BLOOD WAGES AND GLOBALIZATION

SYNOPSIS: 19^TH century-style labor conditions in the 21^st century
I decided to write this article after recently watching on TV a group of Bangladeshi and Pakistani strawberry workers in southwestern Greece wounded by shotgun because they demanded six-month back pay wages,  I thought of South African mining workers shot by police for demanding improved working conditions and wages. Clearly, most workers go to their jobs and do not routinely face gunfire, nor do they live in squalid conditions like the South African miners and Pakistani and Bangladeshi field workers in Greece.

There is an anti labor climate globally that goes hand-in-hand with globalization operating under neoliberal policies, and there is an alarming rise in what I call “blood wages” to which tens of millions of workers are subjected in the early 21^st century. “Blood wages” refers to a broad category of workers earning a living under extremely dreadful conditions, including human trafficking, child labor, semi-slave labor, immigrant labor, and what the International Labor Organization (ILO) refers to as “forced labor” of more than 21 million people. These conditions exist today when humankind presumably is more advanced and civilized than it was in the 19^th century, when more countries claim to be open and democratic.

“Blood wages” were common in the 19^th and early 20^th century during the Industrial Revolution, prevalent from industrialized England to agrarian Russia, from the newly industrializing US to agricultural-mining producing Latin America. Government designed policy to support large agricultural, industrial and banking interests, while ignoring workers and peasants’ interests. “Blood wages and forced labor” conditions in the early 21^st century are very similar to those in Latin America from 1850 to 1930, a period during which the economy and social structure were shaped by domestic oligarchic interests and foreign corporations whose interests the state protected using police and military against workers.

Literary authors described the plight of ‘blood wages’ in the formative era of industrial capitalism, authors like Charles Dickens whose novels dealt with child labor, Emile Zola dealing with the plight of miners, and Upton Sinclair dealing with the meat packing industry in Chicago. The literary world returned to the theme of worker’s plight during the Great Depression, but gradually abandoned such themes as middle class culture took over and the dream of working class people was upward social mobility through college education and a professional white-collar career.  

After the emergence of trade unions, labor laws, safety and environmental laws, human rights and civil rights legal protection amid the expansion of middle class society, one would assume that pluralistic societies protect workers better than in the 19^th century. While many societies made much progress from the 1930s to the 1960s with regard to labor rights, it is ironic that in some respects conditions for workers today are much worse from those of the formative period of trade unionism in the Western World during the 19^th and early twentieth century. This is a reflection of the shrinking lower middle class and difficulty toward upward social mobility in the past three decades.

Societal progress in the past three decades has not included workers sharing in the benefits of rising productivity, but rather limited to the upper middle class that benefit from the “blood wages” of workers around the world, especially during the era of globalization under neoliberal policies that have been in full force from the Reagan-Thatcher decade to the present. The safety net that took decades to build has been eroding in the last three decades to the degree that society is moving backwards toward the 19^th century with regard to labor and social policies.

In the early 21^st century in a number of countries, employers have private security guards, the police, and in some cases the armed forces arresting and in some cases shooting workers who demand better wages and working conditions. One may argue that such extreme incidents take place in developing or semi-developed nations, and rarely in the advanced capitalist countries. As we will see below, such incidents taking place in South Africa’s platinum mines, for example, are linked to Western corporate interests, and police clashing with workers or protesters representing labor interests takes place in Western countries.

Yet, the mass media does not expose the blood wages of the 21^st century as symptomatic of globalization under a neoliberal political economy benefiting the small class of rich individuals to the detriment of society as a whole. On the contrary, the media and government treat such incidents as isolated and extreme, as though they fell to earth from an asteroid without any connection to the rest of society, as though they have no history, no connection to fiscal, economic, labor and social policies.

Egregious conditions from ‘blood wages’ to ‘forced labor’ in the field of labor exist across the world, but they rarely receive much publicity. Confrontations between workers and management have intensified in the last three decades as globalization has taken hold under neoliberal policies throughout most of the world and workers have been losing purchasing power along with the shrinking lower middle class. With the promise of greater prosperity for all under policies promoting greater prosperity for corporations, businesses and governments have become less tolerant of labor, and openly hostile to trade unions identified with political and financial corruption, as though the world of business is free of corruption.

The prevailing trend in the past three decades or so has been toward a weakened labor movement, which includes weakening trade unions, ending collective bargaining, promoting part time work that does not include benefits, and eroding the rights of workers. In the past three decades, governments have weakened labor laws, they have relaxed enforcement mechanisms and inspections of businesses violating workers’ rights and health and safety. Moreover, there has been a trend toward allowing more workers to earn below minimum wage, without social benefits, and without any protection accorded to unionized workers. This is not just in Asia and Latin America, but in the US, Germany and other advanced countries as we will see below.

Tens of millions of workers around the world live with the fear that they may never receive their pay; that they will lose their job because they demand to be paid or receive higher wages and better working conditions; and that they may face violence at the workplace by their employer backed by the police, judicial and political establishment. Finally, several million are part of a virtual slave labor supply, including sexual trafficking that operates from Asia to the US, all under the complicity of the authorities.

FORCED LABOR AND TRAFFICKING
According to the ILO, three of 1000 people in the world are in forced labor/trafficking conditions in which they are trapped, 90% of which are exploited by corporations and individuals in private enterprise, and 26% of which are under 18 years of age. An estimated 4.5 million of the forced labor individuals are part of the sexual trafficking/exploitation industry, again confined primarily to the non-Western World. Most of these forced labor individuals come from the Asia-Pacific area (56%), followed by Africa (18%), and then Latin America (9%).

After the fall of Communism in Eastern Europe and USSR, there was a sharp rise in forced labor/trafficking activity, given that the region accounts for 1.6 million or 7% of the world’s total forced labor/trafficking activity. Cross border movement, especially from war-torn and civil war torn nations in Asia (Iraq, Afghanistan, Pakistan, and Bangladesh) account for a large percentage of legal and illegal workers in the ‘forced labor market’, including sexual exploitation.

Although child labor is a global phenomenon and it exists in developed nations, it is pervasive across Asia, Africa and Latin America. The economic crisis of 2008-present has exacerbated child labor from the plantations of El Salvador to the mines of Madagascar and the factories of China. The Central African Republic (CAR) is one of the more notable examples of a country serving the forced labor and trafficking industry, involving mostly children. Going from CAR to Cameroon, Rwanda, Nigeria, and the Congo, children are taken for various purposes, including sexual exploitation, rebel recruits, but mostly to work as agricultural workers.

Governments are not only aware of the forced labor and trafficking industry, they are in certain instance behind some of the operations. Furthermore, they pay lip service to UN demands about compliance to eliminate forced and child labor and trafficking, but in practice ignore the UN. Civil conflicts in a number of countries, including Chad, Sudan, and Congo make trafficking and forced and child labor even more attractive to those profiting from it. The destination of traffickers is not necessarily local, but for more distant locations, including Europe Union countries.  

“SLAVE LABOR” IN CHINA
China is now the world’s second largest economy, and according to the IMF it will become number one at some point in the first half of the 21^st century. China is the new standard according to which countries measure their labor values, although China has the world’s largest population of working poor and conditions for workers are appalling by Western standards.

There have been many reports of slave labor in China, largely because it is politically a Communist country with a capitalist economic system well integrated with the world economy, yet, still a potential military rival to the US. The government rarely if ever prosecutes or convicts employers, often government entities, for what is a pervasive condition. China uses not only prison labor, but also the LAOGAI forced labor camp system where an estimated eight million work. Reminiscent of Stalinist camps, the LAOGAI system works on the basis of productivity quotas to food rations. American and global consumers enjoy the cheap products made by China’s forced labor, everything from athletic shoes to machines.

In January 2013, the government announced that it would end the forced labor camp system in place under varying forms for six decades, as part of a broader reform policy. Western critics, especially human rights activists have argued that the government used the forced labor system to punish everyone from criminals and substance abusers to dissidents. However, the system was part of a very lucrative process that allowed China to be extremely competitive with the rest of the world by having a segment of its work force work for food and lodging.

It is precisely the cheap Chinese labor system that other nations, including the West felt must be used as a basis for comparing Western labor values. In short, the cheap Chinese labor force became the pretext for the West and other countries in the name of “competitiveness” under globalization. Instead of pressuring China to raise internal consumer demand by raising wages, Western companies manufacturing and buying Chinese products stay silent because its companies made billions from Chinese cheap labor, including forced labor. When the recession of 2008-present spread across the world, the media, governments, and pro-business analysts argued in favor of lower wages. After all, how can the West compete with China?

PAKISTANI-BANGLADESHI LABORERS IN GREECE
One would not necessarily associate Greece with blood wages, but it actually built its economy from 1990 until the present on cheap legal and illegal immigrant labor from the northern Balkans, Asia and Africa. Although blood wages were confined mostly to this segment of the labor force, the IMF-EU austerity program has expanded the blood wages pool to include mainstream working class groups.

In April 2013, several immigrants working on strawberry farms received gunshot wounds from three managers (farm bosses) acting on the orders of the owner who was recorded while giving orders to exploit his workers by refusing to pay them and threatening their lives if they demanded payment. The workers were mostly illegal from Bangladesh and Pakistan who were not been paid for about six months the $25 per day. Twenty to forty men live on the farms in squalor conditions inside plastic tents used as part of abandoned greenhouses converted into makeshift homes, drinking polluted water, without any toilet or washing facilities.

The authorities are well aware of the situation of workers, but have turned a blind eye for a decade. This is because the agricultural enterprises provide the necessary bribes to officials in question, everyone from tax inspectors to local police and politicians, thus buying official complicity. Once the workers were shot and landed in the hospital under the eye of the TV cameras, politicians and public officials suddenly expressed surprise and outrage at this isolated incident that is by no means a reflection of working class conditions. These are the same officials systematically bribed to turn a blind eye for years. Blood wages for immigrant workers entailed immense profits for the owners and bribes for public officials – an estimate $130 million from the local strawberry fields annually, let alone other produce, while the government collects practically nothing in taxes from the producers who invest in bribing officials.

Pakistani-Bangladesh agricultural day laborers shot because they demanded back pay of the last six months alarmed many people. Most saw the incident as a mirror of the future for all workers and society as a whole. Given that the country is under IMF-EU austerity measures and suffers 28% unemployment, there are many currently working in the private sector without securing payment of wages by the employers on a timely basis. The deep recession has become a pretext to avoid paying workers and to simply dismiss them and hire new ones, exactly as what took place with the Pakistani-Bangladeshi immigrants.

The shootings of the strawberry workers took place a day after the EU Human Rights commission warned that Greece has a very high level of hate crimes, especially linked to the newly elected neo-Nazi Golden Dawn party that has around 10% vote support in all public opinion polls. Although the neo-Nazi party is vehemently xenophobic and racist, it has found appeal among the broader masses who feel that if the 600,000 immigrants were to leave, Greece would have no economic, social, or political problems of any kind. This kind of racism plays into the hands of the mainstream conservative ruling party that tries to project the image of embracing right-wing pluralism, on the one hand, but had adopted policies that promote racism, hate crimes, xenophobia, and social polarization reminiscent of the early Cold War. In short, the general population’s fear that blood wages could be spreading for a large segment of workers has polarized society into those openly or covertly embracing racist/xenophobic positions, and those wanting systemic institutional changes.

“Blood wages’ are not confined to the Pakistani-Bangladeshi strawberry workers, but they are an integral part of a larger policy that the domestic political and business elites have been promoting, with the IMF and EU, especially Germany arguing for reduction in labor values to make Greece attractive for foreign investment. How can the EU compete with cheap Chinese labor if the periphery member nations across Southern and Eastern Europe have wages comparable to those of Germany? What takes place in Greece with regard to blood wages is not isolated, but permeates the entire European Union and as we will see below, even Germany has a substantial segment of blood wages working force.

SOUTH AFRICA MINERS
South Africa is now part of the BRIC miracle nations, Brazil, Russia, India and China. However, South Africa with all its progress to leave apartheid conditions behind after Nelson Mandela has not made much progress toward socioeconomic integration of the vast majority of blacks into the mainstream of white middle class society. On the contrary, South Africa had a political revolution, but the social and economic institutional structure has remained virtually the same in the last two decades.  

In February 2013, South African platinum mine security guards fired upon workers, wounding 13 in the process. This incident followed the one in August 2012 when South African police massacred 34 mining workers and wounded 78 others at the LONMIN mining operations. Known as the Marikana massacre, the incident was reminiscent of anti-apartheid-style clashes rooted in the deeply ingrained racist culture of South Africa. One issue was low wages and poor working conditions in the white-owned mines that the government supports. Refusing to condemn the police massacre, the government called for labor-management-government cooperation in a neo-corporatist style that would permit the state to project the image of intermediary, looking after the interests of black miners as well as white mining owners.

Although the regime is composed of blacks, racism and capitalism run hand-in-hand in post-apartheid South Africa. Accounting for 80% of the world’s platinum, Anglo American Platinum (Amplats) has a long record of very poor relations with miners, resorting to force as a means of resolving labor-management disputes. The media blamed the Marikana massacre and the mining clashes in January and February 2013 on rivalry between two mining unions (NUM and AMCU), when in reality wages and safety and the company’s use of police sent to resolve conflict by violence. The ILO has issued a report stating that hazardous work conditions, everything from falling rocks to high temperatures are the cause of death for an average of 20 miners annually at the LONMIN and AMPLATS mining operations.

Just like the Pakistani-Bangladeshi agricultural day laborers in Greece, South African miners live in filthy conditions in cheap housing the company provides at a cost of $450 per month, forcing a number of miners to live together in unsanitary conditions. Although this is well known to the government, it does absolutely nothing about it, except to denounce the companies making millions in profits, while refusing to pay decent wages.

Why do people work in the mines? There is no other work for them elsewhere, given that 60% of South Africans live on less than $1.25 per day and the government looks to the lucrative mining industry as the basis for its macroeconomic strength, while ignoring the microeconomic needs of the community. While there is a great deal of pride associated with the political changes after Nelson Mandela, South Africa has seen very few changes in the domain of social justice owing to the reality of an economy that remains focused on growing without benefiting its people.

GERMANY’S “MAQUILADORA”
Germany is the miracle growth country now leading the EU toward a new integration model where the eurozone will be divided into low-wage areas confined to Southern and Eastern Europe and higher wage one for the northwest core nations. However, within Germany there is a blood wage segment that Belgium exposed because it is concerned about unfair competition. Apparently, Germany has around seven to eight million East European and other immigrant workers earning less than five euro per hour and are not covered by social insurance programs in violation of EU labor laws.

Supported by France and the Netherlands, the Belgian government and the EU Commission have alleged that Germany's "mini-jobs" undermines EU competition rules because it has essentially created a “Maquiladora” enclave within its borders. Employing immigrant workers in what Belgium charges is a ‘mini-job’ regime, German companies are paying less than one-fourth of what the average worker earns doing the exact same job in other northern countries – 3 euro for the immigrant worker in Germany versus 12 euro for the Belgian worker. Moreover, the German companies do not pay into a pension system, thus saving an estimated 450 euro per month per worker. In short, Germany has created blood wage conditions within its own borders, just as Greece has using immigrant workers.

According to Belgian officials, the EU Commission must consider Germany’s blood wage conditions for the seven to eight million workers as a violation of EU social union. Although Belgium, France and the Netherlands are focused on the issue of unfair competition from Germany and not on the blood wage issue, the net result is that Germany is now exposed as the EU core country dominating the eurozone with its policies that violate EU rules. Because Germany has no minimum wage law, it can practice “blood wages” policies, forcing some companies in other parts of the EU to consider moving there. Contrary to the prevailing view outside of Germany, one-third of the workers earn well below 8.5 euro, which the OECD considers poverty level.

Considering there is global competition to lower labor costs, what is so alarming about ‘blood wage’ policies that Germany is practicing? The German model is appealing not only to periphery countries in the EU, but core countries like the UK are just as interested, because they too must remain competitive.    

BLOOD WAGES IN THE USA
The US has a history as a slave-owing country, followed by segregation with the blood wages of African-American workers. In addition, it also has a history of immigrant labor that was subjected to blood wages, as well as poor whites in the coal mines of West Virginia. Labor laws and social safety nets from the New Deal to the Great Society (1930s-1960s) corrected some of the abuses in the workplace, but migrant Latin American workers remained in the blood-wage category.

Today, the US has layers of working class groups, from well-paid elite workers to migrant day laborers and women working in the homes of the wealthy. The agricultural workers in the southwest, California and Florida present solid cases of blood wages, as it has been documented in articles and books over the past decades. Blood wages in the US must be examined in the larger context of declining wages for the entire working class in the past three decades, especially in the past five years amid the recession. While the total pay package of the average US manager has risen 40 times in the last two decades, wages have risen 50% less than the rate of productivity amid a period when high tech, the integration of the former Communist bloc countries and China’s miracle economic growth have created unprecedented wealth that is highly concentrated.

One reason immense wealth is concentrated, is because a substantial part of the labor force has lapse into the blood ages category. The US commercial agricultural industry, construction, and domestic labor represent a part of the “blood wage” labor force that officials know about but turn a blind eye. Many immigrant workers from Latin America work in below minimum wage conditions and live in deplorable conditions that are not much different than those I have described above for workers in Europe, Africa and Asia.

One would find it incredible that Mexican day laborers in Florida’s orange groves live in conditions no different than the Pakistani and Bangladeshi strawberry workers in southern Greece or the South African miners near Johannesburg. Nor would people believe that workers in the US are threatened with violence by their employers if they try to leave, no different than immigrant workers whose passport is taken away from them by their employers in Dubai. Involuntary servitude (forced labor) is not something that the average person within the US or outside of it would associate with America.

Despite the 14 Amendment that forbids forced unpaid labor, blood wages are a reality in America, from sweatshops to agricultural fields, from a welding factory in Tulsa, Oklahoma, employing Indian immigrants forced to pay recruiting fees and live in conditions not very different from those of other forced laborers in Africa, Asia and Europe. Refusing to pay these workers from India is easy because they are beholden to the employer who controls their fate. While sexual trafficking is something that one may associate with southern Asia and Africa, it is alive and well within the US. Prostitution and strip clubs are indicative of a thriving industry based on blood wages in the US, no different from Cyprus infamous for the sexual trafficking industry linked to Russian and Middle Eastern money laundering operations.

If the US is hardly an exception to the rule of blood wages, can there be much hope for smaller and weaker countries?  From the New Deal to the end of the Vietnam War, the US built a society on a solid working class and a thriving middle class. The alarming situation of blood wage conditions is what it represents, not that it is large enough at this stage to pose a threat. “Blood wage” is a fringe segment of the working class that shows how far the core nation of capitalism has drifted to create Third World enclaves within its border. Where this is headed is uncertain, but it is hardly encouraging for the US and for the rest of the world.

CONCLUSIONS
Industrial capitalism created blood wages in the class that social scientists know as "lumpenproletariat". The conditions for this underclass of the population is brilliantly described by Henry Mayhew, LONDON LABOUR AND THE LONDON POOR, Franz Fanon, WRETCHED OF THE EARTH, and others in articles and books about workers around the world.In the early 21st century as capitalism has evolved very rapidly after the integration of Eurasia and all of Asia into the capitalist system, business competition and the race for maximizing profits is much more intense than ever. The 'blood wage' phenomenon is symptomatic of globalization and it is a continuation of the lumpenproletariat class that Mayhew described in the mid-19th century, and Fanon in the mid-20th century.

Globalization may have created more millionaires, but it has done so precisely because it created a blood wage labor force, along with a weakened middle class. Unless pluralistic societies recapture some equilibrium among the various social classes, these social conditions will have political consequences that will mean the transition from the existing weakened democracy to a system of authoritarianism posing as democratic.