Tuesday, June 8, 2010

Why are the Poor Paying for the Crimes of the Rich?

This week, we were offered yet another stark example of the nature of the class war currently being waged by the Dublin government.

Minister for social ‘protection’ Éamon Ó Cuív published a new Social Welfare Bill, the purpose of which is to effectively make the poor pay for the crimes of the rich. Ó Cuív’s new Bill contains two key elements; the first is to introduce a new welfare to work or workfare system, which will force unemployed people into low paid and low-skilled jobs; secondly, the Bill will remove the One Parent Family Payment from lone parents when their child reaches the age of 13, currently the payment is available until the child is 18 or if in full-time education until the age of 22.

These proposals will drive poor people deeper into poverty. The Bill is a callous attack on those who benefited least from the so-called Celtic Tiger boom years and it is they who are being forced to bail out the wealthy class of property developers and bankers who gorged on state subsidies and gambled with other people’s money during that period.

In the same week as the Dublin government further advanced its war on the poor, it made the extraordinary decision to shovel another €2 billion [£1.7 billion] into the zombie institution that is Anglo Irish Bank. Class war does not come much clearer than that.

According to Ó Cuív the purpose of the Bill is to remove these groups from “long-term welfare dependency”. In other words, according to the Dublin government, those reliant on welfare payments are individually responsible for their own poverty and must be weaned off their “dependency”. Of course, this is a spurious analysis, but one favoured by the right wing political establishment who seek to blame the poor for their poverty.

Almost one-in-five, or 18.5 per cent, of households in the Twenty-Six Counties are at risk of poverty and lone parent households are 10 times more likely to live in consistent poverty than other households. Poverty is not pathological – it is caused by the deep structural inequality that exists in Irish society. Little wonder that gross levels of inequality and poverty exist when just one per cent of the population own 34 per cent of the wealth in the state. Rather than the poor being welfare dependent, on the contrary it is the capitalist class that is far and above the greatest dependent on state welfare payments, benefiting from myriad tax incentives for property development, employment subsidies and tax shelters.

The provisions of the new Social Welfare Bill represent the ideological essence of the neo-liberal state, with its championing of individualism and minimal state intervention, in effect a ‘survival of the fittest’ approach. Maximum state intervention, it seems, is reserved for the capitalist class in Irish society, who benefit from a type of turbo charged welfare state.

The ‘small state’ of neo-liberalism, on the other hand, is reserved for the poor in Irish society. In fact, the Twenty-Six County state never developed a welfare-model. Instead, it has created a two-tier, apartheid-style health service, a residual social welfare model, an education system that favours the children of the rich and a housing system that supports and subsidises property developers and private landlords. This is what former Progressive Democrat leader and current Twenty-Six County health minister Mary Harney meant back in 2000 when she expressed her belief, to a gathering of the American Bar Association, that the state she represented was closer to “Boston than Berlin”.

Harney’s belief in the US capitalist model fits seamlessly with the ideology of the current government. Levels of inequality in Irish society deepened during the Celtic Tiger and Dublin government ministers such as her PD colleague Michael McDowell championed individualism and what he considered to be the necessity of inequality. No better place to look for inspiration for this model than the United States where gross levels of income inequality exist alongside minimal state welfare provision.

The level of inequality in US society has grown heavily since the 1970s. This was evident both in the differences in remuneration rates between chief executives and workers and in changes to the welfare system. The ratio between the remuneration of chief executives of US corporations and that of their average employees rose from 45:1 in 1973 to 326:1 in 1997.

The Clinton presidency, which introduced the ‘welfare to work’ or ‘workfare’ system, created huge incentives for the wealthiest sections of US society while simultaneously attacking the poorest sections. By 1995, following changes to the tax structure, the richest one per cent had gained over $1 trillion and owned over 40 per cent of wealth in the USA. The largesse shown to the business class stood in stark contrast to Clinton’s welfare reforms, which forced families receiving US Federal cash benefits into poorly paid employment by cutting off their benefits after two years. By 1998, according to figures from the US Bureau of Labor Statistics, one in every three working people in the US had jobs paying at or below the federal poverty level.

This is the type of welfare reform that the Dublin government has in store for the poor and unemployed in the Twenty Six Counties. Undoubtedly, it will be followed by a concerted attack on the minimum wage, which is currently €8.65 [£7.16] per hour. The Dublin government’s business wing, IBEC, has consistently called for the minimum wage rate to be reduced, using the fallacious argument of ‘competitiveness’ to support their proposals to further impoverish the working class. Behind the myth of competitiveness lies a determined plan to protect the profit margins of the capitalist class.

So what type of jobs will the unemployed be forced into?

A single line in the 2009 Fianna Fáil/Green Party Renewed Programme for Government may have been missed by many but perhaps provides an indication as to what lies ahead for those currently claiming Jobseekers Allowance. Under the heading Stabilising the Economy of Today, the Renewed Programme for Government sets out four key priorities: reform of the banking system; supporting business; creating new jobs and re-skilling those who have lost their jobs. It goes on to state “we will develop a programme of Labour Activation Measures in Tourism, building on the changed profile of unemployment and the advantages of enhancing the visitor experience through the Fáilte brand”.

Labour Activation Measures is a fancy EU term for straightforward US-style workfare, in other words forcing the poor into low paid jobs, particularly in the services sector. The hotel, bar and restaurant sectors in the Twenty-Six Counties are notorious for low paid work and are almost entirely non-unionised, making it easier for employers to exploit workers.

Another component of the Dublin government’s economic ‘recovery’ plan is to invest in tourism, an industry rampant with both exploitation of workers and violation of labour laws, including a refusal to pay the minimum wage rate. In an industry that is largely non-unionised, it is rarely held to account for blatant violations of labour laws. Investment in tourism has a further purpose, which is to bail out property developers.

During the boom years, Fianna Fáil’s developer friends benefited greatly from property tax incentives and embarked on a hotel building frenzy. As a result, there are hundreds of unneeded and now empty hotels scattered across the state. Filling these hotels up with tourists and providing a cheap source of labour to run them is just another example of state sponsored welfare for the capitalist class. Wages in this sector are the lowest of any sector of employment in the state.

The shocking extent of exploitation of workers, in particular migrant workers, in the hotel, restaurant and bar industry was revealed by the National Employment Rights Authority [NERA].

An NERA inspection of over 850 catering businesses found that 76 per cent were in breach of employment legislation, which included the failure to pay minimum wage, overtime, Sunday premium, public holidays, and annual leave. These were not simply the actions of a small number of unscrupulous employers, rather it represented systematic and organised exploitation of migrant labour. Given the lack of trade union organisation in this industry and the large numbers of migrants employed, much of this exploitation went unreported. With a fall off in immigration, the tourism sector requires a new source of cheap labour and it seems the Dublin government is only too happy to oblige. After all, their welfare dependent rich friends would expect nothing less.

The challenge facing the working class is immense. For over a year now there has been a concerted and sustained attack on working people. Public sector pay cuts, welfare cuts and the gradual dismantling of health, education and other public services have occurred simultaneous to a multi-billion euro bail out of the private banking sector.

The response from capitalism to the crisis and recession has been swift and brutal. Across Europe, the living standards of workers are being driven down and, in Greece, we are seeing the second phase of the IMF takeover of that country with this week’s announcement of a massive privatisation plan involving the sell off of transport, water and other public services.

Having already signalled its intention to introduce water charges, if the Dublin government forces through a further €3 billion [£2.5 billion] programme of cuts in next December’s budget, a similar privatisation plan will follow. The working class movement needs to respond to this war in like fashion and this requires a truly national campaign involving people from across Ireland, which will fight Tory-inspired cuts in the Six Counties and the current programme of cuts in the south.

To date, relatively small numbers have mobilised on the streets of Dublin for marches and demonstrations against the cuts. However, in communities outside the capital, much larger numbers have gathered in places such as Lifford, Wexford and Tipperary to fight against planned cuts in local health services. In addition, trade unions representing tens of thousands of workers have voted by huge margins against the Croke Park deal.

Meanwhile, working class communities in places such as Dolphin House and St Teresa’s Gardens are fighting for the right to decent housing. The challenge is to link up all of these various struggles in a mass working class movement that sets as its ultimate task to drive the capitalist class from power and places the working class in control of their own destiny.

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