[OPE] Official economic forecasts 2009

From: Jurriaan Bendien <adsl675281@tiscali.nl>
Date: Tue Dec 09 2008 - 20:59:46 EST

The World Bank now forecasts negative growth in real GDP for 2009 in the developed capitalist countries:

OECD countries -0.3%
Euro Area -0.6%
Japan -0.1%
United States -0.5%

Effectively that means an economic depression as I suggested before, not simply a recession, in the technical sense - not reduced net output growth, but sustained negative growth. World GDP growth weighted for purchasing power parity would drop in real terms to 0.9%, and developing countries would grow at about 4.5% in 2009. Latin America would according to the WB experience a recession, with average real GDP growth being halved, to about 2.1% (in Argentina it's worse, i.e. from 6.6% this year to 1.5% next year). http://siteresources.worldbank.org/INTGEP2009/Resources/10363_WebPDF-01Chapter1-w47.pdf

The OECD comments "Jobless numbers [in the OECD countries] could rise to 42 million by 2010 from 34 million currently, while economic activity is expected to fall by an average of 0.4 percent in 2009, before rising slowly to 1.5 percent the following year.Inflation, however, will ease in all OECD countries." http://www.oecd.org/document/35/0,3343,en_2649_34487_41721827_1_1_1_1,00.html

"We can easily be talking about a world economy that is depressed until 2011 and maybe beyond," Paul Krugman said. http://www.reuters.com/article/domesticNews/idUSTRE4B75KJ20081208

Certainly, on the available estimates, the supposed recovery in 2010 would still mean a level of real GDP growth below what it was in previous years; as I previously suggested, the US economy is forecast to recover somewhat faster than the EU qua growth in real GDP (the social repercussions are something else again).

Anyway not much joy in the economic numbers.

What does in mean for working lives? Stagnant real wages, no job security, more "labor discipline", a higher labor exploitation rate.

In New Zealand for example (I still follow the news a bit there to catch the latest on the neoliberal economic model) the new Premier now wants a "90-day probation period" for new workers in businesses of less than 20 staff, in other words you wouldn't get a fixed employment contract in the first three months of work and could be dismissed during that time. The very term "probation" sounds ominous, it sounds like prison. This would affect about 108,000 workers or 5.9% of the labour force per year. For now, protests in the New Zealand parliament have put the 90-day probation idea on the backburner, but it illustrates the trend. You have little possibility in this system to increase your earnings in the job you are doing, so the only way to get ahead, is to shift to another job, on the strength of what you did before. Life is a sort of hustle.

The background to this is that New Zealand has a highly mobile, flexibilized workforce nowadays, i.e. roughly one in three New Zealanders in a total labour force of about 2.2 million start a new job position each year within a firm or with a different firm, and many of those are in small firms. SNZ gives a grand average staff turnover rate of about 17.5% per year (i.e. about one in six workers leaving the firm per year) and says 181,000 employed workers or 9% of the labour force are "looking for another job" each year. Plenty of work for the "human resources" departments, who do more and more "psychometric tests", often of dubious scientific merit, according to the public service union.

* The total NZ population is 4.1 million, the labour force is 2.2 million, the participation rate is 68.7%, the working age population is about 3.3 million, about 94,000 or 4.2% are officially unemployed.
* The unemployment benefit for a single person over 25 is about US$5,000 after tax per year; basically that means you cannot really afford to live on your own from that.
* New Zealand's grand "average" hourly earnings in US dollars are $12 pre-tax compared to $18 pre-tax in the US, at ppp they are similar.
* In 1991, 50% of working-age women were in paid jobs, now it's 70%, they need the $$$. Women generally get paid much the same as men.
* Since 1988, New Zealand real wages have dropped about 3% in value, while net output per worker increased by 55%.
* A New Zealand CEO earns about 19 times the average wage of the other employees - so if a NZ worker earns a "normal" US$20,000, a CEO averages US$380,000
* New Zealand average wages are now 35% less than Australian wages, and the minimum wage is 50% less than in Australia.
Currently some New Zealand bus drivers who get paid the equivalent of US$7.32 pre-tax an hour, and want a new pay scale to US$8.67 pre-tax an hour, are being locked out, because they planned to give passengers free fares as a protest... (for comparison, a US urban bus driver earns $14 to $17 pre-tax per hour). A NZ supermarket checkout worker aged 16 can earn a little as US$4.60 an hour.

So not much joy about working life either - the degradation of human work, the mainspring of wealth, is well and truly in progress. Maybe the Pope should think about that.


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Received on Tue Dec 9 21:01:43 2008

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