Globalisation ruining workers’ job security

The very sobering suggestion, if that is all it really was, from IDA chief executive Barry O’Leary yesterday that workers at the Bausch + Lomb plant in Waterford have little option but to carefully consider the take-it-or-leave-it ultimatum put to them this week by the company’s new owners must send another shiver down the spines of the 161,000 workers employed by foreign firms.

If the truth be told, the grim situation faced by the Bausch + Lomb staff resonates with nearly every worker in the private sector where job security is more often than not a fond memory from another, seemingly less cut-throat time.

The grim choice between greatly reduced wages or unemployment is not unusual but it cuts to the bone every time. What is an entirely legitimate accountancy exercise for an employer is a life-defining, more often than not a life-draining, experience for cornered workers, especially those working in an economy where unemployment hovers near 12%.

Canadian drug giant Valeant bought the Bausch + Lomb parent group in an $8.7bn deal last year and warned the 1,100 workers in Waterford that the plant’s survival depends on immediately shedding 200 jobs and a wage cut of 20% for the surviving workers. The company said that it intends to bring its Irish cost base closer to the one in Rochester, New York, where wage rates are more than 30% lower. As the average wage in Waterford is a moderate €35,000, it is hard not to see this as anything other than an example of the piteous race to the bottom, the process that rightly makes the idea of globalisation anathema to so many vulnerable manufacturing workers. This also has significant cost implications for the exchequer — a reduction in employment taxes and possible increased demand for welfare supports by workers falling below qualification thresholds for the first time. This again raises the pressing question of multinational firms making substantial profits while offering workers an income so poor that they qualify for welfare support. Who is being subsidised? The worker or the employer?

This grim situation is obvious in the figures that define this economy too. The great bulk of exports — a figure persistently around the 90% mark — come from foreign firms with Irish bases. This seems a dependency that, no matter how appreciated and how welcome, make us very vulnerable to the shifting sentiments of international business, labour costs, and competitiveness.

It is ominous, too, that there has been a renewed focus on tax arrangements in recent days. If we are forced to demand more from these firms it is likely many employees around the country will face the stark choice offered to the Waterford workers.

There seems only one way to insulate, in as much as that is possible, Irish jobs from this process and that it to almost fanatically support indigenous businesses with the potential to expand and export services or goods. There is, of course, no guarantee these companies will not relocate to a cheaper environment — as Aer Lingus threatened this week — but it is essential that everything that can be done to secure the kind of worthwhile employment not dependent on foreign investment and its whims is done. Until that happens, more and more people will unfortunately face the grim choice offered to the Waterford workers.