Austerity and ‘Hire and Fire’ Policies Activate Workers


As far as problems such as shrinking employment opportunities, joblessness and job loss due to the brutal methods of hiring and firing by corporations, the differences between the developing and developed countries are becoming thinner.

Current data showed no improvement in the employment front even in so-called developed countries like Britain, whose Office for National Statistics revealed that the unemployment rate rose to 5.6% in the three months to June, up from 5.5% in the first quarter. The number of people in work fell by 63,000 to 31.03 million in the quarter to June compared with the previous quarter. There were 1.85 million unemployed people at the end of June, 25,000 more than in the first three months of the year.

Last year, a study for the UK-based Prince’s Trust charity claimed that three quarters of a million young people in the UK felt that they had nothing to live for, and “a third of long-term unemployed young people have contemplated taking their own lives.” Young people aged 15-24 were the group, which have been badly hit by unemployment in most countries since the global economic downturn in 2008. Western Europe had the highest average youth unemployment rate in 2013 at 21.7% of the economically active population aged 15-24. Living the life of unemployed in the younger age is a state of wretched drudgery.

In the developing nations, the condition is much worse. For example, in South Africa, unemployment had been a major problem for more than two decades. From the first democratic elections in 1994, roughly 25% of the labor force were consistently unemployed. However, poverty among the employed is also a severe problem which the ruling groups in South Africa are less concerned about.

In the name of tackling the financial crisis, governments in both developing and developed countries have been pursuing severe austerity policies which hit the working poor very hard. The numbers of people who have two or three different jobs but who still cannot make ends meet have increased in an unprecedented manner.

In European Union countries, the problem of long-term unemployment is becoming acute. Currently, among 19 million jobless people in Europe, more than half have had no jobs for the last year, and over 15% have not had a job for more than four years.

The information technology (IT) industry, which provides employment in the countries of Asia, including India, follows various policies of firing their employees. In July 2014, in India, Tata Consultancy Services (TCS) handed “pink slips” to 2,574 employees in bulk. The company’s decision drew outrage from IT workers and trade unions. Unsurprisingly, to further corporate capital accumulation, TCS planned to fire thousands of IT workers while preparing to hire a large number new recruits. In companies like IBM, employees were always under threat of getting the pink slip. And, in some other companies like Accenture, the firing rate was 15%. Citing various reasons like checking educational background, previous employment, employee performance in work, background check, projects requirement, etc., the companies fire their employees in a cruel manner. Work pressure is also very high in IT companies while job conditions are very poor.

In many countries, governments are silent spectators and do not intervene to stop corporations’ ruthless hire-and-fire practices. In India, the government has introduced many labor reforms that would trigger further hire and fire of workers by the corporates unilaterally. The governments’ labor law amendments would loosen the existing strict hire-and-fire rules. According to the amendments, a factory with fewer than 300 workers could lay off workers without government permission, changing the current rule which requires approval for layoffs for factories employing 100 workers or more.

The National Convention of Workers May 26 in New Delhi drew up a joint platform of all the Central Trade Unions of the country, along with independent national federations of all sectors and service establishments, opposed the government’s labor reforms. The convention’s Declaration dealt at length with “anti worker, anti-people and pro-corporate actions of the present Government at the Centre in pursuance of the policy of globalization.” It condemned the government for “amending all labor laws to empower the employers with unfettered rights to ‘hire and fire’ and stripping the workers and trade unions of all their rights and benefits.”

Not only the trade unions, but all sections of society in India fear allowing unlimited Foreign Direct investment in strategic sectors like railways, defense and financial sector, because it would endanger job security end destroy new employment opportunities.

The Delhi Convention called upon Indian trade unions and working people, irrespective of affiliations, to unite and make the countrywide General Strike a massive success on Sept. 2, 2015.

Globally, the overall official figures indicate that over 7% of the economically active population is now unemployed and neo-liberalism [which promotes free-market principles] tends to aggravate the situation much further. The global workers’ resistance could only save the working people from the murderous policies of the fire-and-hire companies and the austerity policies of the corporate-backed, power-wielding ruling elites.

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

From The Progressive Populist, September 15, 2015

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