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decisions) and on the processes for approving and overseeing loans. China has
previously promised that the AIIB will follow the same international standards as
other lending institutions like the IMF when it comes to environmental concerns and
labor rights. China has also promised, however, to keep AIIB lean and efficient
rather than weighted down by bureaucratic procedures. In other organizations,
some standards are harsh and even attached with political conditions,Xinhua
noted, saying that China founded AIIB precisely to get around those issues.
China says AIIB is expected to begin operations by the end of 2015, although some
delegates are uncertain if every member country will be able to win legislative
approval for the AOA that quickly.
Amazon, which had sales in the UK of 3.35bn in 2011, only reported a "tax
expense" of 1.8m.
And Google's UK unit paid just 6m to the Treasury in 2011 on UK turnover of
395m.
reported on the "raid" by tax protesters, who shouted: "Dave and George
do your sums." Later that same month, the Guardian ran with the headline "UK
Uncut: 'People are starting to listen to us'".
Withdrawal of custom
Another impact of tax shaming is that some people, such as 45-year-old selfemployed businessman Mike Buckhurst, from Manchester, boycott brands.
"I've uninstalled Google Chrome and changed my search engine on all my
home computers. If I want a coffee I am now going to go to Costa, despite
Starbucks being nearer to me, and even though I buy a lot of things online, I
am not using Amazon.
"I'm sick of the 'change the law' comments, I can vote with my feet. I feel
very passionate about this because at one point in my life I was a top rate tax
payer and I paid my tax in full," he says.
To some extent, the shift is down to the recession, according to Dr Stuart Roper, a
corporate reputation expert at Manchester Business School.
"We are in an age of deep public spending cuts and real austerity. And this [tax
avoidance] is not a victimless crime, if you like. If this was six or seven years ago,
pre-financial crisis, I don't think it would have had the same impact it's had now," he
says.
War on Want's tax justice campaigner Murray Worthy says there has also been a
change in public perception.
"As the public have got to understand better what corporate tax avoidance is, there
is a clear sense of outrage that is going well beyond a small group of protesters - it's
something that the public feels is really not right with the current system," he says.
Discussions of the ethics of tax avoidance are now everywhere. But a few years
back, it was a hardcore gaggle of activists and campaign groups like UK Uncut that
were staging sit-down protests in stores such as the Arcadia Group, Boots, Vodafone
and Fortnum and Mason.
Journalists and newspapers are also doing their own investigations, argues Worthy,
with the appearance of Google, Starbucks and Amazon before the Public Accounts
Committee a result of stories by the Daily Telegraph, Reuters and the Guardian
respectively.
In a report published on Monday, the committee's chairwoman Margaret
Hodge said the level of tax taken from some multinational firms was "outrageous"
and that HM Revenue and Customs needed to be "more aggressive and assertive in
confronting corporate tax avoidance".
MPs also called for those who do not pay their "fair" share to be named by the
government, but Prime Minister David Cameron and Chief Secretary to the Treasury
Danny Alexander ruled it out, saying it would breach taxpayer confidentiality.
Capitalism has been globalised, but the rules that protect people from capitalism
have not.
Last April, 1,127 workers were killed when Rana Plaza, a garment factory in Savar,
Bangladesh, collapsed. To put this in perspective, that's more than twice the number of
Americans that have been killed in mass shootings since 1983. This unfathomable tragedy
reached us around the world in the form of images troubling enough to make even the most
calloused consumers think twice about where their clothes come from. Surely - we all
thought - the companies that source from Bangladesh would do something to address the
pervasive problems with the industry.
What we have so far is a new Accord on Factory Safety in Bangladesh, which 38 companies
around the world have agreed to sign. The Accord does have serious shortcomings, of
course: it's voluntary, temporary,
Last April, 1,127 workers were killed when Rana Plaza, a garment factory in Savar, Bangladesh,
collapsed. To put this in perspective, that's
been killed in mass shootings since 1983. This unfathomable tragedy reached us around the world in
the form of images troubling enough to make even the most calloused consumers think twice about
where their clothes come from. Surely, we all thought, the companies that source from Bangladesh
would do something to address the pervasive problems with the industry.
What we have so far is a new Accord on Factory Safety in Bangladesh, which 38 companies around
the world have agreed to sign. The Accord does have serious shortcomings, of course: it's voluntary,
temporary, and it doesn't include most
Sears, JCPenney, Nordstrom, and so on (who have initiated a separate agreement that analysts have
already denouncedas a "sham"). Still, it represents an important step toward better global labour
standards.
But the singular focus on safety that has come to dominate the debate about Rana Plaza obscures
the far more serious, systemic problems that are ultimately to blame for this tragedy. Even if the
Accord were mandatory, permanent, and universal, it would still leave these deeper issues untouched.
Indeed, the companies that have signed the Accord have likely done so in hope of putting an end to
the public outcry before it generates pressure for the more substantive reforms they know need to
take place.
economic policies imposed over the past few decades, companies now have the power to rove the
globe in search of what CEOs refer to as the "best investment conditions". Poor countries like
Bangladesh have to compete with other poor countries to attract much-needed foreign capital by
offering the lowest minimum wages, the flimsiest safety standards, the cheapest taxes, and so on.
Most economists justify this destructive "race to the bottom" under the banner of "comparative
advantage".
As part of this deal, companies no longer have to bargain with local workers - they can opt out of the
social contract whenever it suits them. If workers in Savar, say, got together to demand better wages
or safety standards, the companies that use them would just start sourcing from somewhere else,
leaving them unemployed. Such a move wouldn't take more than a mouse-click at the headquarters of
Gap or Wal-Mart.
So workers are made to face a stark choice: accept dangerous conditions and minimum wages
of$0.21
per hour, or lose their jobs. The constant threat of replacement keeps workers cheap and
Jungle.
Wages in many sectors are falling as desperate people the world over compete to sell their labour for
less than the next person, even as worker productivity increases and corporate profits reach record
highs.
To put it bluntly, the global labour market is rigged in the interest of multinational companies; it is
designed to allow them to pump value out of human bodies - mostly poor, brown, female bodies - as
efficiently as possible. Those bodies generate the enormous wealth that flows into corporate coffers,
but only a fraction of it goes back to them in wages - the vast majority gets pocketed as profits and
CEO bonuses.
This process of appropriation - or theft, really - helps explain the shocking
trends in global
inequality that we have seen over the past few decades, to the point where the richest 200 people
now have
more wealth than the poorest 3.5 billion - more than half of the world's population.
more harm than good. Even if they wanted to, they often can't: most free trade agreements - like
NAFTA and the forthcoming TPP - empower foreign corporations to sue sovereign governments for
regulatory legislation that reduces their profits.
If we're going to have a global labour market, it stands to reason that we need a global system of
labour standards, something that will put a floor on the race to the bottom and guarantee a baseline
level of human fairness. The single most important component of such a system would be a global
minimum wage.
a plan along these lines, arguing for a wage floor of $0.50 per hour. I'm thrilled
that Yunus is bringing publicity to this cause, but his plan isn't quite good enough: the wage floor
would apply only to the garment industry, and it would be left up to corporations to take action something we already know they won't do. For Yunus, this would be a matter of "corporate social
responsibility" - and brand enhancement - rather than a matter of basic justice.
A bigger problem with Yunus' plan, however, is that a fixed minimum wage would be little use to
people who live in countries where it's impossible to survive on even $0.50 an hour. That, and it would
unfairly hurt the poorest, lowest-wage countries by eliminating their comparative advantage.
A better idea would be to set the global minimum wage at a fixed
Palley recommends 50 percent - of each country's median wage, so it would be tailored to local
economic conditions, costs of living, and purchasing power. As wages increase across the spectrum,
the floor would move up automatically, so we wouldn't have to constantly pressure politicians to raise
the minimum to keep up with inflation. All countries would be treated equally, and countries that
presently enjoy a comparative advantage through cheap labour would retain that advantage.
Of course, in some countries wages are so low across the spectrum that 50 percent of the median
would still leave workers in poverty. So the global minimum would need a second safeguard: wages in
each country must be above the national poverty line.
inequality within countries - indeed, for this reason the UN would be wise to adopt a global minimum
wage as a key strategy toward realising the post-Millenium Development Goals
development
agenda. Raising wages also has positive economic benefits: it stimulates demand and thus
facilitates local economic growth, and it does so in a way that doesn't depend on debt.
Sceptics who worry that a minimum wage system might negatively affect employment can take
comfort in the now-overwhelming evidence
What would a global minimum wage mean for consumers? Not much, it turns out. Economist Robert
Pollin has
found that doubling the wages of sweatshop workers in Mexico would raise the price of
clothes sold in the US by only 1.8 percent. In fact, you could raise sweatshop wages by a factor of ten
and consumers in rich countries still wouldn't be fazed: a
Research shows that people are willing to pay 15 percent more on a $100 item - and 28 percent more
on a $10 item - if it is made under "good working conditions".
A global minimum wage would go a lot further than the "fair trade" fad that has become popular
among many Western consumers. Every time I walk into a store and see items labeled fair trade, I'm
always struck by what their presence implies: that the rest of the "normal" products are
unfair. We
shouldn't be presented with a choice between fair trade goods and oppression goods - oppression
goods shouldn't exist in the first place. When we buy the things that we need to sustain and enjoy our
lives, we should be able to be confident that we are not colluding in the exploitation of other human
beings who toil in near-slavery conditions.
The problem with globalisation is that capital has been globalised while the rules that protect people
from it have not. It's time to take the next logical step. Not only is it now conceivable to have a global
minimum wage system, it's also - for the first time in history - quite doable. The UN's International
Labour Organization has already proventhat it has the will and the capacity to govern such a system.
Imagine if we put this idea to popular referendum. Imagine the landslide support it would receive from
people across the world. "The arc of history bends toward justice," Dr Martin Luther King, Jr told us.
Yet this is true only when we summon the courage to bend it thus. What we need now is to mobilise
the popular pressure to make it happen, to grip and bend the arc of history, recognising that "power
concedes nothing without a demand", as Frederick Douglass once put it: "It never has, and it never
will."