's no real surprise the companies do their best to minimize its use.

And thanks to the laws of increasing returns for technology development, that means almost all the new ways to do stuff are ways that employ more capital stock and fewer people.

To change that, we're going to have to change the higher-level incentives. (And yes, that may mean people doing jobs machines could do, which is not a problem except insofar as the people do it for negligible pay under miserable, unsafe conditions.)

Myrtle Blackwood said...

"uncountable women prolly!
Apologies for this omission. I just couldn't find any data on the situation with women in the time frame I was using to highlight this issue.

"You forgot to mention a too long work week

This posting was originally intended as a response to Sandwichman's on shorter working hours. I decided that it was just as much 'work' to write an article instead. I guess that's why it didn't focus that much on the shorter working hours solution (sort of assumed into the background somewhere).

Paul said: "And yes, that may mean people doing jobs machines could do, which is not a problem except insofar as the people do it for negligible pay under miserable, unsafe conditions.

Yes/no... Keeping in mind that one of the essential factors behind this 'jobless' crisis is an economic system that assumes people are displaced from land and are huddled into urban centres. Given that land is the fundamental source of wealth, if a great portion of the population moved back to rural areas and engaged in genuine stewardship many problems of poverty would disappear. This change is needed in any case, as a matter of environmental sustainability. 'Joblessness' (being an artificial construct embedded in the industrial capitalist economy) would no longer be an issue in so far as the effective working of (and caring for) the land can provide an adequate sustenance in itself.

J.Goodwin said...

Well, yes, but being a person with a college degree who wears glasses, I'd prefer not to be one of those lying in a mass grave after the Khmer Rouge have evicted me and my soulless city-dweller associates from our homes.

I have Cambodian-American friends who were born in refugee camps in Thailand who had relatives who didn't make it that far...this is a dangerous road.

Myrtle Blackwood said...

j.goodwin, I don't understand your drift. Are you saying that decentralisation of the population and a move back to smaller organic farms would result in government eviction and murder? If so, why?

What is the long-run viable alternative?

The Big Mook said...

Goodwin made the false slippery slope argument. Brenda Rosser advocated a voluntary return to rural roots movement; Goodwin leaped it to genocide.

This is a familiar debate tactic. Obama suggests lowering taxes on the middle class: Joe the Plumber reworked that suggestion into Marxist confiscation of wealth.

I'll use the same leap for Goodwin.
He suggested it would be nice if Israel were to annoy the new Obama administration, so that we could withdraw our support from that beleagured nation. I'll make the leap to ask if Goodwin would be happy to see Israel destroyed?

Anonymous said...

I certainly like this idea more than the 'short week' solution.

Less centralization, less integration, less specialization, more autonomy - and maybe longer work week, but more meaningful, more satisfying work; producing (mostly) things you yourself will consume.

But this is all utopian stuff, of course: all the tendencies point the other way, to the opposite direction.

J.Goodwin said...

If Israel ceased to exist as a state by and for Jewish people, I wouldn't be particularly bothered by that. That doesn't mean that I think it should be bombed off the face of the earth.

I'm also for voluntary decentralization, but there are definitely historical analogues that are very disturbing.

Myrtle Blackwood said...

"Less centralization, less integration, less specialization, more autonomy - and maybe longer work week, but more meaningful, more satisfying work; producing (mostly) things you yourself will consume...

Abb1, such a lifestyle has always been possible, if one wanted it badly enough. Many members of my immediate community live like this. Combining a shorter working week with greater production for self, family members and immediate neighbours.

I don't see such a change as 'utopian'. More that it is inevitable and necessary.

J Goodwin: "I'm also for voluntary decentralization, but there are definitely historical analogues that are very disturbing...

Certainly there has been. Greater and greater levels of urbanisation won't preclude further disturbing analogues from occuring though. It will likely hasten them.