Inequality – Pike & Hurricane

The Precariat – The Loss of Job Security and What To Do About It

Oliver Ösmark — Wed, 10 Feb 2021 20:00:07 +0000

Khalil Gibran’s book “The Prophet” begins with the protagonist Almustafa spotting on the horizon the ship that will take him back to the isle of his birth, and he prepares himself to leave the city of Orphalese which he has called home for 12 years. But he is struck by melancholy as his thoughts turn to the hurt he will cause the people of the city with his passing. Being a popular fellow, he is beseeched by men, women, elders, and clergy to speak to them of the truths he has learned in his time: “Now therefore, disclose us to ourselves, and tell us all that has been shown you of that which is between birth and death.” Almustafa obliges and shares his wisdom in 26 dainty morsels on the topics of love, good and evil, crime and punishment, joy and sorrow, friendship, laws, time, talking, trade, work, and so on. The word “meaning” is not used a single time in the whole book.

At this stage one might feel as though the omission of “meaning” in this context is of no significance as the narrative itself is heavily flecked with the mysticisms, superstitions, dogmas, and all the loose scales shed from the scalp of theism. After all, the ultimate meaning of religion is faith, and faith is servitude to the idea of God and all that entails; or “the gods, sprits and idols,” if you are the kind of person to diversify your spiritual portfolio. One would be forgiven for thinking so. Gibran was a Maronite flirting with Islam, Sufi mysticism, and the Bahá’í Faith. But his eclecticism also spanned into the artistic enclaves of Romanticism, and modern (at the time) symbolism and surrealism. The point here being that it is not far-fetched to claim that any artist engaging in honest dissemination of the human condition does not regard close-mindedness a virtue. “Meaning” is not God’s decree. It is a consortium of disciplines. Disciplines represented with poetic precision by Gibran in his book.

The Prophet Almustafa says of work:

“You work that you may keep pace with the earth and the soul of the earth […]

You have been told also that life is darkness, and in your weariness you echo what was said by the weary.

And I say that life is indeed darkness save when there is urge,

And all urge is blind save when there is knowledge.

And all knowledge is vain save when there is work,

And all work is empty save when there is love;

And when you work with love you bind yourself to yourself, and to one another, and to God.”

Love for one’s trade is the flower borne from the seed of urge. Yet, the realities of the day—underemployment, redundancies, glass ceilings, manufactured impediments to accessing education, etc.—leave many scrambling in for options. Any options. And even though a small—plausibly non-existent—minority of people would make the claim that their gig as a human billboard brings them closer to God, work satisfaction falls by the wayside with little or no long-term job security. Darkness abounds, and this is the precarious circumstance a growing portion of the labor force find themselves in. But before we explore this phenomenon any further, first we must address some common suppositions.

The usual suspects

Economic inequality is a prompt for social mobilization on the regular. “The 1%” have been the punching bags of the discontent and disempowered since the invention of value itself. These days that practice is perfectly understandable. In 2018, the 26 richest people in the world held as much wealth as half of the global population (3.8 billion at the time), a change from 43 people the preceding year. Yet, it is a mistake to think that inequality is rising everywhere. It is not all-pervasive, nor an inescapable symptom of globalization. Neither has the average level of inequality changed much. In countries like China, India, Indonesia, and the U.S., which together account for 45% of the world population, the Gini index—the go-to barometer of wealth inequality—saw an increase of about 4 points. Hence, while the average country saw little variation of the Gini index, the average person lived in a country that saw rising income inequality.

Unemployment numbers do not tell the whole story either. These have more or less followed a stable flat trend within the 3-7% range, alongside with a steady increase in GDP per capita, since the ILO began recording unemployment data per state. Extreme outliers like Spain and Greece in 2013—which peaked at 27% and 25% respectively—led to much civil unrest as austerity measures inflamed an already volatile situation. Youth unemployment in these countries was more than twice as high as the country average, as is often the case in most countries on average. High rates of underemployment compound this issue. Underemployed workers may be able to find work, but their income may not be sufficient for meeting basic needs. Youths are overrepresented in this category. Hence, unemployment rates alone are inadequate measures of labor market slack.

Indeed, labor underutilization affects 473 million workers worldwide, which is more than double the number of unemployed people considered separately, and 61% of workers worldwide are in informal employment. Significant inequalities in access to decent work opportunities has become an increasing trend and feature of current labor markets.

The precariat

Guy Standing is an economist and professor at the University of London who has worked extensively on economic inequality and written two book on a new social class dubbed the “precariat”; the word itself is a portmanteau of “precarious” and “proletariat”. Unlike the latter characterized as exchanging labor for livelihood yet deprived of the “means of production”—raw material, facilities, machines, capital—the precariat are only partially involved in labor and must take on extensive amounts of uncompensated “work”—e.g. updating CV’s and sending out job applications, attending job interviews, being “on call” for “gig” work—to have access to decent earnings. Emblematic of this class is a lack of job security, benefits, or union protection. The precariat also spans the income and education spectrums: from illegal migrant work to highly educated but freelance-dependent industries.

Workers of a Mexican textile plant or “maquila”. Most workers work 11 hours a day, 6 to 7 days a week, for less than the legal minimum wage. Industries in the US and elsewhere make heavy use of Mexico’s and other Central American countries’ low-cost labor.

Standing says that this phenomenon really took off after 2008 in the aftermath of the 2007–2008 financial crisis. In his book “A Precariat Charter: From Denizens to Citizens” he outlines 29 “demands” aimed at providing the precariat both economic stability and empowerment to live in comfort and participate in society—these range from rehauling unions, reforming migration policies, ending means testing. A central demand is the establishment of a universal basic income, an idea that has been courted by the international labor and economic mammoths ILO, OECD, the World Bank—especially in the wake of the Great Recession—but never consummated.

But won’t basic income dissuade people from working and bleed government of tax revenue? Cool your boots, prolepsis. Let us entertain the side of the argument where one aspires for universal access to opportunity and decent standards of living. Take the Swedish unemployment fund (arbetslöshetskassa or “a-kassa”) which, ideally, pays up to 80% of your salary—though there are many fine print provisos to resign the newly dispossessed to feeling more fleeced than golden. To retain unemployment benefits, one must be active in looking for jobs; you must be able to prove that you are active in looking for jobs (the specifics of this are ad hoc and negotiated with the Swedish Public Employment Service); and you cannot decline any job offers—even ones that offer unstable hours and temporary employment. Receiving a limited yet regular amount in benefits from the government makes far more sense than sporadic and unreliable employment. As Standing says: “In effect, the system for the precariat has a huge disincentive for people taking low-wage jobs and punishes them for doing so. That is thoroughly unfair.”

So foul a sky clears not without a storm

Universal basic income is not a new idea. The social philosopher/lawyer/humanist Thomas More wrote about it in 1516, followed by corsetmaker/journalist/revolutionary Thomas Paine in 1719. Still, what the two Thomases were suggesting has never sifted into the mainstream of real-world policy. The 2020 Democratic presidential candidate Andrew Yang proposed that every American adult receive a monthly check of $1,000 as a solution to structural unemployment caused by automation. This “Freedom Dividend” only got him 2.8% of the votes in the primaries and he subsequently dropped out of the race. Then came the pandemic, which revealed the degree to which unemployment insurance had come up short in keeping up with the labor market. The welfare systems were overwhelmed, and people were desperate. Suddenly government started experimenting with forms of basic income.

Libertarians, austerity buffs, and Ayn Rand fans have long touted that welfare programs are much too expensive to fund and complicated to manage, but this was not the case. For example, Canada’s response program covered not only those who lost their jobs, or suffered reduced hours, but also those unable to work due to quarantine and childcare. The gig-workers and self-employed qualified. It was easy to apply for and payments were received within days. But the programs employed around the world were not true systems for basic income. They were expedient and temporary. Real universal basic income is a permanent program with consistent payments.

A guaranteed minimum income does not stop people from working and makes for a healthier and less unequal society. In Finland and the Netherlands, evidence found that basic income helped people who had been chronically unemployed for years. In both scenarios, recipients were more likely to find full-time jobs than control groups stuck with the traditional approach of mandated job searches, job-readiness programs, and regular contact case workers. Rather than having to settle for temporary gigs, people had more time to look for better jobs without bureaucratic trials and tribulations in the way. Studies in Canada and Malawi showed similar positive effects.

Taken at face value, the costs for universal basic income are colossal. The price tag for Yang’s “Freedom Dividend” was estimated at $2.8 trillion. Yet, this initiative would significantly reduce poverty and inequality and according to a study by the Roosevelt institute the economy would “grow by approximately $2.5 trillion and create 4.6 million new jobs” generating around $800–900 billion in new revenue from economic growth and activity. Such a strategy coupled with more progressive tax systems more than make up for the expenses. Costs are minimized by returns in taxes, targeted to low-income recipients, and is likely lower than what governments spend on pensions.

However, thinking about universal basic income only in monetary terms is an error of judgement. Universal basic income is an investment in society, not a cost. It is not an expenditure, but the means of which communities that value health, education, and security are made manifest. The returns come in terms of higher standards of living as well as from taking the pressure of other social programs treating symptoms of poverty, like poor health.

For long, implementing universal basic income has been considered unconventional, even outright inconceivable. But, as the pandemic has revealed the glaring holes in the safety net, it is a humane alternative to the classical model. It allows for purpose to be rediscovered. To “keep pace with the earth and the soul of the earth” and a decent life disposed of darkness. And yes, even encourage love for one’s work. Let the solid surfaces deal with the billboards.

Related articles:

Nowhere to Stay Home

An Insecure Future

Who brings the food to your table?

Photo credits:

Job Satisfaction, by It’s No Game on flickr, CC BY 2.0

Maquiladora, Free for commercial use, DMCA

Home is Where the Fun Is. The Irony, by Andreea Popa on Unsplash

The post The Precariat – The Loss of Job Security and What To Do About It appeared first on Pike & Hurricane.

An Ideology of Selfishness — How Misinformation Propagates Inequality

Filip Zahariev — Mon, 02 Nov 2020 15:26:39 +0000

Since the 2010s, a sharp uptake in the levels of misinformation can be observed, in the push for so-called austerity, in the war on facts, in the bold attempts of different socio-political organizations to exchange fact for opinion.

The mechanisms of propaganda have mastered their most powerful array of tools yet––social media. That’s not to say misinformation hasn’t gone hand in hand with print media; it has walked hand in hand with factual information, since as long ago as the fifteenth century, when the printing press took off. In the intervening centuries, human society has, collectively, found ways to combat misinformation through methods of verification which, the hope was, the Internet would make foolproof. But rather than provide a higher standard, the rise of the Internet (and of social media, in particular) has seen the decline of hard journalism along with the printed press.

Nowadays, criticism is systematically dismissed as “fake news”––if not outright silenced––, no matter the source or topic it is aimed at. It would be easy to pin the blame on a name or on a score of them. Easy but misguided. The Trumps and Bolsaneros of the world are a symptom of an economic system at odds with itself, much like the ouroboros swallowing its own tail, at once hungry and suffering from agonising convulsions.

Marilynne Robinson, in a piece for the NYRB in June, “What Kind of Country Do We Want?” described this economic system as:

“…the snare in which humanity has been caught––great industry and commerce in service to great markets, with ethical restraint and respect for the distinctiveness of cultures…having fallen away in eager deference to profitability.This is not new, except for the way an unembarrassed opportunism has been enshrined among the laws of nature and has flourished destructively in the near absence of resistance or criticism.”

This is, Robinson writes, a “system now revealed as a tenuous set of arrangements that have been highly profitable for some people but gravely damaging to the world”. And not just the world––growing economic inequality is as high as it has ever been.

Inequality – A Cancer Eating Away at Society

Inequality affects “more than 70% of the global population,” according to a UN report, but nowhere is it more jarring, more on focus than in the richest, most powerful and prestigious countries in the world. To this end, it’s time to turn the reader’s attention to several recent developments, first in the USA and then in the UK.

Robinson describes the USA as “having been overtaken with a deep and general conviction of scarcity, a conviction that has become an expectation, then a kind of discipline, even an ethic. The sense of scarcity instantiates itself. It reinforces an anxiety that makes scarcity feel real and encroaching, and generosity, even investment, an imprudent risk.”

It is this sense of scarcity that drives society towards polarization, which Robinson in turn characterizes as “a virtual institutionalization in America of the ancient practice of denying working people the real or potential value of their work.” This institution couldn’t work without popular support. It is here that the mechanisms of branding––dare we call it by its non-politically correct name, propaganda?––enter into the scene. With them come their main beneficiaries, would-be demagogues whose interest lies in reinforcing the status quo.

Through the benefits of unified branding, large swathes of the population are persuaded to vote against their own interests. This branding rarely has a basis in fact, as is the case with perceptions of economic competence in the USA, for example. Every Republican administration from Reagan onward has overseen a recession, and every Democratic administration has overseen a strong recovery and an economic boom. Do Americans trust Democrats more to do a good job with the economy? On the contrary: the GOP enjoys a durable advantage, recently at eight points. The pandemic may agitate sentiments and approval numbers, but even in the chaotic era of President Trump, Americans irrationally trust in the GOP’s longstanding image as the party of practical, “fiscally conservative” businessmen who know how to run things efficiently and profitably. (Joseph O’Neill, “Brand New Dems?” for the NYRB)

This is no small feat of misinformation, but a wilful spread of what is equivalent to a mass delusion over decades. So, too, with migration; despite migrants performing jobs the vast majority of Americans do not want, their contribution to society is denied.

A Universal Problem

This is not a uniquely American issue, though the USA is perhaps the most extreme example––and the richest country in the world. If we turn to the UK, much the same can be seen, both in terms of a push for austerity and in the divorce from facts. For a decade now, British austerity has gutted the NHS (National Health Service)––in a time of a pandemic, the fault lines of this act couldn’t be more pronounced.

The “Leave” campaign was successful on the grounds of false claims, as well as racism and a perceived economic victimhood of the English (more so than any other group) at the hands of migrants. At the UK’s great economic loss over membership taxes to the EU, as well. Why is it, then, that British farmers were faced with the possibility of their harvest rotting, unpicked, on trees? This is an issue exacerbated by the coronavirus, certainly, but with its roots in the Eastern European migrant labour force that so offended English sensibilities, despite performing a job that no Britons are interested in.

And in February, Business Insider estimated that by the end of 2020, the British government will have spent £200 billion to leave the UK, more than all its payments to the Union over forty-seven years of membership. One cannot help but wonder what these funds might’ve accomplished, were they aimed at reducing economic inequality within the UK, rather than spent on a divorce bill.

What becomes clear through these examples––and many more like them––is that the drive towards ever greater profitability at the core of our economic system is not only flawed, it is a pandemic more deadly, more divisive than COVID-19 could ever be. Its tools seek to propagate an ideology of selfishness. And it is easy to drink its bitter message in. What’s required is only passive consent, a wilful lethargy, an unwillingness to look away from the screen.

Or… a different choice can be made. We can examine humanity through a prism not of its greed or rugged individualism, but through an outrage for the injustices embedded in our society, and most of all, through a shared human experience and selflessness.

Related articles:

A Stark Case of Propaganda

The Social Network of Ethnic Conflict

Photo credits:

Astroturf by hanne jatho, CC BY-NC-ND 4.0

INEQUALITY by Teeraphat Kansomngam, CC BY-NC-ND 4.0

Paul Harrop / Poster site, New Bridge Road, Newcastle / CC BY-SA 2.0

The post An Ideology of Selfishness — How Misinformation Propagates Inequality appeared first on Pike & Hurricane.

Combining the best of both worlds or hurting either system?

Clara Bieler — Wed, 28 Mar 2018 19:24:11 +0000

The European Union–an economically integrated region that covers 4 million km² and has 508 million inhabitants. Wave by wave countries joined the union, adding to the socio-economic heterogeneity, uniting unequally developed economies and countries with different demographics. Currently, wages vary widely across the European Union: hourly pay averages €41.30 in Denmark, €39.10 in Belgium, €37.40 in Sweden, €6.80 in Lithuania, €5.00 in Romania and €4.10 in Bulgaria (according to Eurostat data for 2015). Similarly, social welfare and benefits range from abundant to non existent giving people the opportunity to benefit from the gray zones of the diverse system.

Swiss-German “Grenzgänger”

Switzerland may not formally be in the EU, but has still one of the closest trading relationships with the bloc, having signed free-trade agreements and pegged its currency. Linguistic similarity, attractive commuting routes and clearly regulated bureaucratic procedures allow Germans living in the area of Lake Constance and Breisgau region to become ‘cross border’ workers. Now in 2018 up to 300,000 workers cross the country’s borders every day for employment, benefitting from the cheaper rents and cost of living on the German side. Salaries are higher in Switzerland, whilst taxes and social security contributions are lower. Whilst there are provisions in place for Double Taxation, there is still an imbalance created by this arrangement. Germans work in Switzerland, but spend the majority of the money earned in another country. It’s an unintended imbalance.

Austria’s child benefits outflows

Austria’s newly elected conservative People’s Party has recently made its intentions public to cut benefits from children of Austrian residents not living in the country. A similar move had been debated by Germany the year before. The narrative is that children, whose parents work in Austria (which makes them residents and eligible to apply for benefits), living in low-wage countries like Romania, Bulgaria, Czech Republic, Slovakia, Hungary and Slovenia, should not be entitled to the same amount as Austrian children (114€ per month per child). In 2016, Austria transferred a total of 273 million € to EU and European Economic Area countries, supporting 132,000 children, whose parents work in Austria. Undoubtedly it benefits the children receiving it, even more so, than children living in Austria, given the differing purchase parities. It however adds to the inequality of the countries and systems.

Medical tourism, i.e. fertility and dental

In 2016, 488,000 foreign patients sought dental treatment in Polish clinics, according to the Polish Association of Medical Tourism. This trend is mirrored by other Central European countries: Hungary attracts patients hoping to save money on their dental treatments, whilst Czech Republic is now renowned for cataract surgery. Patients from the UK, Germany and Nordic countries can save up three times the cost by going abroad. In 2013, an EU directive further reinforced this by allowing patients to get refunds for medical treatments in other member states, if said procedures are covered by the national health scheme. However, this practice reinforced a divide.

Spotting the differences between European countries is far from rocket science. Jumping the systems has become easier with the European Union framework enabling unprecedented mobility of workers and capital. Yet, the subject keeps returning to imbalance of welfare systems, cost of labor and cost of living between countries. The free mobility of labor and capital creates a potential for arbitrage. In an Adam Smithian fashion, individuals act on self interest–trying to improve their status quo. That is just natural survival instinct. But who bares the cost?

It is an opportunity for many citizens of countries, that have not recovered as quickly from their past, be it communism, economic collapse or exodus. It is a challenge for countries, whose welfare systems were not built with newcomers in mind, and who experience an outflow of money to other economies, rather than seeing it re-invested. It is an issue that should have been tackled the same way ‘Bologna’ (finding a way of transferring credits across different universities and equalizing diplomas) or ‘Schengen’ (finding a way to allow non-EU citizens to access all member-countries with one type of visa) were approached. Acknowledging differences and finding workarounds.

Photo credits:

Image 1 by andreame, ‘europe-eu-collapse-broken-european‘, CC0 Creative Commons

Image 2 by Etching created by Cadell and Davies (1811), John Horsburgh (1828) or R.C. Bell (1872), ‘Profile of Adam Smith’, Public Domain

The post Combining the best of both worlds or hurting either system? appeared first on Pike & Hurricane.

From the Silk Road to Paradise Papers: Tax Havens and Economic Inequality

Laura Korte — Tue, 12 Dec 2017 20:14:06 +0000

When talks of the wealth gap begin, images of class wars start forming in minds of some. However, other contributors to the wealth gap––globalisation and tax havens––seem to be left out of the debate.

Wealth gap, by definition, refers to the unequal distribution of capital within a population––in other words it is economic inequality. As this inequality is growing, several NGOs and institutes are doing more and more research on the topic. According to The Guardian, “half of world’s wealth [is] now in hands of one percent of population.”

From the Silk Road we have travelled a long way, to the era of opulence and luxury brought to us by modern day globalisation. Globalisation––the flow of capital, cultures and services––has gotten us adjusted to the myriad number of options, but we have now come to see the perhaps unavoidable side effect of globalisation; the global wealth gap. The continuity of its existence is much clearer for those who connect the dots between the wealth gap and its factors. So let us talk about one which tends to not be talked about; the impact of tax havens on economic inequality.

Different Rules in Taxes

The recurring topic of tax havens has surfaced on the front page of many newspapers with titles like ‘Paradise Papers’ and ‘Panama Papers’. Off-shore tax havens with their no-tax or low tax policies appeal to many wealthier individuals and companies as they create more or less lawful migration of capital which in return destabilises the economy. Keep in mind that legality is not the problem here, but rather ethicality.

Tax havens and companies, such as Appleby which helps the super-rich to “hide” their wealth, have been scrutinised for several reasons. Investigative journalists have done their duties and brought up issues such as the connections between individuals who are involved in for instance terrorism, illegal mining, human rights abuses and corruption.

It is believed that on a global level the use of tax havens results in approximately 255 billion US dollars loss in tax money annually. After a quick search you will find multiple research papers and journals talking about how tax havens hold between five and seven trillion US dollars. The 2016 US presidential candidate, Bernie Sanders, stated that it is time for the biggest US companies to “pay their fair share of taxes so that our country has the revenue we need to rebuild America.” It does seem like there are different rules for the super-rich and for the rest of us; the financially mortal.

A Gulf in Wealth

Rich individuals and multibillion-dollar companies avoiding taxes in poorer countries, and even wealthy countries like the United States, bereave these countries from providing its citizens with public services.Bad tax schemes in countries also support the existence of economic inequality. According to Tax Justice Network, an example of this is tax competition, where governments try to lower taxes on the rich to keep the tax revenue in their country rather than it ending up in a tax haven, but simultaneously end up increasing the taxes on the poor. This in return, strengthens the economic inequality that already exists in all countries.

Though tax havens may seem like a niche that is exclusively for the exuberantly wealthy, tax havens are not marginal in the context of global economics––they truly have a huge impact on financial instability and politics. We do not tie the knot between the issues of wealth gap and tax havens, it seems as though these two things come hand in hand, ushered into our lives through the miraculous phenomenon called globalisation.

We need to start looking at the problem of economic inequality connected to the system that has been producing the imbalance. So from globalisation to tax havens, and from tax havens to the endless cycle of inequality. But understanding tax havens still continues to be strenuous for the ordinary people. Perhaps the lack of knowledge of these tax havens facilitating the endeavours of the richest stops the ordinary people from unifying in efforts of making a change. Like Ronald Wright once said “socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.” But what if we, the bourgeoisie, the working class, the hoi polloi (Ancient Greek: “the many”), finally start rising up against the problem of unethicality and inequality and organise resistance towards this injustice?

Photo credits:

The Shard of glass–sharp like the inequality it reflects.

The wealth of a city built in the midst of inequality.

The post From the Silk Road to Paradise Papers: Tax Havens and Economic Inequality appeared first on Pike & Hurricane.