ON 17 June HSBC bank announced that it would be cutting 3,500 jobs in
the UK. 500 of these jobs would be ‘off-shored’ to HSBC’s call centres in
India and Malaysia. Although HSBC said that these changes were to
"improve the productivity of the group’s UK banking operations"
this does not imply that the bank is running into trouble. Last year HSBC
made a record pre-tax profit of £6.8 billion.
Jane James
BT are planning to transfer 2,200 jobs abroad over the coming year. The
Communications Workers Union (CWU) points out that BT will still charge UK
customers 55p a minute but pay Indian workers just 80p-90p an hour.
There is nothing new in companies shifting work to countries where
workers are paid lower wages and endure worse conditions but until
recently this was confined to manufacturing industry, where jobs are still
haemorrhaging.
The Transport and General Workers’ Union (TGWU) reports that
manufacturing jobs are being lost at a rate of more than 140,000 a year
with the risk of a "manufacturing-free zone" within a
generation.
Now we are seeing service sector and white collar jobs such as
accountancy, computing and telecommuications jobs being off-shored to low
wage economies. Up to 200,000 office-based jobs in the UK could be at
risk. In the US, off-shoring is predicted to increase by 40% by 2015,
resulting in 3.4 million jobs going abroad.
Driving down of wages
THE OVERRIDING reasons for companies to offshore are lower wage costs.
Cost savings of 40%-60% are possible for a company sending call-centre
work to India, while labour costs in India make up one-third of overall
costs compared to 50%-70% in the UK.
Big business is waging an assault on workers worldwide to drive down
wages and conditions.
Digby Jones, CBI Director General (the bosses’ organisation), has
warned that if Britain does not keep a ‘flexible workforce’ then jobs
would go abroad. Last year, 700 Npower call centre workers in Tyneside
agreed, by a two-to-one majority, to accept pay cuts of up to 25% in order
to keep their jobs.
Thousands of jobs are currently being off-shored to India where we are
told that India’s telecom and computer sector is booming, creating new and
better-paid jobs for skilled workers and developing India’s economy.
There are between 75,000 and 115,000 call centre workers in India,
mostly in retail banking, insurance and telecommunications.
Some multinationals (such as General Electric and British Airways)
moved much of their back office processing there in the mid-1990s
encouraged by successive Indian governments who have promoted
liberalisation and privatisation. Such measures include tax breaks and
financial incentives to companies who relocate, along with labour market
‘de-regulation’.
Labour laws have been ‘relaxed’, some to allow women to work at night.
Wages are 70%-80% lower than in the UK or US, often as little as
£1,000-£2,000 a year.
Workers face the same stress as call centre workers here but with
additional pressures. Having proved they have a high standard in speaking
English they are taught to refine their accents and given Western names
and identities.
Evening and night work is the norm in order to match peak day-time
hours in the West. Working eight to ten hours a day, six days a week, is
common and we are not aware of any unionisation in call centres.
Globalisation
DURING THE 1980s and 1990s multinational companies, faced with
declining profitability, went in search of the cheapest source of raw
materials, finance and labour costs. This usually led to the relocation of
jobs to countries where production costs were lower.
Globalisation – the closer integration of the capitalist world economy
– has led to bigger profits for big business and a driving down of pay and
conditions for workers in both the advanced capitalist and underdeveloped
countries. New technology has facilitated relocation especially in the
service sector. Telecommunications and computerisation allow workers in
any country to access phones and computers worldwide.
Fujio Mitarai the boss of Canon in Japan believes that any process
where labour makes up more than 5% of production costs can be relocated to
a low-wage economy.
In other words, the more labour intensive the job the bigger profits a
company can reap by slashing wages – bearing out Karl Marx who argued that
labour creates value and that profit is the ‘surplus value’ ie the unpaid
wages of the working class.
If companies could get away with paying workers in Britain £1 an hour
and make no contribution towards the welfare state then they would not
need to offshore jobs.
However, the potential strength of the working class in the ACCs
(Advanced Capitalist Countries) would respond to such drastic attacks with
protests and unrest which, at this stage, capitalism sees no need to
trigger. But without a determined struggle from the trade unions, workers’
conditions will be further eroded.
Trade unions response
THE UNIONS affected most by off-shoring have all launched campaigns to
save their members jobs. The CWU has a "Pink Elephant Campaign"
to "stop the UK job stampede". They argue that as "BT is a
UK company, it should support the UK economy and jobs."
Tony Woodley, general secretary of the TGWU, in condemning off-shoring
calls on the government to protect UK jobs. He argues that other
governments such as in France and the US have recently stepped in to save
firms and jobs from going abroad. He quotes Schršder (the German
Chancellor) who recently described off-shoring as "unpatriotic".
The French government has saved the engineering firm Alstom from being
sold abroad, with the loss of 8,500 jobs, by a £1.4 billion rescue.
The US government has implemented selective short-term import controls
to stem US jobs going abroad, while Democrat presidential hopeful John
Kerry has promised tax credits to companies who take on new workers in
industries losing jobs to outsourcing.
Woodley calls on employers to act "responsibly"; for tax and
aid policies which ‘reward the good employer investor and punish the bad’.
While the trade unions need to work out a coherent strategy to prevent
jobs from being off-shored, such reformist and protectionist demands are
not the solution.
Protectionism within the capitalism economy, whether in the form of
subsidies to firms who want to shift production and jobs abroad or import
controls to reduce competition from abroad, are no real solution to the
loss of jobs.
Such arguments can lead to nationalist demands – that workers should
join with ‘their’ government to save British jobs and against governments
and workers in other countries. The impression could be given that bosses
and workers have joint interests. This could lead to job losses being
blamed on workers in India or Malaysia, thereby playing into the hands of
the bosses.
While there is an inherent tendency within capitalism towards
globalisation in times of crisis capitalism will turn to protectionism.
Capitalists in many countries resorted to protectionist trade wars
during the devastating 1930s world economic recession but that only
exaccerbated the crisis.
Even the biggest multinationals rely on the state within the country
they are based in order to defend their profits and existence in the face
of economic crises, mass movements and social unrest.
Governments could be forced to use state intervention to prop up firms
or introduce import controls in order to defend the national economy and
stem revolutionary movements.
Under capitalism neither the ‘free-market’ nor protectionism is a way
out for the working class and exploited masses.
When protectionist measures are introduced their aim is to protect the
profits and markets of big business and not for the benefit of ordinary
workers. In fact, workers would pay more for imported goods that are
restricted as they are forced to buy dearer home produced goods.
Nevertheless, where government subsidies or rescues result from a
struggle by workers to save their jobs this would be seen as a partial
victory. Socialists would then argue that rather than give tax income to
big business, the firm should be nationalised under democratic workers’
control.
Furthermore, we would go beyond nationalising one or two companies and
raise the demand for a planned economy, not only within one country but
pointing out the necessity for an international socialist revolution so
that the resources and production worldwide could be planned.
Likewise, in a period of heightened struggle where workers took over
their workplaces and forced them to be nationalised, socialists would
support measures that would protect workers’ jobs.
We could not support cut-price and often heavily subsidised imports,
nor cheap labour, undermining workers involved in strikes – hence our
opposition to cheap coal imports during the miners’ strike of 1984-85.
At all times it would be essential to link up with workers abroad to
organise united struggles.
The future of off-shoring
HOWEVER, THE future for off-shoring is not plain sailing. Newer
technology needing fewer but more skilled workers has convinced some
companies to bring production back to their home countries.
Problems have arisen in India with poor infrastructure, political
instability and high staff turnover. Moreover, 50 million workers
participated in a trade union-called one-day general strike last year
against neo-liberalism and privatisation.
With a strong tradition of trade union organisation and recent
combativity, the Indian working class will inevitably wage struggles
against the bosses of these ‘new’ industries.
Companies based in the ACCs will find it easier to pull out of
off-shored countries where workers have less or no rights to redundancy
agreements and pay.
Workers of the world unite
EVERY JOB under attack has to be defended while not allowing the bosses
to divide workers on national lines. BT workers, whether in Manchester or
Mumbai, are exploited by the same employer.
Trade unionists need to find out where all the employees of their
company are employed and if appropriate which subsidiary employs them in
order to make links and struggle together against the same boss.
We are witnessing a race to the bottom on pay and conditions and only a
united struggle of workers worldwide can halt the attacks. However, as
long as capitalism exists workers will be faced with exploitation and
endless struggles which is why we must argue for a socialist alternative
while fighting against all injustice here and now.
We demand:-
- Defend every job under attack.
- Open the companies’ accounts to see where the profits have gone.
- Nationalise, don’t subsidise, companies planning cuts and
closures. - A campaign to unionise workers at risk from off-shoring.
- Oppose the transfer of work between factories and workplaces
(whether in Britain or elsewhere) without the agreement of the
threatened workforce. - Trade unions to make links with workers employed by their company
in other countries. - Organise solidarity action with workers in struggle in other
countries.
