19 October 2021   Leave a comment

Globalization has enriched some people to an incredible degree as many products once produced in high wage countries were shifted to low wage countries. The winners in this transition were those who owned the production process and the workers in the newly built factories; the losers were those who once worked in the factories that were outsourced to the low wage areas. The loss of jobs in some countries such as the US was considerable and amplified by the process of automation, as the graph below indicates.

Is Trump keeping his promises on manufacturing?

The winners were the owners of capital and the transition in the US was replicated globally. The effect of the transition was to create extraordinary wealth for the owners but little wealth for those who could only sell their labor. In many respects the process seems to be replicating the distribution of wealth in the period of feudalism.

The COVID pandemic aggravated the disparities as low wage workers were laid off or quit their jobs while those who owned stocks and houses benefited tremendously. Credit Suisse reports:

“Regarding what happened in 2020, the verdict is unanimous. The indices all agree that global wealth inequality rose in 2020 by a substantial amount: the share of the top 10% increased by 0.9 percentage points, the share of the top 1% by 1.1 percentage points, and the Gini by 0.6 points. Furthermore, with a single exception – the share of the top 1% in 2014 – the inequality rise in 2020 was significantly greater than that recorded in any year this century”

It may be the case, however, that workers are asserting their power and demanding more of the profits generated by the owners of capital. There are several labor strikes going on in the US as reported by The Economist:

“THE PANDEMIC has been very good for cornflakes, and very busy for those who make them. With so many people spending so much time at home, cereal consumption has boomed. Kerry Williams, an instrument technician, says this has translated into almost constant overtime shifts at his Kellogg’s plant in Pennsylvania, sometimes as long as 16 hours a day. That would be hard enough. But what makes it that much harder, he says, is seeing Kellogg’s, one of the world’s biggest producers of ready-to-eat cereals, pull in giant profits even as his pay has barely increased. ‘We feel it’s time that this money trickles down to us because without the workers on the floor there would be no Kellogg,’ he says. Mr Williams and about 1,400 colleagues at Kellogg’s factories around the country, from Tennessee to Michigan, have been on strike for two weeks.

“They are far from alone. On October 14th about 10,000 employees of John Deere, a manufacturer of agricultural machinery, walked off the job in five states. More than 20,000 nurses and workers in California and Oregon with Kaiser Permanente, a health-care company, have voted to strike. Some 60,000 behind-the-scenes film and television workers were also set to head to picket lines, having voted 99% in favour of a strike, but a last-minute deal on October 16th averted that.”

And many people are simply leaving their jobs in large numbers, a movement that has been dubbed “The Great Resignation“. The Economist continues:

“Even without the strikes, there is no doubt that American workers are getting pickier. Nearly 4.3m quit their jobs in August, the most in the two decades or so that the Labour Department has monitored this data. Celine McNicholas of the Economic Policy Institute, a left-leaning think-tank, notes the exodus has been most pronounced in restaurants and retail operations, service sectors with few unions, low wages and little sick pay. ‘Folks are saying, ‘This is not a job worth it to me right now’, she says. ‘They’re being asked to take it or leave it, and they’re leaving it.'”

We will have to see whether workers continue to demand a higher share of the profits they help generate. There is evidence that this labor discontent is spreading globally.

Posted October 19, 2021 by vferraro1971 in World Politics

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