Outsourcing

How do you like them facts?

Published by Anonymous (not verified) on Tue, 12/09/2017 - 11:00pm in

wage-inequality

Apologists for mainstream economics (such as Noah Smith) like to claim that things are OK because good empirical research is crowding out bad theory.

I have no doubt about the fact that the theory of mainstream economics has been bad. But is the empirical research any better?

Not, as I see it, in the academy, in the departments that are dominated by mainstream economics. But there is interesting empirical work going on elsewhere, including of all places in the International Monetary Fund (as I have noted before, e.g., here and here).

The latest, from Mai Dao, Mitali Das, Zsoka Koczan, and Weicheng Lian, documents two important facts: the decline in labor’s share of income—in both developed and developing economies—and the relationship between the fall in the labor share and the rise in inequality.

I demonstrate both facts for the United States in the chart above: the labor share (the red line, measured on the left) has been falling since 1970, while the share of income captured by those in the top 1 percent (the blue line, measured on the right) has been rising.

labor shares

Dao et al. make the same argument, both across countries and within countries over time: declining labor shares are associated with rising inequality.

And they’re clearly concerned about these facts, because inequality can fuel social tension and harm economic growth. It can also lead to a backlash against economic integration and outward-looking policies, which the IMF has a clear stake in defending:

the benefits of trade and financial integration to emerging market and developing economies—where they have fostered convergence, raised incomes, expanded access to goods and services, and lifted millions from poverty—are well documented.

But, of course, there are no facts without theories. What is missing from the IMF facts is a theory of how a falling labor share fuels inequality—and, in turn, has created such a reaction against capitalist globalization.

Let me see if I can help them. When the labor share of national income falls—the result of the forces Dao et al. document, such as outsourcing and new labor-saving technologies—the surplus appropriated from those workers rises. Then, when a share of that growing surplus is distributed to those at the top—for example, to those in the top 1 percent, via high salaries and returns on capital ownership—income inequality rises. Moreover, the ability of those at the top to capture the surplus means they are able to shape economic and political decisions that serve to keep workers’ share of national income on its downward slide.

The problem is mainstream economists are not particularly interested in those facts. Or, for that matter, the theory that can make sense of those facts.

Tagged: 1 percent, economics, economists, exploitation, facts, inequality, mainstream, outsourcing, surplus, technology, theory, wages, workers

Cartoon of the day

Published by Anonymous (not verified) on Mon, 04/09/2017 - 10:00pm in

Cartoon of the day

Published by Anonymous (not verified) on Wed, 02/08/2017 - 9:00pm in

SilkJ20170729_low

Special mention

198505_600   The Democratic Party Restart

Tagged: Carrier, cartoon, Democrats, jobs, Mexico, outsourcing, Trump, Trumpcare

Vote for Corbyn to Stop the Work Capability Tests

Published by Anonymous (not verified) on Thu, 08/06/2017 - 7:13pm in

This is the text of another of my table-top pamphlets, this time against the notorious Work Capability Tests. These were also introduced by New Labour at the behest of Unum and other private healthcare providers.

These are not objective tests to assess who is well enough to support themselves. They are simply a callous, bureaucratic mechanism for throwing people with disability off the benefits they need to support themselves. These have included severely disabled people, including terminal cancer patients in comas!

This iniquitous system has been retained and expanded by the Tories – David Cameron and his Lib Dem lackey, Nick Clegg, and now Theresa May.

It is killing people. As I’ve mentioned far too many times before, about 600 + people have died in misery and despair after having their benefit withdrawn due to these tests. Stilloaks, Johnny Void, Mike at Vox Political and DPAC have put together lists and videos putting names to faces, to show the human reality of these statistics – whose mothers, fathers, sons, daughters, brothers and sisters were killed thanks to the Thatcherite insistence of cutting down on welfare.

The number of people, who have died after having been assessed as ‘fit for work’ is well above ten thousand, though the true figure may never be known. Mike and the other disability activists, who tried to get the figures were blocked by IDS and the DWP at every turn when they tried to get them.

Jeremy Corbyn has also promised to end workfare.

So vote for him. Don’t let the Tories kill more disabled people under the pretence of saving money.

Stop the Work Capability Test –
Before More People Die

by David Sivier

One of the very worst policies introduced by various governments as part of their campaigns to dismantle the welfare state over the past decade has been the Work Capability Test. This was introduced by New Labour in October 2008 along with a new benefit for the disabled and long-term sick, the Employment Support Allowance, which replaced Incapacity Benefit. The Work Capability Test is intended to show if the person claiming benefit really cannot work. It consists of questionnaire, in which boxes are to be ticked in answer to particular questions about the claimant’s health and disability. 2Ten of these tests were on the claimant’s physical health, and another ten are on their ‘mental, cognitive and intellectual’ fitness. There may also be a brief physical examination. The tests are performed by medical doctors working on behalf of a government outsourcing company. This was given to the French company, Atos, but the company was forced to terminate its contract a year early in 2014 following public anger at the system’s incompetence and maladministration. The contract was then given to an American company, Maximus. The tests may be repeated as often as the JobCentre Plus decides. If the disabled person scores low in the tests, they are judged fit for work. They lose their ESA and are told to apply for Jobseeker’s Allowance.

The tests are based on a monograph, The Scientific and Conceptual Basis of Incapacity Beneft, by Gordon Waddell and Mansel Aylward, of 2005 and a succeeding work, Is Work Good for Your Health and Wellbeing? By Gordon Waddell and Kim Burton. They were also strongly influenced by a 2001 New Labour conference, in which Aylward was a contributor, Malingering and Illness Deception. These led in turn to the publication of a Green Paper in 2006, A New Deal for Welfare: empowering people to work – an independent assessment of the arguments for the proposed Incapacity Benefit reform. Both Waddell and Aylward were professors at the Unum Provident Centre for Psychosocial and Disability Research at Cardiff University, which was funded by the American insurance giant from 2004-9. The Work Capability Test uses a form of Bio-Psychosocial model of assessment, developed in America by Unum Provident. This model of assessment is considered to have been devised by George Engel in 1977. In 2006 a paper produced by Professor Christopher Butler and his colleagues attacked the model as ‘wanting’ and inadequate. Waddell and Aylward’s 2006 paper has also been attacked and discredited by Emeritus Professor Alison Ravetz.

Unum, and pseudo-medical testing actually became part of the disability benefits system twelve years or so prior to the Waddell and Aylward’s paper, in 1993, when the-then Conservative Health Secretary, Peter Lilley, introduced tougher testing designed to evaluate whether claimants were totally incapable of work. They had previously been awarded benefit if they were unable to do their job. Lilley considered that this approach was to open to sentimental interference by doctors, and so set up an ‘Incapacity benefit medical valuation group’, whose members included Dr John Le Cascio, the second vice-president of Unum Corporation. Lo Cascio had recently been seconded to its British branch, Unum Ltd, based in Dorking in Surrey. In 1994 Lo Cascio was appointed to train the British doctors charged with carrying out the tests by the Benefits Agency Medical Services. New Labour claimed that the purpose of the Work Capability Tests has been ‘to get people back into work’. This was always a misleading claim. New Labour had a ten-year plan to remove one million people from the 2.8 million receiving disability benefits. Their Secretary of State for Health declared ‘We know that being in work can be good for your wellbeing’, echoing the title of the paper by Waddell and Burton. 13 Years before that, Lilley introduced the tests with the aim of cutting £2 billion from the benefits bill.

And Unum itself regarded the benefit cuts as a great commercial opportunity. In their report in 1994, Chairman Ward E. Graffam was enthusiastic about ‘exciting developments in Britain’, saying ‘the impending changes to the State ill-health benefits system heralded in the November 1993 Budget will create unique sales opportunities across the entire disability market and we will be launching a concerted effort to harness the potential in these.’

Atos immediately decided that three-quarters of those in receipt of benefit were fit for work.16 Between the introduction of the tests in October 2008 and February 2012, the Department for Work and Pensions made over 1.36 million decisions on whether to award ESA following the administration of the tests on claimants. It declared 794,000 sick and disabled people ‘fit for work’. From the very beginning, the tests were criticised as being vastly inaccurate, and the treatment of claimants under it as cruel and degrading. ‘We Are
Spartacus’, a network of disability researchers and campaigners, denounced the way claimants were ‘wrongly assessed, humiliated and badly treated’. In response to repeated requests by disability campaigners, the DWP finally released the figures for the number of people dying over 11 months in 2011 while in receipt of ESA. 10,600 people in total had died. Of these, 1,300 had died after being taken off benefit following the decision that they were ‘fit to work’. Some of the people, who have died, committed suicide in despair at having their income terminated. One of these was a 47 year old man, who took a drug overdose. Others experienced a deterioration in their mental health due to the stress of assessment. Between 2008 and 2014, there were 600,000 appeals. This constitutes a third of all assessments, and in 2012-13 there were 465,000 appeals, with a success rate of 39 per cent. In some areas, lawyers had a success rate of over 80 per cent overturning decision by Atos against the claimant receiving benefits. 60 per cent of those, who had successfully appealed had scored zero. That is, Atos had declared them entirely fit for work. In 2013, however, the Conservative government took the decision to end legal aid for claims for welfare payment, which meant that fewer people would be able to afford to take the government to court.

In America, Unum Provident was fined $31.7 million in a class action lawsuit in California in 2003 for running ‘disability denial factories’. Two years later in 2005, John Garamendi, the California Department Insurance Commissioner, fined the company $15 million, declaring ‘Unum Provident is an outlaw company. It is a company that has operated in an illegal fashion for years’. The insurance commissioners of 48 American states had made a settlement with the company by 2006 that required it to review 200,000 claims and pay a $15 million fine. In 2008 the American Association of Justice declared that the company was the second most discredited insurance provider in America.

Despite public anger at Atos’ conduct of the Work Capability Test for ESA, the government in 2012 awarded the company another contract, worth over £400 million, for assessing whether disabled people were suitable for the Personal Independence Payment that was scheduled to replace the Disability Living Allowance in 2013. The Disability Living Allowance provided the handicapped with up to £130 per week to help them look after themselves. This was mostly awarded to help people cook, wash, and assist those with mobility problems. In the three years from April 2013 to 2016, this is to be phased out and replaced with the PIP, which is designed to get people back into work. The government was determined to cut spending on the PIP by twenty per cent during these three years, after the number claiming DLA rose by 30 per cent to 3.2 million people between 2002 and 2011. This was expected to throw 500,000 people off disability benefit.

As with their administration of the ESA fitness to work tests, Atos has proved to be less than efficient in its administration of the PIP. Those applying for the benefit may have to wait months before being notified that they are entitled. The cancer charity, MacMillan Cancer Support, stated that there were serious delays in the approval of payments. As well as leaving the terminally ill without this benefit, it also meant that they were unable to claim other vital benefits with which PIP was linked. As a result, some were forced in their desperation to take out loans from payday loan companies, which have a truly exorbitant interest rate. The number of problems with ESA dealt with by Citizens Advice rose by 54 per cent from 2011 to 2012, when the bureaux dealt with 450,000 of them.

Paul Farmer, the head of the mental health charity, Mind, criticised the tests for failing to consider the effects of mental health on people’s ability to work. In an interview with the Guardian in 2012, he said

The system is based on assumptions that claimants need to be forced back to work, rather than supported on their own terms, and that those not well enough to go back to work are somehow perceived as scroungers. These attitudes only serve to further damage individuals’ mental health and increase the time until they may be ready to return to work.

Richard Hawkes, the chief executive of Scope, another disability charity, stated that the tests ‘should be more than an exercise in getting people of benefits. It should make sure disabled people get the specialist, tailored and flexible support they need to find and keep a job.’ The House of Commons Work and Pensions Committee condemned the tests, stating that the system was so flawed it needed to be completely overhauled.

Guy Standing in his A Precariat Charter states that governments have been able to cut benefits for the disabled far more than for other groups, because they are a minority and so there is likely to be fewer objections to their treatment and lost votes. He also recommends that any firm hired by the government to provide services for the disabled should be bound by three commitments. The first should be to the disabled themselves; the second should be to the government; and the third should be to the whole of society, as the rest of us could be next. The employment contract awarded to such outsourcing firms should include penalty clauses requiring them to compensate the disabled claimant directly when they do not award them the correct benefits. This compensation should be much more than the benefits the disabled person did not receive. They should also be penalised for their mistakes. This would be a start, but it is not enough. The problem lies not with the companies administering the tests, but with the whole system of tests itself. The cause of the problem is attitude of successive governments, from John Major’s Conservatives, through Blair and Brown’s New Labour and then the Conservative-led governments of David Cameron, that the disabled should automatically have their benefits reduced, regardless of the poverty and hardship involved. The goal should be to provide benefits to support the poor and disabled, rather than cuts intended to reduce the tax burden for the rich. The Work Capability Test and the poverty and stress it inflicts should be stopped. Now.

Theresa May Plans to Stop Children Having Free School Meals

Published by Anonymous (not verified) on Sat, 20/05/2017 - 7:35pm in

Along with her other vile policies – like ending her promise not to raise VAT, taxes and national insurance, ending the triple lock on pensions, bringing back fox hunting, opening more grammar schools, May also wants to end free school meals for infants.

Maggie Thatcher tried something similar way back in the 1970s. She wanted to end free school milk as Heath’s education secretary. This earned her the soubriquet ‘Maggie Thatcher, the Milk Snatcher’. Mike in one of his articles on her vile policies has posted a very nice gif from EL4C, which shows a picture of Maggie with that chant, followed by May and the slogan ‘Theresa May takes your lunch away’.

http://voxpoliticalonline.com/2017/05/19/at-last-britons-are-uniting-against-theresa-may/

Historians of the ’70s have argued that Thatcher’s stopping of free school milk was, in itself, a minor issue, which became a political battleground because people were fed up with the Tories generally.

But the stopping of free school meals for infants is a very different story.

We now have a society in which a hundred thousand people or more have been forced through Tory welfare cuts to use food banks. According to statistics, seven million people life in ‘food insecure’ households. Which means that they don’t know if they’re going to have enough to eat tomorrow.

Mothers are starving themselves in order to give food to their children.

This isn’t scaremongering by the ‘cultural Marxist left-wing media’. And people don’t go to food banks, ’cause it’s free food, as spouted by Tory liars like Edwina Currie.

It’s documented fact.

This will make the situation worse. It will mean more children going to school hungry, where they won’t be able to learn because of the hunger pangs. And if they can’t learn, they can’t pass exams, and so won’t get a proper, paying job. If any are still around after they’ve all been either automated away or outsourced.

And so we’ll go back to the 19th century, when there was real famine and malnutrition amongst the Labour poor.

This is what the Tories want. This is what May intends to give the ‘hard working people’ her party claims to be defending.

All to give her friends and paymasters in big business more tax breaks, and a cowed labour force so desperate they’ll work for literal starvation wages.

Don’t put up with it.

Kick and them out.

Vote Labour June 8th.