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June 2003   

History: Nest of Traitors
Rowan Cahill uncovers a ripping yarn that could redefine the way we look at Australian involvement in World War II.

Interview: A Nation of Hope
Former PM Bob Hawke bemoans the demise of industrial relations but takes heart from the prospect of peace in the Middle East

Unions: National Focus
Noel Hester reports on a soap star rebellion, Howard’s plans to renuclearise South Australia, more historical atrocities in the north, the redundancy test case plus more in the monthly national wrap.

Safety: The Shocking Truth
It’s every power worker’s worst nightmare – and it happened to Adrian Ware. In a flash of voltage, his life changed forever, as Jim Marr reports.

Tribute: A Comrade Departed
From Prime Ministers to wharfies, the labour movement paid tribute to Tas Bull this week. Jim Marr was among them.

History: Working Bees
Neale Towart looks at a group of workers who got sacked so their boss could keep making the Bomb.

Education: The Big Picture
The NTEU’s Dr Mike Donaldson and Tony Brown join all the dots in the current debate around higher eduction.

International: Static Labour
Ray Marcelo argues there’s another side to the recent furore over Telstra’s use of cheap Indian IT contractors.

Economics: Budget And Fudge It
Frank Stilwell argues that Peter Costello’s latest budget plumbs fiscal policy to new depths.

Technology: Google and Campaigning
Labourstart’s Eric Lee argues the latest weapon for campaigning could be the humble search engine.

Review: Secretary With A Difference
Looking for a new job can be hard enough, without having to worry about sadomasochistic bosses and the threat of being spanked for forgetting to cross your ‘t’s, says Tara de Boehmler.

Poetry: The Minimale
The Labor Party leadership is in the news again, inspiring our resident bard David Peetz to song

Satire: Howard Calls for Senate to be Replaced by Clap-O-Meter
John Howard released a controversial policy statement today, arguing that the Senate be abolished in favour of a device measuring noise from the gallery of the House of Representatives.


It’s Our Party
Long time union watcher Nicholas Way looks at the changing dynamics between the industrial and political wings of the labour movement.

The Soapbox
Grass Roots
In his Maiden Speech, new MP Tony Burke argues that the ALP’s union links are nothing to be ashamed of.

Opinion Forming Down Under
Evan Jones condemns the mainstream’s media coverage of the War on Iraq and the damage it is doing to our national psyche.

The Locker Room
Location, Re-Location!
It’s all fun and games until someone loses a club, writes Phil Doyle


To the Victors The Spoils
Revelations that private American lawyers, rather than the ILO, will rewrite the labour laws of countries levelled by the American military vindicate the warnings of those concerned by US unilateralism.


 Rail Chaos Looms

 Electrolux Blows Fuse at Fundraiser

 ACM Loosens Handcuff on Democracy

 Sick Call on Mum’s Job

 Now For Industrial Shock and Awe

 Brian Miller – Working Class Hero

 Dynamite: Howard Handout for Rorters

 Family Case to Nurture Mothers

 Militants Lock Out Another 600

 Tipping the Turtle – Fijian Style

 Carr Goes Private

 Wages Blemish Sound Budget

 Westie Takes On Westfield ‘Hypocrisy’

 Eleventh Hour Reprieve for Women's Centre

 Activist Notebook

 In Defence of Cuba
 The Story in General
 Thinking of America
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Static Labour

Ray Marcelo argues there’s another side to the recent furore over Telstra’s use of cheap Indian IT contractors.


Revelations that Telstra is importing IT contractors from India to work in Australia has ignited an industrial dispute over job losses from global outsourcing. Australian unions claim that Telstra is paying the Indian contractors one fifth of the pay of an Australian IT worker. But as India strives to make outsourcing more attractive, the issue is far from resolved.

India's global competitiveness is founded on its infamously low wages. A manufacturing worker's wage for example, is little more than Aus$1 an hour. Global companies are now beside themselves trying to get into India and hire skilled (yet cheap) workers.

Over the past few years, Indian IT workers have shown that using new technologies, they can now work as efficiently as their counterparts anywhere else in the world - and do it cheaper. Some estimates say between 50 and 70 per cent cheaper.

It's not surprising that these low costs now appear to have lured Telstra. The Community & Public Sector Union (CPSU) says IT contractors from India are being paid $12,000 Australian dollars to work in Australia. Both Telstra and the Indian IT contractor have denied the claims.

But what's at stake here is not just an ordinary pay dispute, but the willingness of corporations to cut jobs in rich countries and send them to cheaper places like India. A salary of $12,000 appears cut-price for Australians, but it is around six times more than the salary of an office worker in New Delhi (exchange rate effects help).

Of course, if Telstra is breaching Australian industrial laws by paying these wages in Australia, they should be prosecuted. Nonetheless, my guess is that the Indian IT contractors will send much of that money back to India and help ease some financial hardship for their families.

The fact is that there are thousands more highly skilled Indian IT workers looking for work. India's government and Indian IT corporations see outsourcing as a key to India's development and global status. Corporate cost-cutting in rich countries is indeed driving India's outsourcing industry. Some Indian IT outsourcing companies claim they have never stopped hiring.

Many corporations hype (and many unions worry) that outsourcing of services represents the new era of globalisation. It is not. Outsourcing is part of the same urge to locate production in the lowest-cost location. It's the evil genius of capitalism.

Outsourcing is creating new wealth in India. It's offering thousands, young people especially, new job prospects. Some perspective: thousands of new jobs from outsourcing is creating islands of affluence amid grinding poverty. India needs at least 450 million new jobs to help (mostly unskilled) poor people earn more than a dollar a day.

It is, however, immoral and plain unfair for Australian workers to compete with Indian wages in order to keep their jobs. Australian workers are entitled to feel insecure and angry as global outsourcing grows.

But if an Australian IT worker loses her job, or can't get a new job because it is outsourced to an Indian IT worker, there is still arguably a net rise in global equality. The comparatively poorer Indian worker and his family gains an opportunity he would not otherwise have had. Admittedly that's not a soothing thought for Australian workers and their families.

So what can be done? The Australian government could mandate that no Australian jobs can be outsourced (echoing similar legislative attempts in America) but this solution sadly tends to appeal to base prejudice and easily leads to the charge of "foreigners taking Aussie jobs".

Government-owned companies can decide against outsourcing, as the CPSU has demanded. But under competitive pressures, even state enterprises may not be able to afford such a policy. It's better to employ people by staying solvent than to risk jobs by going under. Other market interventions may help; where private investment fails, the government can be a "buffer" employer, for example.

But in developed economies like Australia, the only immediate help for workers that comes to mind is to rely on a very deep safety net. If political (and trade union) pressure makes job cuts so odious and unpopular as they ought to be, then there is no reason why governments shouldn't be able make unemployment payments, and retraining and job placement schemes, very very generous.

On an international front, it's in the interests of Australian unions to support rising wages in poor countries. Apart from the obvious effect of helping such workers buy more of the things they produce, it also helps restrain capitalism's restless urge to shift production to low-cost regions. For unions, simply opposing more trade that actually creates jobs in poor countries will not help workers in developing countries earn more money. Supporting ways for low-paid workers in poor countries to unionise will.


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