Economic Highlights
New Delhi, 27 November 2009
Rich, Bad &
Ugly
TIME TO EMPOWER
WORKERS
By Shivaji Sarkar
“Richest 40 add 65 per cent to their
wealth over the year. But the poor continue to pay inflation tax”, screams a
newspaper headline. The number of billionaires in the country almost doubled to
52 in a year which saw the world going through the worst recession in 80 years.
That is the paradox. The world-over
the rich are becoming richer and the poor are being marginalized. While the
rich go on adding to their wealth, the poor are losing their capacity to buy
the bare necessities as food prices rise by almost 15 per cent (14.55 per cent
as per in a year and 55 per cent since March). Inflation does not impact the
rich, but it further impoverishes the poor. Larger the number of poor means
less they have the capacity to bargain or earn in terms of wages. The loss of
the poor is the direct benefit of the rich. They get cheap labour and can
further add to their wealth.
The stark reality is that the 40 rich
Indians are all industrialists. They have replaced the maharajas and nizams,
who were counted among the world’s richest. Maharajas were thriving on the toil
of the poor, it is often said, and the 40 rich are industrious people. This is half
truth if not untruth. While these and many others of their tribe thrive, those
working in their establishments are suffering wage cuts and job losses. This only
testifies what Karl Marx had said: that the
rich could become rich exploiting the poor. Are we going back to re-enact Water
Babies of the 17th and 18th centuries?
For an Indian, it is a dilemma –
whether to celebrate the achievements of the rich or mourn over the five- lakh
job losses as per official statistics during the period the country’s 40 rich
add almost three-fourth more to their wealth. This is also the period when many
poor workers, not just debt-ridden farmers, committed suicide after having lost
their jobs even in the national capital – Delhi.
There is a stark similarity with the US – the trend is alike as
disparity grows there. The Lehman Brothers and AIG scandals have robbed
millions of people in America
of their lifetime savings and pension payments. Officially now 12.5 per cent or
37 million people in the US
live below the poverty line (though the line at $ 21203 a year family income
may be higher by Indian standards).
The situation in the US is
worsening. “My guess is poverty is going to go up from around 12.5 per cent
now by about half percentage point to 13 per cent,” said Rebecca Blank, a senior
fellow at the Brookings Institution in Washington.
“The main driving factor is the rising unemployment.”
During
the recent visit of Prime Minister Manmohan Singh, US
President Barack Obama expressed the hope, “Indian investments would create
jobs in the US”.
Has the wheel taken a full circle or is it another ruse of the rich to deprive
the poor nations of the opportunity to invest their wealth in their own
countries? The
situation in Europe is also on similar patterns
but there the rich are continuing to grow richer.
Sadly, the condition in India is not
seemingly improving. The policy makers have to be cautious. Tata and Reliance
are investing in loss-making units in degenerating European economies raising
huge debt. It serves one purpose. The workers in the West agree to work at poor
wages while the condition at home also becomes conducive for keeping the wages
low at the threat of throwing people out of jobs. In the process they add more
personal wealth.
This is how the rich are making huge
money while the common man is getting impoverished or, at best, holding on to
his low income. Increase in inequality appears to be inevitable. The workers of
England were impoverished in
the 19th century to release investment in factories of Manchester. This is seemingly being repeated
in the 21st century. The wolf of recession has helped the rich further reduce
the cost on wages. So while the common man is denied of even the subsistence
wages, large companies shamelessly make huge profits.
It pays to keep the people poor. The
poorest grumble but do not protest. They are more concerned about their hunger
and have little time to look at the way they are being deprived. Surely, this
cannot be the model for development, either for India or the world. The Arjun Sengupta
report says that 77 per cent of Indians subsist on Rs 20 a day. Thus, we have
the Maoists who are not fighting for the cause of the poor but the ruse has
helped them find support among them and disturb peace in a wide stretch of the country.
Disparity cannot be the model for
development. If the rich want to grow richer the system would not prevent that.
But what was true in the 19th century – maintaining low wages -
cannot be panacea in the21st century. Though the industry may be
making hey-day due to the weakening of the labour movements across the world,
it should be viewed as a temporary relief. Indeed, some workers have started
uniting and raising their voice once again demanding “floor wages” – euphemism
for just and equitable wages and sharing of profits with the workers. It is at
a nascent stage.
If their voice is not heard, it
would not be very long when the world may witness resurgence of trade unionism.
Industries need to learn that low wages prevent the workers from consuming
goods. It results in more production and low demand. In the end it ultimately
cuts on their earnings as some manufacturers are now experiencing.
Clearly, it is time to consider
empowering the workers particularly in this country, which is at the threshold
of taking over the global leadership. The model of rising inequality with
alleviation of poverty is unlikely to work. If the corporate and their owners
want to grow they would have to do so by paying just and adequate wages. ‘Hire
and fire’ cannot be the solution to jack up profits. Being rich is not bad. But
they would also have to come up with a model so that all those around them –
the workers – also become rich to sustain them. Less the disparity, higher
would not only be the growth but also the “index of happiness”. Would the
Indian rich take the lead? ---INFA
(Copyright,
India News and Feature Alliance)
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