Thursday, June 27, 2013

Labour Exploitation In The Knowledge Economy

The basis of the economy has changed over the last fifty years, and with it has come a change in how companies operate.  Arising from these changes is a new form of exploitation that affects workers at all levels.

Through the industrial revolution, we moved from artisan labour producing most products to an environment of mass production.  Artisans became factory workers, and when the predations of employers became too much, organized into labour unions to have the collective strength to fight back and gain better treatment for workers.  (This is a bit of an oversimplification, but for the purposes of this essay, it sets out the basis from which I will be building an analysis of today's issues)

Since sometime in the 1980s (especially in the wake of Thatcher's efforts in the UK), Neo-Conservatives around the world have been working actively to weaken the power of the trade unions.  This has resulted more recently in so-called "right to work" laws in the United States.  Laws which clearly undermine the effectiveness of unions and collective bargaining.  Superficially, these laws only appear to affect traditionally organized labour groups - manufacturing, government services and so on.

However, that is far from the full picture.  In fact, it is miles from it.  Conservatives have spent a great deal of time in the last forty years painting unions as slothful, entitled and wasteful in their efforts to undermine them.  The net effect has become that the balance of power has once again shifted heavily in favour of the employers.  Many unionized labourers find that their unions are of limited help when it comes to addressing grievances related to working conditions, pay or other workplace issues.  Contractual negotiations have turned again to a situation where the employer is dictating terms to the unions and so on.  In Alberta, for example, the government has just legislated the "agreement" with teachers in the province without actually negotiating with the ATA and other related bodies.  This is not an agreement, it is something else entirely.  Whether the ATA and its members agree with the imposed settlement is moot.

Now, as we turn from the labour economy to the so-called information economy, we find a new problem arising - and it is an ugly one indeed.  Knowledge workers, whether in IT or other domains, are highly skilled, highly intelligent people with extensive backgrounds in a myriad of areas.  They often hold advanced degrees as well as professional certification as engineers.  These people are used to being treated similarly to other professionals such as lawyers or doctors.

Unfortunately, the world has been changing dramatically since the early 1990s.  First of all, the rise of the multi-national corporation has begun to present a serious challenge.  Most countries have some kinds of laws which regulate corporate activities and place boundaries around them to some extent or another.  These laws are not, however, consistent across nations.  So, Canada has one set of laws, the United States another, and India another set of laws entirely.

When corporations have become so large as to span many nations, they become a law unto themselves at the moment.  If they don't like the conditions in one country, they simply move the bulk of their operations to another country where it is more favourable.  More favourable could mean anything from cheaper labour to fewer restrictions on how business is conducted or lower taxes.

The problem for Knowledge Workers has become one where their skills are emerging in more and more markets.  IT skills have become "commonplace" in the minds of many employers, with the consequence becoming that suddenly the notion of hiring skills locally has been replaced by "offshoring" - hiring expertise from India or some other country where "you can hire 10 programmers for the cost of one in North America".

The same thing is emerging in other "knowledge" domains such as engineering.  Building bridges is rapidly becoming something which is done "offshore", with only local labour being used for final assembly.  The design can be exported to an engineering firm in India, the manufacture of segments could happen elsewhere in the world.  As we found with the Temporary Foreign Worker program recently, this can result in local talent being shut out of the work simply because they are deemed (arbitrarily) more expensive.  In the case of the TFW program, Canadians are being obliged to train their replacements in how to do their jobs which will then be shipped off to another country.

What does all this suggest?  First, we have to recognize that money is fundamentally psychopathic.  It has no moral or ethical framework which bounds it.  Only individuals can bound money with ethical and moral considerations.  As corporations grow, they eventually expand to a point where decision making at the top is only bounded by profit considerations.  The impact on people becomes a secondary consideration.

As an example, when a company I used to work for moved to new facilities in the 1990s, the company was comparatively small.  A lot of decisions were made in terms of working environment that specifically accounted for the needs of the staff, and respected the input received from the staff.  More recently, I have heard that the same firm is moving into new facilities.  However, it is now part of a much larger multinational entity.  The new facilities are designed around minimizing the costs of office space per employee.  In fact, staff weren't even consulted about the working arrangements during the planning process.  The message?  Staff don't matter - even specialized knowledge is deemed to be replaceable by cheaper labour abroad if necessary.

The upshot is that there is nothing that obliges a company to utilize local talent in the course of business.  In fact, because the multinational company is able to sidestep local labour laws and suchlike, they can move business wherever they see maximum profit.

Because professional workers are not accustomed to having the "weaker hand" in negotiating with employers, they are only just beginning to recognize what is happening to them.  It used to be that having significant skills and depth of knowledge was a significant bargaining lever.  It still is, except that for a lot of knowledge domains, the competitor isn't down the street, but halfway around the world living in dramatically different circumstances.

What is happening is a two-ended exploitation.  Knowledge workers are being pressured to do more work for less money and in ever deteriorating conditions on one side of the equation, and on the "receiving side" of the offshoring discussions, the workers are being exploited with lower wages and no doubt poor working conditions as well.

The problem really boils down to there being a lack of effective tools for restricting the money-centered predations of large companies.  Local unions have limited leverage simply because much of the work can be moved elsewhere so easily, and the fact that work can be moved around with such minimal consequences for the employer further compounds matters.

I do not know how long it will take for knowledge workers to begin to recognize the degree of exploitation that they are currently experiencing.  I do know that the recognition of that exploitation is emerging and it will take some significant organization and change in the world in order to overcome this.  It will take more than just a trade union like construct to start to change this.

A part of the solution may well involve some kind of international union construct.  Another part will be the creation of a form of legal and regulatory environment that overcomes the ability of a multi-national company to sidestep local labour laws by shuffling the deck of cards as they are currently able to do.

The construct of corporate boards to oversee and guide the management of a corporation is no longer an effective tool in managing large organizations.  They are too far removed from the local consequences of their decisions to understand those effects on people and regions.  The construct of the board has become a means for the elites to communicate and share information, rather than a means of guiding a company with respect to ethical considerations.   This too may yet need to change in order to balance off the otherwise predatory nature of a company's desire to acquire more wealth.

In essence, we need to reinvent the notion of capitalism so that it works at a global scale, and the relationship between capitalism and labour must also be revisited.  Corporate accountability at the level of the nation-state is far too easily sidestepped.


Mercedes said...

Because of the nature of technical jobs (i.e. almost transient, freelance, previously well-financed and supported, arrived at often by diverse educational directions), there's never been a coming together of knowledge-based sectors, and in some areas, everyone's become conditioned to see everyone else in their field as competition. So there's been nothing near like a union or sector solidarity, which will make facing those challenges far more difficult.

In graphic design, it's becoming even worse, with companies doing things on speculation, with sometimes a hundred designers submitting pieces irrespective of backgrounds and skills, each hoping to be the one accepted for the $x.00 commission. I don't do work on spec, but I can understand why (when things get lean enough), people do.

You wrote: "A part of the solution may well involve some kind of international union construct."

Maybe, but it will be a challenge, when livelihoods are made to depend on competition and rivalry.

MgS said...

Nothing about this is simple. It will take time and probably some ugly things happening before people recognize what is going on, much less start to unify around common cause.