The dark art of deal leaks. Also: CEO-to-worker pay ratios skyrocket.
Read the original here: Pre-Marketing: Deal leakage
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The dark art of deal leaks. Also: CEO-to-worker pay ratios skyrocket.
Read the original here: Pre-Marketing: Deal leakage
The committee responsible for overseeing Qatar’s 2022 World Cup says a new “workers’ charter” will ensure worker welfare standards in the Gulf state.
See the article here: Charter for Qatar World Cup workers
Labour party look at proposal to encourage workers to participate directly in management
The Government is considering a fundamental review of company law to allow workers to sit on boards. Mrs Barbara Castle, Secretary for Employment and Productivity (DEP), has written to employers and the Trades Union Congress (TUC) telling them of her interest in plans to encourage workers to participate directly in management. A confidential document from the DEP on industrial democracy admits that very large issues are involved, adding that they “could involve a fundamental review of company law and of the accountability of management to employees.”
The TUC yesterday set up a special working party to clarify union attitudes. Sir Sidney Greene, TUC president, is to take the chair and among other members will be Mr Jack Jones of the Transport and General Workers’ Union. The Government paper poses a series of questions about the appointment and authority of workers as directors. The TUC will give Mrs Castle a general reply before embarking on a detailed study.
TUC leaders are expected to tell the DEP that worker directors must be appointed only by the unions and not by shareholders nor by direct election from the shop floor. They believe there need be no conflict of interest between such directors and their union colleagues during plant-level wage bargaining. TUC staff point out that ordinary directors have to juggle their institutional interests and those of shareholders.
Mrs Castle draws attention to West Germany where companies have two boards – one composed of working managers and the other taking a supervisory role. The TUC has not decided whether it wants a similar set-up here and, until it does, it will find difficulty in saying whether it wants full-time voting positions on boards, union officials sitting on a part-time basis, or rank and file workers attending board meetings as advisers.
In the public sector at least, the TUC wants a much more radical approach to the whole question of worker representation. It will tell the Government that union nominees should come from the industry and the region in which they serve as part-time members, and that they should be allowed to continue to hold rank and file union positions during their terms of office.
Shinzo Abe is doing what many economists have been calling for in the US and Europe: a comprehensive programme entailing monetary, fiscal, and structural policie
Japanese prime minister Shinzo Abe’s programme for his country’s economic recovery has led to a surge in domestic confidence. But to what extent can “Abenomics” claim credit?
Interestingly, a closer look at Japan’s performance over the past decade suggests little reason for persistent bearish sentiment. Indeed, in terms of growth of output per employed worker, Japan has done quite well since the turn of the century. With a shrinking labour force, the standard estimate for Japan in 2012 – that is, before Abenomics – had output per employed worker growing by 3.08% year on year. That is considerably more robust than in the United States, where output per worker grew by just 0.37% last year, and much stronger than in Germany, where it shrank by 0.25%.
Nonetheless, as many Japanese rightly sense, Abenomics can only help the country’s recovery. Abe is doing what many economists (including me) have been calling for in the US and Europe: a comprehensive programme entailing monetary, fiscal, and structural policies. Abe likens this approach to holding three arrows – taken alone, each can be bent; taken together, none can.
The new governor of the Bank of Japan, Haruhiko Kuroda, comes with a wealth of experience gained in the finance ministry, and then as president of the Asian Development Bank. During the East Asia crisis of the late 1990s, he saw firsthand the failure of the conventional wisdom pushed by the US Treasury and the International Monetary Fund. Not wedded to central bankers’ obsolete doctrines, he has made a commitment to reverse Japan’s chronic deflation, setting an inflation target of 2%.
Deflation increases the real (inflation-adjusted) debt burden, as well as the real interest rate. Though there is little evidence of the importance of small changes in real interest rates, the effect of even mild deflation on real debt, year after year, can be significant.
Kuroda’s stance has already weakened the yen’s exchange rate, making Japanese goods more competitive. This simply reflects the reality of monetary policy interdependence: if the US Federal Reserve’s policy of so-called quantitative easing weakens the dollar, others have to respond to prevent undue appreciation of their currencies. Someday, we might achieve closer global monetary-policy coordination; for now, however, it made sense for Japan to respond, albeit belatedly, to developments elsewhere.
Monetary policy would have been more effective in the US had more attention been devoted to credit blockages – for example, many homeowners’ refinancing problems, even at lower interest rates, or small and medium-size enterprises’ lack of access to financing. Japan’s monetary policy, one hopes, will focus on such critical issues.
But Abe has two more arrows in his policy quiver. Critics who argue that fiscal stimulus in Japan failed in the past – leading only to squandered investment in useless infrastructure – make two mistakes. First, there is the counterfactual case: how would Japan’s economy have performed in the absence of fiscal stimulus? Given the magnitude of the contraction in credit supply following the financial crisis of the late 1990s, it is no surprise that government spending failed to restore growth. Matters would have been much worse without the spending; as it was, unemployment never surpassed 5.8%, and, in throes of the global financial crisis, it peaked at 5.5%. Second, anyone visiting Japan recognises the benefits of its infrastructure investments (America could learn a valuable lesson here).
The real challenge will be in designing the third arrow, what Abe refers to as “growth”. This includes policies aimed at restructuring the economy, improving productivity, and increasing labour-force participation, especially by women.
Some talk about “deregulation” – a word that has rightly fallen into disrepute following the global financial crisis. In fact, it would be a mistake for Japan to roll back its environmental regulations, or its health and safety regulations.
What is needed is the right regulation. In some areas, more active government involvement will be needed to ensure more effective competition. But many areas in which reform is needed, such as hiring practices, require change in private-sector conventions, not government regulations. Abe can only set the tone, not dictate outcomes. For example, he has asked firms to increase their workers’ wages, and many firms are planning to provide a larger bonus than usual at the end of the fiscal year in March.
Government efforts to increase productivity in the service sector probably will be particularly important. For example, Japan is in a good position to exploit synergies between an improved healthcare sector and its world-class manufacturing capabilities, in the development of medical instrumentation.
Family policies, together with changes in corporate labour practices, can reinforce changing mores, leading to greater (and more effective) female workforce participation. While Japanese students rank high in international comparisons, a widespread lack of command of English, the lingua franca of international commerce and science, puts Japan at a disadvantage in the global marketplace. Further investments in research and education are likely to pay high dividends.
There is every reason to believe that Japan’s strategy for rejuvenating its economy will succeed: the country benefits from strong institutions, has a well-educated labour force with superb technical skills and design sensibilities, and is located in the world’s most (only?) dynamic region. It suffers from less inequality than many advanced industrial countries (though more than Canada and the northern European countries), and it has had a longer-standing commitment to environment preservation.
If the comprehensive agenda that Abe has laid out is executed well, today’s growing confidence will be vindicated. Indeed, Japan could become one of the few rays of light in an otherwise gloomy advanced-country landscape.
23% of Britain’s major employers keep workers on contracts that deny them the same conditions as regular employees
Almost a quarter of Britain’s major employers now recruit staff on zero-hours contracts that keep workers on standby and deny them regular hours.
According to government estimates, 23% of employers with more than 100 staff have adopted the flexible contract terms for at least some staff following a surge in the number of public sector services contracted out to private providers.
Labour MPs and unions have branded the contracts as a throwback to the Victorian era and say they are being used by employers trying to avoid agency-worker regulations, which entitle agency staff to the same basic terms and conditions as permanent employees after 12 weeks.
The 2011 Workplace Employment Relations Study found that the proportion of firms with some workers on zero-hours contracts rose from 11% in 2004 to 23% in 2011.
The contracts have long been popular with retailers including Sainsbury’s, Poundland and Abercrombie & Fitch. Large charities and public sector organisations have also adopted the arrangements.
A sharp rise last year in the number of zero-hours contracts in the health sector was blamed by unions on the government’s privatisation of essential services, including radiology, which meant professional workers on such contracts found themselves tied to rotas that could be changed at 24 hours’ notice.
Employers say the contracts provide flexibility for workers juggling family commitments.
However, many of the jobs advertised demand a high degree of knowledge and onerous responsibilities.
In a recent case the security firm G4S advertised for custody detention officers to work alongside Lincolnshire police officers on zero-hours contracts to oversee the safety of people held in custody and, if necessary, restrain them.
Steve Evans, a spokesman for the Police Federation, said the deal, part of a partnership agreement signed last year, was an attempt to apply a business model to policing that kept a reserve group of workers employed on an ad-hoc basis.
He said: “This can obviously create some dangers. Things can change rapidly in a custody environment – legislation, training, equipment and policies and an individual’s experience and knowledge could quickly become out of date if they are not regularly working in the environment.”
Shadow policing minister David Hanson said: “The nature of the job is that the police can suddenly be busy handling a public order situation, so what checks are in the system to ensure staff are available?
“Any public-private partnerships must pass tough tests on value for money, on resilience and security, on transparency and accountability, and most of all on public trust. The public need to trust that policing is being done in the interests of justice, not the corporate balance sheet.”
G4S said zero-hours contracts allowed the company “to provide additional resilience to forces, and ensure they can respond effectively to peaks and troughs in demand, typically coinciding with major sporting events or music festivals”.
It said: “This pool of officers, less than 10% of the total number we employ, receive the same training as their colleagues on full-time contracts and their skills are kept up to date through regular work and training.
The Labour Research Department, which studies employment trends, said there were occasions when a no-strings-attached arrangement might suit workers, “such as sometimes occurs with bank nursing or supply teaching. But it is increasingly being used to replace proper secure employment with its associated guaranteed level of paid work and other benefits.”
It added: “Even worse, it can be applied in such a way that a worker, in order to have any chance of getting paid work, is obliged to be available for work at the whim of the employer and so cannot commit themselves to any other employment.”
Concerns that zero-hours contracts amount to an attack on the terms and conditions of low paid and younger workers were compounded yesterday by speculation that the government plans to cut the minimum wage following a review by the Low Pay Commission.
No 10 has hinted that the current minimum wage of £6.19 an hour could be cut alongside cuts in welfare benefits to ease the burden on employers while the economic situation remains weak.
Not everyone on a zero-hours contract sits at home waiting for a call. Some employees can access a rota and sign up for as many hours as they want or are allowed. And once on the rota, the hours are secure. But either way, life on a zero-hours contract is a lottery.
It is shocking that figures show nearly a quarter of big employers use them. It is yet another signal, if one were needed, that the recession is hitting the low paid and the young more than we like to imagine.
In the catering and cleaning industries there are some employers who insist workers pay for their training and uniforms, and wait for a call to work on this ever more popular type of flexible contract.
It is not quite that bad in the newly privatised sections of the health and police services. The training is paid for, along with the uniform. But workers still cannot know from one day to the next how much work they will have.
Without an obligation to employ someone for even a minimum number of hours, employers have effectively indentured a member of staff, especially in areas of high unemployment. All the obligations are on one side of the contract. Yes, times are tough, but employers are going too far.
An ex-US beef firm worker sues chef Jamie Oliver, ABC News and a food blogger, saying their use of the term “pink slime” helped get him sacked.
See the article here: Chef Oliver sued for ‘pink slime’
Taiwan’s migrant worker policy sparks debate
Read more: Taiwan debates migrant workers
Human rights tribunal hears allegations of abuse and low pay against clothing companies that supply high street stores
Workers making clothes that end up in the stores of the biggest names on the British high street have testified to a shocking regime of abuse, threats and poverty pay. Many workers in Indian factories earn so little that an entire month’s wages would not buy a single item they produce.
Physical and verbal abuse is rife, while female workers who fail to meet impossible targets say they are berated, called “dogs and donkeys”, and told to “go and die”. Many workers who toil long hours in an attempt to support their families on poverty wages claim they are cheated out of their dues by their employers.
The allegations, which will be of concern to household names including Gap, H&M, Next and Walmart, were made at a human rights tribunal in the southern Indian city of Bengaluru. The “national people’s tribunal for living wages and decent working conditions for garment workers” was convened to investigate widespread human rights abuses in the garment industry.
Sakamma, a 42-year-old mother-of-two working for Gap supplier Texport in Bengaluru, told the tribunal she earned just 22p an hour and that when she finished at the factory she had to work as a domestic help to top up her wages.
“It hurts us to be paid so little. I have to do this and they sell one piece of clothing for more than I get paid in a month,” she said. “We cannot eat nutritious food. We don’t have a good life, we live in pain for the rest of our life and die in pain.
“Low wages is the main reason. How much burden can a woman take? Husband, children, house and factory work – can we manage all these with such a meagre salary? So we are caught up in the debt trap. Is there no solution for our problem?”
Like many of the women giving evidence, she said workers faced abuse if they failed to meet quotas. “The targets are too high. They want 150 pieces an hour. When we can’t meet the targets, the abuse starts. There is too much pressure; it is like torture. We can’t take breaks or drink water or go to the toilet. The supervisors are on our backs all the time,” she said. “They call us donkey, owl [a creature associated with evil], dog and insult us … make us stand in front of everyone, tell us to go and die.”
According to Indian government figures, the national textile industry is worth £35bn a year and employs 35 million people. Garment exports are worth £21bn. But human rights campaigners accuse international brands of subcontracting to firms paying poverty wages to the people who make their clothes.
A spokesperson for Texport denied setting unachievable targets and said abuse of workers was not tolerated. Gap said: “These allegations describe conduct that violates our Code of Vendor Conduct. We are looking into this matter and will take appropriate action with our vendors, depending on our findings.”
The Asia Floor Wage Alliance (AFWA), which organised the tribunal, wants companies to pay a minimum living wage of 12,096 rupees (£138) a month, equivalent to 58p an hour. But the tribunal heard that a factory supplying Gap and Next paid as little as 26p an hour. The supplier – Pearl Global, based in Gurgaon, in Haryana state – admits it has underpaid workers for overtime and has required them to work illegally long hours, but said it had now repaid them. It insists it complies with the legal minimum wage, though evidence submitted to the tribunal by one worker indicated that he was paid below the legal rate.
Pearl Global was first exposed by the Observer for rights abuses in 2010 when it traded as House of Pearl, but it has continued to operate and supply the brands under its new name.
Many workers at the tribunal claimed that long hours and poor health and safety conditions made them ill. One worker said that a colleague was electrocuted by a bare wire last year in a factory supplying Gap. Ashok Kumar Singh, 29, who works for Gap supplier Modelama Exports in Gurgaon, gave evidence that he was paid just 5,097 rupees a month (24.6p an hour), although the legal minimum rate for his job was 5,300 rupees.
He said workers were taught to lie to auditors sent to check up on working conditions. “Before a visit they gather all the workers around and tell them what to say. If we don’t say what we are told, we are fired,” he said, adding that some workers had been dismissed after complaining to auditors about conditions.
Workers who failed to meet targets were verbally and physically abused, he said. “They call us motherfuckers and push us around and some people get slapped by supervisors and managers,” he said. “I feel the companies look at the workers like enemies.”
The tribunal, in front of an international jury, took evidence in person from workers and will consider written evidence compiled at regional hearings.
Gap and Next were accused of using suppliers that paid below the minimum legal wage, paid below the legal rate for overtime, and required workers to work excessive and illegal overtime. They also faced allegations, along with H&M and Walmart, of using suppliers that verbally abused staff, while there were allegations of physical abuse against a supplier for Gap, H&M and Walmart.
H&M sent representatives to the tribunal and insisted it was committed to improving working conditions. “The social and environmental responsibility that we take puts H&M’s sustainability work ahead of the field in the fashion industry worldwide,” said a spokeswoman. “We clearly see these issues as industry problems that need to be addressed at industry level by government, suppliers, trade unions, workers, buyers, etc.”
A spokesman for Next said: “Next identified that Pearl Global was falling well short of the group’s standard codes of practice in 2010. As a result, Next ceased using this supplier in 2011, after making a determined effort to bring about major change at Pearl Global. Next last reviewed the supplier in July, when the decision to remain disengaged from it was maintained. Next has no plans to recommence manufacturing at Pearl Global.” Anannya Bhattacharjee, international co-ordinator for the AFWA, told the tribunal that despite the recession the garment industry continued to bring in profits. She said workers continued to suffer “shocking, inhuman conditions” and were being paid poverty wages. “Nothing can be more important than a decent living wage for workers working day and night to clothe the world.”.
Peter Betzel, head of Ikea Germany, apologises for the flat-pack furniture company’s use of prison labour in the 70s and 80s
It has become a retail byword for affordable, functional furniture: plain, cheerful items with a certain Nordic wholesomeness about them that millions of consumers the world over can’t seem to resist.
But on Friday Ikea became associated with something darker when it admitted that at least some of its cupboards, chairs and other household products were produced by East German prisoners incarcerated for their political beliefs.
A roomful of angry former GDR prisoners first watched – and then started to vent decades worth of anger – as a squirming Peter Betzel formally apologised for using prison labour in the 1970s and 1980s.
“We regret wholeheartedly that this happened,” said Betzel, head of Ikea Germany, after an independent report by auditors Ernst and Young confirmed that Ikea managers knew of the practice.
“It is not and never was acceptable to Ikea that it should be selling products made by political prisoners and I would like to express my deepest regret for this to the victims and their families”.
The company insists that nothing comparable goes on today. But already questions of compensation are being raised that could cost the company dear, not to mention the reputational damage of being seen to profit from people who were fighting for freedom.
Alexander Arnold was one such. He was sent to prison at 22 for “distributing anti-communist propaganda” – handing out flyers containing poems by Bertolt Brecht and Hermann Hesse. He says he still has nightmares about the isolation cell where he was sent if he failed to keep up with the heavy work load. Arnold made parts for office chairs.
“By the end of my 11-month sentence, I knew every part of the process,” he said. “From the rollers on the feet to the spine of the chair”. He was also well aware that he and his fellow prisoners were working for a major western European company, none other than the Swedish flat-pack furniture giant, Ikea. “It was no secret,” he said. “Their name was on the boxes which the products were packed into and the prison guards didn’t keep it a secret from us. Everyone knew. I am relieved that this is finally coming to light,” said Arnold, 51. “I’m glad that Ikea is taking responsibility but I’m sorry it took someone other than Ikea to bring this to light”.
Arnold recalled how he and fellow workers had been set productivity targets. “Each day we worked what amounted to two and a half working days of that of a normal worker on the outside,” he said. “If we slipped to below 80% of the target set, that’s when they’d throw you in the isolation cell, for 10 days at a time”.
The Ernst and Young report said that while Ikea had had a policy of visiting production facilities to control working processes, access to East German suppliers had been restricted. Dieter Ott, 49, a former prisoner from Naunburg who worked on a punch press making parts for Ikea cupboards and doors, asked why Ikea had not questioned why it was not allowed to visit workers.
“Did you not suspect something? And after all, you were working with a country that was separated from Sweden by a hulking great wall. Surely that should have given you reason enough to ask if you should have been working with East German suppliers?”
Anita Gossler, 79, who was sent to Hoheneck prison for her resistance to the regime and who described how her three-month old baby was taken from her, asked Betzel if Ikea could offer assurances that it was no longer using political prisoners in other parts of the world, particularly in China, where considerable quantities of furniture products are made. “How can you guarantee that in a place like China you really know what’s going on in the factories?”
Betzel said the company had had a strict system of checks and balances in place since 2000. “We now have a very well organised control system with well over 1,000 control checks being carried out every year.” The company said it had received tipoffs that it had been using forced labour, but had taken insufficient action against the claims.
“We took steps to ensure that prisoners were not used in production, but it’s now clear to us that these were not decisive enough,” Betzel added. Gossler, who as a prisoner made sheets, aprons and table cloths for companies other than Ikea including leading west German clothing and household catalogues, welcomed the company’s announcement that it planned to donate funds to research projects on forced labour in the former GDR.
“There were many companies involved in this practice,” she said. “And finally they should all be named and shamed. Ikea has put its head above the parapet and admitted its guilt but there are plenty of others who should also be approached for compensation.”