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Though we often associate slavery with the past, it is still widely practiced throughout the world today. Estimates put the number of currently enslaved people at almost 21 million. Modern day slavery, otherwise known as human trafficking, occurs when individuals are exploited through coercion or deception and typically involves restricted freedom of movement. It can take many forms that we often do not think of as slavery. Below are six specific forms of modern day slavery.

6 Types of Modern Day Slavery That Cannot Be Ignored

  1. Forced Labor: Forced labor includes all types of enslavement that involve coercion against one’s will and a threat of punishment. The practice is typically found in industries with little regulation and many workers. It is commonly used in global supply chains by the private economy to make products. This form of slavery is also used by governments, particularly in state prisons. If the work is not voluntary and involves a threat of penalty, it can be considered forced labor. Forced labor can occur even without the presence of physical violence because it is highly ingrained in some cultures.
  2. Bonded Labor: Debt bondage occurs when an individual is forced to work to repay a debt. As the worker labors to repay their debt, the employer can add other expenses making repayment impossible and enslavement permanent. This type of slavery is often used to make consumer products. It particularly targets migrant workers looking for an economic opportunity who incur debt for travel or housing expenses. The debt involved can also be generational, so children can be born into a situation where they must work to repay a debt incurred by their parents.
  3. Domestic Servitude: This type of slavery consists of live-in domestic workers who cannot leave of their own free will. Since authorities are unable to easily inspect homes, this modern day slavery is easy to hide. It is also extremely difficult to detect because enslaved individuals can appear to be nannies or other types of domestic workers. As a form of bonded labor, domestic servitude often affects migrant workers who incur a debt to their employer for travel or recruitment that they are unable to pay back.
  4. Sex Trafficking: Sex trafficking occurs when women, men, or children are forced to engage in commercial sex acts. Commercial sex involving children under age eighteen is always considered sex trafficking. Those living in extreme poverty are particularly vulnerable to this practice because of their economic marginalization and lack of education. They can be lured overseas through false employment opportunities. Victims suffer physical and psychological trauma and potential legal charges.
  5. Forced Marriage: This type of slavery occurs when an individual lacks the option to refuse marriage or is married to someone else by relatives. Forced marriage can also happen when a wife is married in exchange for payment. This practice is characterized by a lack of consent by at least one party. A major motivation of this type of slavery is cultural tradition or threats. Forced marriage of a child under the age of eighteen is called early marriage. Girls are more common targets for this because they can be controlled through sexual violence.
  6. Child Labor: Any form of modern day slavery that involves children under 18 is considered child labor. More than a quarter of slaves today are children, and many are involved in occupations that are harmful mentally or physically. The demand for cheap labor and specific physical characteristics increases the use of child workers. Children are also easier to control and usually do not demand better working conditions or wages. Those living in poverty are especially vulnerable because of the desire or need to support their families due to a lack of education and employment opportunities.

These are six of the most common types of modern day slavery, but the practice is not limited to just these forms. Slavery still occurs throughout the world in practices that are not always easily recognizable. Governments and organizations must remain informed about the occurrence of modern day slavery to be able to stop it in its tracks.

Lindsay Harris

Photo: Flickr

India's Gender Gap

As two-thirds of the world’s illiterate population or 496 million people are women, the gender gap in literacy rates remains conspicuous. The Guardian calls the gap “stubbornly unchanging” as gender inequality persists and overall literacy rates improve.

In the past 20 years, youth literacy rates have jumped from 83% to 91%, while the number of illiterate youth declined from 170 million to 115 million. Yet the difference between literacy rates for men and women has remained quite stable.

For instance, India’s gender gap is stark. The country holds the largest illiterate population and constitutes one-third, or 187 million, of all illiterate women around the world; there is a 24 percentage point difference between men and women. About 75% of Indian men have at least a basic level of literacy while 51% of women are literate.

This disparity in literacy rates remained persistent throughout the years according to data collected by India’s National Commission on Population. For example, in 1951, the literacy rate for males was 27% while just a mere 8% of women were literate — a 19 percentage point difference. In addition, in 1981, 56% of men were literate with a 30% literacy rate for women — a 26 percentage point difference.

Taking a Closer Look at India’s Gender Gap

As the gender gap remains stable although overall literacy rates are on the rise, this predicament is an interesting puzzle that requires a closer look at possible causes.

According to Planet Read, the following social factors have contributed to India’s gender gap:

  1. Gender-based inequality
  2. Social discrimination and economic exploitation
  3. Domestic responsibilities dominating educational responsibilities
  4. Low female enrollment in schools
  5. Low retention rate and high dropout rate

It is obvious that abiding social and cultural norms have been a roadblock towards promoting a more balanced ratio in literacy rates.

In a report by the University of Maryland, College Park, Aparna Sundaram and Reeve Vanneman observed a counter-intuitive relationship between an increase in women’s labor force participation and literacy rates. In areas that promote the idea of women in the labor force, there are also lower rates in literacy and education levels.

One may assume that the participation of women in the labor force contributes to an equalization in women’s status and, thus, a decrease in the gap between men and women literacy rates. However, this does not seem to be the case. The solutions towards resolving disparity seem much more complex than simply promoting an equalized labor force.

As more education is provided to a society as a whole, the more likely it would be for the persisting gender gap in literacy rates to decrease. Sounds like a paradox, but it is a solution worth noting.

As literacy is tied to thriving economies, it is important to focus on improving the gender gap in literacy rates. According to data, an increase in literacy rates correlates with a decrease in the share of the population living in poverty — on less than $2 per day. Moreover, focusing on educating women more specifically would, according to Bloomberg, yield a “growth premium” in DGP trends around the world.

Priscilla Son

Photo: Flickr

VisionspringThe importance of manual labor in the global economy is a key component in the fight against poverty in developing nations.

The World Economic Forum foresees that, despite predictions of technological advances, employment in the manufacturing and agricultural sectors will continue to grow for years to come.

A New York-based social enterprise sees the solution clearly: to alleviate poverty in developing nations, we must first focus on elevating the labor force.

The World Health Organization estimates that 90 percent of the world’s visually impaired live in developing countries, while nearly 80 percent of visual impairments can be prevented or cured. Without affordable vision care services, an estimated 703 million people in developing countries suffer from visual impairment and lack access to eyeglasses.

These problems are compounded by the nature of labor-intensive manufacturing jobs in developing countries, such as textile, clothing and machine/computer assembly – which require clear eyesight. As a result, vision problems pose significant obstacles to workers, by either hindering their productivity or rendering them unemployable.

With these looming statistics and the understanding that “if you can’t see, you can’t work,” founders and optometrists Jordan Kassalow and Scott Berrie established Visionspring in 2001 with the aim of providing vision care and eyeglasses to combat poverty in developing nations.

Visionspring considers the lack of optic care in low-income areas a market failure, and intends to address poverty in developing nations by fundamentally restructuring the market for eyeglasses.

Visionspring relies on partnerships with local NGO’s and small businesses in over 40 countries. Local entrepreneurs are trained by Visionspring to operate satellite optical shops. The shops provide high-quality care, and sell glasses that cater to a variety of customer needs, including bifocals, single vision, and photocromic lenses.

Rather than providing donated eyeglasses, which are costly to ship and often damaged upon arrival, Visionspring supplies new pairs of glasses to its customers around the world, thus stimulating production and providing lenses to those who need them most.

A 2007 Impact Assessment performed by Visionspring measured the effect of providing reading glasses to those in the developing world. The study found that reading glasses have the potential to increase a worker’s productivity by 35 percent.

A follow-up study done by the William Davidson Institute at the University of Michigan reported a consequent increase in monthly income by 20 percent for those whose vision was corrected. The result is a higher disposable income for the world’s poor, and eventually elevation out of poverty.

By addressing a specific need and empowering local people to provide essential services to their communities, the Visionspring model is globally viable. In 2012, Visionspring celebrated its millionth pair of eyeglasses sold in the developing world.

Eye care continues to gain ground as an important topic in the global health arena. In 2013, the World Health Assembly approved an action plan for universal access to eye health, which aims for a 25% reduction of avoidable visual impairments by 2019.

Visionspring will play an integral role in the achievement of this goal, as it keeps its sights on addressing the needs of workers and alleviating poverty in developing nations.

Laurel Klafehn

Photo: Flickr

Poverty in Ecuador

With nearly 35% of the population or close to four million people living in poverty, poverty in Ecuador is extremely pervasive. According to The World Bank, “one and a half million Ecuadorians live in extreme poverty and cannot meet their nutritional requirements, even if they spend everything they have on food.”

Rural and urban poverty in Ecuador tend to have markedly different characteristics. The rural poor tend to have little access to land, lack education, have no integration into the market and have few employment opportunities. The indigenous population, included in the rural poor, is among the poorest of the poor.

The urban poor, on the other hand, face a lack of safe water and sewage, have to rent housing, have low job participation and, as with the rural poor, possess little education.

The World Factbook states that “Ecuador’s high poverty and income inequality most affect indigenous, mixed race, and rural populations.” The government has set up social services that are based on the poor sending their children to school and getting them medical check-ups. This has helped with advancing the education of rural poor children.

Oil and Agriculture: Profits and Challenges

Oil is the biggest export in Ecuador, accounting for half of Ecuador’s export income. But falling oil prices and other issues, including climate change, caused a financial crisis in 1999/2000. In 2000 the government approved new structural changes, including the adoption of the U.S. dollar as legal tender. This move, along with increasing oil prices, has helped improve the Ecuadorian economy and poverty levels.

Although oil is the largest export, the principal employer in rural Ecuador is agriculture. But, according to Rural Poverty Portal, the percentage of the total workforce that farming employs declined from 26.2% in 2001 to 20.8% in 2010. Small farmers also face disadvantages such as lack of access to land, lack of access to markets, lack of credit, soil degradation and climate change.

Labor, Land and Housing

The World Bank suggests that the main assets of the rural poor in Ecuador are “labor, land and housing.” Utilizing and growing these assets can lead to not only lower poverty levels but improved standards of living.

Education is the most powerful key to the labor force. Secondary education and allowing women access to jobs empowers the workforce. Keeping small, rural farmers on their land through access to credit and markets keeps them empowered and fed. Helping the poor use their homes to open businesses and other ventures could help generate income and help improve poverty in Ecuador.

The Price of Production? Deforestation

Unfortunately, the expansion of agriculture and oil production leads to deforestation. With expanded deforestation, other environmental and economic problems arise. The loss of forest not only changes the ecosystem, but it also brings the challenge for local owners to retain their land, especially indigenous landowners who are the hardest hit by poverty in Ecuador.

The country has been a member of the United Nations Reducing Emissions from Deforestation and Forest Degradation (UN-REDD) Program since 2009. In this program, incentives are given to landowners to keep the trees standing.

World Wildlife Federation (WWF) states that the United Nations Environmental Program calls Ecuador one of 17 megadiverse countries in the world. WWF believes that the worst threats to biodiversity within the country are the ways the economy has developed since the 1970s.

The economic measures taken have caused a loss of sustainability of natural resources and over-industrialization. By helping maintain biodiversity and improving sustainability, poverty in Ecuador can be greatly improved.

Rhonda Marrone

Photo: Flickr

Causes of Human Trafficking
Likened to modern slavery, human trafficking is driven mostly by similar motivations to those of slavery. The Department of Homeland Security defines human trafficking as the “illegal trade of humans for exploitation or commercial gain.” Exploitation frequently involves forcing victims into prostitution or slavery. Human trafficking can be separated into sex trafficking and labor trafficking. Though they have different purposes, there are general trends that explain the overall root causes of human trafficking.

According to a 2012 International Labour Organization (ILO) report, 21 million people are victims of forced labor. The Asia-Pacific region accounts for the largest number of forced laborers in the world with 11.7 million victims (56 percent of the global total), followed by Africa with 3.7 million (18 percent) and Latin America with 1.8 million victims (nine percent).

According to the Huffington Post, approximately 75 to 80 percent of human trafficking and slavery is for sex. The rest are forced into labor exploitation, such as agriculture and construction work. In 2015, 5,544 cases of human trafficking were reported, as stated in a study by the National Human Trafficking Resource Center.

Top 5 Causes of Human Trafficking

  1. Poverty, war, natural disasters and a search for a better life. Traffickers look for people who are susceptible to coercion into the human trafficking industry. Those people tend to be migrants, fleeing their homes either because of economic hardship, natural disasters, conflict or political instability. The displacement of populations increases individuals’ emotional vulnerability, and frequently they do not have the financial support to protect themselves. This makes them subject to abuse through trafficking.
  2. Women and children are targets. In some societies, the devaluation of women and children make them far more vulnerable to trafficking than men. Traditional attitudes and practices, early marriage and lack of birth registration further increase the susceptibility of women and children. They are also targeted because of the demand for women in sex trafficking. A report by Equality Now states that 20.9 million adults and children are bought and sold worldwide into commercial sexual servitude, forced labor and bonded labor. Women and girls make up 98 percent of the victims trafficked for sexual exploitation.
  3. Demand for cheap labor. The service industry, particularly restaurants and kitchens, are common exploiters of human trafficking. There is also a demand for cheap domestic and agricultural labor. Employees are often initially promised a safe work space and a steady salary, only to later find that they are paid less than minimum wage and worked over time. Business owners guilty of this behavior continue to practice these illegal norms because the victims of trafficking can rarely protect themselves and they have very few alternatives.
  4. Human trafficking generates a huge profit. According to the ILO, the human trafficking industry generates a profit of $150 billion per year. Two-thirds is made from commercial sexual exploitation, while the remainder comes from forced economic exploitation such as domestic work and agriculture. Human trafficking is the fastest-growing and second-largest criminal industry in the world, after drug trafficking.
  5. Cases of human trafficking are difficult to identify. Some challenges in identifying victims of human trafficking arise because victims are well-hidden or highly traumatized. Those that are traumatized are unlikely to divulge information to investigators, either because they are scared to confront law enforcement, or because they are too troubled to respond. Consumers of human trafficking also contribute to the crime’s hidden nature, according to a report by the Urban Institute. Both traffickers and consumers are aware of the huge risk they take by participating in this illegal behavior and will do their best to cover up any illicit activity.

Initiatives to diminish these causes of human trafficking include international cooperation agreements, national policies against trafficking, improved immigration policies that can detect the exit or entry of humans being illegally trafficked, and increased infrastructure to protect those that are being exploited for labor or sex.

Michelle Simon

Sources: The Atlantic, US State Department, Urban Institute, International Labour Organization, Restaurant Opportunities Centers United, UNICEF, National Human Trafficking Resource Center, Huffington Post, The Department of Homeland Security, Equality Now
Photo: Flickr

Fair_Trade

Earlier this year, Safeway, in a partnership with the nonprofit organization Fair Trade USA, became the first U.S. supermarket to offer Fair Trade seafood. The initiative is part of a program aimed at expanding the social and environmental considerations of the Fair Trade movement into the world seafood market, which currently employs over 120 million people across the world.

The supermarket chain began its Fair Trade seafood program in March with the distribution of wild-capture tuna from small-scale fishing operations in Indonesia. Those products are being supplied by four Fair Trade associations representing 120 fishermen in Indonesia’s Maluku province.

In order for seafood to become Fair Trade certified, suppliers must source and trade in compliance with standards established by Fair Trade USA’s Capture Fisheries Program. Those criteria include standards for empowerment and community development, which prioritize the well-being of communities in trade activities; fundamental human rights, which protect workers from forced labor and ensure their right to organize; and wages, working conditions and access to services, which aim to improve wages and benefits as well as working hours.

The Capture Fisheries Program is especially significant given an Associated Press investigation conducted in March, which found that hundreds of men in the Indonesian island village of Benjina were being forced to catch seafood against their will. Most of those interviewed were found to have been Burmese immigrants who were taken to Indonesia and forced to fish. A number of workers were deemed by employers to be “flight risks,” and were consequently forced into cages to prevent their running away.

“All I did was tell my captain I couldn’t take it anymore, that I wanted to go home,” said Kyaw Naing to an Associated Press (AP) video camera snuck into the work site by a fellow worker. “The next time we docked, I was locked up.”

These labor conditions are not limited to the Indonesian market. Although the waters encompassing the Maluku province are Indonesian territory, it sees a large amount of illegal fishing activity, including from Thailand, one of the United States’ foremost seafood providers. While the United States purchases 20% of the country’s $7 billion in seafood exports, the State Department blacklisted Thailand for failing to address human trafficking and labor abuses.

The Indonesian supply-chain is such that tainted and ethically caught fish are generally processed side-by-side. AP found that the two products were mixed and very well could end up being sold in American supermarkets including Walmart, Safeway and Albertsons.

Though American and Indonesian officials have decried the labor conditions that define much of the region’s seafood industry, the most immediately effective method of combating this race to the bottom is to popularize Fair Trade initiatives like the Capture Fisheries Program. However, until supermarkets prioritize Fair Trade products and eliminate ethically tainted ones from the market, these human rights abuses will continue to have moral implications for both suppliers and consumers.

Zach VeShancey

Sources: SFChronicle, Fair Trade USA, New York Times, Food Tank
Photo: Fair Trade USA

Bolivia Minimum Wage
In the wake of recent national economic gains, Bolivian President Evo Morales has promised that the nation’s minimum wage will increase by 10 percent.  The move is a hotly debated one concerning Bolivian unions, and the employer federation has been embroiled in the debate for some time.  The labor unions applaud it, saying it would equalize things between the “haves and have-nots,” while the Confederation of Private Entrepreneurs (CEPB) spurned it and contended that it would increase taxation.  A BBC report also notes that President Morales is in an election year and may have had political reasons for siding with union wishes.

The same BBC piece also points out that “Bolivia’s gross domestic product tripled to $27 [billion] in 2012 since Mr. Morales took office in January 2006, according to World Bank figures.”  Changes to the national Constitution and increasing the role of the state contributed to the gains, along with “high commodity prices and a prudent macroeconomic policy.”  The World Bank also states that public debt dropped vastly, bolstering the banks in the process and alleviating national poverty to a great degree.

However, despite the gains nearly half of all Bolivians still live in poverty.  The unpredictability of commodity pricing can affect and potentially reverse positive gains, so private industry must play a more substantial economic role.  Bolivia’s informal economy, where a large portion of the population finds work, “results in lower productivity” according to the World Bank.  Lagging infrastructure is also a deterrent to further and faster progress.

The International Monetary Fund (IMF) is projecting slower economic growth in Latin America in 2014.  “Weak investment and subdued demand for the region’s exports held back activity in 2013… For 2015, the IMF projects a modest pickup, to 3 percent. The key risk is a sharper decline in commodity prices caused by weaker demand.”  More specifically, growth in Bolivia “is projected to fall sharply in 2014, to about 2.75 percent  from nearly 6 percent in 2013.”

President Morales may be trying to draw support from his political base with his pledge to increase the Bolivian minimum wage.  In 2013, Morales was publicly inveighed when per diems paid to the families of Morales and his vice president were worth “more than twice the minimum monthly wage,” according to an AFP report.  The money covered travel expenses when the families accompanied the leaders on official trips.  Political rival Adrian Oliva likened the per diems to stealing and contended that Morales had abandoned his socialist roots.

The science behind hiking minimum wage rates is contentious to say the least, often crossing the proverbial bridge from impartial observation to political overtones.  However, the work of UC Irvine economist David Neumark and William Wascher of the Federal Reserve Board can’t be easily disputed.  A Forbes report said they “determined that 85 percent of the best research points to a loss of jobs following a minimum wage increase.”  Empirically, the wage increases aimed at eliminating poverty also quash private sector employment and hiring; a study in the Journal of Human Resources posits that higher minimum wage can increase poverty.

What lies ahead for Bolivia and the rest of the Latin American region remains to be seen as outside economic forces control the commodity rates that are so woven into recent economic gains.  In a race for political power and reelection, Bolivia’s Evo Morales has evidently chosen to adhere to the populist vision that won him initial favor, but at what cost?

Do large-scale informal economic gains qualify as a national victory when nearly half of all Bolivians are still considered poor?  Does alienating the private sector through a push for more reforms mean greater prosperity and long-term economic growth and stabilization?  What is clear is empirical evidence suggesting that minimum wage hikes do more harm than good, even in a strong commodities market.  President Morales may be best served to explore other options that appeal not only to national unions and workers but to the firms who employ them, thereby increasing private investment and paving the proverbial road out of Bolivian poverty.

– Dave Smith

Sources: BBC, WorldBank, Free Malaysia Today, Global Post, Forbes
Photo: Interet General Info

oxfam_sugar_land_grab
Oxfam is an international confederation of organizations that aims to eradicate poverty in countries all over the globe. Oxfam’s most recent effort, entitled Behind the Brands, urges the world’s largest food and beverage companies to consider the social and environmental impact of their actions. The companies targeted include Coca-Cola, Betty Crocker, Oreo, Pepsi, Trident, Minute Maid, Cheerios and Mazola. According to Raymond Offenheiser, president of Oxfam America, fewer than 500 companies control 70% of the major decisions in the food system including prices, quality standards and investments in technology. This process allows CEOs to extract wealth from the company while the lower levels of the hierarchy, including farmers and women, face most of the hardships and risks. Given this relationship, it is no surprise that 80% of the world’s hungry live in rural areas.

Oxfam has utilized petitions and social media campaigns to call attention to the wrongdoings of the world’s largest food and beverage companies, who have a lot to lose in our increasingly conscientious world. In a survey by Cone Communications, nine of ten consumers said that they would boycott brands that partake in “irresponsible behavior” and this trend has been depicted within the brand preferences of consumers within the last year.

As a result of Oxfam’s efforts, Coca-Cola has agreed to address the main issue of Oxfam’s report entitled, “Nothing Sweet About It.” The report highlights the tendency of the world’s largest sugar supply chains to “land grab.” These sugar companies are forcing poor communities across the globe off their land without just compensation or prior consultation in order to gain more land for sugar plantations. In order to tackle this issue, Coca-Cola has committed to disclose the top three countries and suppliers of its cane sugar conduct, publish human rights assessments and engage with suppliers in order to ensure that the community’s concerns are attended to.

Nestle, another large food and beverage provider, has also addressed Oxfam’s complaints regarding women in the cocoa supply chain. Often times, women in third world nations farm the cocoa that is consumed across the globe; however, they never receive any compensation or income for their work. Nestle has agreed to explore how the company can more positively affect women by incorporating gender indicators into the company’s framework and supporting women’s farmer associations.

The efforts by the aforementioned companies depicts how the food and beverage industries have become more socially conscientious; however, many other large businesses have yet to respond to Oxfam’s urges. By utilizing social media and contacting the companies listed on Oxfam’s Behind The Brands proposal, we can encourage social responsibility and help farmers all across the globe.

– Lienna Feleke-Eshete

Sources: Oxfam, Nestle, Global Post
Photo: The Guardian

Collectives Empower the Marginalized Classes of India
Empowerment is one of the single biggest positives to come out of aid work. Not merely giving hand-outs, but enabling people to take the step up on their own power. Earning something gives someone a huge advantage over simply being given it.

Better yet when local governments can act to empower their own citizens. In the city of Pune, India, the government, rather than contracting with private contractors, has instead engaged waste pickers to collect the majority of the city’s garbage. Waste pickers are a ubiquitous sight in Indian landfills. A marginalized segment of the urban population, waste pickers earns a living sifting through trash in order to sell recyclables. It’s a grueling job to earn a meager wage, but many have no alternative.

Change in Pune began twenty years ago though, with a collective called Kagad Kach Patra Kashtakari Panchayat (KKPKP). This collective spent years mobilizing the waste pickers of the city until as an organized body they were able to get the attention of the city government. In 2007, KKPKP and the Pune municipal government formed another collective, Solid Waste Collection and Handling (Swach).

The innovation of the Pune government was then engaging the waste-pickers to handle the majority of the waste collection, as opposed to hiring private contractors. Today, the number of houses served by Swach is 400,000, or 90% of the city’s non-slum households. Houses pay on average 60 cents a month for the services of the waste-pickers, meaning the government outlay is an eight of what it would be for a truck-hauled waste disposal system.

Additionally, waste-pickers segregate trash after collection: recyclables, organic matter for compost, and non-recyclables for incineration. Interestingly, before the introduction of SWACH, the informal collection of waste pickers meant that nearly 50 percent of plastics were eventually recycled. With a more formalized set up and the ability to segregate trash at an early phase, this number could rise. This is significant, especially when you compare that to an 8.2 percent recycle rate for plastics in the United States.

This is a rare success story that combines the empowerment of a lower class with immediate tangible economic benefits and improvements to environmental health. While the future stability of Swatch isn’t certain, and any expansion of the program will face social and political checks, the groundwork has at least been laid.

– David Wilson
Source: KKPKP, Solid Waste Collection and Handling, SWACH, New York Times
Photo: Daily News

Escalating Tensions in South Africa
In August of last year, police killed dozens of striking workers at a South African platinum mine. Yet, now, nine months later, labor disputes continue to sweep the country.

This unrest is largely fueled by disputes and turf wars between two rival unions, the Association of Mineworkers and Construction Union (AMCU) and the National Union of Mineworkers (NUM). The competition between these two leads to ever-increasing demands as they try to attract new members. For example, NUM is seeking pay rises of up to 60% for its members. The trouble is that these figures are unattainable. South Africa’s currency has plummeted in recent weeks, meaning increased import costs and more rapid inflation.

A lot of factors play into the give and take between industry and the unions. Unemployment in South Africa sits at 25%, although if one were to factor in those unemployed who are not currently seeking jobs, the figure rises to 37%. Strict job protection rules prevent people from stepping in place of union workers. This creates a vicious cycle: jobseekers are kept out of the workforce, thus they must offer their services at higher rates, and then as a result, those privileged few with jobs wind up with higher costs and thus require higher wages. This cycle leads to an escalation in pay, without a corresponding rise in productivity, and perpetuating high unemployment rates.

South Africa’s economy is struggling. Exports to its biggest market, Europe, have slowed drastically due to the recession. Retailers are reporting disappointing figures. Mining output is down and inflation may be on the rise. In addition, industrial strikes, or just the threat of them, could potentially lead foreign investors to take their money, money that South Africa desperately needs, elsewhere.

While increased salaries and better working conditions are crucial elements of stable industry, the demand for them cannot be so high as to engender the failure of the industry as a whole, else all of South Africa may suffer.

– David Wilson

Source: The Economist,Global Post
Photo: Photo Blog