True Sustainability and Degrowth in the Citizens Imaginary
The People and Planet paradigm in a truly democratic ethos unburden by capitalism
The world is steadily going back to stages that we thought we had overcome. Democracy and its so-called democratic institutions are, for the most part, a complete mockery. In lieu of a democratic ethos, the market dictates the rules by which everyone must attempt to live, in complete contradiction with the most basic premise of democracy: to procure the welfare of every rank of society, and with special emphasis on the dispossessed. In most so-called democratic nations, their sovereigns are their citizens, the demos. Yet, governments have betrayed their democratic mandate to go in pursuit of the welfare of the citizenry, who has entrusted such a seminal responsibility on their livelihood in a cadre of elected public servants. Instead, the vast majority of public servants have become agents of the owners of the market and, in full connivance with them, work together in tandem to impose the ideal conditions to maximise the effectiveness of the wealth-extracting syphons of the institutional investors of international financial markets.
Parting from this context, whivh ensues rapidly escalating geopolitical conflicts and the patent reaction of the planet against the unsustainable anthropocentric consumption of resources by the global marketocratic system, the premise of this work is that we must start today to radically change our life styles to put them in harmony with what Mother Earth can provide in food, water, energy and other natural resources in a truly sustainable manner for us and for all living beings. This means that we must embark on a quantum leap paradigmatic change that puts an end to marketocracy. If there is any long-term hope for humanity and the rest of living creatures, we must replace the current marketocratic ethos with a truly democratic ethos. To put it succinctly, we will not be able to build a sustainable system without replacing capitalism, because the true sustainability of people and planet –social justice and a healthy planet– are completely incompatible with the premise of capitalism. True sustainability and capitalism are an oxymoron. Consequently, replacing the capital accumulation paradigm is the only way to make realistic the construction of a new paradigm anchored on the drastic degrowth of our ecological footprint. However, given that all national and international institutions have been captured by the market, we must start by rescuing them from the market-driven agents. In other words, we must start by legally and peacefully removing from power the owners of the market and their market agents entrenched in the halls of governments. This is the quintessential sine-qua-non condition to realistically attempt to build what for now I can best describe as the Paradigm in pursuit of the welfare of People and Planet and Not the market.
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The idea of degrowth in the imaginary of the citizenry
The idea of degrowth is the only truly sustainable imaginary of social coexistence for it revolves around the sustainability of the planet and not of its antithesis, the market, as it is today. If we consume more than the capacity of replenishment of our planet, as it occurs in the market, then we have an unsustainable system. Hence true sustainability must be assessed solely in terms of the planet's capacity to sustain the replacement of natural resources vital for life and energy in the same proportion as our species consumes them and not in terms of increments in the production of goods and services.
For all these reasons Jus Semper deems essential to open a space devoted to the promotion and development of the Degrowth imaginary, specifically to strive to prompt, through its dissemination, awareness about the plight of Mother Earth as a direct consequence of the human activity, which takes place in a structural and systemic way in the marketocracy paradigm. This is an endeavour through which we hope that increasingly more people will come to see the enormous need for everyone to start taking responsibility for our own ecological footprint and strive to modify it to live in harmony with nature. In this sense, the idea of Degrowth proposes the best vision to move from the current market paradigm of infinite consumption to the paradigm in pursuit of the sustainable Welfare of People and the Planet, of the responsibly restrained consumption, and NOT of market welfare.
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PPP WAGE RATE GAPS FOR SELECTED DEVELOPED AND "EMERGING" ECONOMIES FOR ALL EMPLOYED IN MANUFACTURING WORKERS (1996 up to 2013).
From an equalisation perspective, Among East Asian countries, South Korea experienced very strong gains in Eq-Idx between 1996 and 2013. It has achieved remarkable progress in the equalisation of its living-wage gap with equivalent U.S. wages, improving its Eq-Idx from 48 in 1996 to 72 in 2013, ahead of every country in the region and recording its best Eq-Idx ever. Japan has improved more gradually; it recorded no change from 2012 and it is lagging behind South Korea since 2012. Singapore is also far better off than in 1996, yet, while gaining five points between 2010 and 2012, a slight drop of nominal wages in localcurrency in 2013 caused a steep loss of three points in its Eq-Idx.
Overall, nine out of the twelve countries in this assessment are better off in 2013 than in 1996, with East Asian economies and Australia recording the greatest gains in their wagerate position. South Korea is the only country that has consistently narrowed its living-wage gap with equivalent U.S. wages in the region and amongst the 31 countries included in our assessments since 1996. In contrast, Canada is in 2013 at nearly its lowest point, whilst the UK is at its lowest point since 1996. Germany continues to recover but it is still fardistant from its best position and from its 1996 Equalisation Index (Eq-Idx). Six of the twelve economies recorded a gain in their Eq-Idx, with seven of the twelve economies recording their best position in 2013 for the eighteen-year period.
South Korea experienced very strong reductions of its wage rate gap between 1996 and 2013. South Korea recorded in 2013 its lowest wage rate gap of 28%, the strongest improvement among all other economies, down from the 52% wage rate gap recorded in 1996. Japan is also at its lowest wage rate gap, but with no change between 2012 and 2013. Singapore recorded its lowest wage rate gap (28%) in 2008 but its gap has increased since then and it is now at 32%.
The UK has been steadily losing ground since its best position in ’06 (14%) and by 2013 its wage gap had more than doubled at 30%. This is the widest wage gap recorded by the UK for the entire eighteen-year period. Canada’s wage rate gap has stagnated since 2008 with barely any change, and it is now back at the same level as in 2002 and far distant from its smallest wage rate gap of 10% of 1996. Australia has managed to continue reducing its wage rate gap since 2010, recording its smallest gap ever, at only 12%.
Among the euro-area countries, despite a growth of the PPP cost of living in all four countries, Germany and Italy still managed to reduce their wage rate gaps in 2013 from 2012, whilst France and Spain recorded no change for the same period.
Brazil’ wage rate gap did not change in 2013, despite its minimum-wage appreciation policy, due to a strong devaluation of its currency, but it still managed to retain its lowest wage gap since 1996 of 65%. Mexico remains with virtually no change since 1996, with the widest wage gap (74%) of the twelve economies in this assessment.
Download the pdf file with the wage rate gap update for 12 economies (Germany, France, Italy, Canada, U.K., Spain, Japan, South Korea, Singapore, Brazil, Australia and Mexico).
NEW ASSESSMENT OF ARGENTINA'S WAGE rate GAP 1996-2013
Despite high inflation and currency devaluations since 2010, real wages grew powerfully in US dollars. This allowed manufacturing wages to gain five points in their Equalised Index (Eq-Idx) since 2010, to reach a 56 index in 2013, the highest recorded in the eighteen-year period.
After Argentina’s economic collapse at the start of the century, economic policy made an essential point of its recovery to recover real wages across all sectors; the opposite of what practically all governments do after an economic crash with high inflation and a deep devaluation. Nominal wages increased on average annually 26,3% in local currency, 18,8% in dollar terms, with PPP real wages in dollars averaging an annual rate of 9,4% for the 2003-2013 period. As a result, real wages in the manufacturing sector have not only recovered but have nearly doubled their equalisation position at the lowest point in 2002-2003 with equivalent US wages.
Argentina’s nominal wages increased by 119,1% in local currency, 56,4% in US dollars and 13,9% in real PPP terms since 2010. Argentina’s peso depreciated 28,7% since 2010 whilst the PPP indicator increased 37,4%, from $0,72 to $0,98, or about 98% the cost of living in the US (see table T5 in page 26). The calculation of the PPP incorporates the “Billion Prices Project” from MIT, which is now the leading estimate of true inflation in Argentina –to be at 24,02% in 2011, 25,98% in 2012 and 23,3% in 2013. We use this estimate given that INDEC, the official Argentinian statistics bureau responsible for this metric, has consistently underreported by more than 50% Argentina’s real inflation. Nonetheless, Argentina’s rather powerful growth of its manufacturing nominal wages in local currency, since 2010, clearly outpaced the strong growth of the PPP fuelled by inflation (119,1% versus 96,6%). Thus, despite high inflation and a currency devaluation since 2010, PPP real wages grew powerfully in US dollars 13,9%.
The challenge in order to sustain its current wage appreciation policy is to cope with all the pressures of a variety of actors both domestic and foreign. The future of Argentina’s wages and its labour’s share of income depend on the resolve of the government to reject the predatory interests of the robber-baron bondholders, as well as on controlling inflation, which has stubbornly continued at high levels, forcing it to devalue its currency drastically by 50% since 2012, and on resuming a healthy economic growth of no less than 2,5%.
Parting from the assumption that Argentina’s government will continue to regard the appreciation of real wages as a fundamental element of its economic policy, the two projections included in this analysis clearly show that Argentina can achieve a living-wage equalisation in the manufacturing sector within twelve years or less if it is able to control inflation and generate a minimally meaningful economic growth, as outlined in the criteria applied in both projections.To be sure, the probability of reducing inflation to at least a 15% average and of averaging an annual GDP of 2,5% or more depends to a great extent on successfully neutralising the pressure of the vulture funds in particular and international financial markets in general, finding alternative lending sources, such as the BRICS, expanding their export markets and diversifying their import sources, prominently with China and Russia. If inflation is not reduced to less than half of its present level (+30%), real wage appreciation will not remain sustainable. In fact, as we can observe in both projections, using the latest available inflation data, it is quite likely that real wages will lose some ground in 2014 and begin to recover in 2015, unless nominal wages grow above 30%, a pace impossible to sustain without fuelling even more inflation.
Download the pdf file with the analysis of Argentina's wage ratge gap here.
UPDATED ASSESSMENT OF MEXICO'S WAGE RATE GAP 1996-2013
Nothing has changed, unless it changed for the worse. The Mexican State, which has been permanently challenged for the lack of legitimacy of its elections in 2006 and 2012, corroborates every year its vocation as a customary violator of the labour rights of its citizens
The premeditated and carefully designed State policy of all governments in power since the 1980s –which deliberately pauperises the Mexican labour force– leaves no alternative but to continue exhibiting the nefarious consequences of such policy on the real wages of workers and the huge wage gaps with equivalent workers in the U.S. and, barring the Philippines, in all 31 countries included in our assessments. Moreover, it is necessary to depict once again the political context in which this planned pauperisation is imposed. Assessing the wage data of Mexico’s manufacturing sector since 1975, irremediably exhibits the exploitative and repressive character of the group that has wielded real power for more than three decades. A group that has completely submitted itself to international financial capitalism and the interest of its corporations, by working as its market agent in exchange for the benefits of its full support to remain in power. This ethos 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 modern-slave-work, of near labour bondage that drags the country back to conditions prevailing before the social revolution of 1910.
The future of wage rates for all employed in the manufacturing sector 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 wage rates. Additionally, the State has unleashed a policy of repression of the rights of freedom of association and to organise and collective bargaining. Contrary to what corporate media like to portray, the deep impoverishment of Mexicans is an incontrovertible fact. This prospectus remains with exactly the same tone conveyed in previous reports since 2007, for the deprivation, depredation and deliberate pauperisation – as a State policy– continue deepening.
In summary, three decades of predatory capitalism in Mexico exposes, decisively, a government's policy –from the perspective of manufacturing wages rates in particular and all wages in general– 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 a reality in the term of thirty years is currently zero.
Download the pdf file with the analysis of Mexico's wage rate gap here.
UPDATED ASSESSMENT OF BRAZIL'S WAGE rate GAP 1996-2013
Hourly wage rates in the manufacturing sector for 2013 barely improved from the previous year in their equalisation index with equivalent U.S. wages due to a steep devaluation of its currency, despite the continuous increase of real wages since 2010
The biggest obstacle to sustaining the closure of the wage rate gap is the dramatic increase of the PPP cost of living. Indeed, in 1996 the PPP cost of living for private consumption was $0,94 dollars or 94% the U.S. cost of living. Then, at the deepest point of Brazil’s recession, the PPP had dropped to $0,41 in 2002. However, Brazil’s recovery has made it extremely expensive again, to the point that by 2011 Brazil had become as expensive as the U.S, with a PPP cost of living of $0,99 or 99% the U.S. cost of living, to then drop to $0,83 in 2013. The higher the PPP, the higher the equalisation wage rate required. If the PPP is 99% of the U.S. rate, then the nominal Brazilian wage rate required in U.S. dollars, to be fully equalised with the U.S. wage rate, must be 99% of the U.S. wage rate. If inflation is higher than in the U.S., the PPP will grow and viceversa. Exchange rates have a direct bearing on the PPP but not on equalisation. As previously explained, the PPP is the rate of currency conversion that equalises the purchasing power of different currencies. Thus, it acts as the estimated effective exchange rate used to reflect the real cost of living in a given country. The factor more directly affecting the PPP is the NCPI (inflation rate).
For Brazil to consistently reduce its living wage gap to equalise real wages with those of its U.S. counterparts for all employed in manufacturing, it must put inflation in check (below 5%) and continue to increase nominal wages above inflation rates. Concurrently, Brazil must recover its momentum and resume high economic growth rates of at least 4 to 5% of the annual GDP. Between 2002 and 2005 Brazil averaged a 3,05% GDP; for the 2006-10 period it averaged a 4,5% GDP growth, but between 2011 and 2013 it averaged a 2,14% growth and the estimate for 2014 is a drop of 0,3%. It will be increasingly difficult to continue improving its equalisation index with equivalent U.S. wages unless it resumes economic growth and keeps inflation in check.
Download the pdf file with the analysis of Brazil's wage ratge gap here.
UPDATED ASSESSMENT OF SPAIN'S WAGE RATE GAP 1996-2013
To put Spain’s living wage rate position in a European perspective, only eight economies recorded gains in 2013 vis-à-vis 2012, while Spain and nine others recorded no change. Ireland, the UK and Greece, recorded a widening of their living-wage gap with equivalent U.S. wages
As in previous reports, despite the drastic government-induced depression of the Spanish economy –with the evident yet ulterior motive of imposing the further privatisation of its Welfare State– the result of Spain’s planned process of convergence with the major economies of the EU continued in 2013. Yet, although the Equalisation Index (EQ-Idx) of Spain’s manufacturing sector wage rates did not change from the previous year, it is converging because the UK’s Eq-Idx is lower than Spain since 2010, and continues to lag further behind (75 vs. 70). France’s Eq-Idx did not change as well and Germany’s and Italy’s Eq-Idx barely improved.
The fact that Spain’s Eq-Idx did not change, from 2012, is a direct reflection of the EU’s deliberate policy of depressing the wage’s share of income for the benefit of employers, their shareholders and financial investors across the EU area. Indeed, wage rates for those who are employed in Europe are stagnating. In 2013, sixteen of the twenty-one economies included in the assessment experienced gains in living-wage equalisation (Eq-Idx) vis-à-vis their 2010 position. The Netherlands recorded no change whilst Ireland, the UK and Greece increased their gap. However, when observing their changes from 2012, only eight economies recorded gains in their Eq-Idx in 2013, while Spain and nine others recorded no change and, once again, Ireland, the UK and Greece recorded a widening of their living-wage gap with equivalent U.S. wages
In summary, the capitalist systemic crisis has served to ensue a new assault on labour rights and the Welfare State in Spain and across the entire European Union, converting it into a factory that is a net producer of legions of people that are making up the new class of capitalism, the precariat.
Download the pdf file with the analysis of Spain's wage rate gap here.
UPDATED TO 2013!
TABLE T5: 1996-2013 REAL-WAGE GAP rates FOR TWELVE ECONOMIES, IN PURCHASING POWER PARITY (PPP) TERMS, FOR ALL EMPLOYED IN MANUFACTURING. *(The base table used for all PPP real-wage gap analysis)
Beginning with the 2012 living-wage gap assessments, the purchasing power parities (PPPs) used refer to private consumption (i.e., household final consumption expenditure), as opposed to the PPPs for Gross Domestic Product previously applied. The PPP for GDP includes prices for the entire economy and not just for the private consumption of consumer households. This change enables Jus Semper to deliver a more accurate metric of all the indicators that we used in our methodology to assess the wage gaps between actual and equalised wage rates. The PPPs for private consumption have been therefore revised for all years beginning in 1996.
Overall, nine out of the twelve countries in this assessment are better off in 2013 than in 1996, with East Asian economies and Australia recording the greatest gains in their wage-rate position. South Korea is the only country that has consistently narrowed its living-wage gap with equivalent U.S. wages in the region and is amongst the 31 countries included in our assessments since 1996. In contrast, Canada is in 2013 at nearly its lowest point, whilst the UK is at its lowest point since 1996. Germany continues to recover but it is still far distant from its best position and from its 1996 Equalisation Index (Eq-Idx). Six of the twelve economies recorded a gain in their Eq-Idx, with seven of the twelve economies recording their best position in 2013 for the eighteen-year period.
Download the pdf file of Table 5 here.
TABLE T5-EUROPE: 1996-2013 REAL WAGE GAP RATES FOR EUROPEAN ECONOMIES, IN PURCHASING POWER PARITY (PPP) TERMS, FOR ALL EMPLOYED IN MANUFACTURING.
In 2013, seventeen of the twenty-one economies included in the assessment experienced gains in living-wage equalisation (Eq-Idx) vis-à-vis their 2010 position. The Netherlands recorded no change whilst Ireland, the UK and Greece increased their gap. However, when observing their changes from 2012, only eight economies recorded gains in their Eq-Idx in 2013, while ten recorded no change and, once again, Ireland, the UK and Greece recorded a widening of their living-wage gap with equivalent U.S. wages.
Download the pdf file of Table 5 for European economies here.
TABLE T5-ASIA AND OCEANIA: 1996-2013 REAL-WAGE GAP RATES FOR ASIA AND OCEANIA, IN PURCHASING POWER PARITY (PPP) TERMS, FOR ALL EMPLOYED IN MANUFACTURING.
South Korea is the only country that has consistently narrowed its living-wage gap with equivalent U.S. wages in the region and is amongst the 31 countries included in our assessments since 1996. More recently, since 2010, the Philippines is the only country with no progress in its living-wage equalisation, whereas South Korea, Australia and New Zealand were the only countries that reduced their gap between 2012 and 2013. Not directly comparable data for India and China show no meaningful progress for India whilst China records a strong reduction of its wage gap.
Download the pdf file of Table 5 for Asia and Oceania economies here.
Table T5: New 1996-2013 REAL WAGE GAP RATES for the four largest economies in the Americas (Canada, Brazil, Mexico and Argentina), in purchasing power parity (PPP) terms, FOR ALL EMPLOYED IN MANUFACTURING.
In the Americas, Argentina and Brazil have clearly made progress closing their living-wage equalisation gaps with U.S. equivalent wages, particularly since 2002 and 2004, respectively. Canada shows no meaningful change in its wage gap since 2008, at around 20% vis-à-vis equivalent U.S. wages, and Mexico confirmed, for the nth time, the imposition of a state wage policy designed to block any gain in real wages and in living-wage equalisation for the last three decades. Of the 31 countries included in our assessments, Argentina has recorded, by far, the strongest trend in the closing of its wage gap with equivalent U.S. wages since it began recovering from its 2002 economic collapse.
Download the pdf file for Table 5 of wage gaps for all employees in manufacturing in the Americas here.
Living Wages in the Paradigm Transition – The Imperative Challenge of Transcending the Market
The living wage is a human right even though most governments do not recognise it as such. Most workers in the world still earn less than a living wage for their labour. Living on an unliveable wage is a global challenge of immense proportions, affecting the wellbeing of billions worldwide and dragging on the prospects for achieving just and sustainable societies. Although we must work to transform the system and transcend the market, through a systemic transition, the right to a living wage must be recognised in its own right irrespective of the prevailing system. Transcending the dominant marketocratic paradigm is essential not only because of its incompatibility with basic human rights but because the market cannot sustain limitless growth without violating ecological limits. Achieving this requires building a new truly democratic ethos, rooted in harmonious coexistence for people and the planet.
The premise of this paper is that the living wage is a prerequisite to a life with dignity and security. A remuneration for labour must be enough to fulfil basic household needs for food, housing, clothing, healthcare, education, transportation, and leisure. Both the living wage and environmental preservation are essential components of a just and sustainable future. The current market-driven system, where poverty, inequality, and environmental degradation are deemed acceptable and inevitable, cannot be compatible with the equity and inter-generation tenets that lie at the heart of sustainable development.
The living wage is an essential element of true democratic practice to uphold the rights and responsibilities inherent to the social contract. The primordial responsibility of a truly democratic government is to procure and protect the economic and social welfare of all members of society. Citizens consent to delegate certain powers to government in return for the government’s provision for basic needs, public goods and the respect and protection of all citizen rights. Conversely, citizens have the responsibility and vested interest to actively participate in the democratic process and engage in the public matter to protect and enhance the general welfare of the community. Yet if workers are not remunerated with the income necessary to fulfil all the basic needs of their families, they are excluded from participating as citizens in the democratic life of their countries. Because, every day they must struggle to scrape a living they are automatically disenfranchised from the sphere of citizenship, the agora. Thus, truly democratic governments, more than anything, have the fundamental responsibility to guarantee an ethos that provides wage remunerations worthy of human dignity. Without such agreement, democratic institutions cannot flourish, and trust and accountability, the underpinnings of the social contract, will not exist. Today, though a majority of countries enjoy at least nominally democratic governments, significant segments of workers in the Centre (the major economies of global capitalism) and the vast majority of workers in the Periphery (the so-called emerging markets and the rest of the developing world) still do not receive a living wage. Despite the historical recognition of the living wage as a human right in international law, it has yet to be realised in practice. This is why we must continue to pursue the making of the living wage a fundamental element of true sustainability in both the current marketocratic paradigm and in the new paradigm of people and planet, as we gradually transcend the market.
Download the Essay on living wages in the change of paradigm here!
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, the 2009 wage rate data was the last year with available data for production workers, the same indicator that we have assessed since 2003 for 12 economies, for the BLS has decided to stop updating the wage data for production workers. Nonetheless, we will keep readily available this table as a historical reference, going back as far as 1975, for it allows 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 2013 and will continue to be updated every year. India and China's wage data is currently available for the periods 1999-2010 and 2002-2012 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 1996-2013 Aequss Index for All Employees here!
Download the 1975-2009 Aequss Index for Production Workers here!
Capitalism from the perspective of true democracy
Alejandro Teitelbaum’s assessment of capitalism is the result of decades of previous works, studying it carefully as a researcher as well as a social representative committed to protecting the human rights of citizens through a binding regulatory framework of capital‘s activity. A regulation never achieved due to the concerted and systematic opposition of global business lobbies with the enthusiastic backing of the governments of the major powers. In this work Teitelbaum elaborates on the core aspects of capitalism and updates the wealth of evidence on its falsehoods and contradictions. Based on Marx's theory of the appropriation labour’s value, Teitelbaum shells out the main features of the capitalist system to display its contradictions and arrive at a well articulated conclusion. This is that capitalism is incompatible with true democracy from the moment that its supreme value is to protect the private ownership of the means of production, by which it appropriates the surplus value of labour, rather than seek the welfare of society, as it is in true democracy. Therefore, he argues, it is not possible to reform capitalism to make it compatible with democracy, but, rather that, it needs to be replaced by radically changing the essence of human labour as it exists in the capitalist system, in which the worker stands in the production cycle both at the beginning, alienated as a producer, and at the end, alienated as a consumer; from which it is inferred that a move towards true socialism is required. Yet, Teitelbaum asserts that, contrary to what happened in the Soviet Union and other societies, the transition towards socialism must take place in an environment of genuine and fully participatory democracy. That is, in an environment where the only purpose of the societies is the welfare of each and every one of the ranks of society to create social wealth to meet the material and spiritual needs of citizens, according to a social and democratic planning of production and distribution for the full realisation of the human being.
This implies that to live in a truly democratic ethos –and not in the mockery known as representative democracy– a hitherto unknown model must be built –in a superior stage of humanity– in which the citizens hold the initiative and are permanently involved in the public matter, in such a way that the public agenda is set by the fully acquainted citizens so that decision making becomes the result of a direct and informed participation. This is so, says Teitelbaum, for “capitalism has reached a level of development and is such a cumulous of contradictions that it has in fact become on the verge of socialism, as a way of resolving those contradictions in a humanly superior stage
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GLOBAL WAGE REPORT 2014/2015
The Global Wage Report 2014/15 presents both the latest trends in average wages and an analysis of the role of wages in income inequality. The first part of the report shows that global wage growth in recent years was driven by emerging and developing economies, where real wages have been rising since 2007 although wage growth slowed in 2013 compared to 2012. In developed economies, wages generally remained stagnant in 2012 and 2013, and in a number of countries wages remained below their 2007 level. These trends are a matter of concern.
At the level of the individual worker or firm, the immediate impacts of higher or lower wages are self-evident. At the national level, the effects of higher or lower wages on aggregate demand and employment are context-specific and cannot be predicted or evaluated without taking into account the level of wages relative to productivity, the degree of openness of the country under consideration and the relative size of the different components of aggregate demand. At the international level, if too many countries pursue wage moderation policies, the outcome is likely to be negative. In the current environment, in which the global economy risks sliding back into a low-growth trap, higher wage growth would be desirable in those countries where wages in the past have lagged behind productivity growth. As the report demonstrates, in some countries policies have already started to shift in that direction.
The second part of the report turns to the role of wages in income in- equality. Inequality has become the subject of growing interest in recent years across the world, and there has been a realization that growing inequality not only undermines social justice objectives, but can also have adverse economic conse- quences. Through the adoption of the 2008 Declaration on Social Justice for a Fair Globalization, ILO Members renewed their commitment to pursue policies with regard to wages and earnings designed to ensure a just share of the fruits of pro- gress to all and recognized that for a fair outcome for all, it has become even more necessary to achieve social cohesion and to combat poverty and rising inequalities.
In many countries, the distribution of wages and paid employment has been a key factor in recent inequality trends. This highlights the importance of labour market institutions and policies – including minimum wages and collective bar- gaining – that have an effect on income distribution.
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Click here to download the french version of the ILO's Global wage report in a pdf file.
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