To build an incremental national struggle to win an indexed minimum wage and universal social security, in order to fight growing inequality and for advancing national development
The NTUI notes that
Resolution No 2 at its 2nd General Assembly, when calling for the building of a militant struggle to transform the economy to progressively increase the share of wages in national income, recognised that the present sharpness of attack on the working class is the result of an economic crisis that is a product of the nearly four decades of capitalist expansion under neoliberal economic policies.
The present global economic crisis is sharp, deep, and systemic. The crisis, that began as a crisis of private debt and the financial system, is no longer restricted to the private sector and has come out clearly as a crisis of the capitalist state and its debt.
The present crisis is marked by two features – first a crisis of credibility of the United States dollar, opening up a currency crisis; and second, a declining global economic hegemony of the United States – and these two markers together pose an unprecedented crisis of capital.
Under these circumstances, the United States, in its struggle to maintain its hegemony is more likely to look at unleashing aggressive wars much the way it has encouraged northern intervention in Libya and is aggressively seeking to isolate Iran.
As the European sovereign debt crisis looms and balance of force continues to be ranged against the south by the north, it makes the emergence of alternatives to the reserve currency unlikely in the immediate future.
This will not only further contribute to uncertainty in global recovery, but also disproportionately disadvantage southern countries who will pay a disproportionately high price for sharp fluctuations in exchange rates.
The experience of every crisis in the capitalist system over the past century has been that capital has displayed enormous resilience to re-draw rules each time, ensuring a tightening of the share of wages and an increase in the share of profits to offset the persistent tendency of the rate of profit to decline.
The persistent increase in the share of profits in relation to the share of wages is continually contributing to widening income disparities that have reached proportions unprecedented in over a century.
Economic recalibration of the wage share and profit share within Europe and North America has resulted in a sustained attack on social security systems.
There have been sharp reductions in government contribution to social security, further contributing to growing income disparities.
The attack on the working class in Europe is being carried forward by undermining democratically elected governments.
The relative loss of hegemony of the global north has resulted in dispersing power between countries of the north and the larger economies of the south and the shift in focus from the G7/8 to the G20 for consensus building.
The inability of the G20 to arrive at consensus on substantive issues is a display of the lack of willingness of countries of the G7 to accept sharing of power with southern nations.
The G20 November 2011 summit’s inability to arrive at a consensus on fiscal expansion to fuel growth while accepting national autonomy of southern nations in retaining or introducing capital controls and promoting tax based social protection programmes is a clear reflection of this.
This lack of global consensus on fiscal policy lowers the possibilities of a sustained global recovery.
In the absence of a consensus on global recovery, the United States and the dominant European economic powers continue to base the core of their strategies of ensuring economic recovery on the back of consumption in the global south.
This is manifested in the substantial pressure being brought to bear on the large growing southern economies to enter into preferential trading agreements with countries of the global north.
The pressure on India to enter into a Free Trade Agreement with the European Union is a clear manifestation of this.
The NTUI notes, in the Indian context, that
Clearer weakness is emerging in government’s economic growth policy.
Although, despite deceleration, service exports have been growing at a reasonable pace, they do not contribute significantly to growth as they continue to be dominated by low value added services. More importantly, deceleration in service exports , due to the weak economic recovery in developed western economies, particularly the USA, has meant that service sector exports are no longer in a position to offset a widening trade deficit in goods, resulting in a growing current account deficit, putting downward pressure on the rupee.
Manufacturing industry has not contributed to growth in any sustained manner and data over the last two years shows significant weakness in the sustained prospects of manufactured growth.
Manufacturing industry remains highly import dependent for both capital and intermediate goods especially in both high growth and export sectors.
Many low value added industries that are labour intensive like garments and other consumer products that have come to be part of the global supply chain are facing a decline in production due to decline in demand from the global north and have affected the working class disproportionately.
Manufacturing industry is contributing to the increasing trade imbalance.
Ostensibly in search of global markets, manufacturing industry is seeking capital import of intensive technologies that are labour displacing and in the case of energy and heavy industry, environmentally degrading.
Even at the highest end of manufacturing that involves the highest skill levels amongst workers, the share of wages in relation to the share of profits is declining.
The agriculture sector remains un-remunerative and unattractive with continuing decline in land under cultivation.
There is a trend of land under food grain cultivation being replaced by commercial crop cultivation.
Land under food grain cultivation has also declined due to the increase in demand of high protein food products.
In this environment in the absence of a clear government direction and support there is little possibility of an increase in investment in agriculture.
As a result of this there is a decline in the net availability of food grain.
The government has failed to bring forward legislation ensuring a universal public distribution system in order to meet the needs of the working class.
Stagnation in food grain availability has caused an unprecedented rise in food grain prices.
The presence of hoarding and speculation in food products is an added cause for high food prices.
Food price inflation has been pushed up further with the constant pressure from the upper peasantry to allow exports of essential food produce for higher rates of profit.
Price inflation has also been persistent due to high price of petroleum and related imports.
Despite a decline in the growth of manufacturing industry and decline in demand for manufactured goods, the prices of these goods has not come down.
Persistently high prices of manufactured goods are the result of cartelisation and price fixing in the product market.
Prices have further inflated as a result of integration with the global economy since domestic prices are beginning to mirror international prices that tend to be higher.
Unprecedented price inflation, particularly that of food prices, has eroded real incomes and has affected the working class disproportionately more than any other section of the working population.
This continued erosion of the real wage has caused a decline in the savings rate making the economy more dependent on foreign investment for financing growth.
Increased dependence on foreign investment contributes to increasing vulnerability of stable investment flows in view of the crises of capital in both Europe and North America.
The sharp fall in short-term term investment flows and the growing external payments deficit has already resulted in the devaluation of the Rupee by twenty-percent in the last three months.
The lowering in the value of the Rupee will make the cost of the government’s foreign debt more expensive and also raise the price of imports thereby contributing further to price inflation.
Government’s response to inflation has been limited to allowing the Reserve Bank of India to repeatedly raise interest rates.
Government has also sought to pose the opening of foreign direct investment in multi-brand retail as a mechanism to fight price inflation when in fact large corporate retail, including through FDI, would gravely undermine food security, create monopolies adversely affecting prices, cause enormous job loss and deepen the agrarian crisis.
Government has actively contributed to the erosion of real wages by maintaining a wage freeze on wages under the NREGA – for a clear twenty-four months from January 2009 to December 2010 – and thereby maintaining a downward pressure on the money floor wage.
This stands in violation of the commitment of government to maintain a real NREGA wage of Rs. 100 in the Union Budget 2009-10.
During this period the quality of delivery and the implementation of the NREGA have also declined.
Even the minimal provisions of social security envisaged under the Unorganised Workers Sector Social Security Act 2008 have remained virtually unimplemented.
The provision of domiciliary health services under the Rashtriya Swasthya Bima Yojna has been hamstrung by the public-private mode.
All of these together have contributed to a decline in the rate of growth of consumption.
Government has continued to place primary responsibility on private capital for investment, job creation and economic growth.
Private capital continues to receive concession both in fiscal terms and in the form of access to opportunities.
The public sector both in manufacturing and in the services has been further placed for providing sheltered market access to capital for private expansion.
The public sector banks and insurance corporations have been placed at the disposal of private capital that has been built on fleeting venture capital especially in infrastructure development under public-private partnership wherein debt, financed by public sector banks, in proportion to private equity is rising.
The private sector has proved to be inadequate in meeting the infrastructure, and especially energy, needs of the economy thereby placing impediments to growth.
The largest share of deposits with public sector banks is that of the working class and hence the savings of the working class are being placed at the disposal of the private sector whose bad loans are on the increase.
Recent efforts of introducing private and foreign capital into pension funds, and further deregulation of the provident fund system are further efforts to put working class savings and retirement benefits at the disposal of the private sector.
Recent efforts of loosely defining public interest and freeing land acquisition, outside of such public interest, open to private acquisition will open the way for placing land and other natural resources, with at best government regulation limited to defining land use, at the disposal of the private sector.
A section of the peasantry has actively sought an alliance with the capitalist class in seeking at least market prices for their land under acquisition and to dampen wages of agricultural and other rural workers.
Alongside this the upper peasantry has sought to draw in the rural proletariat in alliance with itself to resist land acquisition so as to bargain and negotiate with the state and with capital a profitable exit from agriculture.
While in areas where land holdings are smaller, including areas where land reforms have taken place or have traditionally small holdings, small and marginal peasants who are already impoverished by the deep agricultural crisis are being pushed off their lands, joining the scores of the landless losing their livelihoods.
Agriculture does not have the capacity to create new jobs; hence the landless and those dispossessed of their lands are joining the ever growing numbers of unemployed and underemployed workers in the country.
The sharp increase in surplus workers is contributing to large scale migration from rural areas to semi-urban and urban areas.
Recent data indicates that as many as a 100 million workers, or upwards of one-fifth of the working population, migrates at one time or another each year for however short a period in search of employment.
This enormous underemployed and unemployed section of the working population has no choice but to migrate in search for work, offering itself in desperation at rates significantly below the floor wage and therefore bidding down the floor wage.
The largest numbers of new jobs are being created under the contract labour system.
One in three workers in both manufacturing and services, including in the public sector and government, is employed under the contract system.
The disparity in pay and benefits between regular workers and contract workers is significant.
The creation of a substantial discriminated and insecure workforce at an organised workplace is being used by employers to maintain a sustained attack on the right to freedom of association and erode collective bargaining rights.
The executive and the judiciary are complicit by their sheer failure to enforce statutes that exist.
Opening up large domains of the economic sphere that are natural monopolies to private capital has opened the floodgates for corruption as sections of private capital elbow their way into new avenues seeking extraordinary profits.
NTUI General Assembly Resolution No 2 needs to be advanced over 2012 and 2013 for which the NTUI resolves to build:
A sustained struggle for:
Starting 2nd February 2012 for the stringent implementation of the NREGA and a coordinated militant struggle to win an inflation indexed NREGA wage based on recommendations of the 15th ILC and subsequent Supreme Court judgements in order to ensure that this is a step towards a national struggle for the stringent and rigorous implementation of an indexed minimum wage;
Curbing inflation by building the public distribution system, price controls for essential commodities including diesel and CNG, ensuring comprehensive food security, imposing export restrictions on food grains and food products, and introducing a stringent anti-trust regulation in manufactured goods and services;
Opposing all forms of wage discrimination and inequality, including discrimination against contract workers, women workers including honorary work; and fighting for equal pay for equal work, and lifting the upper ceiling under the Bonus Act;
Winning universal social security and in particular universal access to health, pension benefit and defending provident funds;
Defending the right to freedom of association, the right to collective bargaining, and putting an end to unfair labour practices.
A united front to:
Advance the cooperative movement and defend the public sector to meet the needs of the working class, ensure self-reliant national development;
Fight corruption through a redressing of grievances and the enforcement of tax and corporate laws;
Further transparency in economic policy making and full disclosure by government; and demandfor informed debate by legislature, of all economic actions and international treaties involving an impact in the lives of the working class.
Build a national consensus on Democratic Industrialisation.
Proposer: Gautam Mody, Kamani Empoloyees’ Union
Seconder: Pradeep Roy, All West Bengal Field Sales Representatives’ Union
8 January 2012, Kolkata