Research and analysis to provoke public awareness and critical thinking

We contribute to the liberalisation of the democratic instituions of society, for they have been captured by the owners of the market. They work in tandem with their market agents, who, posing as public servants, are entrenched in the halls of government. The political class has betrayed its public mandate and instead operates to impose a marketocratic state to maximise the shareholder value of the institutional investors of international financial markets. They own the global corporations and think they own the world on behalf of their very private interest.

Our spheres of action: true democracy – true sustainability – living wage – basic income – inequality – ecological footprint – degrowth – global warming –human development – corporate accountability – civil, political, economic, social, cultural and environmental rights, responsible consumption, sustainable autonomous citizen cells...

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Parting from an ethos of true democracy and true sustainability, We, the citizenry, work to advance the paradigm whose only purpose is to go in pursuit of the welfare of People and Planet and NOT the market.

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2018 Report: Living-wage assessment – PPP Wage rate gaps for selected "developed and emerging" economies for all employed in manufacturing workers (1996 up to 2016).

Overall, seven out of the twelve countries in this assessment are better off in 2016 than in 1996. Brazil shows no change and Canada, Mexico, Germany and the UK are worse than in 1996. East Asian economies record the greatest gains in their wage-rate position. Singapore and South Korea have recorded the most improvement in the reduction of their wage gaps since 1996. In contrast, Canada has recorded the greatest decline, followed by the United Kingdom. Both remain at their lowest point since 1996. Germany continues to have the best position with an actual advantage vis-à-vis the U.S. in PPP wage rates. Yet it remains with an index eight points below its best position.

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2018 Report: Living-wage assessment – New assessment of Argentina's wage rate gap 1996-2016

Our analysis of Argentina’s living wages in the manufacturing sector from a global perspective (purchasing power parities) can no longer assume that Argentina’s government will continue to regard the appreciation of real wages as a fundamental element of its economic policy. Unfortunately, with the Macri government, as we expected, we are already witnessing the opposite, given that its economic policies are clearly supply-side and completely committed to resuming the old centre-periphery relationship that applies a neocolonial ethos to Argentina’s economic policies. Unfortunately for him, his economic policies have proven disastrous and in two and a half years, inflation and devaluation have exploded, the country is nearly in default and real wages have collapsed. We are confident that the equalisation index for 2018 will drop very meaningfully and extend the number of years that it will take to close the living wage gap with equivalent workers in the US. In our report, the gap would have been closed in our mid-inflation projection by 2022, now it would take until 2025. As for the high-inflation the gap would have been closed by 2026, now it would take until 2032.

The above notwithstanding, the two projections included in this analysis clearly show that Argentina can achieve a living-wage equalisation in the manufacturing sector within fourteen 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.

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2018 Report: Living-wage assessment – New assessment of Brazil's wage rate gap 1996-2016

Brazil has no longer sustained the closing of its Eq-Idx due to the deep recession that has ensued in the last years. Furthermore, Brazil’s Temer government passed a new law (PEC 55) that freezes all public spending for 20 years, which implies that constitutionally-protected government expenditures in the areas of health, education and other social sectors would remain stunted until 2036. This has in practice ended Brazil’s minimum wage appreciation policy.

Parting from the implications carried by the —already abrogated— plan of Brazil’s government to increase minimum wages in a sustainable manner up to 2023 –and using as the benchmark Brazil’s workers in the manufacturing sector– it can be asserted that the policy to be applied would generate, in all certainty, rather meaningful social and economic benefits in all economic sectors if this policy were to be reactivated.

Although Brazil’s plan would have not closed whatsoever the living wage gap with the United States by 2023, it would have undoubtedly embodied a meaningful improvement that would have triggered different multiplying effects that would have generated the endogenous development of Brazil. This would have placed it closer to the socioeconomic indicators of developed than of developing countries. With Dilma Rousseff’s government ousted, the Temer government immediately changed the policy and applied increases to the minimum wage below inflation in 2017 and 2018. This may change if the new presidential election returns power to Brazil’s Workers Party. There is currently a major convoluted political crisis. Lula da Silva —the leading candidate in the election— has been put in prison, with a 12 year sentence— for alleged corruption charges that have not been proven yet— and barred from running in the election. The second in the race is Jair Bolsonaro —from the far right populist sector, who was stabbed in a recent rally and is convalescing from the injury. Consequently, given the deep political polarisation of Brazil’s society, it is impossible to foresee the outcome and how this will affect the minimum wage policy and manufacturing wages.

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Living-wage assessment – Table T5: 1996-2016 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)

Nominal wage rates in dollars continued to decrease in 2016 at the same rate as in 2014, averaging a drop of 12,5%, vis-à-vis 12,6% in 2014. This is due to a great extent to the devaluation of these currencies against the dollar. Furthermore, most wage rates in local currencies increased at a lower rate than the 5,4% increase of the U.S. hourly wage rate. As a result, most equalisation indices continued dropping. Only Italy and South Korea sustained their 2014 indices and Singapore was the only one of the twelve economies selected that was able to increase its index in 2016.

Since 2012 only three economies did not increase their equalisation gaps. Germany kept the same index and Italy and Singapore improved their equalisation. Of the twelve selected economies, four are worse off than in 1996, Brazil did not change and seven are better off than in 1996.

Overall, East Asia economies have fared far better than the rest.

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2018 Report: Living-wage assessment – New assessment of Mexico's wage rate gap 1996-2016

Mexico’s fraudulent government, fixated on the precarisation of Mexican society, continues to deliberately violate the entire spectrum of civil, political, economic, social, environmental and cultural rights of their citizenry. However, things may change for the better very soon.

With the electoral victory of López Obrador in 2018, things are planned to marginally change for the better for workers. In his Government Plan, he states that the minimum wage will be increased by 15,6% annually, plus inflation, until reaching P$171,00 by the end of his six-year term. This is a plan similar to Lula’s plan in Brazil, and precisely what we have been proposing for over a decade.

For the first time in more than three decades, real wages across the entire economy may change for the better if the new government that starts on 1st December 2018, keeps its promise and increases the minimum wage as planned by 15,6% plus inflation annually. There is no doubt that powerful domestic business lobbies will attempt to exert maximum pressure to force the new government to increase nominal wages at a far lower pace than planned. For instance, COPARMEX, the National Confederation of Employers, is already pushing for an 11% increase for 2019 including inflation. However, given that it is widely known in Mexican society that, after 36 years of deliberate wage pauperisation, Mexico’s minimum wage has become one of the lowest in the world, as low as in Nicaragua, there is enormous pressure to change this immediately, In fact, after more than thirty years of a minimum wage increase below annual inflation or strictly in line with it, the current government was forced to raise the minimum wage for 2017 by 9,6% vis-á-vis a 2,8% inflation in 2016, and for 2018 by 10,4% vis-à-vis 6,6% inflation in 2017. We will see if the upcoming government will indeed comply with its promise and implement a well-articulated policy that meaningfully recovers real wages for the entire economy throughout its six-year term.

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2018 Report: Living-wage assessment – New assessment of Spain's wage rate gap 1996-2016

To put Spain’s living wage rate position in a European perspective, only four economies recorded gains in 2016 vis-à-vis 2014, two recorded no change, whilst Spain and fifteen others recorded a widening of their living-wage gap with equivalent U.S. wages. Overall, as with most countries, wage equalisation in Spain’s manufacturing sector has stagnated, but extremely high unemployment and the deliberate neoliberal job casualisation policy remain its most conspicuous features.

In line with the drastic government-induced depression of the Spanish economy –with the evident ulterior motive of imposing the further privatisation of its Welfare State– Spain’s planned process of convergence with the major economies of the EU has stalled since 2012. The Equalisation Index (Eq-Idx) of Spain’s manufacturing sector wage rates have reached a plateau, which, in line with Germany, France and Italy, have experienced little or no change since 2012. Only the United Kingdom seems to keep sliding its Eq-Idx further down.

There is, however, some gleam of hope for a change. The European Commission rhetoric changed in 2016 from wage erosion to increase competitiveness, resulting in a systematic depression of internal demand, increasing wage inequality and generating a sluggish economic recovery, to put some emphasis in the generation of internal demand, which requires the support of growth of real wages. This may explain why Spain’s minimum wages finally increased meaningfully in 2017 and 2018. However, further growth has been conditioned to a GDP growth of at least 2,5% and the creation of not less than 450 thousand new jobs, which makes it dubious that there will be the political will, even in the new socialist government, to support wage growth. Nonetheless, there is a strong push from the European Trade Union Confederation for a wage-led growth (and solidarity to reduce inequality), instead of internal devaluation for a sound economic recovery.

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Living-wage assessment Table T5: 1996-2016 Real wage-gap rates for twenty-one European economies.

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Living-wage assessment Table T5: 1996-2016 Real wage-rate gaps for eight Asia and Oceania economies.

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Living-wage assessmentTable T5: 1996-2016 Real wage-gap rates for the four largest economies in the Americas (Canada, Brazil, Mexico and Argentina).

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What are we saying when we talk about sustainability?

A political ecological proposal

If you consider 1987 (the Brundtland Report) as the official beginning of the idea of sustainability, the term has made a brilliant journey of almost three decades and is still alive. In its evolution, it has become at the same time a concept, paradigm, theoretical framework, technical instrument, utopia, pretext, ideology and many other things, but above all it has become the word that contains a vague desire of the educated and privileged masses of the planet for a better world in which the human race rediscovers itself ideally with nature and with social justice. Beyond the ideological dimension, and its multiple and ungraspable interpretations, this essay focuses on sustainability as a scientific concept that springs from an interdisciplinary vision of reality, and that for many authors achieves the status of a new paradigm. The essay attempts to show how the scientific concept of sustainability in the vast majority of its versions, is not but a techno-economic expression that explicitly or implicitly is aimed at convincing the "decision makers", and that seeks to apply solutions merely technical. Using a political ecological approach, based on the theory of the three powers, the essay identifies and develops a definition of sustainability as a social power, which turns the concept into a promising political instrument of social and environmental emancipation, in a legitimate version of a " science with conscience.

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The Progressively Accelerated Degradation of the Environment

The reason explaining the progressively accelerated degradation of the environment is convoluted because it is elicited by various factors. Yet the root of it is in the uncontrolled production of all kinds of objects and products, some necessary and others not, as a result of what in economics is called «extended reproduction».This reproduction is inherent to the capitalist system. It is essential to know how it works in order to understand and explain the ecological disaster. Sweezy wrote: «It is inevitable to conclude that the simple reproduction implies the abstraction of the most essential thing in the capitalist: his interest in expanding his capital. He goes about it by converting a part —often the greatest one— of its surplus value into additional capital. His increase in capital allows him to appropriate even more surplus value, which in turn becomes additional capital and so on. This is the process, known as capital accumulation, that constitutes the force driving capitalist development».
 

The capitalist system and a healthy environment are incompatible. That is why Foster, Clark and York are right when in the final part of their article The Ecology of Consumption they write: ...A genuine ecology of consumption—the creation of a new system of sustainable needs-generation and satisfaction—is only possible as part of a new ecology of production, which requires for its emergence the tearing asunder of the capitalist system...

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Global Wage Report 2016/2017

The 2016/17 edition examines inequality at the workplace level, providing empirical evidence on the extent to which wage inequality is the result of wage inequality between enterprises as well as within enterprises. The report also includes a review of key policy issues regarding wages.

Over the past few years there has been a growing recognition of the need to monitor wage trends and implement sustainable wage policies that prevent wage stagnation, raise levels of pay for the millions of working poor around the world, ensure fair distribution, reduce excessive wage and income inequalities, and buttress consumption as a key pillar of sustainable economies. Where incomes have grown and income inequality has been reduced, this has frequently come about as the result of a combination of more jobs in paid employment for low-income households and a more equitable wage distribution. The role of labour markets and wages in reducing poverty and inequality has also been highlighted in the first edition of the World Bank’s annual flagship report, Poverty and shared prosperity (World Bank, 2016).

Second, wages matter for economic and political reasons. At the level of enterprises, the wages of paid employees represent a cost. But at the macroeconomic level, sustainable wage growth is central to maximizing aggregate demand. While excessive wage growth may lead to price inflation and declining exports or investment, weak wage growth can represent a drag on household consumption and domestic demand – a prospect that is particularly relevant in the current global economic context characterized by slow growth. Excessive inequality tends to contribute to lower economic growth and less social cohesion (Ostry, Berg and Tsangarides, 2014; d’Hombres, Weber and Elia, 2012). It can also lead to political polarization: a recent IMF report pointed out that in some countries the nature of political discussions had shifted as a result of “growing income inequality as well as structural shifts, some connected with globalization, that are seen as having favoured economic elites while leaving others behind” (IMF, 2016a, p. xiii).

Last but not least, wages are about more than money; they matter from the point of view of fairness and human dignity. The ILO has long emphasized that “labour is not a commodity” and that, this being so, the price of labour cannot be determined purely and simply through the application of the rule of supply and demand (see ILO, 1944 and 2014a). As pointed out by Piketty, “the price system knows neither limits nor morality” (2014, p. 6). Minimum wages play an important role in ensuring that workers are treated in a way that is fair and compatible with notions of human dignity and respect. Over and above minimum wage levels, policies in the areas of wages, hours and other conditions of work can contribute substantially to fostering social dialogue and collective bargaining, and ensuring a just share of the fruits of progress to all (ILO, 2008a). Fairness includes equal remuneration for work of equal value, and the elimination of pay discrimination between men and women, or between other groups.

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Human Development Indices and Indicators — 2018 ststitical update

Inequalities in human development —a grave challenge to progress. — Going beyond the average achievements, the IHDI and disaggregated assessments reveal large inequalities across human development dimensions. When the HDI is adjusted for inequalities, the global HDI value falls 20 percent


Human development is about human freedoms. It is about building human capabilities—not just for a few, not even for most, but for everyone. In 1990 UNDP published the first Human Development Report (HDR). Since then, it has produced more than 800 global, regional, national and subnational HDRs and organized hundreds of workshops, conferences and other outreach initiatives to foster human development. These activities have extended the frontiers of analytical thinking about human progress beyond economic growth, firmly placing people and human well-being at the centre of development policies and strategies.

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Farewell to Development

An Interview with Arturo Escobar

As inequality and environmental degradation worsen, the search is on not only for alternative development models but also for alternatives to development itself. Leading post-development theorist Arturo Escobar, co-editor of The Post-Development Dictionary and author of Design for the Pluriverse, discusses the fight for pluralism and justice in Latin America with Allen White, Senior Fellow at the Tellus Institute.

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The Underlying Causes of Immigration from Mexico to the United States

Strctures of Deprivation

To write about the underlying causes of immigration means addressing a paramount social issue that pervades the lives of most societies in the world, both in the periphery as well as in the metropolises of the global capitalist system. Immigration is inherent to human nature. Billions of people have travelled from their birthplace in search of a better life from the very moment homo “sapiens” began to wander around his primeval surroundings. At first, all humans were nomads. They constantly moved from one place to another, from cave to cave, from valley to valley, from region to region, from continent to continent, many times traveling thousands of kilometres in their quest for better conditions of survival. Thousands of years later, with the rise of civilisations and hundreds of sedentary settlements, people continued to move to lands inhabited by other civilisations, with different cultural and ethnical backgrounds, always in pursuit of a better life. As empires rose and destroyed competing civilisations, many people were forced to leave, or they were moved forcefully to other places to serve the interests of the conquerors as they pleased. The history of humanity is composed of the never-ending destruction and conquering of many peoples by stronger societies in their quest for power and wealth.

This has never changed despite thousands of years of human experience and “sophistication” in the organisation of societies, despite the rise of so called democratic nation states, human rights covenants and international law. Today, people continue to move from one place to another, many times escaping a high risk of death as a result of social conflicts, poverty, or, instead of the rule of law, a complete state of anomie —the loss of all the ethical social standards conceived to procure a dignified and harmonious coexistence among the members of society. In the vast majority of cases, as should be evident, there is also the effect —to a lesser or greater degree— of the actions of foreign actors that intervene in the lives of other societies in pursuit of their own vested interests, always associated with the pursuit of greater power and wealth. In the twenty-first century, we continue the same ancient patterns of power exertion and displacement of people all over the world. In this way, millions of people continue to migrate from Eastern Europe to Western Europe, from Africa to Europe, from Asia to North America and from Iberian America to North America as well, to name the major migration flows.

This paper focuses on the underlying causes of immigration from Mexico to the United States from a political and socio-economic viewpoint. However, the root causes behind the flows of emigrants in other regions of the world are consistently the same. They result from the impact of powerful geo- political interests on the general population of both the emitting and the receiving countries of the millions of migrants in their escape from unbearable conditions and in pursuit of a dignified life. From this perspective, we will uncover and review the underlying causes of immigration from Mexico to the US, which are structural, in an effort to shed light onto their real solution. That is, the only way to permanently solve the issue of Mexican migration to the US, is by addressing the structural causes that force people to leave their homelands. Addressing only the symptoms triggered by these causes will never solve the issue and instead would further consolidate the patterns regardless of how aggressive and inhumane the policies are designed to stop the flows of migrants. We also focus on Mexico because it has been for many decades the main source of immigrants to the US due to its proximity and even more so after the North American Free Trade Agreement (NAFTA) in 1994, which has made Mexico the third largest US trading partner, after China and Canada, beyond being the main exporter of migrants forced to leave their communities.

 

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The Meaning of Work in a Sustainable Society

The nature and meaning of work, as it pertains to a future society, has deeply divided ecological, socialist, utopian, and Romantic thinkers since the Industrial Revolution. Some radical theorists have seen a more just society as merely requiring the rationalisation of present-day work relations, accompanied by increased leisure time and more equitable distribution. Others have focused on the need to transcend the entire system of alienated labour and make the development of creative work relations the central element of a new revolutionary society. In what appears to be an effort to circumvent this enduring conflict, current visions of sustainable prosperity, while not denying the necessity of work, often push it into the background, placing their emphasis instead on an enormous expansion of leisure hours. Increased non-work time seems an unalloyed good, and is easily imaginable in the context of a no-growth society. In contrast, the very question of work is fraught with inherent difficulties, since it goes to the roots of the current socioeconomic system, its division of labour, and its class relations. Yet it remains the case that no coherent ecological mapping of a sustainable future is conceivable without addressing the issue of homo faber, i.e., the creative, constructive, historical role in the transformation of nature, and hence the social relation to nature, that distinguishes humanity as a species.

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The New Service Proletariat

In recent decades, the spread of information technology, industrial automation, and other innovations has inspired visions of a coming “postindustrial society of services,” in which the proletariat as it existed in earlier eras would effectively disappear. However, even a cursory survey of the reality of contemporary global labour markets belies this myth. The emergence of a new class of educated, salaried workers in high-tech fields is predicated on the increasing invisibility of workers employed in sectors and settings ranging from call centres and telemarketing to hotels and cleaning companies to retail, fast food, and care services. The great majority of these jobs are precarious in one way or another: seasonal, part-time, temporary, informal, or freelance, with little or no security or benefits.

An emblematic example is the zero-hour contract, a perverse form of employment that thrives in the United Kingdom and elsewhere. Instead of working a fixed number of hours or shifts, zero-hour employees must remain perpetually at their bosses’ disposal, waiting for a call. Once they receive this call, they are paid only for the time they actually work, and not for the time—days, weeks, even months—spent waiting. Information technology firms in particular have embraced this method of complete flexibilisation of labour, which serves at once to make workers continually available for exploitation and to further normalise the regime of precariousness, leaving workers with ever fewer protections.

Uber is another example. The company’s drivers, who are treated as independent contractors rather than formal employees, must provide their own cars and pay for all expenses, including vehicle repairs, maintenance, insurance, and fuel. The Uber “app” is in fact a global private enterprise that uses wage labour masked as “independent” and “entrepreneurial” work to appropriate a larger share of the surplus value generated by the services of its drivers.

 

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Global Commodity Chains and the New Imperialism

Jus Semper’s core work has been from inception assessing the enormous disparities in hourly manufacturing labour costs, for equivalent work, between the metropolises and the emerging economies in the periphery of the global system. We have always performed our work for reasons of equity, using purchasing power parity compensation costs, under the context of equal pay for equal work of equal value We do this to expose the sheer exploitation of labour in peripheral economies for the maximisation of productivity and shareholder value of global corporations. In this way, we have published our annual reports on “Wage rate gaps for selected developed and emerging economies in manufacturing” since 2003, using data dating back to 1975. For this reason, we feel truly encouraged to continue our mission by now publishing a new essay that addresses the same issue of sheer labour exploitation of workers in the global South of the system from the perspective of productivity, using as the main indicator the unit labour costs of a select group of both Northern and Southern economies of the global system, namely Germany, Japan, United States and United Kingdom in the North and China, India, Indonesia, and Mexico in the South. Indeed, as the authors clearly explain and demonstrate in the following pages, the much higher rates of exploitation of workers in the global South has to do not simply with low wages, but also with the fact that the difference in wages between the North and South is greater than the difference in productivity. This paper further enlightens with rather strong evidence, anchored on theoretical and empirical research of commodity-chain analysis, our argument that the main driver of social inequality between North and South is the deliberate system of “Modern Slave Work”; a system imposed in the global South by the elites of both the centre and the periphery of the global capitalist system, to exploit the labour-value commodity chains to perpetuate what could best be described as a new global colonialism or imperialism.

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