Second General Assembly 2009: Resolution No. 2

Transforming the Economy by Building a Militant Struggle to Progressively Increase the Share of Wages in National Income

NTUI notes:

That current global crisis has been the result of the nearly two decades of uncontrolled financial liberalisation of the global economy,

That this phase of capitalist development has been led by an upward revision of the rate of profit,

That the increase in the rate of profit has resulted in an increase in the share of profit and a corresponding decline in the share of wages in national income

That the share of wages has declined almost continuously since 1975.

That the reduction in the share of wages in national income has been achieved through the restructuring of work and its devaluation,

That this has meant on the ground is an unmitigated, sustained and unrelenting attack on the organised section of the working class.

That, working hours, job insecurity and unemployment has all increased. Wages have declined in real terms. In some sectors, particularly the primary sector, wages have declined in nominal terms.

All of this has contributed to a relative decline in consumption of working people.

The NTUI notes that in India:

That, even in periods of relatively high growth such as the present, the rate of increase in wages has only been a fraction of the rate of economic growth. Wages have also grown at a rate lower than that of growth of productivity,

That the rate of growth of profit far exceeds the rate of growth of wages,

That income inequality is widening at a rapid pace as a result of the removal of the cap on executive pay, and downward pressure on wage of workers,

That in addition to a decline in wage share, capital resorts to predatory and illegal extraction by denying workers their legal entitlement – including Minimum Wages, Provident Fund, contributions under the Employment State Insurance scheme, gratuity, pension, etc.; and furthermore through the non-payment of overtime; and the employment of casual and contract workers in jobs of a perennial nature; employment of women workers at lower wages, the employment of child labour, etc.,

That there has been increasing integration of the Indian economy, with the global economy, over the past two decades,

That investment decisions have been left to the private sector with the state withdrawing from economic activity,

That the economy has become dependent on foreign investment for sustaining economic growth.

In the agriculture, manufacturing and services sectors the NTUI further notes:

That there is a sustained decline in investment in agriculture,

That this decline in investment in agriculture has resulted in a profound crisis in the Indian country side,

That agricultural output has stagnated and production of food grains has declined,

That India’s manufacturing sector has been dependent on import of technology except for the public sector and a very small segment of private sector and the model of dependent industrialisation has been extended in the last two decades.

That the lack of technological independence and the need for imported capital and intermediate goods, during a period of industrial expansion, means an increasing demand for foreign exchange,

That the growth of the service sector is based on low-end services and dependent on global demand, merely providing low-wage labour to the global supply chain.

In the foregoing context, the NTUI therefore understands:

That the expansion of the low-value added export oriented service sector locked in with global demand has become imperative to sustain the demand for foreign exchange of the other sectors of the economy,

That the integration of the manufacturing and service sectors with the WTO regime has reduced the available space to build indigenous capabilities, and made the economy further dependent on imports,

That with the lack of investment in the real economy the Indian ruling class is pursuing a strategy of economic growth based on the promotion of extractive industries that are being placed at the service of global capital,

That to sustain this expansion the state has been called upon to deliver vast tracts of land, including arable and forest lands, urban public lands and tracts of working class housing, to the private sector.

The present economic growth model affects people:

That this is contributing to the already severe pressure on land adding to the crisis in agriculture,

That the impact of this development is resulting in immiserisation of rural working people, and in particular the destruction of livelihoods of dalits and adivasis,

That investment in both manufacturing and services has been capital intensive and therefore job creation has not kept pace with growth leading to disproportionately large section of the working population remaining notionally dependent on the rural economy,

That there is a palpable impact on food availability, food security and food price inflation, affecting access to and consumption of food amongst both rural and urban working people,

That food price inflation is also directly affected by hoarding and other forms of commodity price manipulations alongside entirely inadequate and poorly implemented legislation to control market manipulation and,

That this uncontained pressure on the incomes of the working class has been accompanied by an unprecedented attack on both the rights to association and the rights to collective bargaining,

That the resultant employment crisis has led to declining minimum wage and increasing working hours

That, it is also contributing to irreversible environmental degradation.

The NTUI understands from the policies of the present UPA government:

That the following the defeat of the NDA, the first UPA government’s response to the immediate demands of working people, is necessary yet far from sufficient.

That while the incomes policy underlying the National Rural Employment Guarantee Act addresses some of the immediate demands of working people in rural areas and has resulted in some improvement in the conditions of the rural poor, the lack of proper implementation and enforcement has not resulted in the expected rise in rural purchasing power, and the concomitant push the urban wage has also been far below expectation,

That the programme for social protection has so far for the most part remained limited and unimplemented,

That the National Rural Health Mission (NRHM) is an exception and has been implemented but it has primarily institutionalised privatisation of health services,

That the Unorganised Workers’ Social Security Act, 2008 falls far short of the promise of universal social security and remains ineffective and unimplemented expect as a marginal anti-poverty programme,

That the programme of social protection has resulted in yielding areas of operation, to meet people’s needs, from the public sector to private capital,

That private capital is not in a position to cater to these basic needs of working people and provide necessary and requisite services.

That the public sector has abdicated its role and there is a complete absence, in many areas, of provision of basic services.

That, in order to provide stability and confidence to private capital, government is encouraging public-private partnerships in most areas if the economy which amounts to a sovereign subsidy in perpetuity to private capital,

That, the public sector have been placed at the service of the private sector, including multinational firms, where in the private sector has been allowed to grow at the expense of the public sector. This is particularly the case in such industries such as drugs and pharmaceuticals and electronics where publicly owned companies made substantial investment in research and development.

The NTUI notes from the present relationship between labour and capital:

That the reduction in personal income tax between fiscal years 2005 to 2010, to those in higher income groups, has been several times the net benefit that rural or urban working class households would gain directly or indirectly through incomes policy and social protection, thus contributing further to income inequality,

That the response of government, to the impact of the global crises, has been limited to a fiscal stimulus through the granting of tax concessions on manufactured consumption goods,

That, despite the government’s admission that the effect of the global crisis on the Indian economy has been minimal and has now been reversed, the tax concessions still remain,

That the Indian capitalist class extracts concessions from the state but does not return the benefits derived from the concession to the economy and the society and is unwilling to return the concessions it obtains for itself,

That the grant of concession through tax breaks, the cash injection into the economy through the sudden spurt in non-development government expenditure, particularly that of the defence bill and through the implementation of the Sixth Pay Commission, that denied benefits to Class IV employees, has not contributed to the creation of any augmentation of the productive capacity of the economy,

That in the absence of any sustained policy for investment in productive capacity the government is left to tinker with monetary policy in order to drive up investment,

That bank’s, especially public sector banks, have becoming more prudent as a result of the global crises and are therefore are more prudent in their lending practice,

That this has forced private capital to rely on relatively more expensive and short-term profit oriented foreign capital inflows,

That these short-term foreign capital flows are largely speculative and go mostly in stock market investments and the real estate market and therefore push up land and house prices in urban areas making it impossible for working people to access civilised housing,

That the dependence on short-term foreign capital inflows and the need to maintain the balance of payments position to pay for imports, leaves government with no choice but, to keep the value of the rupee in relation to other currencies low,

That the low value of the rupee makes the cost of all imported products high and high import prices of fuel and other essential and capital goods and therefore adds to the inflationary pressure,

That in the present phase the integration of the economy with the global economy has contributed significantly to inflation in the price of basic consumption goods.

That inflation in turn reduces the consumption capacity of working people,

That low purchasing power of working people reduces the demand for basic consumption goods,

That stagnant demand for basic consumption goods implies that economic growth can only be fuelled through export demand or the demand by the ruling class,

That the uncompetitive manufacturing and services sector makes exports an improbable avenue for generating the growth surplus,

That both through the integration with the WTO and the dependence on foreign capital inflows there is a considerable loss of national autonomy in economic policy,

The NTUI understands in a global context:

That the global response to the crisis has indicated the need to for shifting the global balance of power, away from developed countries to a more representative body, in favour of a larger group of countries, including those from the developing world,

That the raising the G-20 from a gathering of Finance Ministers to a Heads of Government Summit and by holding three summits in less than 12 months, is a clear indication of the need for this shift,

That this shift is welcome but it as yet continues to indicate that imperialist powers are not yet willing to share power democratically across the globe and allow the United Nations to play the prime role in regulating the global economy,
That the G-20 summits have however so far not resulted in any meaningful consensus on moving the rules that regulate the global economy away from neo-liberal policies of financial openness,

That though all G-20 countries accept that the crises was caused by uncontrolled and unregulated financial transactions there has been no consensus on a tax on financial transactions, which at any rate would be too little to late, or on regulating leave alone capping executive pay and bonuses,

That, debates led by China on the need to examine the need to move global currency setting away from the dollar to a more plural group of currencies has not been allowed to move forward,

That, attempts at extending the discussion towards breaching the neo-liberal consensus led by Brazil and China have had limited success,

That through these efforts the ILO has been brought into the G-20 discussions curbing the monopoly of the IMF-World Bank in the international policy debate,

That, the ‘Global Jobs Pact’ is the first yet very small step, mostly of a symbolic nature, in the right direction,

That India has been silent on global economic negotiations in so far as it is increasingly seeking to position itself not in opposition to imperialist powers but in relation to them in order to extract concession through its negotiating position,

In order to address the demands of the working class the NTUI resolves to build a sustained struggle:

That recognises the prime role of government as regulator of investment decisions,

That results in the increase in public investment in order to expand the production of basic consumption goods and build technological self-reliance in intermediate and capital goods,

That leads to extensive reform of the public sector including mechanisms for raising finance for the expansion of the public sector,

That expands public investment in all sectors to ensure the basic consumption goods are available to the working class at acceptable prices,

That ensures the upward revision of minimum wages based on the principle of need-based minimum wage, the linking of minimum wages to inflation and the non-payment of minimum wages to be a criminal offence,

That allows for stringent norms for the compulsory recognition of trade unions and the election of recognised unions through secret ballot,

That guarantees a system of social protection to provide universal social security to all working people, wherein the minimum social security benefit is financed entirely by the national exchequer,

That creates a global capital control regime and a democratic global financial regulatory regime,

That extends financial regulation to all financial institutions, including small, local credit and banking establishments,

That democratises production through land reform, the building of a cooperative movement and democracy at the work place,

That militates for rapidly increasing the wage share – through a stringent reform of the price mechanism and by expanding the share of working people in the national budget – so as to address poverty and income inequality, as also to build the purchasing power of the working class,

That transforms economic, political and social relations, within a framework of national autonomy, to drive growth and development and thereby meet the aspirations of working people.

That ensures that solidarity amongst the working people results in sustained regional and global cooperation that is mutually supportive and resists imperialism, through cooperation between developing economies, including and in particular, between India, Brazil, China, and South Africa,

That unites the trade union movement with the understanding that only militant, democratic and united trade union power can win the struggle for economic justice.

Proposer: Gautam Mody, Kamani Employees Union/ Maharashtra
Seconder: Chandrashekhar, Sanjha Mulazim Manch/ Punjab

15 December 2009