Socialist View, No. 15, Spring 2006

Capitalist crisis, immigration & defending workers' rights

THE DISPUTE at Irish Ferries was extremely important giving a glimpse of key issues that can become dominant in the years ahead. While the dispute was specific to Irish Ferries the fact that the bosses through IBEC and the media backed up the company in such a strong fashion reflects that the attack on jobs, wages and conditions is becoming more generalised.


Competition for markets be-tween countries and companies is intensifying pushed along particularly by the emergence economically of China and India. The capitalist class across Europe are attempting to respond to this threat by liberalising and developing the EU internal market, the most recent example being the Services Directive, and by diminishing the wages and conditions of the working class.

Enlargement of the EU is a key part of this, as the major powers want to exploit the plentiful, educated and cheap workforces that exist in the more eastern European countries. This will be done by a combination of relocating businesses to these countries and by employing "cheaper" migrant labour. Bosses want to use the lower wages and worse conditions of these workers as a new benchmark to drag down the living standards of workers generally throughout the EU.

In Ireland the mass mobilisation of over 100,000 on 9 December 2005 against the bosses at Irish Ferries showed massive public support and the potential to defeat that company and knock back the employers' agenda. The unions could have fought in a much more serious fashion to make sure that any new crew made up of migrant workers be paid the same wages and have the same conditions as Irish workers. A victory would have given a real confidence boost to workers generally that they could overcome the attacks of the bosses and could resist attempts to impose competition between Irish and migrant workers. It could have been the start of a serious campaign to recruit unorganised workers into the unions.

Unfortunately the union leadership signed a very bad deal with Irish Ferries and squandered the opportunity that the mass mobilisation had created. Instead the dispute and the outcome heightened people's fears of a "race to the bottom" and has made people more nervous of the impact of immigration. Labour leader Pat Rabbitte made comments at the start of this year that instead of showing shared common interests and the need for a united struggle of Irish and migrant workers, did the opposite, clearly implying that migrant workers are the cause of the attack on the rights of Irish workers.

"The time may be coming when we…have to look at whether a work permits regime ought to be implemented in terms of some of this non-national labour, even for countries in the European Union." Having then made some points on the dangers of the Services Directive (which a matter of weeks later Labour voted for in the EU Parliament) and job "displacement", he said "There are 40 million or so Poles after all, so it is an issue we have to have a look at." - Pat Rabbitte Irish Times 3 January 2006.

Rabbitte's intervention indicated a further political degeneration of the Labour Party, reflecting its desperation for power. Labour conducted research that indicated a growing concern about a "race to the bottom" and nervousness at the impact of immigration. His comments were a conscious attempt to stoke up and feed off peoples fears in order to get a cheap boost in support for Labour. Pat Rabbitte has brought the issue of immigration right up the agenda; boosted any anti-working class, racist elements in society and helped provoke a lot of imbalanced media coverage, all of which would have impacted on the opinion poll conducted on migrant workers towards the end of January. The poll showed that people had contradictory attitudes, but indicated a growth in opposition to immigration.

SIPTU's failure

Jack O'Connor, President of SIPTU, has made the point that in an open labour market, regulations, new laws and enforcement are necessary if workers' rights are to be safeguarded. Without diminishing the importance of rights being given a legal basis, it is illusionary to believe that the law, the courts or the industrial relations mechanism can be used to halt the attacks that the bosses are now beginning to impose. Increasing the power of the unions through mass recruitment and industrial action that hits the employers in their pockets are the key weapons that the working class should employ. Wrongly believing that there is no alternative to the capitalist market and by not basing themselves on the real power of the working class to change conditions, the trade union leadership is impotent and incapable of defending the living standards of their members. That Jack O'Connor was quoted as saying he "very much" welcomed Pat Rabbitte's comments, that they were "helpful" and "timely" gives legitimacy to the idea that migrants are the problem and can add to tensions amongst different sections of workers at a time when the opposite is necessary if the bosses are to be combated.

This programme of attacks on rights by the capitalist class throughout Europe is serious. In order to maintain profits and competitiveness they want to smash the historic gains that the workers' movement made after the Second World War. In Ireland and throughout the whole of Europe, the trade unions are facing a big challenge. It is not just a question of the need to fight these attacks. Do they have a political alternative that can defeat wage competition and the race to the bottom? A programme which shows that the capability exists for all workers to have decent lives and one which can unite all workers into one movement. The bosses are co-ordinating their attack trying to play off workers in the different countries against each other. That means the trade union movement must in addition develop a pro-working class internationalist policy and seek to link up and support workers' struggles on a European-wide basis if they are to be successful in defending the rights of the working class.

In dealing with issues such as workers' rights and immigration, it is necessary to be accurate and balanced about the levels of immigration, how the bosses are using it to affect the economic situation and what are people's attitudes towards migrant workers. Most crucial of all is the need to point a way forward for the working class on the basis that the root of the attacks is the emerging crisis in the capitalist system and show opposition to policies or attitudes that serve to divide workers, as the working class is strongest when it stands united.

Consumer spending in the US is the locomotive of the world economy and is in particular a key factor in the growth in China. US consumer spending is not coming from savings but is being funded by credit from outside the US and as a result debt levels of individuals and corporations are massive. The US trade deficit has broken all records and is unsustainable in the medium term. Recession and economic crisis in the US will choke off growth internationally, further adding to competitive pressures and tensions globally. At this point the economic growth in China and India does not offer a way forward for capitalism but makes the situation worse. They contribute much more to the supply of goods and services than they do to world demand and therefore are again adding to the potential for trade conflict between the different capitalist powers.

There is a trend of re-location of investment and industry from the traditionally advanced countries to the east to avail of cheap, educated workforces. This represents a shift in the centre of production not a new lease of life to capitalism. In fact competition from the likes of India and China will result in job losses in Europe and will be used to diminish wages and conditions. The attack on living standards in the west with further growth in unemployment will inevitably diminish people's ability to buy goods and will weaken the market further and undermine the economy.

Neo-liberal competition

Likewise notwithstanding the recent amendments to the EU Services Directive, when implemented it will intensify competition within Europe but will also further assist the bosses to use the large pool of cheap labour that now exists in the EU because of enlargement to reduce workers' rights and living standards generally.

The growth in the Irish economy is on a different basis than in the 1990s. The growth has a real impact, there were nearly 87,000 jobs created in 2005. But the growth is increasingly going hand in hand with the undermining of workers' rights and attacks on conditions. The crisis in the manufacturing sector is continuing as its competitive position is being undermined. There are 12,000 less employed in this sector than a year ago. There have been many examples recently of domestic and foreign companies closing down or pulling out in order to go to cheaper locations. However immigration of workers has been vital in filling the labour shortages in other sectors of the economy. Of course the new found support amongst the bosses and the rich for hiring migrant workers is in reality a declaration by them that they want to be free to exploit these workers as much as possible, and they will discard them when they can no longer make a profit out of them. More than 43,000 of the jobs created last year went to migrant workers. Recent stats from the CSO indicate that there are 170,000 migrants working, just fewer than 9% of the total workforce. The migrant workforce grew by 34% last year. If such growth was maintained over the next two years, officially one in eight of all workers would be migrant, up from one in fifteen in November 2004. These official figures give a basic indication, but it is likely that they understate to some degree the numbers of migrants workers.

The majority of migrant workers in Ireland are low paid. Whether migrant workers are being used to force a reduction in other workers' wages or are been used instead of Irish workers has been an issue of some controversy recently. The real issue is more about how extensive these features are at the moment and what causes them, not whether they exist at all. These features are emerging in the economy because it is clear that the bosses in general would like to employ first and foremost those who can do the job at the cheapest rate. Apart from just boosting their short-term profitability, that is the logic of the capitalist system particularly as it faces into a crisis.

Unemployment amongst Irish workers has not gone up because bosses have used migrant workers. Around 40,000 more Irish people joined the workforce last year. However the growth in the economy and in jobs can mask important changes that are taking place. Most sectors of the economy showed increased numbers of both Irish and migrant workers. However by November 2005 there were 19,000 less Irish workers in the manufacturing sector than a year previously. Over the same timeframe the number of migrant workers in this sector increased by 7,500. A similar picture, although the numbers are much reduced, emerged in the hotel and restaurant sectors.

These examples may or may not indicate direct replacement by bosses of their Irish workers. Some factories could have closed down and un-related others could have expanded or opened hiring migrant workers. Most workers will have got jobs somewhere else. But they certainly indicate an indirect replacement, that is, a preference of bosses for migrant workers. Marc Coleman economics editor for the Irish Times says "Ultimately, the preference of manufacturers for foreign workers that the figures reveal reflects competitive pressures originating from low-wage exporters the other side of the globe, well beyond the reach of social partnership talks."

Replacement of workers

Undoubtedly there is some direct replacement going on but it seems to be limited. Technically there wasn't direct replacement in the case of Irish Ferries as the crew accepted voluntary redundancy. But the reality is that the ships' crew were not given a real or free choice. You can stay but you will be on significantly diminished pay and conditions! Similar replacement is emerging in construction. Workers may leave a job because of a change in conditions and are replaced by a combination of other Irish and migrant workers. At the new firm where such a worker gets employment often the conditions are worse than previously but better than their last boss was imposing, however the pressure is downward. The dispute in the ESB last year illustrated a variation on these trends. Workers were still employed by the ESB but their hours were less (and consequently so were their wages) as some of their work was given out to sub-contractors employing both Irish and migrant workers. Their work was displaced and privatised as opposed to their jobs. Of course in the context of a decline in the economy and the jobs, market and a growth in unemployment, the issue of job replacement could become much more serious. It is clear that what is really happening is the replacement of better paid, often unionised workers, with lower paid workers. Sometimes the lower paid workers are migrants but many times they are not. That fact doesn't diminish the dangers of serious opposition and racism towards migrants in the context of a recession. However as Marc Coleman's perhaps unwittingly demonstrates, the root of these problems is not migrant workers but the actions of the employers in pursuit of profit and capitalist competition.

In the year ending June 2005, average weekly earnings in banking, insurance and building societies had increased by 5.5%. Later figures show that in the year to September the growth in average weekly earnings had slowed to 1.7%, close to half the rate of inflation. In the three months from June to September average weekly earnings in this sector decreased by as much as 2.8%. Migrant workers accounted for 28% of the new staff employed in this sector and in this particular case the Central Statistics Office commented that "average earnings will, for example, be decreased by staff mobility resulting in the appointment of replacement staff at lower salaries". In general there was a definite slowing down in the growth in pay in the latter part of 2005. Undoubtedly the bosses are trying to reduce costs and will try to use and exploit migrant labour in order to achieve that but again it seems in the case of the banking sector those on the lower rate included Irish workers as well.

Bosses turn the screws

The rate of increase in manufacturing pay was down to 2.1% for the year ending September 2005, which represents a de facto pay cut of 1%. Undoubtedly it is easier for bosses to impose lower pay and worse conditions on migrant workers because they are in a vulnerable position and the conditions will be significantly better than they faced at home. The general decline in wage levels in manufacturing can reflect the increased numbers of migrant workers but also the fact that the bosses are just trying to impose lower rates of pay generally.

Average figures cannot fully illustrate what is going on in particular sectors and different people can have very different experiences. In certain areas new workers will be taken on at the going rate. In others, new workers may be taken on at lower rates without it affecting the pay and conditions of the existing workers. However unless those workers resist, it is inevitable that bosses will try to drag their wages down towards the new lower benchmark.

In construction the CSO says that wages are still growing at between 6% - 8%. The CSO only surveys the wages of employees but doesn't include those who are employees but because of sub-contracting and use of the C45s are technically considered self-employed. This is where many of the migrant workers in construction are based. Without union protection many migrant workers in construction are on @10 an hour or less and undoubtedly the construction bosses generally are using the fact that they are able to get away with that try to drag down all wages.

Diminishing wages

The idea has been put forward that Irish workers may leave or be forced out of a job by the boss' which in turn is taken up by a migrant worker, only for the Irish worker to move on to a better paid job up the ladder. Undoubtedly given a strong labour market some are able to do this but it is clear that is not the experience for many others. In the overall economy there has not been a dramatic savaging of pay and conditions but the trend is towards a diminishing of wage increases to a point at the moment, where real wages are just standing still or declining.

In the TNS opinion poll, a third of those surveyed had a firm opposition to immigration and immigrants. Roughly 20% had a very positive position. The attitude of the rest could be summed up as less fixed and a mix of a fear of a race to the bottom and therefore a nervousness of the economic impact of immigration, combined with an openness to and support for migrants who many do not see as the source of such problems. 53% and 63% believed migrant labour was making it harder to get jobs and is pushing down wages respectively, but 59% and 52% also felt migrants were good for the economy and society respectively. If living standards diminish further and particularly in a recession and in the absence of an alternative, there are serious dangers of migrant workers being blamed by more people and the potential for tensions, prejudice and racism to grow and to come out more clearly.

Such a development can be cut across if the trade union movement gave a lead and by the development of struggle which will tend to raise political consciousness and bring workers together. Other EU countries are also likely to make access for people from the EU ten easier and that could reduce the numbers coming to Ireland.

When these issues are put in the proper context it is clear that the attacks on workers' rights are being driven by the capitalist class and the emerging crisis in their system. Irish workers and the unions have a huge interest in doing as much as possible to make sure the bosses are not able to divide and rule between Irish and migrant. Like most Irish workers, most migrants when given a strong alternative can be won over to a trade union position.

The trade union leaders must break from social partnership, part of which is acceptance that the capitalist market and the right of bosses to maximise their profits comes first. If you accept that, inevitably you will accept that workers have to make concessions to maintain competitiveness and profits and that means accepting the race to the bottom. Only by adopting a policy of defending the rights and living standards of the working class and fighting to ensure that any new workers, whether migrant or Irish, get the same conditions, can a race to the bottom be resisted. Again as Marc Colman's comments reveal, if there were no migrant workers the bosses would still be attacking pay and conditions, probably in a more direct way, citing that they are in competition with companies paying a pittance in India and China. The attacks on pay and conditions would happen anyway because it is about maximising profits. Having a different attitude to the rights of migrant workers and not fighting for their rights actually would make it more difficult for Irish workers to defend their own conditions.

Reclaim the unions

In the struggles that will develop it is vital that workers get active and re-claim and re-build the trade union movement so it encompasses the most exploited sections of the working class, including migrant workers. If companies are just going to re-locate or attack jobs and wages, that raises the need to end the capitalist ownership of wealth and resources so they can be used in a planned, rational way on an international basis for the benefit of people. The trade unions were founded by workers, many of whom were driven by a socialist outlook that offered a real way out of the horrors of capitalism at the start of the 20th century. The new movement that will develop over the next years needs to re-develop those traditions of real struggle and real socialism as the task is not just to push the bosses back but to break with capitalist exploitation altogether.

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This article is from the Spring 2006 edition of Socialist View.

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