Professional Documents
Culture Documents
Having looked generally at the impact of science & technology in the previous chapter, we now turn to the more detailed
effects on the workplace. The summaries deal not only with the quantity of jobs, but also their quality.
1. DOES TECHNOLOGY CAUSE UNEMPLOYMENT?
a conversation : www.zmag.org
Now let's ask the question - is there such a thing as
technological unemployment? I don't even know what
that means
Well, what does it seem like it would mean? It would
mean people lost their jobs due to changes in
technology
Right, you do know, and that's a common belief that
people lose their jobs because of innovative new
technologies. But does that mean anything? Does it
mean anything to say that people lose their jobs
because of technology? Well, it doesn't put the blame
where it really belongs. I mean is that what you're
saying
I don't know, I'm asking. Well, let me ask this way --
has a new technology ever walked in, introduced itself,
and taken somebody's job? No
Much less come in with a machine gun and said, I'm
going to take that job? No
In other words, does the technology cause the
unemployment? Suppose tomorrow we invent a new
technology. We're in some industry - I don't know, coal
mining or anything you want, and we invent the
technology that can do the work that 50 percent of the
workers were doing. Now what might happen the next
day? You fire 50 percent of the workers
It could be that the technology replaces the 50 percent
of the workers, and people scream about technological
unemployment because we now have half the workers
and we have the technologies in there, and so sure,
doesn't it look like the technology created the
unemployment. But what would cause the capitalists to
do that? Why would the capitalists do that? Well, they
can make more money
Make more profit and? Maintain the system
And maintain the system that allows them to accrue the
profit. If that's the case, yes, they will make the
change. Now the question is what was the alternative
change that might have been made? You would pay the
workers the same amount that you were and they could
work half as much
Absolutely. We're finished. There's clearly no such thing
as technological unemployment. The technology didn't
choose to replace workers rather than reduce workload
while maintaining pay - the owner did that, and the
owner, moreover, was propelled by his or her situation
to do that, like it or not, as we will see shortly.
So there's nothing wrong with technology replacing
labor, in general. I mean you have to be foolish to have
technology do things that you want to do. You don't
want technology doing the stuff that's fulfilling and
enriching - but for technology to replace onerous work
is a good thing and it doesn't have to lead to
unemployment. That's ridiculous, just reduce the work
week and pay the same salary that you were paying for
40 hours, perhaps minus a little bit to replace the capital
cost of the technology. There is no such thing as
technological unemployment, that's a serious
confusion, a real misunderstanding of the way the world
works.
It's social choices that instantiate technology.
Technology does not have a life of its own. It doesn't
create itself. It doesn't invent itself, and it doesn't
enforce itself. It's these institutional structures and the
agents filling their roles that make choices.
We described how the institutional structure of the work
place leads to certain kinds of choices for the way
workers are organized. You're not going to have the
work organized in a way that empowers the people who
are doing the work. That's a disaster from the point of
view of both owners and managers. So high technology
doesn't mean technology that empowers humans,
which is what it should mean. It means fancy gadget
technology which disempowers humans. That's a social
choice, just like unemploying people is a social choice.
It's not intrinsic to the technology.
Now it is true that the technologies that we have are
often stamped with the logic of capitalism, but that's
because they're conceived and designed within
capitalist institutions according to capitalist norms, not
because technology per se has such attributes
inevitably. Technology can be anything you want it to
be within the laws of physics and chemistry and what's
possible. It can be what you make it, but capitalism
makes it what it is to serve the interest of capital.
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2. TECHNOLOGY AND THE QUANTITY OF JOBS : Rudi Volti
from Society and Technological Change : 1995
Throughout history, production technologies have
increased productivity per worker (by up to six times
between 1900 and 1970), enriching material life but
threatening drastic reductions in jobs (unless
output/consumption levels are increased or hours of
work reduced). Ford maintained its level of production
between 1978 and 1988 yet cut its production
workforce by half, replacing many
workers with robots.
The disruptive effects of
advancing technology have
included the destruction of jobs,
and even whole industries,
despite the creation of new ones. Entire communities,
and the lives of those within them, have had their
economic base destroyed.
Cotton mills in England in the industrial revolution (c. 1800),
destroyed much of the wool industry there, and the cotton
industry in India. Modern shipbuilding techniques and steel
plants have seen the demise of communities such as
Clydeside in Scotland and Corby in England. Large scale
farming techniques destroyed the livelihoods of thousand of
farmers in the mid-west USA in the 1920s and 1930s (see
Steinbecks Grapes of Wrath). Sugar-beet technology in
Europe has had a serious effect on the cane sugar industry in
countries such as J amaica. Large-scale banana plantations in
central America are threatening whole parishes in J amaica
(St.Mary) and whole countries in the Caribbean (St.Lucia).
Yet, did the new technology really have to be so detrimental to
workers and communities? Is it still the primacy of profit that
causes these excesses, rather than the new technology itself?
From as early as the 1600s in Europe, both workers
and public bodies have taken action (sometimes
violent) to prevent the spread of labour-saving
machinery which threatened their jobs, including the
drowning of a mechanical loom inventor in
Danzig (Poland) by municipal
authorities in 1661and the
machine-smashing Luddites in
England in 1811.
During the Luddite disturbances
(named after Ned Ludlum), which
began in the hosiery trade, the
government had to deploy 12,000 soldiers to restore
order. A depressed economy and poor social conditions
at the time, following the Napoleonic wars, helped to
trigger these events. More recently, computers have
been the biggest threat to both jobs and established
ways of working (despite the new industries they have
created).
If one chooses to put aside the distress caused to
individual families, communities and particular
industries by job losses, on a macro scale there should
be plenty of work to do since many people still lack the
basic amenities of life and even with affluence, the
acquisitive trait remains (ie. people always seem to
want more). The demand for services, especially
medicine, education and entertainment seems to be
limitless. Productivity-induced cost (and hence price)
reductions help to increase demand and new industries
(including those which clean up after other industries)
are forever emerging, defying all but the most wild
predictions.
Even where the newer industries appear to be less
labour-intensive, the indirect effects often outweigh this.
For example, the high-tech airplane, with just a handful
of crew, has created thousands of jobs at airports and
in tourism. Computers, which certainly reduce the need
for many categories of workers, has spawned e-
commerce with all its potential for
expansion.
Yet if air travel and e-commerce are the new
job-providers, should we now worry about the
increasing number of bankrupt airlines and
dotcom companies
Despite the labour-saving implications of industrial
robots, computer-aided design/flexible manufacture and
automated, computer-based diagnostics, there remain
many jobs which machines cannot readily perform or
for which the cost is prohibitive. Coming up with the
broad design ideas, dealing with new and unusual
situations, and with peoples individual problems, may
be amongst these. Even so, there seems to be the
prospect of fewer skilled workers being
needed in the future, partly because the
high-tech end of business is not a large
employer of people.
Although it is estimated that two-thirds
of pre-1880 jobs have been lost to
mechanisation, service sector jobs have replaced them,
with a 16-fold increase in the USA between 1948 and
1990. Some of these are actually within industry, but
others arise because of the surfeit of manufactured
goods and the desire for personal services. Whilst the
intermediate (industrial) stage of development allows
for rapid increases in productivity (due to new
technologies) and hence the threat of job-losses, this is
not the case with the post-industrial stage, where the
predominance of the services are usually labour-
absorbing, being difficult (or undesirable) to automate.
However, even where new jobs do appear, the
unemployed may not be able to access them, due to
geography or educational level adjustment will rarely
be smooth or painless.
The new jobs may be in new regions, or even in new
countries. And older workers may not be able to take on
sufficient new skills. What can we do about this? Slow down?
If so, at what price?
Redundancy payments may soften the blow but
retraining (targeted to specific employment needs) is
better than purposeless make-work schemes.
44
Technological change will thus produce winners and
losers, but to limit technology too much to protect the
potential losers may be unwise. The countries with the
least technology are often those with the highest levels
of un- (or under-) employment.
3. TECHNOLOGY AND THE QUALITY OF JOBS : Rudi Volti
from Society and Technological Change : 1995
Industrial production generally takes place in a factory
setting, where work is very different than in a self-
employed artisans workshop (cottage industry) or a
small farmers field. As employees, workers face
impersonal managerial methods, hierarchical command
structures, written rules and precise
schedules (the clock). Shift work and
unsociable hours may be demanded. The
pace of work may be dictated by the
machines, being either frenetic or
unvarying, or both. Often, little skill is
demanded (de-skilling) so that work becomes
monotonous.
But is all this the result of technology, or has
technology been shaped by economic and social
relationships? It appears that similar technologies can
support a variety of working arrangements. So are
factories institutions designed to control and discipline
workers, rather than facilitating the optimum use of
expensive, sophisticated equipment? The alternative,
putting out work, can lead to problems of quality
control and delay which machine-paced work can
avoid. Machines may be hard to manage, but people
are even more difficult!
The division of labour makes control of the workforce
easier. Workers with limited skills, doing limited tasks,
can be easily replaced they cannot easily hold
an employer to ransom and they are
cheaper, as Henry Ford realised early on.
Taylors idea of scientific management
takes this to extremes, removing all
autonomy from the worker, separating
completely handwork from brainwork
and making work even less fulfilling in
the process.
Motivation is reduced to the pay-packet on Friday people
become (passive) consumers of their incomes, rather than
(active) creators of their world. The intrinsic satisfaction of
work has not managed to overtake the extrinsic rewards.
Does this matter?
It has been found, however, that even routine tasks
may require innovative ability in the operators,
especially when things go wrong. And an alienated
workforce may become hostile and unproductive. With
the passing (perhaps) of the era of mass-produced,
identical products, the need for worker skill may re-
assert itself.
Not everyone works on the production line, of course.
White-collar work in the office has become more
prevalent and the use of computers demands higher
skill levels. Computers now allow people the flexibility
and freedom to make a good living from home, in
contrast to the home-based work in the past which
utilised lower skill levels and often resulted in low pay,
overwork, social isolation and lack of social benefits.
Yet on balance, will smart technologies lead to up-
skilling or de-skilling/unfulfilling jobs? Much of the
growing service sector demands low or only moderate
skill levels, and jobs using high-technology are limited
in number.
Would a more democratic and egalitarian working
environment be preferable, one which is designed
around the worker, which promotes initiative and
involvement, which encourages and utilises higher-level
skills as ends in themselves?
The choice depends largely on the relative power of the
employers (owners and managers) and the workers,
and hence on the economic system.
Even though factory work may be less attractive (though better
paid) than cottage industry, technology has eliminated many
unpleasant, dangerous and arduous jobs. Early factories,
mines and plantations often employed children as young as
four years old, demanded workdays of 14 hours or more (six
days a week) and lead to poor health (respiratory disease)
and early death. Modern machinery has replaced much of this
work. Those who remain in these industries generally work
under better physical conditions.
Therefore, should we say that despite its negative
psychological effects, technology has on balance improved
work in factories, mines and large-scale agriculture?
4. THE CHANGING STRUCTURE OF EMPLOYMENT: Robert McGinn
from Science, Technology and Society : 1991
The profile of the workforce in most countries has
changed dramatically over the years. In 1850, 64% in
the USA were farmers in 1850, dropping to 2.5% by
1988. Meanwhile, blue collar work increased to 40% in
1910, falling to 28.5% by 1986. The service sector is
now the largest, with half of these workers being highly
educated professional technical and managerial
workers. About 40% of the types of job that existed in
the USA in 1977 did not exist in 1949, and about 15%
disappeared between 1965 and 1977.
45
These statistics demonstrate what is generally true of
economies as they develop through agricultural, industrial and
service-oriented stages. Over these three stages, agricultural
employment falls steadily from over 90% to less than 5%.
Industrial employment grows to perhaps 50% before falling
back progressively. Meanwhile the service sector grows
gradually at first, accelerating to more than 50% in the third
stage. Where would you place J amaica in this three-stage
schema? What does that say about our adoption of
technology?
Technical changes have played a major role in these
changes including improved farming equipment and
techniques, new materials, computers etc. The farm,
mine and workshop gave to the factory, which then
gave way to the office and laboratory. Machinery has
replaced simple tools and now manipulation of symbols
has taken prominence. If work activity involves power,
control and analysis, the first two have been largely
taken over by machines, and now computers are
tackling the analysis aspect. Work has certainly
become less physical, and more perceptual / mental.
The modern business firm, which is typically large-
scale, multi-unit, horizontally and vertically integrated,
professionally managed and hierarchically organised is
a product of modern transport and communications
technologies.
Work is now time-oriented (working a fixed number of
hours) rather than task-oriented, partly because of the
need to use expensive capital equipment intensively.
Taylorism takes this to extremes, aiming to eliminate all
the wasted seconds in production processes.
Trade unions are the product of these technological and
organizational developments. Defending workers
against poor wages and dangerous and inhumane
working conditions became necessary when the
personal relations between employers and employees
disappeared as firms grew in size. Thus the average
work week in the USA was reduced from 67 hours in
1860 to 42 hours by 1950, with greater material income
at the same time, made possible by increases in
productivity.
Technology has contributed to declining trade union
membership, falling from 33% to 16% in the USA
from 1954 to 1989. Globalised production and the
decline of blue-collar factory work seem to be
responsible.
The trend towards a shorter working week reversed in the
1980s, with working hours increasing again in most industrial
countries and wage rates/standards of living falling.
Is this an effect of new technology, or neo-liberal economics
and the consumerist ideology that goes with it?
Safety in the workplace has changed. Fewer accidents
have been replaced with greater exposure to hazardous
(carcinogenic) chemicals and repetitive strain injury
from computer work.
5. WHAT COMES AFTER KNOWLEDGE WORK?
Kit Sims Taylor : October 1998
Today's tech-savvy, well-compensated worker could become
an expensive anachronism as tomorrow's technological
advances offer new opportunities for slashing costs and
improving economies of scale. A world filled with smart
computers, all linked via the Internet, could easily undermine
whole sectors of today's vibrant service and information
industries. Business Week (1998)
Peter Drucker coined the term knowledge worker in
1959. But now, secure in an economy which finds ever-
new uses for our mental creations, we need to ask -
what comes after knowledge work?
It is commonly assumed that the knowledge sector
with much higher productivity than other sectors of the
economy will expand rapidly in terms of employment
as well as output. As most workers become high-
productivity knowledge workers, our incomes will rise
proportionately.
Unfortunately, this rosy scenario is based on five
premises and four of these are incorrect. The first
premise the correct one is that work of low skill and
low productivity will disappear. The incorrect premises
are:
That demand for knowledge work will grow in
pace with the increased supply and rising
productivity of knowledge workers.
That knowledge workers primarily create new
knowledge.
That we can make meaningful assessments of
future labor markets by projections from today's
labor markets.
That productivity increases, by themselves, will
lead to increases in income.
The pace of the present technological revolution is far
more rapid than any of the fundamental shifts of the
past. The shift of labor from agriculture to manu-
facturing took over 100 years. We are still undergoing
the shift from manufacturing to services which started
almost 50 years ago. And now we face an ever-
accelerating shift to a higher level of service sector
employment based on the ability to acquire, synthesize
and manipulate knowledge and data.
The Demand for Knowledge Workers
Many assume that knowledge work will be available for
all who have the intelligence and the education to
perform it. Let us examine the meaning of such an
assumption.
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For the number of knowledge-work jobs to remain the
same, the demand for the output of knowledge workers
must increase as fast as the productivity of knowledge
workers. For the knowledge sector to absorb the
retrained cast-offs of other labor markets and to absorb
the high percentage of the young who will acquire the
requisite knowledge and skills, the demand for the
output of knowledge workers must increase much faster
than the productivity of knowledge workers.
While our desire for the products of knowledge workers
may well be infinite, desire is not the same as demand.
Effective demand requires the ability to purchase the
product as well as the desire to do so. Demand - unlike
desire, want, or even need - is limited by income.
So where does the demand for the goods and services
produced by knowledge workers come from? We don't
go over to the knowledge section of the supermarket to
pick up a pound of knowledge. The knowledge is either
embodied in other goods and services - such as the
engineering that went into a refrigerator - or comes in a
specific form as a computer game or a video.
Thus an increasing demand for knowledge products
really means an increasing demand for new knowledge
products, not just the continuing application of existing
knowledge.
But many knowledge workers are not creating new
knowledge instead they spend their time creating
knowledge that is new to them. They are only being
paid because creating knowledge that exists elsewhere
is presently cheaper than finding it. And this is in the
process of changing fast!
The Supply of Knowledge Workers
If there is an employment problem in the new economy,
some argue that it is a supply of labor problem. It is not
a lack of jobs, but a lack of workers with the skills that
are needed by the information economy.
But (re-)training opportunities are expanding and a
major push factor will be the disappearance of other
types of employment. A major pull factor is the
interesting and pleasant nature of much knowledge
work compared to other jobs.
This brings us to the key question: is it likely that the
supply of knowledge workers will grow faster than the
effective demand for their products?
In the past this over-supply has occurred with both
agriculture and manufacturing. But there are two
important differences (and the pace of change was
slower in the past). Employment in agriculture fell as
employment in manufacturing was growing;
employment in manufacturing fell as employment in the
service sector was growing.
When we get around to asking "What comes after
knowledge work? Where will the new jobs come from? "
we have to admit that there is no answer.
The Institutional Challenge
We need to break the rigid link between production and
incomes earned. If we continue to tie incomes to ever-
more-efficient production, effective demand will be
insufficient to purchase the products.
The choice is ours. If we fail to adapt to ever higher
productivity, we may well face falling demand, high
levels of unemployment combined with a distribution of
income that will become ever more extreme.
Or we can work less for the same income, enjoy our
lives with less toil; lives in which an abundance of
goods and services is taken for granted; lives filled with
creative and fulfilling activities.
6. BUDDHIST ECONOMICS : E.F.Schumacher
from Small is Beautiful : 1972
Schumacher, whose book 'Small is Beautiful' is a
classic of appropriate technology, founded the
Intermediate Technology Development Group in 1966.
For Schumacher, the indiscriminate use of
inappropriate technology (whether advanced or
obsolete) leads to unnecessary problems in the
workplace. It is usually associated with the modern,
orthodox (marginalist) approach to economics.
Orthodox economics treats work is a disutility (an
economic bad). For the employer, labour is an
economic cost that needs to be reduced to a minimum
by the division of labour, or eliminated altogether by
automation. For the worker, it means that wages are
necessary to compensate for the loss of leisure time
and the boredom of life on the job. In other words, there
should be output without employees and wages without
work!
In contrast, Buddhism treats work as an opportunity for
people to utilise and develop their faculties, for them to
become social beings by joining with others in common
tasks, and for the production of the necessities of
existence. The unfulfilling work generated by the
division of labour should thus be discouraged, people
should be treated as more important than goods, work
and leisure should be seen as complementary parts of
a healthy life.
Mechanisation that serves the worker, that enhances
human skills and power, is a tool. It can be contrasted
to the mechanisation in which the worker serves the
machine, and is enslaved.
When technology destroys jobs, the loss of work is
more than the loss of income, it deprives people of the
nourishing and enlivening factor of disciplined activity.
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It is thus immoral to treat unemployment as an
instrument of economic policy, through which workers
and inflation can be tamed. Nevertheless, this approach
is fundamental to neo-liberal economics (the right-wing
adaption of orthodox economics which has been
dominant since the 1980s).
Providing handouts for those who have lost their jobs
stands the truth on its head, by treating consumption as
more important than the need for creative activity.
Economic policy should thus concentrate on providing
an 'outside' job for all those who need or want it. .
Buddhist economics in NOT in favour of inefficiency. In
fact it strives for the minimum of toil to provide the
physical necessities of life, by deliberately limiting those
necessities and optimising productive effort. Life then
becomes less stressful and more creative, more
fulfilling. Labour-saving technologies, where
appropriate, are thus welcomed.
Michael Albert, founder of Z-net, suggests balanced job
complexes as part of his schema for a participatory economy
(parecon). Every person has a share of the skilled/unskilled,
pleasant/unpleasant work that needs to be done. Schools in
Cuba, and even whole kibbutz communities in Israel have
balanced manual and mental labour in this way.
Could such a system work on a wide scale?
7. MR. LAMBERT BROWN : VICE-PRESIDENT UAWU (JAMAICA)
notes of a lecture given to UTech S&T students on 3.10.2000
Work is no longer just at the formal workplace
besides homeworkers, there are entertainers etc.
The effects of technology on jobs are both positive and
negative. Opinions vary according to who you are,
employer, worker, consumer, government. Employers
are concerned with profits, workers with their jobs and
conditions, consumers with low prices, governments
with tax income and their parliamentary seats. The
effects of new technology on work may be disastrous
and workers sometimes resist, sometimes successfully
(for a time). Whether new technology is advantageous
is not an easy question. The effects are negative for all
the groups at times. When workers lose their jobs,
families, shopkeepers and even politicians also suffer.
Technology is changing fast.
In two years, we shall all be
using technology that doesnt
exist today. The time taken for a
new technology to attract the first
50 million users has dropped over
time 30 year for radio, 13 years
for television, 16 years for personal computers, 4 years
for the internet. In just one year, Napster has attracted
25 million users.
In J amaica, the original telephone law
was in 1893. A new one in 1989 had
lead to a rapid increase in the number of
lines - telegram clerks are a thing of the past.
Computers have destroyed job in accounts, and in
internal messenger services (C&W, the bauxite
industry) where electronic memos have taken
over. At D&G sighters (who look for
foreign matter in bottled drinks with a
magnifying glass) have lost their jobs. At
Wray & Nephew, a new 100 foot
production line has 3 workers the old
70 foot line had 18!
And yet trade unions would be foolish
to oppose the changes which are
needed to maintain competitiveness. The sugar
industry is now virtually bankrupt because the
necessary changes were not make in the 1960s,
because of the threat to jobs, the threat of lost votes
and the threat of lost seats in parliament. It often comes
down to fewer jobs in a viable industry, or no jobs at all
in one which has become uncompetitive.
Providing jobs used to depend on labour-intensive
production. But that is rapidly going road construction
is now capital-intensive, for example, using massive
machines. Most firms in the globalised economy are
having to move in this direction. A 24 hour shop in
Geneva has no shop assistants customers serve
themselves through a computerised system.
With the cash economy being replaced with
the use of cards (even on our buses),
security firms such as Brinks may find
their services required less in the
future. Telebanking is now with
us (Charlie Hyatt advertisement).
The consequences in a no-growth
economy (such as J amaica in the last 20 years) has
been a net loss of jobs, social tensions, crime etc. Even
tertiary-trained people now have trouble finding work.
Question 1: What can be done about the loss of jobs?
Answer: We must not see ourselves as victims.
Retraining may be necessary, perhaps several times in
one lifetime. It may make sense to allow oneself to be
exploited (for a while) in order to learn a trade
followed by starting ones own business. The
government at this time does not appear to be
business-minded, investment is not encouraged
sufficiently.
J amaicans can also look abroad for areas of labour
shortage and take advantage of these. The remittances
sent back are very valuable. Worries about this outflow
(including nurses, but not footballers and
entertainers??) reflects our backward thinking;
providing we train people in sufficient excess numbers,
there is no problem. But we may need to packet our
products better, market them better (eg. canned
kangaroo in Australia, imported coconut milk from
48
Thailand). D&G report that their sales in the USA could
double if the price can be contained.
Question 2: What do you say to those made redundant
after 20 years of service to a firm? Answer:
Counselling is offered and retraining encouraged.
Management is often responsible for the job losses by
not keeping up with the new technology eg. D&Gs
slowness in moving to plastic bottles.
Question 3: Would the PSOJ / J MA etc. agree that the
trade unions in J amaica are progressive when it comes
to new technology? Answer: If anything, it is the
private sector which lags behind. They often have a
knee-jerk reaction to issues (and the trade unions) for
example the proposed Right to Strike Law actually
limits the right to strike but some employers seem to
have missed that in their opposition to it. However there
are progressive voices and talks are currently being
held with the trade unions on the issue of jobs etc.
Questions / Debates - Chapter 5
Q1. Does technology create more jobs, or less? Is
it true that countries which lag behind in
technology inevitably have high rates of
unemployment? Is it technology or the
economic system in a country which has the
greatest influence on the creation and
destruction of jobs?
Q2. Is technology creating interesting and
challenging jobs, but for fewer people?
Q3. How can we better manage the destructive
effect of technology on jobs?
Q4. Does efficient production have to be capital-
intensive, displacing workers with machines? If
labour-intensive alternatives still exist, do they
necessarily imply low wages? If so, is that any
road to real development?
D1: We cannot be soft on jobs we need to adopt
modern production technologies regardless of
the shorter-term effects on jobs, or on conditions
of work.
D2. It is capitalism which destroys jobs, not new
technology.
D3. It is unfair for industrialized countries to use
environmental and labour standards to protect
their jobs.
ROLE-PLAY
The setting is Frome Sugar Estate, chosen because of its historic significance in 1938. This time around, the
management / owners are planning to install new technology in both field and factory to reduce costs / improve
efficiency in order to have some hope of competing globally and retaining a market for the sugar produced.
The workers have heard about the plan and are very worried about their jobs. Many are quite old, with family
responsibilities and little formal education finding alternative employment would indeed be difficult. They are thus
threatening to burn down the factory if the likelihood of job-cuts remains in place.
The management are trying to point out that it either means some lost jobs now, or everyones job going before too long,
unless cost-cutting measures are put in place. The local MP, who is also a member of Cabinet in the current
government, would like to settle the dispute with both employers and employees still on his side.
An Industrial Disputes Tribunal (IDT) has been called to address the matter, and the invited participants are as follows:
1. a representative of the workers
2. a representative from the management
3. the local MP (member of parliament)
4. a consumer representative: she lives in Kingston on a low income and needs cheap sugar to feed her family, but
she also has a family member working at Frome
Divide the class into four groups, each assigned one of the roles above. Discuss what will be said to the IDT then send
one person up to speak for the group. A chairperson (from the IDT) will also be needed.
How can this difficult and quite common challenge be resolved to the satisfaction of all parties?
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D&G TO UPGRADE PLANT 15-11-2000
D&G will be investing between J $1.2 billion and J $1.8 billion
over the next five years. Mr. Stewart told the investors that its
three production and packaging lines would be replaced or
upgraded, as well as the installation of a multi-packaging
equipment, even as they continue to improve the company's
human resources.
BIG JOB CUTS AT RED STRIPE 1-9- 2001
RED STRIPE, formerly known as D&G will be making the jobs
of about 195 employees redundant in October, largely
resulting from the implementation of a J $1.5 billion plant
modernisation programme.
This planned investment is a continuation of the programme of
preparing for globalisation and international competition in
which the company has been engaged since 1993 when
Guinness acquired controlling shares in Red Stripe. Guinness
is now a part of Diageo, the world's leading drinks company.
Red Stripe said that almost all of the hourly-paid employees at
the Spanish Town Road brewery would be offered re-
employment under revised contracts, with competitive benefits
and conditions of employment in keeping with the company's
standards. Staff will be retrained, so that the bottling line will
end up with about 100 employees.
Commenting on the restructuring programme, president, J ohn
Irving said: The company explored various options to achieve
our objectives of the investment and we believe that this is the
most beneficial option for all concerned. This decision also
reduces the anxiety associated with the introduction of the new
equipment which employees know will not be as labour
intensive as the out-dated ones we now have.
RED STRIPE PROFITS UP 19 PERCENT 3-10-2001
A faster growth rate on all beer brands produced by Red Stripe
in the last quarter of the companys financial year, contributed
to a 19% increase in operating profit for the period to J une
2001. This was achieved by volume growth, cost reduction
strategies and greater focus on consumer needs.
The company has reiterated its commitment to spending $1.4
billion over the next five years to fund a capital investment
programme. As part of the incentive for the investment, the
Government has granted approval for income tax to be
payable by the company for the five years, starting at the end
of J une 2002, to be remitted.
THAT FIVE-YEAR D&G TAX BREAK
Letters from Bruce Golding 20/29-11- 2001
It may well be that had the Dr.Davies not granted D&G a 5-year
tax break, the planned $1.5b upgrading would not proceed. If this
level of tax relief is necessary to facilitate
further investment in an established, profitable enterprise, then
something is wrong with our taxation policy both in principle and
practice.
To forego $2b in taxes in return for $1.5m in investment suggests
that ultimately the J amaican taxpayers are not only financing the
full cost of the investment but providing an extra $500m in
working capital. D&G recorded pre-tax profits last year of $1.3b
and is financing this investment not from loans but from its own
cash reserves? Where does this leave the new local brewing
company which has just invested in a plant to compete with Red
Stripe? And where does it leave the many other businesses that
have invested in upgrading, expansion or new ventures?
Dr. Omar Davies has now explained that D&Gs increased output
is expected to generate almost $9 billion in excise and
consumption taxes over the five-year tax relief period, an average
of $1.8 billion annually. Last year D&G paid $637 million in excise
and consumption taxes. $9 billion over five years would require a
200 per cent increase in consumption of D&G products. Is that
Dr. Davies' calculated expectation?
1. What lead to these job cuts? A modern-isation
program by a foreign-owned firm, driven by global
competition. New labour-saving equipment is being
installed (effectively financed by the Government,
according to Bruce Golding) which is putting people out of
work. Were there alternatives? How can a smaller beer
company compete if this is what D&G really must do?
2. We believe that this is the most beneficial option
for all concerned. The Government, by Omar Davies
calculation, hope to make a net in tax revenue. Diageo will
make more profit. But people are losing their jobs. Which
is more important?
3. Red Stripe will say that its either a reduced
number of jobs, or eventually no jobs at all. Those who
remain will be given competitive re-employment
packages. Does this mean better ones? Hopefully it
should because such modernization as this should lead to
better-paid jobs, even if there are fewer of them.
4. But what would you do if you were the trade
union representing the workers? A similar case has
occurred at J amaican Broilers. Given global competition,
are there alternatives? Do the job losses in fact matter, in
the longer term?
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