Doug Henwood wrote:
> And you snipped the quote in a tendentious way. The next sentences:
> "Total regular (formal and informal) wage employment remained
> basically unchanged over this period, registering a zero average rate
> of growth. Only irregular employment grew, increasing at an annual
> average rate of 18.5 percent." But this contradicts the evidence of
> their own table 4, which reports raw numbers, but not the percentages
> I've calculated below:
>
> TF -43%
> EF +1506
> EP +3233
> ES + 285
> IRR + 523
> total + 50
>
>
Let's not mix things up here; the difference between waged and unwaged
is vast, so most of the 50% increase is informal sector (irregular
employment), as Marty and Paul point out.
Here's the gist of the problem you have now. I don't know about NY
State, Doug, but we in South Africa - and I assume our Chinese comrades
- get very annoyed when the state tries calling informal sector work
'jobs'. This isn't a home IT consultancy, it's usually survival
starvation-level activity. The last state survey I've seen of our
situation has one million people earning below US$30/month in this kind
of work, and yet the state here calls 'begging' and various types of
survival activity (even catching fish and hunting wild animals) as
'employment'. Our labour leader has termed this line of thinking
'absurd' and I think it applies to your analytical approach too, when
you continue on this celebratory line of thought:
> So what this is reporting is that employment in state enterprises
> declined sharply - which everyone knows already - but that other
> forms of employment (i.e., a growing capitalist labor market) rose
> dramatically. Total employment was up 50%, which is a long way from
> nothing.
>
The point about your original phrase, the 'growing capitalist labour
market', is simply that sure, you can have a growing proletariat through
dispossession of people's land and the thus involuntary migration to the
'planet of the slums', but this is nothing to be proud of, the way you
might be about the rural-urban gemeinschaft-gesellschaft experience that
your family and mine experienced generations ago. It's a disgraceful way
to improve growth, particularly insofar - as Whitehouse points out in
the paper he delivered in Durban in Feb 2006 - as it entails all manner
of social controls that are comparable to apartheid's migration policies.
And the basic problem, as M&P argue, is as Marx put it: the "industrial war of capitalists among themselves . . . has the peculiarity that the battles in it are won less by recruiting than by discharging the army of workers. The generals (the capitalists) vie with one another as to who can discharge the greatest number of industrial workers."
So just to keep under 25 kb, I'll append the section of M&P's MR piece on the Chinese labour situation, plus the conclusion, so your readers can empathise with the creators of durable consumer goods they utilize today.
Cheers, P.
China, Capitalist Accumulation, and Labor By Martin Hart-Landsberg and Paul Burkett
Most economists continue to celebrate China as one of the most successful developing countries in modern times. We, on the other hand, are highly critical of the Chinese growth experience. China’s growth has been driven by the intensified exploitation of the country’s farmers and workers, who have been systematically dispossessed through the break-up of the communes, the resultant collapse of health and education services, and massive state-enterprise layoffs, to name just the most important “reforms.” ...
CHINA’S LABOR DYNAMICS
While some analysts have begun to acknowledge the problems highlighted above, especially those related to the region’s growing dependence on sales to the US market, few have examined the labor market implications of East Asia’s accumulation dynamics. By contrast, it is widely recognized that in Latin America and Africa, employment growth has been inadequate, so that growing numbers of workers in these regions have been forced to accept irregular work. As the IMF has noted:
With slower GDP growth in the latter part of the 1990s, employment also suffered, particularly for wage earners. The quality of new jobs deteriorated, with many concentrated in micro-enterprises or self-employment at relative low wages. The share of the informal sector -- defined as employment without access to social benefits or unemployment protection -- rose to about 50 percent of total employment in Latin America.xxxv
It is widely assumed that the situation is different in East Asia where capital accumulation remains robust, especially in China. However, the reality is quite the opposite; workers in China and the rest of East Asia are being forced to battle conditions very similar to those in Latin America. Here we focus on the situation in China.
Before looking at job creation, it is important to comment, at least briefly, on employment conditions for those with jobs. For many, including those employed in Guangdong, where approximately one third of China’s exports are produced, these conditions are far from satisfactory. For example,
base assembly-line wages in the Pearl River Delta, the province's manufacturing belt, have been virtually frozen at about $80 per month for the past decade, according to a recent survey by the Ministry of Labor and Social Security. Factor in inflation over roughly the same period, and average pay in real terms has declined by as much as 30%. The reason: China's rise as a manufacturing power has contributed to a surplus of global production capacity for all kinds of goods, from sneakers to DVD players to plastic lawn chairs. With the price of raw materials rising and factory profit margins shrinking, blue-collar workers are at the losing end of a long chain of supply and demand.xxxvi
The situation in Guangdong is far from unique. Migrant workers, who make up a growing share of the country’s industrial workforce, are increasingly responding to these conditions by initiating job actions (including strikes) or quitting and returning to their home villages. Worried companies have been forced to raise wages, but according to one estimate, “even after doubling between 2002-2005, the average manufacturing wage in China was only 60 US cents an hour, compared with $2.46 an hour in Mexico.xxxvii
The central government has begun issuing decrees calling for local governments to raise local minimum wages in line with inflation. But, according to Anita Chan, "in reality the wages of the migrant industrial workers are often considerably lower than the official standards. For one thing, the minimum wage, set by the month, does not reveal the illegally long hours worked by migrant workers to attain that minimum. According to a survey I conducted in China’s footwear industry, the average workday there amounts to about 11 hours each day, often with no days off -- that is, about an 80-hour work-week.”xxxviii
Moreover, many migrant workers are not even being paid what they are owed. At least one government survey found that 72.5 percent of the country’s nearly 100 million migrant workers are owed wages, especially those employed in the construction and coastal export sector.xxxix Non-migrant workers employed by state owned enterprises are not immune from these developments; they are routinely told by their managers that “they must accept a decline in conditions and welfare or be replaced by migrant workers from the countryside.”xl
Those analysts that do acknowledge the difficult conditions under which Chinese workers labor, generally view them as a temporary cost that must be paid as China continues its industrial forward march.xli As they see it, what is critical is that, in contrast to much of Africa and Latin America, China’s industrial growth continues to draw more and more Chinese into formal labor-market relations, thereby advancing modernization and a progressive process of development. However, they are wrong.
Recently, several international organizations have reworked sometimes inconsistent Chinese government labor data to create a more reliable picture of Chinese employment trends. Here we rely on the work of the International Labor Organization (ILO).xlii The ILO began its study by organizing Chinese enterprises into seven different categories: state and collective enterprises, joint ownership enterprises, limited liability corporations, share holding corporations, foreign owned and operated enterprises, small scale private registered enterprises, and individual registered businesses. The first five comprise the formal urban sector and the last two the informal urban sector. The ILO then used these enterprise forms to establish four different employment categories: regular formal wage employment (for those employed in urban formal sector enterprises), regular informal wage employment (for those employed in small scale private registered enterprises), regular self employment (for those running individually registered businesses), and irregular employment (for those engaged in casual wage employment or self-employment -- often in construction, cleaning and maintenance of premises, retail trade, street vending, repair services or domestic services).
Significantly, regular formal wage employment in China’s urban sector actually declined at an annual average rate of 3 percent over the period 1990-2002. Total regular (formal and informal) wage employment remained basically unchanged over this period, registering a zero average rate of growth. Only irregular employment grew, increasing at an annual average rate of 18.5 percent.xliii
Table 4 provides a more detailed view of these trends. In particular, employment in state and collective enterprises (what the ILO calls the traditional formal enterprises) fell by 59.2 million over the thirteen year period. Despite the country’s rapid growth and the government’s support for new, non-state forms of enterprise, the new emerging formal enterprises (cooperative enterprises, joint ownership enterprises, limited liability corporations, shareholding corporations and foreign-funded enterprises) generated only 24.1 million jobs. The result was an overall decline in formal sector employment of 34.1 million. Even with the employment contribution of the informal urban sector (registered small privately owned enterprises and individually owned enterprises), the Chinese economy managed an overall increase in regular employment of only 1.7 million workers over the thirteen year period. This was far from sufficient to match the growth in labor supply. Thus, growing numbers of Chinese workers have been forced to accept irregular employment which, with an increase of 80 million, now comprises the largest single urban employment category. A growing share of this irregular work is accounted for by China’s burgeoning sex industry. While the Chinese government says there are 3 million prostitutes nationwide, independent estimates put the figure at up to 20 million (with sex work accounting for up to 6 percent of China’s GDP) once sex laborers in massage parlors, entertainment establishments, and even barber shops and beauty salons are properly included.xliv
This massive increase in irregular employment is even more shocking when one realizes that growing numbers of workers have actually been leaving the urban labor market. For example, the labor force participation rate of urban residents fell from 72.9 percent in 1996 to 66.5 percent in 2002.xlv In addition, outright unemployment also remains a serious and growing problem. As the ILO explains: “A major consequence of the reforms of the 1990s has been the emergence of open unemployment in China’s urban areas.”xlvi Official government figures seriously understate the seriousness of the problem in part because of the narrow definition used. For example, the urban unemployed are limited to those persons “with non-agricultural household registration at certain working ages (16-50 years for males and 16-45 years for females), who are capable of work, unemployed and willing to work, and have been registered at the local employment service agencies to apply for a job.”xlvii Using more commonly accepted international definitions, the ILO estimates that the 2002 unemployment rate for long term urban residents was in the 11-13 percent range.xlviii
The situation in manufacturing is much the same. As Table 5 shows, despite the growing importance of manufacturing over the period 1990-2002, overall regular (formal and informal sector) manufacturing employment actually fell by 16.6 million workers. Once again, employment activity in the new emerging formal and informal enterprises was not sufficient to compensate for the enormous declines in state and collective employment.
Unfortunately, China’s employment crisis is likely to get much worse very soon. Along with the massive pools of job-seekers generated by rural underemployment and state-sector layoffs, the number of jobless university and high school graduates is increasing rapidly. Of the close to 5 million university grads projected for 2007, nearly 1.5 million will be unable to find work, according to the Chinese Ministry of Education. Similarly insecure prospects are in store for the great majority of the country’s approximately 50 million high school graduates who enter the job market each year.xlix In short, it is increasingly difficult to see a fundamental difference in terms of labor market trends between China, a country with dynamic capitalist accumulation processes, and Latin America, a region with acknowledged economic difficulties.
...
Industrial capital accumulation is not a process that, if unrestrained by regulations and/or worker-organizations, tends toward an equilibrium with labor force growth so as to ensure productive and regular employment for all. Far from it. As Karl Marx explained, the "industrial war of capitalists among themselves . . . has the peculiarity that the battles in it are won less by recruiting than by discharging the army of workers. The generals (the capitalists) vie with one another as to who can discharge the greatest number of industrial workers."lxv This war is especially intense in East Asia, where more and more production is being structured under the control of and according to the logic of competing transnational corporations (and their local subcontractors) operating through cross-border production networks. It is the real force underlying the recent statement by Singapore’s labor minister, responding to the 17-year high 6.3 percent official unemployment rate, “that the boom years of near-full employment would not return as Singapore faced competition from low-cost rivals in the region.”lxvi Similarly, explaining why India’s economy needs to grow at least 8 percent per year just to keep unemployment from rising, the Far Eastern Economic Review noted that the basic problem is that “companies are shedding workers and increasing productivity in the face of new competition.”lxvii
More generally, much of the underemployment and unemployment in China and the rest of East Asia can best be understood as the result of the on-going separation of workers from access to the conditions necessary for their production and reproduction, what Marx called "primitive accumulation." David Harvey has recently coined the phrase "accumulation by dispossession" to describe this process -- the change in terminology rightly emphasizing that this kind of separation and disemployment (creation of a pool of exploitable labor power) is not limited to the early history of capitalism on a global scale, but is rather integral to the system’s ongoing historical development especially in its latest, neoliberal phase.lxviii
Even the "flexibilization" of employment that is promoted by governments in response to neoliberal market pressures can be viewed as a variant of accumulation by dispossession insofar as it involves erosions of workers’ job rights. This is obvious, for example, in the case of state-enterprise industrial workers in China but it is also true for workers in other East Asian countries where capitalists -- domestic and foreign -- have responded to unionized worker struggles by locking out and then replacing them with contract workers and other temporary laborers. In Indonesia, for example, upsurging unionization, strikes, and wage-gains in the immediate post-Suharto period were followed by dismissals of workers (and replacements with contingent workers) exceeding 100,000 per year in 2002 and 2003. Observes Rustam Aksam, President of the Indonesian Trades Union Congress, “Every country is now competing to reduce worker rights. . . . We’re racing to the bottom.”lxix
In sum, the employment problems of China and East Asia need to be seen as part of "the growing failure of capitalism . . . to solve the elementary and, in the long run, the very survival requirements of the vast majority of those living under its sway.”lxx Of course, this failure is multi-dimensional. Alongside these employment problems, there is also "the unprecedented scale and speed of the deterioration of the natural environment."lxxi That working people in the most dynamic centers of accumulation are also suffering from this crisis is an indication of its deep, intensive, and above all system-wide character. Under capitalism, universal access to productive employment -- including jobs in education, health care, and other areas oriented toward improving the conditions of human development -- is always seen as an inefficient diversion from the business of competitive money-making. Better to maintain a massive reserve army of unemployed and underemployed as a check on workers’ bargaining power and as a source of cheap labor to service the consumption needs (servile, sexual, and entertainment-wise) of the capitalist class and its various professional functionaries. Seen from this perspective, it is clear that the answer to worker problems in Africa, Latin America, and elsewhere for that matter, is not to be found in supporting policies designed to replicate capitalism’s so called Asian success stories but rather in building national and international movements with an accurate understanding of, and a commitment to overcoming, the dynamics of contemporary capitalism.