Employment
A society which
does not assure a fair distribution of Money
puts it’s economic growth in a extremely vulnerable situation.
Practically
since I remember caring about politics I remember the unfair vision of our businessmen and politicians in what concerns the distribution of the capital generated
by economic growth.
Let’s start
with employment. In the last year, right in the apex of the sovereign debt
crisis 30 top managers of Portuguese economic groups have achieved yearly
incomes superior to 1 million euros. How
hard can the life of professional manager be to justify a salary up to 170
times bigger of a minimum wage. The answer
could be that the wealthiness generated by his activity is 170 times bigger
than the value created by a simple worker but then again most of these companies
do not retribute their gains to base workers and basically the economic growth
of such company usually, reflects a growing number of workers with the same
limited social rights and over again near minimum wages. This approach though, is quite simple and one
could easily categorise it as just another socialist critic to the capitalist system
and it’s tendency to overrule democracy by lobbyism. The truth is the
capitalism has created many problems but also has given us the overwhelming advantages
of fast technological development which has simply eliminated many of the basic
needs of human beings at little cost. In capitalist democracies unlike some
capitalist dictatures, hunger for example seems to have become an almost rare
site, because the amounts of waste food,
generated by modern agricultural technics and food processing are more than
enough to feed the poor and less fortunate, at least for the moment.
- To cut
with the theories a little bit, the other day a relative of mine was telling me
about an old lady going to the food donation bank to get rice for her chicken,
something which in the times of Salazar would be absolutely unthinkable,
because real subnutrition was happening a bit everywhere in the country. This
was the time when stilling a chicken would almost surely get a person into jail.
-Anyway the
point I really wanted to make clear in this little article, to which I have
such clear statement in the beginning as starting point for this discussion is,
if you don’t increase the income of base workers as your own business is
growing you are basically accumulating capital in less hands. If you don’t give
people legal working contracts that can give them a little stability in life
for sure they will not be able to plan life. Higher paid people will tend to
spend more on superficial investment, like for example paying more 10000 for an
apartment to have an ocean view. Base workers will not create expectations and
will live a life of no expectations and then again spend on commodities that
can ease their lack of future, like technology which value decays exponentially
with time. That’s pretty much what I saw
happening in my country for the past 15 years. Work has become more and more
precarious with top growing business giving the worst examples, multinationals
were not demanded to make the diference and the local business just followed
these patterns with the ambition to get big. People did not stabilize their lives
and spent money unwisely, capital was either concentrating on banks or
corporations which found a way to secure it outside borders and investing in
other growing economies. The people which did manage, with outstanding effort, to start buying a house or invested in small
businesses lost the ability to pay their debts to banks, banks started
collecting large amounts of real estate from faulty payers, a huge amount of
imobiliary became suddenly available decreasing prices both for renting and
buying real estate. A domino effect of
value decrease, reduced the value of stock market acting companies and the rest you already know.
-Another
view of the importance of legal contracting, is the way how precarious work can
totally distort the effective value of a business and totally misdirect further
investment.
In a global
economy where companies can relocate themselves within months, it’s unwise to
support investment in companies which do not give workers legal working
contracts with a duration compatible with the investment agreed which local
governments and authorities no matter how many new jobs can be created.
A company
can stay in a country for 10 years contracting minimum stable jobs and make
subcontracts with 10, 15 or 20 satellite smaller companies, giving by
themselves thousands of workers precarious working conditions, impoverishing the country and moving on to another country with tragic social consequences.
In the past
years we have assisted a number of
companies abandoning the country after
our government giving away millions of euros in facilitated financing, tax
benefits all in the name of jobs which were never solid and gave few people the
chance to start something of their own.
What was
the global balance of this political ingenuity? State bankrupcy. But more than
that we are now even more dependent of this economical make up to be able to maintain
interest rates wich can allow us to simply survive as a country.
For this
reason a country wich does not put effort in assuring that for every working
hour there is a well defined value, a contract and a paycheck receipt, is a
country which is selling it’s working force on sale squeezing money out of borders
every day.
I would
risk to say that it’s more vital in a country to assure legal contracting than
to avoid tax evasion to a certain point.
Luís Pontes
