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AEQUUS INDEX – Living-Wage Equalisation in the Manufacturing Sector
From inception, TLWNSI developed its living-wage equalisation index, which measures how close the real wages of manufacturing workers in a specific country are to those of equivalent workers in the U.S. in purchasing-power-parity terms. The index exposes either the size of the gap or, in some countries, the true compensation advantage that real wages have over the wages of equivalent U.S. workers. Given that in 2011 we expanded our list of 13 economies included in our living-wage assessments to up to 32 economies, we decided to convey the most relevant indicator of our work in a very explicit manner. Hence we have named our index the "Aequus Index", Latin for "equal" or "balanced", which accurately reflects the purpose of our index.
In doing so we provide two indices. The first index measures wage differences for all employees in the manufacturing sector,  which includes all persons employed full or part time in an establishment during a specified payroll period. The second index measures differences for production workers, which refers to only those employees who are engaged in activities directly or closely related to the production process. Both criteria belong to the methodology used by the Bureau of Labour Statistics (BLS) of the U.S. Department of Labour, our source for all nominal wages included in the indices. Yet, this will be the last time that we produce the Aequus Index for production workers, the same measurement that we have assessed since 2003 for 12 economies. The BLS has decided to no longer update wage data for production workers. We will, however, maintain this table readily available, given that it provides wage data as far back as 1975, allowing us to provide a comparison for many countries between that year and, in most instances, 2009. The index for all employees dates back, depending on the country, to 1996 and, except for India and China, compares the benchmark year with 2009 and will continue to be updated every year. India and China's wage data is currently available for the periods 1999-2007 and 2002-2008 respectively. A word of caution, nonetheless, is required with these data, for India and China data gathered by the BLS are not fully comparable to the rest of countries due to some inconsistencies in methodology. However, given that in both cases the BLS argues that this does not substantially affect the hourly compensation estimates, rough comparisons can still be made, and thus, we have decided to include them in our Aequus Index.
Download the 1996-2009 Aequss Index for All Employees here!
Download the 1975-2009 Aequss Index for Production Workers here!
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ARGENTINA'S MANUFACTURING LIVING-WAGE GAP: STILL A WAYS TO GO BUT STEADILY CLOSING IN
After the complete economic debacle of 2002, Argentina is enjoying a substantial recovery and real wages are at their best level ever. Yet, they still have considerable ground to cover before becoming of a living-wage kind; a goal that is realistically attainable in less than a decade if Argentina is able to sustain the current trend and control inflation
Under the new supply-side paradigm Argentina experienced a short bout of economic boom at the end of the century. But in 2001, the laissez-faire opening of Argentina’s economy actually resulted in its complete collapse due to the sheer speculative and predatory basis upon which it was anchored.  With “el corralito” –the actual freezing of all bank deposits due to lack of funds provoked by massive capital flight– Argentina was forced to declare a credit default of its large and mostly securitised foreign debt. As a consequence, since 2003, Argentina has moved from sheer laissez-faire to far more cautious economic policies –with some measure of regulation, and a less privatised and a more demand-side economic approach.
As for the quality of wages, although real wages in Argentina since WWII were not nearly as good as they were in the first part of the century, they continued to be by far the highest in Iberian America and reflected low levels of inequality up to the mid seventies. To be sure, with the abandonment of demand-side economics in favour of a sheer neoclassical approach, real wages deteriorated substantially –except during the brief period of neoliberal GDP growth during the last decade of the past century, and inequality grew exponentially, particularly during the turn of the century until the economy collapsed in 2001-2002. Since then real wages have improved dramatically in line with the unprecedented sustained economic recovery that began in 2003. As a result, manufacturing real wages in particular are at their highest level since at least 1996, more than doubling their previous real value during the short neoliberal boom.
By the same token, since 2003 the living-wage gap vis-àvis equivalent real wages in the U.S. has decreased dramatically as well and, as could be expected, it is much smaller than comparable manufacturing wage gaps among its counterparts in Brazil and Mexico, the largest economies in the region.
Nonetheless, from TLWNSI’s (The Living Wages North and South Initiative) living-wage perspective, before Argentina’s real wages in the manufacturing sector can be considered of a living-wage kind, they still have considerable ground to cover to reach the levels of Western Europe and East Asian wages. Yet, if Argentina is able to sustain the current trend, it will cross the livingwage threshold in less than a decade at a gradual pace and will attain comparable wages –in living-wage terms– to those of Western European and East Asian countries. A realistic goal indeed.
Download the assessment of Argentina's's living-wage gap here!
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NEW EDITION OF TLWNSI'S WORKING DRAFT!
The idea of The Living Wages North and South Initiative (TLWNSI)It was conceived to address a very conspicuous question: why do workers in Southern countries, who work for global corporations, earn a miserable wage by any standard, whilst their counterparts in  Northern countries earn a living wage for doing the same job, of equivalent market value, for the same corporation?
Our work drew a first certainty: the wages paid to workers in the South have nothing to do with the cost of living differentials between economies; rather, they have to do with the logic of comparative advantages that puts supply and demand arguments to work on behalf of a global market system that practices labour exploitation as a core strategic asset of its global operations model.
Nevertheless, contrary to what we envisioned, when the first decade of the current century came to an end, we saw an ever more entrenched fixation with supply-side neoliberal economics both among governments and markets, and a much less than expected opposition from the part of people, both as citizens and consumers, despite their substantial and exponentially growing dissatisfaction. This despite the dramatic and evident systemic crises of the current undemocratically imposed market-driven ethos.
This has moved us to redefine our focus and variables. That is, our living wage concept and argumentation to support it remains exactly the same, but our strategy and tactics have been redesigned to have a full bearing on the marketocratic ethos in which we are living. We go about this through an approach that address the logic of the market in such a way that –in sync with a wide global movement of civil society organisations– we can realistically expect to gradually transition from the current market-driven paradigm into the new true-democracy paradigm in the term of thirty years or about one generation.
In this way, by clicking here you will get a copy of the latest edition of TLWNSI’s working draft, for it will always remain a working draft as we continue to adjust our strategy and tactics to increase effectiveness.
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Observations on the Final Report of the Special Representative of the UN Secretary General on the issue of human rights and transnational corporations and other business enterprises, John Ruggie*
Alejandro Teitelbaum has devoted many years to work on the issue of human rights in the realm of global corporations and other business enterprises. As the former Permanent Representative to the United Nations Office in Geneva, for the American Association of Jurists –based in Buenos Aires, he spent time toiling with the bureaucracies of the UN and member States, in his pursuit of an international legal framework that would harness business activity so that it would stop violating a wide array of human rights in its sphere of influence, as is customarily the case today. As such, he witnessed how, time and time again, the bureaucracies succumbed to the will of the leading economic powers, who were adamant at maintaining the preeminence of corporate interest over their responsibility for their infringement on human rights.
In recent years, Teitelbaum has assessed the extremely pro-business slanted work of John Ruggie, appointed, arguably, to design a framework that would “increase the stakes” for corporations when infringing upon human rights in their daily operations. Teitelbaum has consistently criticised Ruggie’s clear inclination for neoliberal ideology at the service of transnational economic power, which clearly opposes any kind of instrument that would govern, in a binding manner, business practices concerning human rights.
In this brief, Teitelbaum provides his final observations on the perspective that Ruggie attempts to advance in his Final Report. The author incorporates into his assessment the consistent laissez faire course followed by Ruggie since the time when he was the UN Secretary General’s principal advisor for the Global Compact; a public relations instrument –now even derided inside the UN– to allow companies to look good without really doing the public good. In his previous assessment,** Teitelbaum succinctly concludes that Ruggie puts up an act to change so that, at the end, everything remains the same. That is, he advances no binding rules to ensure that business activity does not infringe on human rights, but only an encouragement to voluntarily incorporate into business culture a consideration for respecting human rights. Thus, the author’s recommendation to really address the issue was that “the UN Human Rights Council should make an about turn of 180 degrees on this issue to be in sync with the gravity of the social and economic situation in which the world is living”.
Yet, as could be expected, Ruggie’s Final Report remains consistently on the same course and constitutes merely a meek orientation, wrapped as “Guiding Principles,” that lacks a binding nature for both States and corporations. It is on this respect that the author makes his main observation, conspicuously pointing at the central fault of Ruggie’s laissez faire non-binding premise. His argument is that Ruggie takes advantage of a past mistake made in the Norms Draft for Business and Human Rights “to create the confusion between the inherent obligation of the State to promote, guarantee and ensure respect for human rights and the obligation –and the corresponding direct responsibility in case of violation– of corporations (as of all moral and physical private persons) of respecting the human rights upheld in international norms.” For Ruggie, the author argues, “human rights would constitute a special category of rights that can only be violated by States and their civil servants and not by private persons, except in certain war crimes and crimes against humanity”. However, the author asserts, “there is no doubt that transnational corporations, as all private persons, have the obligation to respect the law, and if they do not do it they must suffer the civil and penal sanctions at an international level as well, which clearly emerges of a relatively attentive examination of the current international instruments”.
In this way, Teitelbaum’s conclusion is that if transnational corporations benefited when the Norms Draft was buried, Ruggie’s Final Report sinks again any attempt to create an instrument of binding nature to enforce respect for human rights in the realm of business activity. Consequently, and as could be foreseen, Ruggie’s work is once again a ploy so that everything remains the same.
*(A/HRC/17/31, 21 March 2011)
** A Dialogue with Ruggie?
Download the assessment of Ruggie's Final Report (2011) here!
Pour obtenir un exemplaire de la version française, cliquez ici.
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UPDATe 1975-2008!
In 2008 the shock of the greatest depression of global capitalism since 1929 is not reflected yet in the real wages of production line manufacturing workers
PPP WAGE GAPS FOR SELECTED DEVELOPED AND "EMERGING" ECONOMIES FOR PRODUCTION-LINE MANUFACTURING WORKERS (1975 up to 2008).
Euro area real wages continue their ascending trend.  This is reflected in the increase of indices above wage equalisation in Germany and Italy, the near equalisation of French wages and the continuity of Spain’s equalisation trend, which now has surpassed the UK. In contrast, real wages in the latter endure a drastic drop of 10%. In Asia, Japan reverts a stagnation trend in its equalisation level, which had been dragging since 2001, now surpassing South Korea, which carried a consistent equalisation trend since 1975, and that now suffers a strong devaluation and a drop of real wages of 16%. Hong Kong does not report any significant change. Singapore experiences some improvement, albeit still below its best position of 2006. In the Americas, Brazil’s wage recovery continued to be stagnated in 2008. In 2009, Brazil instituted an annual minimum wage increase –from 2010 forward– that results from the sum of the inflation index and GDP growth. This should reflect, beginning that year, a strong appreciation of manufacturing wages. Canada maintains almost invariable its small surplus. Mexico maintains its rigid and deliberate pauperisation policy that keeps wages stagnated since 2000. Worst of all, it is expected that, beginning in 2009, with an economy completely dependant on the U.S., real wages will deepen their pauperisation to the level recorded in 1995 or even worse. The subjection of Mexican wages to conditions of modern slave work, instead of bringing them closer to the U.S. benchmark, it is dangerously bringing them closer to the wages of China and India, which due to the sheer size of their labour forces, are representative of the worst misery wage indices.
The Classic Problem Scenario
With market liberalisation, MNCs sell their products in both the host countries and in all other markets where they are active, including their home country, at the same or at a very similar sales price. They achieve maximum profitability when the manufacturing process in their developing countries' operations is at par in quality and production efficiency with the standards used in their home operations, but their cost of labour is dramatically lower. The MNCs' markets, manufacturing and marketing operations are globalised but their labour costs remain strategically very low in order to achieve maximum competitiveness at the expense of the South's workers. As a result, the MNCs get all the benefit. Sometimes the salaries that they pay are higher than the legal minimum wage in the host country. But, these wages still keep the workers in dire poverty. A minimum wage does not make a living wage even in the most developed economies. What has occurred, with market globalisation, is the dramatic widening of the gap between wages in the North and in the South.
The Argument
Workers performing the same or an equivalent job for the same business entity, in the generation of products and services that this entity markets at global prices in the global market, must enjoy an equivalent remuneration. This equivalent remuneration is considered a living wage, which is a human right. A living wage provides workers in the South with the same ability to fulfil their needs, in terms of food, housing, clothing, healthcare, education, transportation, savings and even leisure, as that enjoyed by equivalent workers in the North, which we define in terms of the purchasing power parities (PPP) as defined by the World Bank and the OECD.
The definition of a living wage of The Jus Semper Global Alliance is as follows: A living wage is that which, using the same logic of ILO´s Convention 100, awards "equal pay for work of equal value" between North and South in PPPs terms.
The premise is that workers must earn equal pay for equal work in terms of material quality of life for obvious reasons of social justice but also, and equally important, for reasons of global sustainability.
The argument of an equivalent living wages is anchored on two criteria: - Article 23 of the UN Universal Declaration of Human Rights, on the following points:
- Everyone, without any discrimination, has the right to equal pay for equal work
- Everyone who works has the right to just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection.
- ILO´s Convention 100 of "equal pay for work of equal value', which is applied for gender equality, but applied in this case to North-South equality, using PPPs as the mechanism.
The proposal is to make workers in the South earn living wages at par with those of the First World in terms of PPPs in the course of a generation (thirty years). This does not mean, whatsoever, that progress should be equivalent to the increase of irrational consumption, depleting all non-renewable resources. Eventually, during the twenty-first Century, a new paradigm must be built in which the purpose of the market is the welfare of all ranks of society, and the privileging of sustainability and not of shareholder value. Yet, while that stage is reached, there is no justification at all, moral or economical, for the workers of the South not to earn wages equivalent to those of their counterparts in the North, in PPP terms, based on equal pay for equal work of equal market value.
The analysis is and update for 12 economies and the U.S., prepared by TJSGA, using hourly compensation costs for production-line manufacturing workers (1975-2008) as reported by the U.S. Department of Labour, and PPP data from the World Bank and the OECD. The report exposes once again a global labour system that profits over the majority of the people in favour of a global elite. Download the pdf file with the wage gap update for 12 economies (Germany, France, Italy, Canada, U.K., Spain, Japan, South Korea, Singapore, Brazil, Hong Kong and Mexico).
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UPDATED ASSESSMENT OF MEXICO'S WAGE GAP 1975-2008
The Mexican State, still challenged for the lack of legitimacy of its election, corroborates every year its vocation as a customary violator of the labour rights of its citizens
The following assessment may seem redundant to those who have read our analyses of previous years. Yet the stubborn policy of the government in power –which deliberately pauperises the Mexican labour force– compels us to insist in the same assessment that exhibits the nefarious consequences of such policy. Moreover, it is necessary to depict once again the political context in which it is imposed. To start, by evaluating wage data of the manufacturing sector of thirty three years, the exploitative and repressive character of the group that has wielded real power for the last three decades, when it submitted itself to the Washington Consensus, with the goal of remaining in power, becomes rather blatant. This has engendered an environment that stands out on a global scale for the tremendous erosion of labour rights. The illegitimate and mafia like nature that accurately delineates the Mexican State, has imposed an ethos of labour bondage that takes the country back to conditions prevailing before the social revolution of 1910.
The future of production-line manufacturing wages in Mexico is absolutely ominous unless society removes from power those who have imposed the mafia State and impose a citizen’s government of real democracy. Every year the government’s economic policies contain or further erode real wages. Additionally, the State has unleashed a policy of repression of the rights of freedom of association and to organise andcollective bargaining. The deep impoverishment of Mexicans is a fact. Official data acknowledge that 81% of Mexicans are poor (Coneval 2009). By the same token, based on INEG’s 2006 National Survey of Occupation and Employment, it is estimated that in 2006 the minimum wage could only afford 22,5% of the cost of the socalled basic basket of 40 goods (CBI) deemed essential for survival (Sánchez Juárez: 2006). Parting from these findings, it is estimated that 77% of the economically-active population does not earn the wage required to acquire a CBI. Moreover, the government began 2010 with strong price increases in the energy sector, which guarantee a greater pauperisation of real wages. This prospectus is the same conveyed in the 2007 report, for the deprivation, depredation and deliberate pauperisation – as a State policy– continue deepening.
In summary, more than a quarter century of predatory capitalism in Mexico exposes, decisively, a government's policy –from the perspective of manufacturing wages– of perverse and premeditated pauperisation and exploitation of Mexican labour, for the only public policy of the mafia State is to govern for the benefit of domestic and foreign institutional investors and their corporations. In this way, as long as the “robber baron” elites currently in power remain in control, the deepening of the pauperisation of Mexico’s population is more than guaranteed, in such a way that the odds in favour of making the closing of Mexico’s living wage gap in the term of thirty years a reality is currently zero. Download the pdf file with the analysis of Mexico's wage gap here.
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UPDATED ASSESSMENT OF BRAZIL'S WAGE GAP 1996-2008
Brazil’s recovery of production-line manufacturing wages remains idle in 2008. Yet, there IS A plan for a strong long-term equalisation
Parting from the implications carried by the plan of the Brazilian government to increase in a sustainable manner minimum wages up to 2023 –and using as the benchmark Brazil’s production-line workers in the manufacturing sector– it can be asserted that the policy to be  applied will generate, in all certainty, rather meaningful social and economic benefits. Although Brazil’s plan will hardly close the wage gap with the United States by 2023, it will undoubtedly embody a great improvement that will trigger different multiplying effects that will generate the endogenous development of Brazil. This will place it far much closer to the socioeconomic indicators of developed countries than of developing ones. Moreover, it is to be expected that once the benefits to be obtained are attested, the new government of Dilma Rousseff –Lula’s successor and Cabinet Chief– and future governments will maintain the same policy with the intention of sustaining the same growth until the degree of development becomes attuned with that of the major economies. Brazil’s demand-side economic policy will generate multiplying effects that will consolidate social development, anchored on the generation of aggregate demand. This will increase not just wages, but formal employment, tax revenue, the sustainability of the social security system, economies of scale and the competitiveness of the Brazilian economy in the global context, among others. These effects notwithstanding, the greatest benefit will be the drastic decrease of poverty and an abatement of innumerable social problems engendered by poverty and exclusion.
Download the pdf file with the analysis of Brazil's wage gap here.
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UPDATED ASSESSMENT OF SPAIN'S WAGE GAP 1975-2008 Maintaining the European trend, Spain improves once again the equalisation of its production-line manufacturing workers' REAL WAGES with their U.S. counterparts In symmetry with the trend of the major economies of the European Union, in 2008 Spain continued closing the gap dividing the competitiveness of its production-line  manufacturing real wages –in purchasing power parity terms– with that of its U.S. counterparts. This makes these wages the sort that can generally be regarded as living wages –assuming U.S wages to be living wages. Since 1975 the equalisation index of Spanish wages (89) has increased 75%. In 2008 Spain surpasses the United Kingdom in this indicator due to the heavy drop of real wages in the latter.
Unfortunately, this will tend to change beginning in 2009, and even more so from 2010 on, when the high jump in unemployment, triggered by the implosion of the global capitalist system, makes its indelible mark on the drop of real wages worldwide, but particularly in Spain, where the unemployment index has reached one-fifth of the EAP. Yet, the drop will be all the more dramatic due to the corroboration, for the nth time, that European Union Governments –and practically all governments in the world– have become mere agents of the casino-like economy of the institutional investors of financial markets. In this way, in 2010, investors have ordered the dismantling of the welfare State and of labour rights by aiming at the “flexibilisation” of collective contracts, in Spain’s case, and the two-year extension of the legal retirement age in France, despite ample social opposition in both instances. Greece is enduring predatory reforms ordered by the very culprits of the global debacle, exposing, thereby, who is really ordering public policy in the democratic mockery in which the world is engulfed. To be sure, unless society reacts appropriately, this is just the beginning of a new predatory assault by the owners of the market; a situation that will consolidate the true marketocracy ethos in which we are living.
Download the pdf file with the analysis of Spain's wage gap here.
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UPDATED TO 2008!
TABLE T4*: 1975 - 2008 REAL-WAGE GAPS FOR TWELVE ECONOMIES, IN PURCHASING POWER PARITY (PPP) TERMS, FOR PRODUCTION-LINE MANUFACTURING WORKERS. *(The base table used for all PPP real-wage gap analysis)
In 2008, the international comparison of hourly compensation costs for production-line (PL) workers between the U.S. and selected developed and "emerging" markets, maintains a consistent trend towards surpassing or nearly equalising real wages in the euro area countries. Japan reverses a negative trend, whilst the UK and South Korea experience drastic increases in their wage gaps. Canada, Mexico, Brazil, Hong Kong and Singapore experience stagnation or little change in their equalisation positions. In 2008 the shock of the greatest global depression since 1929, does not have a bearing yet in the real wages of PL manufacturing workers vis-à-vis their  equalisation with the real wages of their U.S. counterparts, which grow 2,1%. This will occur beginning with the data for 2009. Real wages in the euro area keep their incremental trend, whilst –barring Japan the UK and South Korea– the remaining economies report no meaningful changes.
✦ In the four euro-area economies (France, Germany, Italy and Spain) the cost of living –in purchasing power parity terms– kept increasing as well as the strong appreciation trend of the euro, which increased 7,4% only in 2008 –increasing by 60% since it became the official currency in 2001. Nonetheless, real wages continued their ascending trend above the growth of equivalent wages in the U.S. This is reflected in the growth of the indices above wage equalisation in Germany and Italy (1,18 and 1,06 respectively), the near wage equalisation in France (98) and the continuity of the equalisation trend in Spain (89). In contrast, real wages in the UK endured a drastic drop of 10%, thus their equalisation index dropped from 97 to 85.
✦ In Asia, Japan reverts a trend that was dragging since 2001, which had stagnated its equalisation index at around 70 and allowed South Korea to surpass it in 2005. Therefore, in 2008, Japan's PL real wages experienced a rather strong increase of 17,5%, thus driving its equalisation index from 72 to 83, its best ever. In contrast, South Korea, which had experienced a consistent trend towards equalisation since 1975 –which reached an 85 index in 2007– suffered a strong devaluation of 18,3% and a drop of real wages of 13,9% in dollar terms. In this way, nominal wages dropped 16,2% in dollars and even 1% in local currency, thus driving down its index from 85 to 72. In the case of Hong Kong, real wages do not report any meaningful change in 2008 and maintain the same equalisation level reached in 2007 (32). Singapore experienced some improvement vis-à-vis the drop suffered in 2007, increasing its equalisation index to 53, albeit still below its best index of 55 reached in 2006. Since 1995, when it recorded a 51 index, Singapore has not experienced any consistent upwardly trend.
✦ In the Americas, Brazil's wage recovery –relative to its U.S. counterparts– remained stalled in 2008, with the same 2007 index (37). In 2009, Brazil instituted an annual increment of its minimum wages –starting in 2010– directly linked to the sum of the inflation index and the growth of GDP. This should reflect, beginning in 2010, a strong appreciation of manufacturing wages. Canada keeps a small surplus in wage equalisation with the U.S. of 103 for its PL workers. Mexico maintains its rigid and deliberate pauperisation policy, which in 2008 records a slight drop to 17; a position which has not changed since 2000 with minimum variations. Worst of all is that, beginning in 2009, with an economy completely dependent on the health of the U.S. economy, real wages are expected to deteriorate further, to the level recorded in 1995 or even worse. The subjection of Mexican wages to modern-slave work conditions, instead of bringing them closer to the U.S. benchmark, is driving them to the wage standards of China and India, which, due to their huge labour supply, are the benchmark for the worst exploitative wage indices.
Download the pdf file of Table 4 here.
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UPDATED TO 2008!
Table T5: New living-wage gaps 1996-2008 –in purchasing power parity terms (PPPs)– vis-à-vis the U.S. for all manufacturing employees for the four largest economies in the Americas (Canada, Brazil, Mexico and Argentina)!
The equalisation indices of hourly compensation costs for both all manufacturing sector workers (AMWs) (blue & white collar) and for production-line manufacturing workers (PLWs) for Canada recorded an erosion; remained stagnated for Mexico and Brazil; slightly improved for Spain whilst wages for Argentinian AMWs improved markedly.
Our analysis of the major economies in the Americas compares AMWs' hourly wages between countries as well as with the wages of PLWs –except Argentina, assessing, in this way, the size of living-wage gaps. Spain is included in the analysis for comparison  purposes of Canada's and Iberian American economies with a large euro-area economy. PLWs are engaged in fabricating, assembly, and related activities. Comparisons are: 1) size of living-wage gaps; and 2) whether living-wage gaps for PLWs or AMWs are greater.
✦ Wages gaps for the manufacturing sector in Mexico are dismal and by far the largest among the selected countries and among OECD members. Moreover, although wage gaps for all workers were slightly less dramatic than for production workers, the tendency since 1996 has been towards the disappearance of such relationship. In this way, since 2004 the difference between the wages of AMWs and of PLWs has been zero or of only one point (18 vs. 19 in 2008), a position where both gaps have remained stagnant in the last few years.
✦ Brazilian wage gaps for both AMWs and for PLWs have stagnated in the same equalisation level since 2005, practically without variance (35 and 37 respectively). In contrast, in the case of Argentina, where data only for AMWs is available, the trend towards wage equalisation with their U.S. counterparts –since 2002– continued improving sensibly in 2008, reaching a 60 index.
✦ As a whole, the trend of slightly better equalisation indices for PLWs than for AMWs persists for Canada, Brazil and Spain. In contrast, in Mexico, the once slightly better position of AMWs wages has disappeared thus merging both wage gaps at a dramatically dismal level.
Download the pdf file for Table 5 of wage gaps for all employees in manufacturing in the Americas here.
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mexico: HELL IS THE TIJUANA ASSEMBLY LINE
The maquiladora factories, where consumer goods are pieced together along the Mexican-US border, are falling apart. Their workforce is without rights, without hope, and increasingly without jobs Anne Vigna’s incisive account of the maquiladora sector –in-bond plants that import about 97% of the parts, which are assembled to be then “exported” back to their  contractors– exhibits the dire and complete disenfranchisement of Mexican workers in the formal economy. Yet over 50% of workers toil at a living in the even worse underground economy.
In Vigna’s first hand experience, right on the field during 2009, she talked to workers earning even lower wages. She found workers –mostly women– earning $58 per week in the electronics sector. That is barely more than a dollar an hour (about $1,16), for the typical work week of at least 48 to 50 hours. In the apparel sector, the hourly pay could easily be below a dollar an hour. Such labour endowments are, to be sure, what is now commonly regarded as modern-slave work wages. Contrary to popular wisdom, slavery in the XXI century is not by any account a thing of the past. It is a social phenomenon that has been growing in direct proportion to the grip that today’s global Darwinian capitalism –the worst of its kind– is increasing on a world where representative democracy has been supplanted by marketocracy, where the institutional investors and their corporations dictate the pubic agendas.
Indeed, the most prominent feature of the practice of modern-slave work in Mexico’s maquiladora sweatshops –a far more accurate adjective to refer to this mode of production– is the complete, systematic and customary violation of all international labour rights as well as many other human rights that Mexico’s Congress ratified many years ago. This creates an ethos clearly reminiscent of the worst kind of social Darwinism practiced in the factories of the English Industrial Revolution that Charles Dickens so eloquently portrayed.
In the case of Mexico, Anne Vigna’s brief vividly exposes the dire circumstance that millions of Mexicans working in the maquiladora sector throughout Mexico endure daily in a gripping account of first hand experiences. Since NAFTA took effect, millions of Mexicans have been displaced –completely disenfranchised– for they lost their past livelihoods as part of the so-called “market externalities” of today’s global economy. Many of them have sought to work in the sweatshop sector as a measure of last recourse; many after trying unsuccessfully to migrate to the U.S. where many corporations and millions of consumers benefit from the modern-slave work conditions model of Mexico’s maquiladora industry.
As could be expected, the maquiladora sector is only a symptom of a far more complex and dire problem. The actual systematic depredation and destruction of this nation for the last three decades is due to the close partnership between the Mexican oligarchy, foreign corporations and their governments, who have worked closely –through the traditional centre-periphery relationship– to exploit at ease the human and natural resources of this depredated territory.
Anne Vigna’s account of life in the maquiladora sector represents a rather important contribution to expose the truth about Mexico and denounce it. Far from being a democracy, the real Mexico can only be regarded as a devastated “protectorate” of global Darwinian capitalism, imposed jointly by the Mexican oligarchic mafias and their tutors in the global centres of economic power.
Download Anne Vigna's account of Mexico's sweatshops here!
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INDIA'S LIVING-WAGE GAP
Another modern slave work ethos
Regarding the real value of the manufacturing wages, India’s living-wage  gap is not as dramatically dire as that of China. However, as could be expected, it is still one of the worst in the world, for it clearly exhibits its sheer modern slave work nature. As a result, India’s increasingly deregulated economy is rapidly becoming a very important source of misery wage manufacturing workers for the Darwinian capitalist system of today’s global corporations and their institutional investors. Whereas there is increasing talk about China reaching a turning point when its pool of surplus labour would start declining, India is expected to contribute, over the next few decades, a larger labour supply to its manufacturing sector than China. Yet, to be sure, this will continue to occur at rather meagre real wages. Consequently, along with China, India will continue to exert tremendous downward pressure on the wages of all the developing nations that have bet their economic strategy on the traditional centre-periphery relationship, anchored on the offering of comparative advantages. In this way, as Álvaro de Regil, the author of this analysis argues, from the perspective of real democracy and human rights, this poses a rather intractable problem for the labour endowments of workers worldwide, but all the more so for those in the periphery of the world’s Darwinian capitalist system in which we have been undemocratically immersed.
Download the assessment of India's living-wage gap here!
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MEXICO VIS-À-VIS THE ROBBER SCUM
Dignity or Capitulation in the Face of Mexico's Abduction by the Political-Business Mafias
What is Mexico dying of? Next to the miseries of modernity, a whole series of inherited miseries distress us, a by-product of the resilience of ancient forms of production already outdated, with all their entourage of anachronistic political and social relations. Not only those alive besiege us, but also the dead. (Marx, 1867) If we had the chance to look at Mexico from a point in the future, surely we would shudder at seeing the whirlwind of contingencies in which it sinks, and with painful urgency we would ask ourselves, why did it happen this way? Yet today the problem is to understand our situation from the point of view that we have access to: the present. And, from this vision, the truth is not only that daily we are stressed out by poverty, unemployment and violence, but, all the more, by, from the citizen’s perspective, the lack of solutions, unless we endow ourselves with another political class: for the current one lacks moral stature, strategic intelligence, public responsibility and vocation to lift the country from its sinking. "Mexico vis-à-vis the Robber Scum" is an assessment of the outrageous situation endured by our country. It is about the systemic illegalities executed by those in government invariably against the citizenry. It is about an institutional edifice that establishes predatory privileges for the coalition in power. It is about, unequivocally, a “despotic island” that maintains, exacerbated, all the authoritarian and illegal depravities of the Mexican State, with repercussions deeply damaging of our social wellbeing; as if its historical clock had stopped before adjusting to the West, and the time of modernity remained an unreachable promise. This book describes the systematic and paralysing plundering that Mexican society is facing up to. Nonetheless, for its author, Álvaro de Regil, to think about Mexico’s problems just as a matter of moral order is tantamount considering the predators, the robber scum, would need to humanise how they deal with the citizenry and be upright with the public matter. For this, to infuse morality, is indeed to go against the nature of the current regime. Moreover, a strategy of this kind does not end with the ungovernability and misgovernment, for the plundering has been exacerbated by the institutionalisation of a perverse method. De Regil compartmentalises comprehensively and critically the institutional system and its incapacity to process the challenges posed by today’s environs. Even more, the author ponders beyond the mere critique of the perverse effects of neoliberalism, and explores a grim and subdued terrain: the pending responsibilities of the citizenry. In this area, he underscores the issues of the modern concept of democracy, demanding the fundamental conditions: participation, rights and empowerment. That is, we are what we are, by virtue of our participation (active or passive) in the public life of our society. Hence his final proposal is a call to action to get rid of, as citizens, the inherited miseries, as Marx would say, that keep Mexico in agony. In sync with this vision, "Mexico vis-à-vis the Robber Scum" puts together quite revealing dimensions of the undertones of the political process and their meaning in the national and international debate. To grasp the character and the motives of this agony in which Mexico is trapped will allow us to assess our life as citizens and to know where we are heading. Guadalupe Lizárraga Independent journalist and writer
Download here the detailed assessment about the threat that looms over Mexico! (document currently available only in Spanish-language version).
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A COMPARATIVE APPROXIMATION INTO CHINA'S LIVING – WAGE GAP
China’s manufacturing wages incorporate millions into the modern slave work model of today’s Darwinian capitalism in one of its direst possible forms
Some recent studies argue that, due to demographic trends, this economy may be about to reach the turning point when its pool of surplus labour would start declining, which would make real wages rise. The number of cases of labour strikes and other forms of pressure that have resulted in dramatic wage increases are apparently mounting. But this is still too early to tell and it is strictly based on traditional market logic. On the contrary, if China eventually runs short of workers, market logic –Darwinian as it is– would make multinationals leave China to better labour exploitation  heavens, where the political-business oligarchies would be more than happy to let corporations exploit their citizens in exchange for a share of the profits. This Darwinian logic imposes a tremendous downward pressure on the quality of life of many societies in the developing world, for governments have bet their sustainability in power on customary centre-periphery relationships. The result is a rather dire situation for the vast majority of the population in these societies. Neoliberal globalisation has globalised consumer markets, prices and access to labour pools, but wages, deliberately, have not been globalised. In this sense, the extremely low level of China’s wages is a perfect strategic element used by corporations to maintain strong pressure on the manufacturing wages of other economies that compete with China. This is the political economy milieu explaining the labour endowments of Chinese workers. Given the importance of China as a major global player, the TLWNSI project has been seeking, for several years, reliable data that can enable it to assess the state of real wages in China and their gap with a living wage. TLWNSI regularly uses as its main source for its analytical work the annual reports published by the Bureau of Labour Statistics (BLS) of the U.S. Department of Labour. Lett and Bannister –the authors of the BLS’ reports on China– argue that albeit these data are not as reliable as those for the most developed economies, the accumulated evidence to date, including China’s First National Economic Census..., supports the general validity of the BLS’ annual calculations on China’s manufacturing employment and labour compensation. In this way, TLWNSI now deems it appropriate to prepare its first comparative report of hourly compensation costs in China’s manufacturing sector vis-à-vis selected countries. From TLWNSI's living wage concept perspective, this work assesses the dimension of the gap between the real wage and the living wage. Subsequently, two projections into the future of China’s manufacturing sector wages are performed. The first projection is based on the growth experienced during the five-year period of this study (2002-2006). This will allow us to prospect how long it would take to close the living-wage gap –at the average nominal wage growth rate of 9,2%– under certain assumed conditions. The second projection explores the average growth rate of Chinese real wages, in the manufacturing sector, required to close the gap in thirty years –TLWNSI’s standard to close wide wage gaps– under certain assumed conditions. Parting from TLWNSI’s living wage concept, the two projections in this assessment expose, comparatively, the dramatic gap that currently exists between the real wages paid, on average, to all manufacturing employees in China and the nominal wages that would constitute a living wage in real terms. This gap is dramatically wider than those prevalent in the two largest East Asia economies of Japan and South Korea, and still quite wider than those in some of the so-called emerging markets in other regions, such as Brazil and Mexico. Moreover, the likelihood that China’s future economic policy will integrate a reasonable long-term plan of thirty years to achieve labour endowments of a living wage condition is currently unrealistic. Although, in the last few years, Chinese real wages have been appreciating, China’s role as the largest supplier of cheap labour –under modern slave conditions– in the global capitalist system’s international division of labour, does not show any signs of any significant abatement. China’s development policies are still anchored on offering the traditional centre-periphery comparative advantages, namely cheap labour. Thus, the weight of China’s huge labour pool will continue to exert strong downward pressure on the wages of other developing economies that are dependent on centre-periphery relationships.
Download the assessment of China's living-wage gap here!
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BRAZIL: in perfect harmony with tlwnsi's concept
Brazil undertakes a historical policy to close wage gaps that stands out for its strong affinity with Jus Semper’s TLWNSI concept for the realisation of living wages
President Lula’s Brazilian government, approaching the end of its second term, has just made a decision that is both transcendental and historical due to its paramount effectiveness in the reduction of poverty in a very meaningful manner and in the span of little more than a decade. Beginning in 2010 the Brazilian State intends to increase the real minimum wage annually, until 2023, following the simple rule of increasing nominal wages by applying the rate of inflation plus the GPD growth recorded two years earlier. Without a doubt, such policy will gradually transform Brazilian wages into living wages. In this way, Brazil commits to closing the wage gap  prevailing between current Brazilian labour endowments, still undignified, and the living wage ethos prevailing in developed economies, within the current market context. This commitment makes the Brazilian State achieve a great deal of congruence with the most primeval raison d'être of any State that takes pride in being a democracy: the pursuit of the welfare of every rank of society, and especially of the dispossessed. The Brazilian plan brings a great dose of encouragement for Jus Semper’s mission, for it exhibits rather strong affinity with our concept: The Living Wages North and South Initiative (TLWNSI); an initiative designed to close the wage gap between so-called developed and developing economies, through the gradual increase of real wages, by increasing nominal wages several percentage points above inflation. Our ebullience is unprecedented for TLWNSI has always argued that, unfortunately, the vast majority of so-called democratic governments have become market agents of the world’s capitalist system. Consequently, their performance typically favours institutional investors and their corporations. A second alternative to close the wage gap is the pressure of consumer power on businesses; an option until now unsuccessful, however, for the development of a responsible consumer culture is still in its infancy. Therefore, if by chance a State commits itself to closing the wage gap in its society, as is the case in Brazil, the setting could not be better to fulfil a fundamental human right in the context of real democracy, with the full power of the State: the right to a just and favourable remuneration ensuring the worker and his/her family an existence worthy of human dignity, as stipulated in Article 23 of the Universal Declaration of Human Rights. In this manner, Jus Semper obtains conclusive evidence, and hardly surpassable, that provides a powerful argument to assert, convincingly, that the realisation of this human right is perfectly possible through the gradual closing of the wage gap, as proposed by TLWNSI, when a country counts with the resolute political will of the State. Download assessment of Brazil's new wage appreciation policy here!
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ISO 26000 – BUSINESS AS USUAL
Another standard where the market reigns supreme and, thus, the fundamental issue of the living wage remains in oblivion
This brief succinctly makes the argument about the business as usual approach that the International Organisation for Standardisation (ISO) has taken in the development of its ISO 26000 standard to address corporate social responsibility (CSR) practices. As was expected, the Final Draft of the standard is not a binding framework. It is a tool that organisations may incorporate discretionally as guidelines to develop their best practices. Far more important, as was also expected, ISO 26000 failed to address the issue of the ineludible obligation of business organisations to pay to all their workers –including those in their supply chains– a living wage, so that their best practices comply with Article 23 of the Universal Declaration of Human Rights. As usual, the issue remains a taboo topic, not to be addressed, for it goes directly against the interest of the market. Moreover, what was not expected, was that the ISO 26000 is an exception to customary practice inside ISO. In contrast with most of its standards, ISO 26000 is not a tool that can be used to certify the practices of an organisation that claims to have incorporated ISO’s 26000 CSR guidelines. Such particularity plays all the more in favour of business organisations, where the mantra is to leave all issues up to the logic of the market, which has as its only purpose the maximisation of shareholder value.
One of the most consistent issues in all the guidelines, norms, standards and principles currently available “in the market”, is the sheer degree of ambiguity of many of its concepts. One fundamental reason for this is the ambiguous ethos in which international conventions –including those binding upon States– have been developed. For instance, decent work, a decent standard of living and decent working conditions do not provide a conceptual definition of decent or at least a process to determine what shall be considered “decent” to accurately and objectively qualify these concepts. Everything is left up to the interpretation of governments and businesses, in a discretionary manner, in an ethos completely immersed in the context of the market. Consequently, given that the ISO 26000 is anchored on many international conventions –particularly on the issues pertaining to human and labour rights– it indulges as well in a great deal of ambiguity, when addressing these critical concepts. Furthermore, it leaves the critical issue of the living wage outside its framework. This is so despite the fact that a living wage is a fundamental responsibility that no business organisation that pretends to be perceived as socially responsible and with a sustainable business model can do without. Such approach does not provide much added value to what is already available. In this way, in regards to ISO’s 26000, the market reigns supreme, once again. Download the assessment on the new ISO 26000 standard here!
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BUSINESS AND HUMAN RIGHTS – Upholding the Market's Social Darwinism
An assessment of Mr. John Ruggie’s Report: “Protect, Respect and Remedy: a Framework for Business and Human Rights”
In January 2008 Álvaro de Regil published a study that included a detailed evaluation of Mr. John Ruggie’s work, as part of a comprehensive assessment of the debate on the responsibilities of business regarding human rights. In this new work, he continues the same approach by assessing the vision and arguments that Mr. Ruggie –UN's Special Representative for Business and Human Rights– advances in his new paper: Protect, Respect and Remedy: a Framework for Business and Human Rights.
The author's conclusion is that Ruggie’s vision in the current report continues to be in open conflict with the basic concept of democracy and of true long-term sustainability, for he continues to uphold the market as the principle that reigns supreme over the lives of societies across the world; never mind the customary, massive, ubiquitous and systemic violation of a wide range of human rights that the market exerts over billions of people every second of our time.
In his report, Mr. Ruggie deems the governance gaps –created by market globalisation– between the markets’ footprint on human rights and society’s capacity to manage it, as the root cause of the increasing abuse of human rights, and regards bridging these gaps as our fundamental challenge.
The author's assessment is in stark disagreement. In his opinion, it is absolutely futile for Mr. Ruggie to address the customary violation of human rights in the business ethos if he does not address the true root of the problem: true democracy has been supplanted by marketocracy and, thus, has disabled the States ability to impose a regulatory framework that effectively protects human rights from corporate malfeasance. The lack of regulation –a fundamental irresponsibility of any truly democratic government– is the current standard in almost every area of business activity. To be sure, the clearest and most pervasive case is the greatest debacle of capitalist economies that we are attesting to, as a direct consequence of the economic deregulation that governments have undemocratically imposed upon societies across the world since the 1970s.
Consequently, relative to human rights, de Regil contends that, as long as we do not demand from our governments a universal and legally-binding framework to protect human rights from business’ predatory practices –as a core element of international law– we will remain “in a sea of rhetoric rights, deception and posturing”. De Regil contends that unless we force our governments to fulfil our demands they will continue relying on the good old formula of pretending that they are making changes so that, at the end, everything remains the same. Something that, by the way, it is likely to occur in all areas of business, particularly in financial markets, unless society gets directly and permanently involved in the public matter, which is a fact of life in today's societies.
Download the assessment of John Ruggie's report here!
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ILO's GLOBAL WAGE REPORT 2010/2011
The ILO"s 2010 Global Wage Report provides clear evidence on the impact of the global capitalist crisis and urgently calls on governments, employers and trade unions to materialise their, otherwise, rhetoric support of the internationally agreed ILO Declaration on Social Justice for a Fair Globalisation and the Global Jobs Pact, which requires a jobs- and income-based growth strategy.
The ILO's 2010 global wage report asserts that the global economic crisis has had devastating consequences on labour markets. Unemployment has increased  to 210 million, the highest level ever recorded, and many millions more have simply dropped out of the labour force because they are too discouraged to continue looking for work. Paychecks have been affected too. The report shows in particular that the global growth in real average wages was reduced by half in 2008 and 2009, compared to earlier years. This highlights how while the crisis has been dramatic for those who lost their jobs, smaller than expected paychecks have also severely affected the purchasing power and well-being of those who managed to stay in work.
In this way, the ILO argues that a jobs- and income-based growth strategy is urgently needed to bring the global economy back on track, to redress past imbalances and to place economic growth on more solid foundations. As could be expected, the most pressing challenges to be dealt with are rising wage inequality, the growing disconnect between wages and productivity, and the 330 million or so employees who are now amongst the low paid in their country. A figure that the Jus Semper can only deem as rather conservative given the fact that the vast majority of workers in emerging and other developing countries do not earn a living wage by any standard. Rather optimistically, the report hopes that policy makers and their social partners will use its findings to advance their decent work objectives.
Click here or on the picture to download the full pdf file.
Click here to download the french version of the ILO's 2010-2011 update on wages in a pdf file.
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