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14 June, 2001In the IMF's survey "The purchasing power of working time", comparisons are made between the time that has to be worked to buy food, clothing, fuel, rent, durable goods, income tax and social security in 63 countries . It's a horn of plenty.
BY DAVID FOWLER
The fact that a new edition of the IMF's popular biennial survey, The Purchasing Power of Working Time, comes out at a time when the Swiss annual Watch and Clock Fair announced booming sales is purely coincidental (although it is also good news for the highly-skilled Swiss watchmakers, members of the IMF through their union, the FTMH). No, although living in Switzerland, we are not obsessed with time.... well, not in the abstract, but yet with the value of working time as it affects metalworkers' standard of living and, of course, quality of life.
As the IMF has already found out, anyone seeking to carry out such a comparison on the basis of earnings is faced with a pretty formidable task. In fact, a straightforward comparison of converted currencies generally leads only to greater confusion. For this reason and based on many years of experience, the IMF opted for the working hour solution.
OLDER TRADITIONS DIE HARD
One hour is 60 minutes in whatever part of the world; it is inflation proof and, fortunately, not vulnerable to stock market speculations. Having said that, be warned. An accurate comparison of standards of living is beset with a number of difficulties, all of which will not be covered in this article for fear of losing reader interest. A brief glance at the explanation given on the calculation of net earnings based on purchasing power parities in the notes at the end of the study will illustrate what I mean.
The global village may be bringing people closer together and television programmes, much the same in many parts of the world, but older traditions die hard. Bread may be the stuff of life in Western countries, but staple foods in other countries differ -- potatoes or rice, "some like coffee, some like tea". Consumer choices also differ, and that also includes priorities, i.e. what consumer goods or indeed other goods are needed most?
Many IMF members come from Muslim countries and eat lamb, while other religious denominations can eat pork. Petrol in Venezuela, it used to be said, was cheaper than water. Certainly overcoats and snow boots are not very useful in the tropics. Other influences can also play an important role. Let me give you an example.
CHANGING LIFE STYLES
The recent scare about BSE followed by the epidemic of foot-and-mouth disease has created havoc in consumer preferences. Those who are not already vegetarian are changing lifestyles, eating less meat or switching to other diets. South African exporters of ostrich meat claim that demand has increased by 10%-15% in three months. Exports of frozen shrimp from Thailand rose by 63%. Increased demand for kangaroo meat may lift exports by 30%, worth about US$20 million. There seems to be some truth in the proverb that "it is an ill wind that blows nobody any good".
SEVEN INDUSTRIAL SECTORS
Those readers already familiar with the IMF databank will find The Purchasing Power of Working Time a horn of plenty. One-hundred and seventy-nine pages of tables, graphics and explanatory notes covering 63 countries and seven different industrial sectors, plus one for the whole of the manufacturing industry, provide a mine of information for any trade union negotiator looking for data to support a claim using international comparisons of purchasing power. In effect, it is a truly invaluable source for research.
The survey, published at the end of 2000, is based on net hourly earnings expressed in the working time needed to buy a wide range of consumer goods, after social security deductions.
The data has been calculated on price levels for medium quality goods, e.g. clothing, durable consumer goods and monthly expenses for rent -- all applicable to a main industrial town in the countries mentioned.
Industrial branches covered are basic metals, machinery and equipment, electrical machinery and apparatus, radio, television and communication equipment and apparatus, motor vehicles, shipbuilding and repair, aircraft and space vehicles.
Comparisons are made between the time that has to be worked to buy food, clothing, fuel, rent, durable goods, income tax and social security.
A KILO OF BEEF
Readers and researchers of The Purchasing Power of Working Time will of course have their own reasons for making comparisons. These can be for collective bargaining or even just curiosity to find out where the workers in their country or industry stand in the international league table.
For the purpose of this article, I have made an almost arbitrary choice, by way of illustration and to give some idea of the differences in standard of living between metalworkers across the world.
My first choice concerned a steelworker or similar job in a basic industry buying a kilo of beef in a developed country, in this case Japan, where the price for the purpose of our comparison would be 1 hour and 40 minutes. An Australian steelworker, in another highly industrialised country, but one with a highly developed agricultural sector, would only pay the equivalent of 49 minutes working time.
In a newly emerging economy, i.e. Brazil, with both a large basic industry and an extensive agricultural economy, a metalworker in heavy industry would be even luckier, paying slightly less with 47 minutes, for his beefsteak.
Taking a developing country on the African continent, the price would be five times as much. A Romanian steelworker is even poorer off and expected to pay 3 hours 41 minutes of his labour for his kilo of roast beef.
BUYING A CAR
For many years, a guiding principle, repeated in numerous IMF collective bargaining seminars and used in countless negotiations, was that a worker should earn enough to buy the products of his manufacture.
The question I asked myself, therefore, was "what chance had any autoworker, in whatever part of the world, to actually purchase the fruits of his labour?"
My first choice was, not surprisingly, the USA. Here one finds that an autoworker could expect to buy a medium-sized automobile for the price of 986 hours and 53.5 minutes of work. A West German autoworker would pay only 764 hours and 39 minutes, i.e. 23% less. A South African metalworker in this industry would have to work much harder to achieve the 4,851 hours and 32 minutes to realise his ambition, while for a Turkish worker, in a middle-range economy, the price would be 2,772 hours 11 minutes, something over half the price.
At a more mundane level, I was curious to know how much it costs to walk. A shipyard worker in South Korea, for instance, will work for 14 hours 35 minutes to buy a pair of shoes. A Polish boat builder will pay a little less at 14 hours 7.5 minutes while an Indian worker employed in shipbreaking will expect to pay a little more at 17 hours 29 minutes.
Most fortunate is the Danish shipwright who will only pay the equivalent of 4 hours 33.5 minutes. Most expensive of all is the price paid by the Greek shipyard worker whose shoes will cost 23 hours 13.5 minutes!
A TELEVISION SET
In this age of information technology, high tech, and the revolution in telecommunications, where no home is complete without a television set, the electrical and electronics industry is probably the fastest growing sector of the metal industry.
TV sets and electronic components are produced by many of our members, particularly in Asia and in the "maquilladores" of Mexico, where prices, however, often remain high. In Japan, an electrical worker can buy a new television receiver for about 19.5 hours work. In Italy, workers in the same industry find prices only a little bit higher at 23 hours 17 minutes.
Electrical workers in the developing and often producing countries Malaysia, Hong Kong and Mexico have to toil for respectively 154 hours 35 minutes, 85 hours 48.5 minutes, and 145 hours 43 minutes to buy the same set!
JAPANESE COMPANIES MOVING
Labour costs have been named as one of the main reasons for the Japanese companies quietly moving their manufacturing overseas. Japanese manufacturing now conducted outside Japan is almost 15 per cent up from 9 per cent five years ago. Household names such as Aiwa and Fujitsu in the electrical and electronics industry recently announced plans to shift production to cheaper locations in Taiwan, Korea, and China. Yamaha, the world's second largest motorcycle maker, also in the metal industry, is to move 90 per cent of its total scooter output to Taiwan. Meanwhile Taiwanese officials have been facing criticism of the hollowing out of their own industries as Taiwanese companies make even lower cost ventures in mainland China. Such is the progress of globalisation. Will this result in cheaper products in the host countries? More purchasing power for a shorter working week?
Readers will find no information on working time in China in the IMF publication, simply because the IMF has no affiliates there. Some of our members, however, may be familiar with a recent publication of the Danish Metalworkers' Union "The Global World of Metalworkers -- Six Portraits from a Changing World", which compares prices in working time of a metalworker Ding Tei Bing, a machine operator from the east coast of China: for milk 13.5 minutes and a colour television set 142 hours, compared with Denmark at 2.5 minutes and 15 hours, respectively.
INFLATION RATES OF OVER 1,000 PER CENT
After even a superficial look at the IMF statistics in The Purchasing Power of Working Time, one is left with the overwhelming impression of the disparity between earnings in one country compared to another. For this, many factors are responsible. One could recall that it is not so many years ago that inflation rates of over 1,000% were experienced in some countries of Latin America. If prices go up and wages stand still, more hours have to be worked to buy the same goods and services. Nothing can change that.
The relentless search for cheaper labour costs by the multinational corporations, such as the prohibition of trade unions, poor safety conditions, long hours of work and low wages, wage and other discrimination between men and women workers, the causes are legion and one doesn't have to look far to find them. Speculation and global slumps in raw materials and commodities, or a rise in the price of energy can ravage the economy of a developing country, to say nothing of increases in oil prices, corruption and political scandals, not to mention natural disasters. These fluctuations, of course, are reflected in the statistics that the IMF collects and often tell their own story.
AMONG THE BETTER PAID WORKERS
Today it is fashionable to talk of globalisation, yet way back in 1893 the IMF delegates at its founding congress resolved that each country should report every three months on, among other things, "the average number of working hours" and "the average wages". Perhaps at this time currencies were more stable and comparisons, given similar conditions in member countries, more reliable. IMF pioneers were then not unaware of the impact of international developments on their own countries and economies. The difference today lies, perhaps, not so much in kind as in the degree and speed of international integration.
Metalworkers, wherever they may be, have tended to be among the better paid industrial workers, but a glance at some of the IMF tables sadly bears out the truth that the rewards of globalisation, expressed as a direct concern for decent living standards, have yet to be incorporated in the principles of world trade.
"ONE HOUR FOR THE FUTURE"
If the engine of globalisation continues to be profit and not solidarity, there will be more emphasis on being competitive and less on public service, more attention given to market shares and less to fair shares. If one needs a good example of solidarity, one only has to look to the contribution of metalworkers at Volkswagen in Germany. Under the slogan "One hour for the future", autoworkers created an entirely new concept of the purchasing power of working time. Since autumn 1999, VW workers have each donated one hour of their annual pay towards sponsoring projects for street children run by local institutions where the VW group has operations. In its first year, the scheme recorded a collection of 3.4 million German marks (US$1.7 million) for children in need. Also making their contribution to "One hour for the future" were workers of other group companies such as Audi, Sachser, Seat, Skoda, VW Brazil, VW Brussels, VW Financial Services, as well as VW suppliers and business partners, retired employees, IG Metall local offices, various action groups and private donations.
Some of the cities where projects are being sponsored are São Paulo, Brazil; Uitenhage, Kwanobuhle and Cape Town, South Africa; Puebla, Mexico; Hannover, Halle, Bad Dürrheim and Hamburg, Germany.
As an end note, no comment on the goods and services that an hour of work will provide would be complete without the reminder that women spend two thirds of their working hours on unpaid work (men spend just one fourth), and most of these hours are spent in caring work, for which the market gives almost no rewards.
The "Purchasing Power of Working Time" can be downloaded from the IMF's website under "Publications." Hard copies may be ordered from the IMF website under "Do you know," by e-mail on [email protected], or by fax: +41.22.3085055. It is available in English, German, French and Spanish.
The fact that a new edition of the IMF's popular biennial survey, The Purchasing Power of Working Time, comes out at a time when the Swiss annual Watch and Clock Fair announced booming sales is purely coincidental (although it is also good news for the highly-skilled Swiss watchmakers, members of the IMF through their union, the FTMH). No, although living in Switzerland, we are not obsessed with time.... well, not in the abstract, but yet with the value of working time as it affects metalworkers' standard of living and, of course, quality of life.
As the IMF has already found out, anyone seeking to carry out such a comparison on the basis of earnings is faced with a pretty formidable task. In fact, a straightforward comparison of converted currencies generally leads only to greater confusion. For this reason and based on many years of experience, the IMF opted for the working hour solution.
OLDER TRADITIONS DIE HARD
One hour is 60 minutes in whatever part of the world; it is inflation proof and, fortunately, not vulnerable to stock market speculations. Having said that, be warned. An accurate comparison of standards of living is beset with a number of difficulties, all of which will not be covered in this article for fear of losing reader interest. A brief glance at the explanation given on the calculation of net earnings based on purchasing power parities in the notes at the end of the study will illustrate what I mean.
The global village may be bringing people closer together and television programmes, much the same in many parts of the world, but older traditions die hard. Bread may be the stuff of life in Western countries, but staple foods in other countries differ -- potatoes or rice, "some like coffee, some like tea". Consumer choices also differ, and that also includes priorities, i.e. what consumer goods or indeed other goods are needed most?
Many IMF members come from Muslim countries and eat lamb, while other religious denominations can eat pork. Petrol in Venezuela, it used to be said, was cheaper than water. Certainly overcoats and snow boots are not very useful in the tropics. Other influences can also play an important role. Let me give you an example.
CHANGING LIFE STYLES
The recent scare about BSE followed by the epidemic of foot-and-mouth disease has created havoc in consumer preferences. Those who are not already vegetarian are changing lifestyles, eating less meat or switching to other diets. South African exporters of ostrich meat claim that demand has increased by 10%-15% in three months. Exports of frozen shrimp from Thailand rose by 63%. Increased demand for kangaroo meat may lift exports by 30%, worth about US$20 million. There seems to be some truth in the proverb that "it is an ill wind that blows nobody any good".
SEVEN INDUSTRIAL SECTORS
Those readers already familiar with the IMF databank will find The Purchasing Power of Working Time a horn of plenty. One-hundred and seventy-nine pages of tables, graphics and explanatory notes covering 63 countries and seven different industrial sectors, plus one for the whole of the manufacturing industry, provide a mine of information for any trade union negotiator looking for data to support a claim using international comparisons of purchasing power. In effect, it is a truly invaluable source for research.
The survey, published at the end of 2000, is based on net hourly earnings expressed in the working time needed to buy a wide range of consumer goods, after social security deductions.
The data has been calculated on price levels for medium quality goods, e.g. clothing, durable consumer goods and monthly expenses for rent -- all applicable to a main industrial town in the countries mentioned.
Industrial branches covered are basic metals, machinery and equipment, electrical machinery and apparatus, radio, television and communication equipment and apparatus, motor vehicles, shipbuilding and repair, aircraft and space vehicles.
Comparisons are made between the time that has to be worked to buy food, clothing, fuel, rent, durable goods, income tax and social security.
A KILO OF BEEF
Readers and researchers of The Purchasing Power of Working Time will of course have their own reasons for making comparisons. These can be for collective bargaining or even just curiosity to find out where the workers in their country or industry stand in the international league table.
For the purpose of this article, I have made an almost arbitrary choice, by way of illustration and to give some idea of the differences in standard of living between metalworkers across the world.
My first choice concerned a steelworker or similar job in a basic industry buying a kilo of beef in a developed country, in this case Japan, where the price for the purpose of our comparison would be 1 hour and 40 minutes. An Australian steelworker, in another highly industrialised country, but one with a highly developed agricultural sector, would only pay the equivalent of 49 minutes working time.
In a newly emerging economy, i.e. Brazil, with both a large basic industry and an extensive agricultural economy, a metalworker in heavy industry would be even luckier, paying slightly less with 47 minutes, for his beefsteak.
Taking a developing country on the African continent, the price would be five times as much. A Romanian steelworker is even poorer off and expected to pay 3 hours 41 minutes of his labour for his kilo of roast beef.
BUYING A CAR
For many years, a guiding principle, repeated in numerous IMF collective bargaining seminars and used in countless negotiations, was that a worker should earn enough to buy the products of his manufacture.
The question I asked myself, therefore, was "what chance had any autoworker, in whatever part of the world, to actually purchase the fruits of his labour?"
My first choice was, not surprisingly, the USA. Here one finds that an autoworker could expect to buy a medium-sized automobile for the price of 986 hours and 53.5 minutes of work. A West German autoworker would pay only 764 hours and 39 minutes, i.e. 23% less. A South African metalworker in this industry would have to work much harder to achieve the 4,851 hours and 32 minutes to realise his ambition, while for a Turkish worker, in a middle-range economy, the price would be 2,772 hours 11 minutes, something over half the price.
At a more mundane level, I was curious to know how much it costs to walk. A shipyard worker in South Korea, for instance, will work for 14 hours 35 minutes to buy a pair of shoes. A Polish boat builder will pay a little less at 14 hours 7.5 minutes while an Indian worker employed in shipbreaking will expect to pay a little more at 17 hours 29 minutes.
Most fortunate is the Danish shipwright who will only pay the equivalent of 4 hours 33.5 minutes. Most expensive of all is the price paid by the Greek shipyard worker whose shoes will cost 23 hours 13.5 minutes!
A TELEVISION SET
In this age of information technology, high tech, and the revolution in telecommunications, where no home is complete without a television set, the electrical and electronics industry is probably the fastest growing sector of the metal industry.
TV sets and electronic components are produced by many of our members, particularly in Asia and in the "maquilladores" of Mexico, where prices, however, often remain high. In Japan, an electrical worker can buy a new television receiver for about 19.5 hours work. In Italy, workers in the same industry find prices only a little bit higher at 23 hours 17 minutes.
Electrical workers in the developing and often producing countries Malaysia, Hong Kong and Mexico have to toil for respectively 154 hours 35 minutes, 85 hours 48.5 minutes, and 145 hours 43 minutes to buy the same set!
JAPANESE COMPANIES MOVING
Labour costs have been named as one of the main reasons for the Japanese companies quietly moving their manufacturing overseas. Japanese manufacturing now conducted outside Japan is almost 15 per cent up from 9 per cent five years ago. Household names such as Aiwa and Fujitsu in the electrical and electronics industry recently announced plans to shift production to cheaper locations in Taiwan, Korea, and China. Yamaha, the world's second largest motorcycle maker, also in the metal industry, is to move 90 per cent of its total scooter output to Taiwan. Meanwhile Taiwanese officials have been facing criticism of the hollowing out of their own industries as Taiwanese companies make even lower cost ventures in mainland China. Such is the progress of globalisation. Will this result in cheaper products in the host countries? More purchasing power for a shorter working week?
Readers will find no information on working time in China in the IMF publication, simply because the IMF has no affiliates there. Some of our members, however, may be familiar with a recent publication of the Danish Metalworkers' Union "The Global World of Metalworkers -- Six Portraits from a Changing World", which compares prices in working time of a metalworker Ding Tei Bing, a machine operator from the east coast of China: for milk 13.5 minutes and a colour television set 142 hours, compared with Denmark at 2.5 minutes and 15 hours, respectively.
INFLATION RATES OF OVER 1,000 PER CENT
After even a superficial look at the IMF statistics in The Purchasing Power of Working Time, one is left with the overwhelming impression of the disparity between earnings in one country compared to another. For this, many factors are responsible. One could recall that it is not so many years ago that inflation rates of over 1,000% were experienced in some countries of Latin America. If prices go up and wages stand still, more hours have to be worked to buy the same goods and services. Nothing can change that.
The relentless search for cheaper labour costs by the multinational corporations, such as the prohibition of trade unions, poor safety conditions, long hours of work and low wages, wage and other discrimination between men and women workers, the causes are legion and one doesn't have to look far to find them. Speculation and global slumps in raw materials and commodities, or a rise in the price of energy can ravage the economy of a developing country, to say nothing of increases in oil prices, corruption and political scandals, not to mention natural disasters. These fluctuations, of course, are reflected in the statistics that the IMF collects and often tell their own story.
AMONG THE BETTER PAID WORKERS
Today it is fashionable to talk of globalisation, yet way back in 1893 the IMF delegates at its founding congress resolved that each country should report every three months on, among other things, "the average number of working hours" and "the average wages". Perhaps at this time currencies were more stable and comparisons, given similar conditions in member countries, more reliable. IMF pioneers were then not unaware of the impact of international developments on their own countries and economies. The difference today lies, perhaps, not so much in kind as in the degree and speed of international integration.
Metalworkers, wherever they may be, have tended to be among the better paid industrial workers, but a glance at some of the IMF tables sadly bears out the truth that the rewards of globalisation, expressed as a direct concern for decent living standards, have yet to be incorporated in the principles of world trade.
"ONE HOUR FOR THE FUTURE"
If the engine of globalisation continues to be profit and not solidarity, there will be more emphasis on being competitive and less on public service, more attention given to market shares and less to fair shares. If one needs a good example of solidarity, one only has to look to the contribution of metalworkers at Volkswagen in Germany. Under the slogan "One hour for the future", autoworkers created an entirely new concept of the purchasing power of working time. Since autumn 1999, VW workers have each donated one hour of their annual pay towards sponsoring projects for street children run by local institutions where the VW group has operations. In its first year, the scheme recorded a collection of 3.4 million German marks (US$1.7 million) for children in need. Also making their contribution to "One hour for the future" were workers of other group companies such as Audi, Sachser, Seat, Skoda, VW Brazil, VW Brussels, VW Financial Services, as well as VW suppliers and business partners, retired employees, IG Metall local offices, various action groups and private donations.
Some of the cities where projects are being sponsored are São Paulo, Brazil; Uitenhage, Kwanobuhle and Cape Town, South Africa; Puebla, Mexico; Hannover, Halle, Bad Dürrheim and Hamburg, Germany.
As an end note, no comment on the goods and services that an hour of work will provide would be complete without the reminder that women spend two thirds of their working hours on unpaid work (men spend just one fourth), and most of these hours are spent in caring work, for which the market gives almost no rewards.
The "Purchasing Power of Working Time" can be downloaded from the IMF's website under "Publications." Hard copies may be ordered from the IMF website under "Do you know," by e-mail on [email protected], or by fax: +41.22.3085055. It is available in English, German, French and Spanish.