Earnings Up! What’s the Catch?

Earnings are rising faster than inflation, said the UK’s Coalition government triumphantly this week, a claim repeated by the BBC:

“Growth in average pay for UK workers overtook inflation for the first time in five years, according to data from the Office for National Statistics.

Wages excluding bonuses rose by 1.3% in the year to September, beating the 1.2% Consumer Prices Index inflation rate.

Including bonuses, earnings rose by 1% from a year earlier, the ONS said.

The ONS also said that UK unemployment in the July-to-September period was down 115,000 on the previous quarter, cutting the total to 1.96 million.

Pay has lagged inflation since the global financial crisis, but in recent months earnings have been rising just as the pace of price growth slows.”*

It sounds wonderful, but the reality is nowhere near as rosy.

Firstly, the Office for National Statistics (ONS) considers only the wages of full-time employees. Most adults in the UK are not full-time employees. The ONS’s survey-based figures for July to September 2014 suggest that there were 19.203 million full-time employees. At the same time, there were a total of 38.865 million men aged 16-64 and women aged 16-59 living in the UK. These are the age ranges still used to describe the population of ‘working age’, although women’s state pension age is already 62 and is rising to 65 by 2018. From October 2020 neither men nor women will be able to claim a state pension until they are 66, if current legislation persists.

Already, the figures for July to September show that 1.119 million over-65s were officially working.

The median earnings for 19.203 million full-time employees between July and September were £481 a week gross, equivalent to £25,012 a year. This was exactly the same as in the previous quarter, April to June. For full-time earners in the lowest 10%, their median wage was £250 a week, £13,000 a year, exactly the same as in the previous four quarters. A slight improvement was reported for full-time workers across the lowest 25% of earnings, up to £334 a week from £327, an increase of 2.1%, but £334 a week is equivalent to only £17,368 a year.

The self-employed are mysterious elephants rampaging about the room. Their numbers surged from 4.141 million in June 2013 to 4.523 million a year later, expansion of 9.2%. Their median earnings are not yet known because they have nearly ten months from the end of the tax year, April 5th, to submit earnings figures to Her Majesty’s Revenue and Customs, and in any case they are excluded from ONS’s earnings data.

The 4.523 million — almost one for every four full-time employees — include successful entrepreneurs, of course, but they also represent a surplus reserve, there to cover peak labour requirements without having to receive holiday pay, or sick pay, or any pay at all when they are not required.

Part-time employees are also a big part of the labour force, 6.824 million between July to September, one to every 2.8 full-timers. Not all want to be part-time, but they cannot find full-time work. Another 123,000 people are unpaid workers in family businesses, and a further 123,000 are on government employment and training schemes.

Far from reflecting rising prosperity, the earnings and employment data show a nation with many more people than well-paid jobs, a nation which is low-paid in relation to demands on incomes. Income tax has been eased for the lower paid, and mortgage rates for home-buyers remain low, but council tax and the costs of privatised utilities — electricity, gas, water, telecoms — squeeze disposable incomes hard. Add in the rents demanded of tenants, and childcare costs for working families with children, and travel costs for commuters on our privatised railways, and the picture is blacker still.

Privatisations have amplified income inequalities which show no sign of easing. and which dim the prospects of today’s generation of children.

*’Pay growth beats inflation as jobless total falls, ONS says’, BBC News business, November 11th 2014

Employment and wages data from the Office for National Statistics, the EARN and EMP data series, June to September 2014

Pat Dodd Racher

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Free trade and exploitation: the distress of Guatemala

No population can survive without food, therefore it is a strong argument that governments should prioritise secure food supplies.

Free-trade food policies are based on the belief that food should come from areas of the world that can produce it at the lowest immediate cost. Detrimentally for our future, the lowest immediate cost takes no account of environmental degradation, or fossil energy or water depletion, or the livelihoods of small-scale farmers who are affected by globalised food chains. The proponents of free trade generally claim that tariff barriers and financial support schemes which protect farmers in the affluent world mean that farmers in ‘developing’ countries cannot compete successfully, despite their lower labour costs. Yet small-scale farmers in Africa, Latin America and Asia are the last to benefit from free trade. The cash benefits go to large farmers and corporations, for planting crops for export rather than food crops for local consumption.

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Guatemala’s volcanic soils have the potential to feed the 14.4 million population, but much of the best land is foreign-owned, and revenues leave the country.

Guatemala in Central America is a stunning country, both for its memorable peoples and landscapes, and for the corruption of its governments down the years. The indigenous peoples continue to suffer from domination by a tiny number of foreign corporations and their local political enforcers.

I spent six weeks in Guatemala in autumn 2007, staying with a family and helping out at a UK-funded school, Escuela Proyecto La Esperanza, in Jocotenango. On Friday October 12th 2007 I was part of a small group travelling to the Mayan ruins at Tikal, in the forests of the Petén. We had to cross Guatemala City, which I remember for ubiquitous McDonalds; Esso, Shell and Texaco filling stations; and high-rise American hotels, encircled by tin-roofed shacks, unfriendly streets, potholes, rubbish and guns.

We followed the CA9 highway north-east out of Guatemala City to El Progreso, Rio Hondo and Quirigua, where there are intricate Maya carvings. Quirigua is in the Motagua river valley, which reaches the Caribbean at Puerto Barrios, Guatemala’s only significant port on the Caribbean.

Most of the valley land is owned by corporations, with fruit plantations and horticultural crops for export, the latter protected by acre upon acre of plastic. The bananas are plastic-protected too, encased in perforated blue plastic to protect against rain, dust and wind. What a lot of plastic to replace when the oil runs out. At Quirigua the plantations belong to Chiquita Brands — descendent of the infamous United Fruit Company — and to Del Monte.

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Banana plantation in the Motagua valley, owned by Chiquita Brands International of the USA.

North from the Motagua valley through the Petén to the ruined Maya city of Tikal, we passed a succession of shiny new evangelical protestant churches (financed from the USA), set in decrepit villages. The farms visible from the road were either under two hectares or vast, containing much unused land. Most of the land north of the little town of Frontera, where the Lago de Izabal narrows into the Caribbean-bound Rio Dulce, is controlled by a handful of powerful families. They used to run cattle, tended by local labourers, but since the road was hard-surfaced in the years around 2000, the labourers have migrated away, to the slums of Guatemala City and as illegals to the USA.

Staying overnight in Finca Ixobel, a country guesthouse owned by an American widow whose Guatemalteco husband was assassinated by a death squad in the ‘civil war’ between 1960 and 1996, in which some 200,000 people died or ‘disappeared’, I read in Revue magazine for June 2007 that over a fifth of the population, 21%, have to exist on less than $1 (59p) a day, and well over half the people, 58%, subsist on less than $2 (£1.18) a day.

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Forest has reclaimed the massive stone monuments of Tikal.

The Petén is, according to Pablo, who works as a guide in Tikal, the world’s fifth largest forest reserve, and the biggest in Central America. The reserve also functions as a drugs highway. Drug runners are constantly building air strips deep in the forest for the lucrative narcotrafico, which finances grand villas behind high walls, and four-by-fours with tinted windows. Drugs are more important to the local economy than tourism, despite the presence of amazing Mayan monuments. “Each year around 150,000 visitors come to Tikal,” said Pablo. Increasingly, they fly in to Flores Airport, to avoid the hazards to life and limb in Guatemala City. Flores Airport is bringing ‘development’ to the Petén, shopping malls plonked incongruously in the rural landscape. Pablo was pessimistic. He said that poverty is increasing because subsistence farmers do not have enough land. The landlords are opposed to any process of land reform, even though their own land may lie idle. Now they are looking forward to a golden era of biofuels, a scenario in which small farmers, campesinos, do not feature. Fewer families can afford to send their children to school, and in Pablo’s view the illiteracy rate was escalating again, above the low point of 40% estimated in 2002.

In Guatemala the law of the jugular applies. There are courts, and prisons, but legal procedures are slow and uncertain, and extra-judicial killings commonplace.

The apparatus of the state in Guatemala, such as exists, is deployed to protect existing power structures. The welfare of the people comes way down this agenda: politicians and businessmen – the same people, often at the same times – have little interest in working to abolish hunger among the indigenous peoples, to provide affordable healthcare, or to create a thriving countryside where families can produce enough food for themselves and their neighbourhoods.

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Flimsy superstructures are no match for torrential rainstorms. Much housing is in tin shacks, often precariously sited on slopes.

The indigenous Maya believed that man was merely part of the natural order on Earth, a natural order that needed to remain in balance. When their practice departed calamitously from this tidy theory, their civilisation declined. The Maya loved mathematics and astronomy. Even today, Mayan children in school are fascinated by numbers and are skilful in arithmetic. Over a thousand years ago, the results of the Mayan linkage of religion with astronomy was causing catastrophe, as their huge, astronomically-aligned temples and monuments, in socially and occupationally complex cities, absorbed too much of their collective energy, and demanded too much food, fuel and construction materials from the rural hinterlands. The forest was felled.

As resources dwindled, Mayan tribes fought intense wars to try and seize as much as they could of the remaining food and water. The knock-out blow at Tikal was a 30-year drought around 1000AD. The occupants of Tikal walked away, and many of their descendants – still poverty-stricken — live in the western highlands of Guatemala, on steep, infertile land which the European families and the multinational corporations have not wanted.

The relationship between trees and human survival is too often overlooked, ignored. Jared Diamond, in Collapse: how societies choose to fail or survive[i] points out that forests

“….function as the world’s major air filter removing carbon monoxide and other air pollutants, and forests and their soils are a major sink for carbon, with the result that deforestation is an important driving force behind global warming by decreasing that carbon sink. Water transpiration from trees returns water to the atmosphere, so that deforestation tends to cause diminished rainfall and increased desertification. Trees retain water in the soil and keep it moist. They protect the land surface against landslides, erosion, and sediment runoff into streams. Some forests, notably tropical rainforests, hold the major portion of an ecosystem’s nutrients, so that logging and carting the logs away tends to leave the cleared land infertile.”

— Diamond 2005, p.469 in 2006 Penguin edition

This is what happened at Tikal. and in exploited lands all over the world, from Norse Greenland to Haiti in the Caribbean, from Easter Island in the Pacific to Rwanda in Africa. Deforestation ends societies, even civilisations.

Once free of human interference, the jungle returned to Tikal and clothed the monuments, which slept undisturbed for centuries, while the Mayans were conquered and later dragged unwillingly into a capitalist economy.

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Culture and tradition often count for a lot more than consumer purchases. The blouses, huipils, are home-woven, and each village has its own designs.

Mayans are relatively indifferent to consumer culture, a ‘failing’ which annoys foreign entrepreneurs:

“An enormous disadvantage for this country is that the Indians [the Mayans] won’t work more than just enough to fill their basic needs, and these are very few. The only way to make [a Mayan] work is to advance him money, then he can be forced to work. Very often, they run off, but they are caught and punished very severely.”

— from the story of a German who emigrated to Guatemala in 1892, told in Daniel Wilkinson’s Silence on the Mountain: Stories of Terror, Betrayal and Forgetting in Guatemala, p.38.[ii]

This German immigrant, Friedrich Endler, ran a coffee plantation. The plantations struggled to find enough labour, so the government instituted a form of slavery, the labour draft. Daniel Wilkinson explains this system in Silence on the Mountain, a moving and tragic analysis of Guatemala in the 20th century:

“The labor drafts. Upon the request of a plantation owner, the governors of each department would round up a work gang of fifty to one hundred Indians and send them to work on the plantation. An 1894 law provided Indians with one way to escape this form of forced recruitment: become an indebted worker for a plantation.”

— Silence on the Mountain p.76-77.

The pass laws, so hated in South Africa later in the 20th century, already existed in Guatemala:

 “ ‘We were slaves because of the law of Ubico,’ recalled the next elderly peasant we talked to. He was referring to President Jorge Ubico, who had governed the country from 1930 to 1944, and the ‘slavery’ he described was not debt peonage but the vagrancy laws that had replaced it. ‘We had to carry a booklet, like an identity card, which showed what plantation we worked in and how many hours we had worked that year. If you didn’t carry it, the government could jail you and make you work without pay’.”

Silence on the Mountain p.97.

Land is at the heart of the unhappy history of Guatemala. Immigrants with access to capital claimed it. Government was for them, not for the Mayans, and there was no question of prioritising rights for the indigenous peoples above rights for plantation owners to obtain as much profit as possible. The landowners have benefited financially from colonisation and its successor, free trade, because they have deliberately marginalised the indigenous peoples.

by Pat Dodd Racher

 

[i] London and New York: Allen Lane and Viking Penguin, 2005.

[ii] Silence on the Mountain was published in 2004 by Duke University Press.