Labor Leaders Furious After World
Bank Recommends Ditching Minimum Wage, by Tyler Durden,
4/25/18,
Bernie Sanders is preparing to release
his version of the "jobs guarantee" that has become a fixture of the
UK Labour Party's platform under leader Jeremy Corbyn.
And although his office admits it hasn't
carried out a cost analysis for its visionary plan, Sanders says his goal is to guarantee a job (paying $15
an hour) in construction, health-care, education and a handful of other fields,
to every American who wants one.
But while the socialist fervor unleashed
by Sanders's 2016 primary run shows little sign of abating, a
draft report released by the World Bank shows just how misguided a "jobs
guarantee" would be.
In the report, the World Bank proposes
lowering minimum wage and easing restrictions on hiring and firing for
employers to help prepare countries for the onslaught of robot labor that
consultancies including McKinsey believe will kill 800 million jobs by
2030, according to the Guardian.
The World
Bank is proposing lower minimum wages and greater hiring and firing powers for
employers as part of a wide-ranging deregulation of labor markets deemed
necessary to prepare countries for the changing nature of work.
A working
draft of the bank’s flagship World Development Report – which will urge policy
action from governments when it comes out in the autumn – says
less "burdensome" regulations are needed so that firms can hire
workers at lower cost. The controversial recommendations,
which are aimed mainly at developing countries, have alarmed groups
representing labor, which say they have so far been frozen out of the Bank’s
consultation process.
Of course, anybody who has followed our
coverage of minimum wage hikes in Ontario, Seattle (as well as McDonald's workers' "Fight for $15) would know that these types of
government-mandated wage hikes often destroy more jobs than their backers
realize. Furthermore, studies have found that mandated wage hikes
disproportionately harm female and minority workers.
But despite all available empirical
evidence, Labor organizations are slamming the World Bank for ignoring the
harsh realities faced by workers every day.
Peter Bakvis,
Washington representative for the International Trade Union Confederation, said
the proposals were harmful, retrograde and out
of synch with the shared-prosperity agenda put
forward by the bank’s president Jim Yong Kim.
He added that
the WDR’s vision of the future world of work would see firms relieved of the
burden of contributing to social
security, have the flexibility to pay wages as low as they wanted, and to fire
at will. Unions would have a diminished role in new arrangements for "expanding
workers’ voices."
The
paper "almost completely ignores workers’ rights, asymmetric power in the
labor market and phenomena such as declining labor share in national
income," Bakvis said.
The
International Labor Organization has also expressed alarm at the proposals,
which include the right for employers to opt out of paying minimum wages if
they introduce profit-sharing schemes for their workers.
The WDR draft
says: "High minimum wages, undue restrictions on hiring and firing, strict
contract forms, all make workers more expensive vis-à-vis technology."
The World Bank doesn't focus solely on
minimum wage. In addition to waiving the minimum wage, the NGO advocated
loosening restrictions on hiring and firing employees to encourage companies to
hire more Why? Because by making it more expensive to fire a worker,
governments are making companies more risk-averse when hiring workers, too.
And while labor leaders are aghast at
what they perceive as the World Bank arguing for labor-market deregulation,
they're apparently ignoring the researchers' claim that labor market
regulations - in their current form - only "protect the few who hold
formal jobs while leaving out most workers."
And what's more, the
World Bank is only advocating eliminating minimum wages for companies that
agree to introduce profit-sharing arrangements for their employees -
thereby better aligning the interests of labor with the interests of management.
The report is
being prepared amid growing speculation about the impact of artificial
intelligence and automation on employment and wages in future decades.
"Rapid changes to the nature of work put a
premium on flexibility for firms to adjust their workforce, but
also for those workers who benefit from more dynamic labor markets," the
draft says.
Bakvis said the draft "puts forward a policy
program of extensive labor market deregulation, including lower minimum wages,
flexible dismissal procedures and UK-style zero-hours contracts. The resulting
decline of workers’ incomes would be compensated in part by a basic level of
social insurance to be financed largely by regressive consumption taxes."
The paper
says that labor regulations "protect the few who hold formal jobs while
leaving out most workers" and the sort of social protection schemes
that began with the German chancellor Otto von Bismarck in the late 19th
century were not appropriate because they covered only a third of developing
country populations.
...
A World Bank
spokesman said: "To stimulate debate and draw attention to critical
issues, the report will present a range of ideas for how governments can create
the conditions for workers to benefit from huge shifts in technology,
demographics, urbanization and other factors."
"To end
poverty and boost shared prosperity, it’s vital that we consider new initiatives
to meet the disruption that will surely come from these structural changes. We
encourage and look forward to comments and an evidence-driven discussion on
this important topic."
Of course, this doesn't make the idea
any less toxic to the labor movement - though if they would only continue
reading for a few more sentences, instead of becoming overwhelmed by
sanctimonious anger after reading the phrase "lower the minimum
wage", maybe they'd understand that something is going to need to change
in the labor market to accommodate the advent of the robot era.
And until we all agree on a solution, no
proposal should be too profane to consider.
Norb Leahy, Dunwoody
GA Tea Party Leader
No comments:
Post a Comment