First published on inteldaily.com July 2011
In the Third World having a job has never guaranteed relief from poverty, in fact the lot of the working poor is often little better than that of those who are reduced to begging. I personally saw an example of this some fifteen years ago in India: stone breakers, often women, are so poorly paid that they are sometimes obliged to borrow money from their employers. To these poor peasants this was a good thing, as they supposed that the employer would always keep them employed so that they could pay back the money they owed. The sad reality though is that they were being scammed by a thoroughly ruthless employer, who should have been paying at least double their wages rather than lending them more money at interest.
At the time the idea of people in the First World, here in the ‘west’ being employed and in poverty seemed utterly ridiculous. Of course, in countries such as India and China many people are climbing out of absolute poverty, however beyond the headlines of economic growth there are still many millions who still work for such paltry sums that they can barely feed themselves. No surprise there says you, but what is surprising is the beginnings of a return to the depravation and poverty that afflicted the majority of ‘western’ workers up until well into the twentieth century.
I know a great number of people who are lucky enough to still be in full-time employment, myself included, who are finding it increasingly difficult to make ends meet. Here in Ireland most people on average or lower than average incomes have had their pay either frozen of reduced during the last three years. Meanwhile the cost of everything (with the exception of electronic goods) has gone up, fuel for cars and heating being a particular cause for concern. While the price of oil continues to remain high the baseline costs of producing most goods is adversely affected, eventually leading to higher prices for consumers.
Many people find themselves coming to the end of the week or the month with nothing left from their pay cheques, or worse again – a growing overdraft or credit card balance. What is more worrying still is the fact that for most people in this situation there is little or no assistance available from the government. Meanwhile many of the unemployed, in countries with generous welfare schemes (Ireland for instance), are actually far better off than many of those who are working hard and paying tax. It is only right that help should be available to those with no income, however the weight of this burden coupled with a ‘get out of jail free card’ for the super rich means that the employed working class are being drained of their savings and any disposable income.
This situation may seem to suit the corporations and the elites of society, sure with lower labour cost that means more profits. However, this is very short-sighted view, as the bulk of the tax income, paying for the basic infrastucture of society, is contributed by ordinary working citizens who are far from rich. If this situation continues unabated then the employed working class will be reduced to little more than surfs and many may choose to join the ranks of the unemployed rather than continue to slog away for peanuts.
Apart from making people very angry, this state of affairs is extremely dangerous and could lead to such a short-fall in tax that governments become unable to make welfare payments without imposing ridiculous rates of tax on everybody. If this happens there will be a mass exodus of the wealthy to low tax countries, while the rest of us who are still employed will be consigned to a life of toil for almost no reward.
Clearly major changes are required to prevent further deterioration and entry into a downward spiral. Firstly the rich need to be prevented from avoiding/evading tax; tax for average income workers needs to be capped or minimum wage levels increased to offer some incentive for actually going to work; lastly over generous welfare schemes need to be seriously overhauled to prevent the malaise of the ‘dole culture’ that leads some people to become lost to apathy for years and expect endless handouts for no effort.
There has always been inequality in ‘western’ society, the super rich and privileged class will probably never disappear, however there has, during the industrial age, been a reasonable chance for the person who is prepared to work hard to improve their lot. This perception of opportunity being there is essential for the functioning of modern society; take away the chance for people to improve their lot and provide for themselves and you take away people’s incentive to work, their dignity and any hope for the future.
Lining the pockets of the rich through bailouts, laying off millions to cut costs and imposing more austerity taxes on those workers who are already stretched to breaking point is a recipe for disaster. If the mistakes of the system have to be paid for, let them be borne mostly by those who caused the problems, after all, these same people are also the most able to pay.