Third General Assembly 2013: Resolution No. 2

Building a Militant Struggle for a Living Wage and to Increase the Wage Share

The NTUI has been correct in its understanding that the global crisis of capitalism has led first, to a persistently declining real wages that has been the cause of low demand which in turn reduces jobs and investment; and second, to a self-absorbed financial sector whose links with the production of goods and services are increasingly attenuated, but which produces asset bubbles that only distort the real economy.

The NTUI notes in the global economy:

That this trend persists, and in fact is widely recognised as standing in the way of the revival of global economy.

That unless the imbalance against wage growth is addressed there is no possibility of an end to the crisis.

That the present phase of Imperialist Globalisation and the domination of finance has led first, to a greater attack on working class across the world through further unemployment; and second, to a continued decline of the real wage. This tendency has been exacerbated in India because the agrarian crisis has added to surplus labour.

That unemployment and low pay continue to contribute to the widening of inequality both between countries, and among people within countries. Between countries this becomes even more evident and stark if China is taken out of the equation.

That unemployment and low pay represents the core key aspects of neo-liberalism, which is based on the principle of high and rising inequality within national economies, even though some economies of the South may have begun closing the gap with those of the North. The crisis of the European Union symbolises the breakdown of this model in one of the most advanced economies of the world.

That the framework of high and rising inequality as a driver of growth is the outcome of a model of economic development and growth that is based intrinsically on shrinking the wage share, by increasing labour productivity and creating excess capacity, alongside a downward spiral in demand as a result of declining real wages.

That even though we are now in a situation where rates of economic growth are still very low and flat lining in the global north, and declining in the global south, there is an increase in profits through shrinking wages, and increase in labour productivity using greater work intensity and pressure on workers at the workplace.

That the pressure to keep wages low, and squeeze them further whilst increasing labour productivity, is what motivates the unprecedented attack on unions and organised labour and the hiring of irregular workers.

That it is now beyond doubt that the global boom that preceded the crisis was based on the financialisation of the global economy, creating an unsustainable structure of demand on the back of credit and debt, and high-risk financial assets which ultimately turned toxic.

That the policy of austerity, driven by the incorrect assumption that a significant reduction in public debt is imperative for economic stability, is contributing to further aggravating the crisis.

That with economic recovery not in sight the contradictions of imperialist globalisation have deepened, with both the United States and the European Union seeking to recalibrate their economies at the cost of the global south, resulting in severely affected exchange rate stability and increased dependence on the advanced economies.
That neo-liberalism was premised on growing the global south on financial flows and investment from the north, rather than through domestic savings and progressive taxation.

That this effort at recalibration has contributed further to the hardship of working people in the global south as a result of the sharp deceleration of currency values, but has also opened up the possibilities of a currency war.

That the costs of war and sanctions have pushed up the price of oil, and sought to curtail the autonomy of Iran, Venezuela amongst other countries.

That the global crisis has weakened the sway of US imperialism, and brought forward other forces, both in the form of the BRICS and each of these countries in their own right.

That whilst there may be a decline in the power of US imperialism, the contours of a multi-polar economic regime are yet to emerge, in part because of the individual ambitions of each of these countries, and hence their often opportunistic foreign policies.

That the fall in investment flows along with declining demand from the north, alongside the integration into the global economy, has made economies of the global south more vulnerable than they were before the crisis.

That, whilst capital may be faced with its deepest crisis yet, progressive forces have not been able to unite around a meaningful or substantial alternative, and have for the most part been left defending the welfare state.

The NTUI understands as a result of the costs of global integration

That despite claims to the contrary, from 2011 it is clear that the Indian growth model has come apart.

That India’s integration with the global economy has further accentuated the unsustainability of its economy.

That the economic growth over the past decade was built on financial flows from overseas that were then employed to reflate the economy with an easy monetary policy and soft fiscal policy.

That the inflationary crisis has been contributed to by the dependence for investment on foreign inflows and speculation in commodity markets.

That the foreign exchange problem including the depreciation of the exchange rate has been directly impacted by the declining inflows relative to the financing requirements, and a stubbornly high current account deficit.

That the fiscal problem has been exacerbated owing to the inability to introduce progressive taxes, even as concessions made to capital are maintained.

That the stability of public finances has been used to shore up the private sector, and together with the public sector it has been undermined.

That with the decline in foreign flows the inflationary pressure continues unabated but there is a decline in demand, investment, savings and jobs.

That what carries on unabated is the element of fiscal policy that was aimed at providing investment incentives to private capital. The nature of capital-state relationship is such that this incentive has become more a permanent concession to capital.

That the growth model is built on exploitation of natural resources, with expansion in manufacturing and infrastructure keeping pace, and the assumption that the service sector would grow to meet the needs of these sectors while agriculture would be pulled up with increasing urban demand.

That the manufacturing sector has not been able to rid itself of its inherent instability, since it has been unable to acquire the capacity to develop technological capabilities and absorb technology and innovate, hence failing to acquire a global scale necessary for competitiveness in export markets; and the sector therefore continues to be expensive in its foreign exchange needs.

That in the absence of technological capabilities and a global scale capacity, manufacturing has failed to be a net creator of new jobs.

That the intrinsic low value added nature of the service sector, and the inability of Indian entrepreneurs to travel up the value added chain, has made the service sector significantly dependent on its capacity to replace workers in the global north with cheap labour, and makes it vulnerable to declining demand for ITES from the global north, while continuing to operate at low rates of return.

That in the absence of sustained expansion of the urban economy and inadequate support for autonomous development of the rural economy the agrarian crisis has severely threatened the livelihoods of small and landless peasants.

That the government has entered into WTO+ bi-lateral Free Trade Agreements with the objective of attracting foreign investment.

That whilst the FTAs have not led to any marked increase in inward investment, there has been an increased dependence on imports in the manufacturing sector of the economy, and increased vulnerability in some sectors of agriculture.

That the WTO regime and the FTAs have severely undermined the existence of small and medium enterprises, that remain an important source of employment and an important site for building competiveness.

That in the absence of a technological advantage in either manufacturing or in services the economy remains significantly dependent on low-value added exports for meeting the country’s foreign exchange requirement.

That in the knowledge that the trade agreements were not pulling in requisite inward investment government has liberalised investment in retail, and is in the process of further liberalising investment in the financial sector.

That investment in large retail is detrimental for jobs.

That foreign direct investment in retail, agriculture and other sectors is reducing autonomy in national economic development.

That the increased investment in large retail comes with the added pressure to free up the patent regime to allow for genetically modified crops that are more profitable.

That GM crops, in the absence of adequate testing, and liberal patent regimes, especially in the case of pharmaceuticals, are detrimental to food and health security.

That therefore the exploitation of natural resources and building of infrastructure are the two principal areas for capital accumulation.

That both these economic activities are land intensive and that this land grab has come to define the most significant form of attack on rural livelihoods.

That infrastructure development is primarily advanced through public-private-partnerships which are substantially financed by public sector debt.

That both land acquisition and public-private-partnerships have brought out the complicit nature of the relationship between capital and the state as also the extent of malfeasance and corruption within the economy.

That transfer of public monies for the development of the private sector and the regressive tax system are the primary source of inequality.

That growing inequality and eroding wages and livelihoods are the cause for declining demand in the economy.

That rural demand is declining as a result of the agrarian crisis.

That the agrarian crisis is exacerbated by low and non-remunerative prices for agricultural produce, causing immiserisation among small and medium peasants.

That the agrarian crisis has resulted in a situation where there is insufficient employment for workers in rural areas to ensure a dignified existence.

That worker’s in rural areas are being pushed to migrate as a result of the economic collapse.

That migration of workers has increased significantly and there is strong statistical evidence that nearly 25% of the total working population migrates at one or another time in the year, if not permanently, for work.

That migration pushes wages down since it results in wage competition amongst workers and is in fact creating a situation where the achievable bargained wage is only equal to the statutory minimum wage.

That competition amongst workers has brought inordinate benefit to employers especially in new areas of investment and growth.

That employers’ have engaged in blatant violation of law and engaged in discriminatory wage and employment practices between regular and irregular workers, including contract workers.

That wage costs have in fact become the key variable that corporates control in order to sustain profitability.

That the triad of the agrarian crisis, the failure to create regular jobs in the urban sector and uncontrolled inflation have significantly eroded the real wage.

That the wage and employment crisis has exposed the most discriminated within the workforce to greater risk.

That women have been forced more into insecure and unsafe jobs at lower wages than their male counterparts in order to make two ends meet.

That measures of social security and social protection with legal protection have been advanced as a result of the political compromise of 2004.

That the measures for social security and social protection have been found to be inadequate in allowing for a dignified existence by not in full measure satisfying employment security, health security or food security.

That the measures of social security and social protection have however not been implemented effectively.

That these measures have also opened up new opportunities for private profit that has hampered implementation of the social security measures.

That there has been a dilution of the rights under these measures through the introduction of cash transfers.

That as a result of these measures ‘honorary workers’ have emerged as possibly the largest source of stable new jobs in the last decade though deprived of the minimum wage and any employment rights.

That this symbolises a growth and development paradigm built on a poverty wage.

That the 6th Pay Commission albeit necessary for ensuring pay-parity with the private sector and ensuring requisite talent in the public sector ended up more by contributing to inequality and discrimination.

That the 6th Pay Commission has became the source of increasing income inequality and social discrimination by reduction of employment in Group D category and through the out-sourcing of these jobs.

That reduction of employment in Group D is both the source of growing inequality as also discrimination since it closes entry level opportunities to SCs, STs and other disadvantaged communities.

That by so doing, government has institutionalised employment of contract, casual, temporary and ‘honorarium’ workers, trainees and apprentices in perennial jobs in all sectors of the economy.

That the cost of climate disaster can be measured in terms of loss of lives, livelihood, property; and the cost of “disaster relief” in terms of private interests and profiteering, and deepening inequalities in the region.

That the push mainly by USA and Europe to use the climate change issue to promote their green technology linked to national commitments on emission reduction and climate mitigation will lead to greater imports and pressure on local manufacturing.

The NTUI recognises that the present economic paradigm is based on the exploitation of the working class and cannot address their needs.

And therefore the NTUI commits itself:

To build a nation-wide alliance of trade unions and peoples’ movements for an alternative sustainable economic paradigm based on the principles of autonomous national development that can meet the needs of the working class and democratise the economy by increasing the share of wages in the national income.

To build a nation-wide struggle against poverty wages of contract, casual, temporary and ‘honorarium’ workers, trainees and apprentices and all other forms of irregular workers; and to this end demands a Commission on Wages that advances the principal of the living wage and runs concurrently with the 7th Pay Commission and provides parity with appropriate levels of government employees in both wages and service conditions.

To take its experience of struggle for the minimum wage and social security to build a nationwide struggle for a just minimum wage, based on the principal of a living wage; and universal social security in the form of universal access to free healthcare and a pension linked to the minimum wage.

To defend the right to livelihood

To advance the struggle for the 8 hour work day and all other conditions of employment which are universally accepted as core labour rights.

To build a struggle to ensure a secure and safe workplace for all workers, and especially women workers.

To advance the foregoing by ensuring that no instance of an attack on the right to freedom of association and the right to collective bargaining goes unchallenged; and through the unity of the trade union movement.

Proposed: Gautam Mody, Kamani Employees’ Union
Seconded: M. A. Patil, Maharashtra Rajya Anganwadi Karmachari Sangh