Job Loss as Capital Offensive


Historically speaking, we have now more unequal world. In this world, according to Oxfam’s report-2017, eight men own the same wealth as 3.6 billion poor people. One of the means by which a very few big corporations are amassing huge wealth is through drastic cuts in labor costs. So the economic growth under neoliberalism produces unprecedented inequality, along with a “jobless growth” or “job loss growth.”

The corporations, in their drive for profiteering and capital accumulation, are always pursuing more and more cost-reductions measures. Reducing labor cost is the viable means to expand their corporate capital empire.

We are witnessing the incessant retrenchment drive of corporations across the world. In Asia, many IT companies are reducing more than 50% of their current workforce. Such inhuman retrenchment, with thousands of employees losing their jobs, is happening in all sectors, including manufacturing, services, banking, etc. The state-owned public sector is also encouraged to pursue retrenchment. This makes life very much harder for the working people.

South Korean corporations have invested a huge amount, $35.25 billion, abroad. Last year, Korea’s net investment outflow was $24.65 billion. Due to this huge outflow, it was estimated that about 370,000 jobs vanished. This is happening thanks to the inherent profit-seeking attitude of corporate capital. In Korea, cumulative employment losses from net investment outflows in the past five years amount to about 1.36 million.

In the beginning of this year, the world’s largest hard disk producer, Seagate, with operations in many Asian countries, including Thailand and Malaysia, announced the shutdown of its manufacturing plant in Suzhou, in China, and laying off of about 2,200 employees.

Last year, global banks like Goldman Sachs, Barclays, etc., operating in Asia had retrenched many finance professionals and technologists and it was reported that they couldn’t find employment in the finance sector and were struggling to get new employment.

In May this year, the South China Morning Post carried a news item revealing that a Foxconn factory, which manufactures electronics, reduced its employee strength from 110,000 to 50,000, reducing its labor costs by introducing robots.

From July to September 2016, Larsen and Toubro Group, the largest construction company in India, cut 14,000 jobs, amounting to 11% of its workforce.

If any corporation announced that it was undergoing “restructuring,” that would be a warning sign that a certain number of jobs would suddenly cease to exist and a certain number of workers would be retrenched.

Many companies indulged in “disguised retrenchments,” which means that the companies were terminating employees without taking necessary legal responsibilities.

In July 2017, Nestle announced it had retrenched “a small number” of its employees in Singapore. What were they offering for retrenched employees? Nestle said they would engage “an experienced outplacement agency to assist with personalized one-on-one career coaching and counseling” and arrange “expert support” in resume and social media profile creation and render “support to help find new employment”.

The employees who were retrenched might have been working for the companies for 15 or 20 years. Suddenly, they are told that they needn’t come back any more. By doing disguised retrenchment, companies manage to avoid treating the layoff as a retrenchment and deny fair benefits for the retrenched workers.

The layoffs at Nestle Singapore showed how the job market in many South Asian countries is shrinking. In Singapore, according to the latest figures from the Ministry of Manpower (MOM), redundancies came around 4,000 in the first quarter of 2017 in many sectors, like manufacturing, services, construction, etc,.The report also revealed that the professionals, managers, executives and technicians remained “over-represented among those laid off,” accounting for 71%.

It is a common sense that those employees who are not competent and productive could be at the risk of being laid off. But many other factors contribute to job loss.

Many companies are retrenching senior staff and engage junior and mid-ranked staff to replace them. Junior staffers are more desirable because their labor is much cheaper.

For those working in corporate banking, retrenchments happen in many ways. If a bank decides not to focus on certain core areas, or cut costs by doing away with its Asian business or specific investment banking, the concerned employees are in danger of losing jobs. For example, Citigroup closed its “Alternative Credit Program,” which allowed a select group of clients to make high-stakes bets on currency markets without going through the bank’s normal procedures to manage risk, after one of the firms made a disastrous bet on Swiss francs.

Loss of jobs-syndrome was further strengthened by the Trump’s policies that do not want Asian workers, including Indians, “grabbing” Americans’ jobs.

The guaranteed jobs and the jobs with social security have become important issues. Increasing joblessness has also increased suicide attempts. From 2000 to 2011, joblessness caused suicide deaths of about 45,000 people annually, according to a study published in the journal, Lancet Psychiatry.

The corporate media are hiding the real facts behind these job-loss phenomena. They are treacherously depicting it as mental status of individuals and suggest ways to deal with it mentally. “How to cope with job loss, ” and “Why job loss is a real threat and what to do if you are dismissed” were some of the headlines of the stories in magazines and newspapers. A columnist’s advice for the job-seekers is this: “Treat looking for a job like a job”.

But the issue has to be addressed with totality. Scarcity of jobs is in large part the result of neoliberal offensive of the corporate capital with the patronage of the States.

N. Gunasekaran is a political activist and writer based in Chennai, India.

From The Progressive Populist, September 15, 2017

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