issue 173 - July 1987
Modern methods of superexploitation, tried and tested in the Third World, are coming home to industrialized countries. Celia Mather looks South, then North, today.
FOR workers in the South being ‘disposable’ is nothing new. In the 1970s, when declining profitability caused plant closures in the industrialized North, they constituted cheap labour for richer countries. Third World govemments, mainly in Asia and Latin America, established free-trade zones employing thousands of young women workers to attract foreign capital investment. From South Korea to Chile rules were changed, trade union rights were suppressed and casual work became the order of the day.
Sub-contracting became a useful tool for cost-cutting and avoiding responsibilities to the workforce. In Indonesia, for example the US-owned oil company Caltex had some 10,000 people working for it by the beginning of the 1980s. But the company did not want the hassle — or embarrassment — of dealing direct with its own low-paid work force. Instead workers were employed by about 100 different sub-contractors. These fly-by-night ‘bosses’ changed so frequently that workers would lose track of who was actually employing them. But some things never changed: there was no holiday pay and if they went went sick they lost their jobs.
The workers tried to become employees of Caltex itself but without success. The All Indonesia Labour Federation (FBSI), a tame ‘yellow’ union created by the Suharto regime, signed a collective labour agreement with Caltex, but only for the small elite of core workers. Those employed by contractors were left out. When the recession and falling prices hit the oil industry a few years later Caltex was able to ‘shake out’ the workforce with ease.
Suppression of unions also enabled Japanese textile firms in West Java to systematically take on ‘probationers’ for two years and then sack them just before they were entitled to become permanent staff. Since the recession hit Indonesia, tens of thousands of textile and garment workers have lost their jobs, without compensation.
There are other bizarre examples. James Hardie, an Australian-owned firm outside Jakarta employed ‘seasonal’ labourers to produce asbestos construction materials. ‘There is nothing “seasonal” about this work!’ the workers said. ‘What we have in Indonesia is a climate of hak pengusaha — where the right of the employer rules.’
Back in the industrialized countries of the North a reserve army of workers is lining up in dole queues, desperate for work. Protective labour laws have been replaced by anti-union legislation. The job market had changed dramatically. It is now possible and often desirable for many companies to bring home Third World labour relations. Now the threat to well-paid secure jobs in the industrialized countries comes less from cheap workers in the Third World than from ill-paid casual workers at home.
In 1971 only one in seven British jobs was part-time. By 1984 the proportion had grown to almost one in five. The ‘peripheral’ workforce as a whole now accounts for 34 per cent of those in employment — 8.1 million people. This is a growth of 16 per cent between 1981 and 1985.
In the United States, economists calculate that those who work at home for outside contractors or involuntarily work part-time have doubled since 1980 to nearly 17 per cent of all workers. If employees who voluntarily work part-time are included, there are 25 million ‘peripheral’ workers in the US, accounting for 25 per cent of the workforce.
Casual work is growing most rapidly inthe service and retail sectors but even traditional manufacturing companies are catching on to the trend. New labour relations are being introduced in industries where they were technologically or politically unthinkable a decade ago. Car plants, such as Fiat in Turin, Italy, are famous for replacing male muscle with robots. The other important but less visible change is that those who operate the robots and computers are part-time women workers.
Home-working has also seen a considerable upsurge — with women as its most thoroughly exploited victims. Not only are they usually paid below the legal minimum — a study in 1984 showed three-quarters of homeworkers in Britain were earning £1 ($1.60) or less an hour — but they also have to carry the overheads of heating and lighting. Nor do they benefit from statutory benefits such as sickness or holiday pay, or health regulations — important for those working with hazardous materials such as adhesives. Putting out work to these women, who are often from immigrant communities and are reluctant to complain, comes under the heading of ‘streamlining’ as far as their employers are concerned.
The US steel industry — with all its images of gigantic workforces of powerfully unionized white men — should, one would imagine, be impervious to the new trend. Not so. With plants closing down nationwide, management are imposing work practices in the plants they have kept open and are enforcing large pay-cuts. If workers reject the cuts, as did 22,000 members of United Steelworkers of America Union at USX Corporation in August 1986, they can be sent home and re-hired under subcontractors with acute losses of pay, conditions and union rights. Peter Reformat, a pipefitter for 10 years at USX Corporation’s Gary works plant, was laid off and promptly hired again under a new employer. He had earned US$13 an hour plus ample benefits under USX but under the subcontractor he gets just US$5 an hour and no benefits.
New technology allows companies to decentralize, contract out and break up large factories which have unionized work-forces. Management then only has to make sure that the costs of co-ordination and quality control are outweighed by the savings in labour costs. Smaller units, particularly individuals in their own homes, make it easier to avoid labour legislation. They also remove at a stroke the central workplace, the bedrock of strong trade union organization.
The threat of being hired and fired at will frightens off workers from unions. ‘Don’t agitate. You could be next for the chop,’ is the central theme. It is, to be sure, an unprecedented attack by corporations and governments on trade unions. And so far there can be doubt who is winning.
Celia Mather is a co-editor with International Labour Reports.