The New Slave Labour

Who would think that in 2013, the situation of domestic workers would be no better  than in Victorian times? The UN Agency The International Labour Organisation (ILO) has just produced a report entitled Domestic Workers, which is the first of its kind looking in depth at working conditions and the extent of legal protection enjoyed by domestic workers worldwide.  At least 52 million domestic workers worldwide experience poor working conditions and insufficient legal protection, according to the report.

The report also reveals that these domestic workers (a person who is employed in a private household carrying out domestic work such as cleaner, gardener and elderly carer) of whom 83% are female, account for 7.5% of women’s wage employment worldwide - and a far greater share in some regions, particularly Asia, the Pacific region, Latin America and the Caribbean.

Despite the size of the sector, many domestic workers experience poor working conditions and insufficient legal protection.  Sandra Polaski, ILO deputy Director General, said: “Domestic workers are frequently expected to work longer hours than other workers and in many countries do not have the same rights to weekly rest that are enjoyed by other workers - combined with the lack of rights, the extreme dependency on the employer and the isolated and unprotected nature of domestic work can render them vulnerable to exploitation and abuse.”

The ILO report showed that only 10% of all domestic workers are covered by general labour legislation to the same extent as other workers. More than a quarter are completely excluded from national labour organisation.

More than half of all domestic workers have no limitation on their weekly normal hours under national law and approximately 45% have no entitlement to weekly rest periods.  Just over half of all domestic workers are entitled to a minimum wage equivalent to that of other workers.  Lack of legal protection increases domestic workers vulnerability and makes it difficult for them to seek remedies. As a result they are often paid less than workers in comparable occupations and work longer hours.

The report showed that live-in domestic workers are particularly vulnerable to exploitation since they are often paid a flat weekly or monthly rate irrespective of hours worked. In practice, that means a domestic worker is available whenever needed.

Sandra Polaski added: “ The large disparities between wages and working conditions of domestic workers compared to other workers in the same country underline the need for action at the national level by governments, employers and workers to improve the working lives of these vulnerable but hardworking individuals.”

The report also showed that between the mid-1990s and 2010, there was an increase of more than 19 million domestic workers worldwide.  Many migrate to other countries to find work.  The ILO suggests it is likely that the figures contained in the report underestimate the true numbers of domestic workers worldwide, which may in reality be tens of millions more.

The figures also exclude child domestic workers below the age of 15 that are not included in the surveys used by the report.  Their number was estimated by the ILO at 7.4 million in 2008. 

The report, published recently by the ILO covered 117 countries and had an employment coverage of 88.7% within those countries.

A little bit of history of this very effective UN agency: The ILO was founded in 1919, in the wake of a destructive war, to pursue a vision based on the premise that universal, lasting peace can be established only if it is based on social justice. The ILO became the specialized agency of the UN in 1946.  It is now the international organisation responsible for drawing up and overseeing international labour standards.

One of the great strengths of the United Nations is its global reach.  No other organisation could conduct such a wide-ranging survey with authority. It is also in a position to put pressure on national governments to make sure that they introduce humane laws to protect workers in their country. 

The position of the British Government on the issue of domestic workers is interesting.  On 12^th December 2012, the Kate Willingham of Anti-Slavery International wrote to the Secretary of State for Business, Innovation and Skills as follows: “Today, 12 December 2012, is being marked globally as a day of action for ratification of the International Labour Organisation (ILO) Convention No. 189 on Decent Work for Domestic Workers, which has now entered into force following its formal adoption by four countries. On this occasion, we urge you and your colleagues to promote and protect the rights of domestic workers by ratifying the Convention and its accompanying Recommendation, as well as restoring essential protections for migrant domestic workers in the UK.” 

Convention No. 189 is a ground breaking treaty which establishes the first global standards for the estimated 50 to 100 million domestic workers worldwide, the vast majority of whom are women and girls, who clean, cook, and care for children and the elderly in private households. Despite their contributions to the global economy, domestic workers are vulnerable to a wide range of abuses. These include excessive hours of work with no rest, non-payment of wages, forced confinement, physical and sexual abuse, forced labour and trafficking.  Convention No. 189 provides desperately needed and long overdue protections, including special protections for child domestic workers and migrant domestic workers.

Despite this the UK Government has publically stated in an explanatory memorandum laid before Parliament on 27 April 2012, that whilst the UK supports the principles behind the Domestic Workers Convention, it does not think that ratification of the Convention is appropriate for the UK because of the burdens that implementing the health and safety provisions would impose on UK business and citizens.

This very short-term view will store up future trouble for the UK Border Agency, the Home Office and most of all for thousands of UK domestic workers themselves.

Do you see the cat?

by Pete Smith
 
“Seeing the cat” has served as a metaphor for achieving an understanding the teachings of Henry George since he set them out in his bestselling economic treatise “Progress and Poverty” in 1879. George sought to understand why there are recessions and poverty amid plenty and his investigation led him to identify the central role of land in the economy. The original story goes something like this:

"I was one day walking along Kearney Street in San Francisco when I noticed a crowd in front of a shop window... I took a glance myself, but I saw only a poor picture of an uninteresting landscape. As I was turning away my eye caught these words underneath the picture: 'Do you see the cat?' ...I spoke to the crowd. "Gentlemen, I do not see a cat in the picture; is there a cat there?" Someone in the crowd replied, "Naw, there ain't no cat there. Here's a crank who says he sees a cat in it, but none of the rest of us can." Then the crank spoke up. "I tell you," he said, "there is a cat there. The picture is all cat. What you fellows take for a landscape is nothing more than a cat's outlines. And you needn't call a man a crank either because he can see more with his eyes than you can with yours."

The metaphor works because the cat – like role of land in the economy - is utterly unmistakeable, once it becomes clear. I first “saw the cat” about three years and now I can’t help but see it everywhere. I see it when I walk up the High Street and pass street traders, empty shops and unaffordable house prices in estate agents’ windows. I see it when I walk past the Job Centre and derelict brownfield sites in other parts of town. I see it when the discussion turns to the barriers facing business start-ups. Any media coverage of economics, welfare dependency and poverty and again I “see the cat”.
 
The ramifications of these findings are far reaching and extremely relevant to the Transition Movement today as it develops initiatives to build resilience, re-localize the economy and create prosperity that is shared across the community. To be successful Transition requires social cohesion which in turn rests on equal access to economic opportunities and relative parity of wealth. However the Law of Rent is immutable – it is an economic reality that cannot be wished out of existence as we shift to a new economic paradigm. Landlords still need to be paid and new enterprises still need to secure locations at the going rate. The squeeze of rent will continue to be felt.
 

A possible future scenario is that land values will fall as the old economy unravels and landowners, finally recognising that there will be no “return to normal”, capitulate. This may then create the conditions for economic rebirth – a transition economy of new work opportunities, full employment and decent reward for an honest day’s work.  Examples of communities pulling themselves up by their bootstraps can be found in the past, particularly in the aftermath of wars and natural disasters. This “pioneer phase” is typically characterised by a high degree of cooperation and community spirit. Nevertheless as the economy blossoms it is inevitable that rents will rise once more and a wedge will again be driven horizontally through society, elevating those above it and pushing down those beneath.


What then is the solution to this problem? Henry George proposed that the economic rent of land be shared equally by the community rather than be allowed to flow into private pockets. He held that this remedy is in keeping with the highest principles of justice because people own what they create through their labour while the things found in nature, most importantly land, belong equally to all. Whether or not one accepts George’s remedy the crux of the matter is that as human beings we cannot survive without access to the natural environment. The big issue at the heart of economics therefore is the terms upon which people have access to land. Understanding this and developing an effective response is the challenge facing all of us who are engaging in the task of creating an economy that works for people and planet.

“Until there be correct thought, there cannot be right action, and when there is correct thought, right action will follow”. Henry George, Social Problems, 1886.

Pete Smith is co-founder of the Henry George Society of Devon, amateur economist, and entrepreneur.

Post originally published on Transition Network's Social Reporting Project during their recent week on Economics


Images: the cat in question; estate agent window, Totnes; derelict buildings - photos Pete Smith

Robin Hood and our Tax System

By Mark Crutchley

Robin Hood, as we all know, stole from the rich to give to the poor, so it comes as no surprise to find that the modern day tax for which his name has been appropriated, doesn’t find favour with our current government. Nonetheless earlier this week you may have seen that a group of 11 European nations, including both France and Germany, agreed plans to introduce a Financial Transactions Tax – the so-called Robin Hood Tax. The tax would be a very small charge on all financial transactions such as foreign exchange, bond, share and derivative deals. Because the value of these transactions is so great – foreign exchange turnover is well over $4,000 billion a day (source BIS), around half of it traded in London – even a small percentage tax will raise billions of pounds for the governments which implement the tax. 

Here in the UK though the government refuses to implement the idea, despite the fact that London being the largest financial centre in Europe would mean that they stand to raise more than any other government; perhaps up to £20 billion a year. The tax would – according to our government – damage the competitive position of London in the global financial markets. It says it would only participate if the tax were to be levied globally, something which it well knows is not going to happen. But is London’s competitive status really so weak that a tax of 0.01% (£100 on a million pound deal), the likely rate on currency and derivative transactions, going to undermine it.

Meanwhile the Confederation of British Industry threatens that the tax would adverse impact on people saving through pensions and other investments, ignoring the fact that most pension funds do not engage in currency speculation or intensive use of derivatives. It would be “damaging for jobs and growth”, well perhaps for a few in the investment banks, but what ridiculous exaggeration.

This is just part of a pattern which sees companies – with their high level access to government allowing them to influence policy (see Guardian article) – setting an agenda which favours ever lower corporate taxes, not just here in the UK but across the world. Accountants PwC reported lastweek that tax payments by a group of 100 largest UK listed and headquartered companies fell by 18% last year despite their profits having gone up. This continues a trend in payments going back to 2005 which has seen the corporate tax take reducing. And this isn’t through tax dodging, which sees the likes of Starbucks and Amazon moving their profits around to low tax countries; it’s a result of government cuts in corporate tax rates; cuts which are set to see the corporation tax rate fall significantly further in the next couple of years. Competitive tax reductions may move a small number of jobs from one country to another, but have far more influence on raising profits than on economic growth. All this is supposed to boost our economy, but I don’t see much sign of that happening, do you?

The financial crisis was triggered by the reckless lending and speculation of our banks and the British and European economies are still struggling to come to terms with it. A transaction tax on the speculative activities of those same banks could both alleviate the burden of cuts which are being imposed on the poorest sections of society and potentially reduce the risk of a recurrence in the future. The only losers are the investment banks and their massively well rewarded employees. How sad that our government has chosen to side with them, rather than with the overwhelming majority of the people of Great Britain.

Why Markets Aren’t Working

By Mark Crutchley

The free market, paragon of virtue, answer to all our problems, worshipped by all the major political parties and lauded endlessly by the press and economic commentators. How can we have got into the economic mess we are in right now when free markets have been given such unfettered control of our lives over the last thirty years?

Whisper it quietly – perhaps they don’t always work. Though it might be fairer to say they don’t necessarily work in the interests of the majority of people. There are those of course for whom free markets have worked wondrously well throughout this time and continue to do so even now.

A week ago I went to a discussion at the UEA where two economics professors discussed rational choice theory. This lies at the heart of conventional economic theory, simply stated it is the proposition that people will make choices in a rational manner favouring those goods which give them greater utility over those which give less. From this basis it follows that the decisions people make over what to buy indicate what provides the greatest benefit to them and collectively to society. So allowing a free choice of goods and services will maximise utility. (This is very simplistic, but I don’t want to bore you with too much theory). 

The trouble is that the world doesn’t actually work like that. Studies in the psychology field and on decision making, have shown that people are highly susceptible to framing – where something is put in a context that changes the way they think about it. The decisions they make often run counter to what rational choice/utility theory would suggest and are important to a newer branch of economics called behavioural economics. This recognises that social, cognitive and emotional factors all play their part in the way in which people act. For an in depth analysis of how people’s minds work I cannot recommend too highly a book called “Thinking Fast and Slow” by Daniel Kahneman.

What seems to me really significant here is that companies, PR agencies, Marketing organisations, the press and governments are all aware of this work and in one way or another seek to use it to their advantage. Our government (along with the Obama administration) for example has a “nudge unit” – or behavioural insight team, which is tasked with altering our behaviour in a positive manner. 

In the corporate sphere though the application of decision making theory represents a dramatic challenge to the idea that free markets reflect the will and interests of consumers. The reality is that advertising, brand placement, association, the press, magazines and a whole host of other intermediaries, to say nothing of peer pressure, drive our purchasing nowadays. 

Supermarkets spend millions monitoring the way people walk through their shops, analysing spending patterns, detailing the flows of people and traffic in and out of a city to determine where to position their convenience stores. They pump the smell of freshly baked bread into the shop and always have fresh produce at the entrance as it gives a positive impression. Products are carefully positioned at eye level if they want to push them, or near the floor if not. Own-brand packaging invariably closely (but not too closely to invite legal action) resembles the brand it is positioned against to trigger positive associations.

Manufacturers play the same mind games to create artificial wants and needs, driving our apparently insatiable desire for the latest gadgets and versions of things we already own. Sometimes we see the spin, but much of the time it will just subliminally enter our consciousness and lie there ready to subvert our judgement the next time we have to make a decision on something about which it is relevant. 

As such our free markets have mutated from being a bottom-up reflection of the wishes of consumers, into a top-down system where manufacturers and retailers manipulate us into buying what they want to sell to us. Which just coincidentally will be those things on which they make the greatest profit. So a modern free market serves to maximise the utility of the corporate interest rather than that of the individual.

Change may be slow in coming, but come it surely must as people increasingly realise that our current economic system and its adherence to free-market principles is working not for us but against us. But realising this is only the first step, now we need to change it.