What Color Is Your Cigarette Package?

Aug 17, 2012

In the animal kingdom, colors matter. Some beasts use colors to hide from predators or attract mates. And beasts must know something: the whole color aversion-attraction dynamic is coming to a local supermarket near you in the form of—ugh—Pantone 448C…rolls right off the tongue huh?

Pantone 448C is actually kind of green, or, depending on your eye, something else. What it will be is the color of cigarette packages at the end of the year, as The Age reports:

When plain cigarette packs hit the shelves — scheduled for December 1 — they will be ‘‘drab dark brown’’ with large graphic health warnings and the manufacturers’ brand names written in a small generic font — just big enough to read from a distance of one metre.

How this color was picked is really the end result of research done by Victoria Parr, from research agency GfK Bluemoon, who will present her findings at the annual conference of the Australian Market & Social Research Society  (AMSRS), which is taking place in Melbourne Sept 6th-7th. It comes on the heels of the High Court’s ruling that the tough new packaging standards are constitutional.

As Parr says in a summary of the research to be presented:

Ultimately we were looking to design a pack that met the desired criteria of having low overall appeal, containing cigarettes that are harder to quit, containing cigarettes that have the highest harm to health, containing lower quality cigarettes and containing cigarettes that smokers would be less likely to consider smoking.

Meaning, you won’t be attracted to this box. Celebrate that.


Wal-Mart Reaping What It Sowed

Aug 17, 2012

The gyrations of stock markets, the Euro crisis and the conflicting predictions about the direction of the economy are related to one basic point: average people are tapped out. Wal-Mart tells us the story in pretty simple terms.

Turns out, who knew, but a paycheck isn’t what is used to be:

The Bentonville, Ark, retailer has rebounded from an earlier domestic slump, and reported that sales at U.S. stores open at least a year rose 2.2%, growing for a fourth consecutive quarter.

Still, customers living paycheck-to-paycheck “remains pronounced” in the U.S, said Chief Executive Mike Duke. There are “continuing economic pressures.”

Wal-Mart has been challenged recently as its core lower-income customers in the U.S. contend with high gasoline prices and persistently high unemployment levels. The company also expects inflation to rise in the back half of the year, particularly on food and drought-related items like corn and soybeans.

Wal-Mart cautioned that it is now seeing in international markets the same “paycheck cycle” it saw in the U.S., where customers buy immediately after payday and then make smaller purchases as money runs out. The trend has become particularly pronounced in the U.K., where customers at Wal-Mart’s Asda grocery stores are “clearly stretched,” Chief Financial Officer Charles Holley said during a conference call with reporters Thursday morning. [emphasis added]

For anyone but the elites who want to pay attention, this should come as no shock. Decade after decade, we see the same story: corporations demand wages cuts from workers partly to underwrite huge pay packages for CEOs: financiers try to game a system that ends up collapsing, leaving average people to pay the bill; and political leaders spend too much time trying to appease bond holders, and, rather than spend more money to create decent-paying jobs, they get obsessed with a non existent debt and deficit crisis.

And, by the way, Wal-Mart whinges but, in fact, thrives and grows based on a model of poverty. It pays its workers wages that don’t allow a decent standard of living—and is virulently anti-union to boot. Those obscenely low wages force Wal-Mart workers to shop at Wal-Mart, where prices are low, low, low…for the people who can’t make it from paycheck to paycheck. At the same time, the Wal-Mart heirs are collectively worth about $80 billion—but it never occurs to them to, for example, give their workers even decent health care benefits to ward off poverty.

The logical person would pause and wonder: isn’t the Wal-Mart model self-defeating. The answer is of course, “yes”—but only if you believe in a world of equity, fairness and a decent standard of living for all.

This is all worth remembering when we read about the absurd agenda of the Coalition and its business allies who want to undo the basic fair standard of living enjoyed by workers. Recall what the review of the Fair Work Act found:

After considering the economic aspects of the Fair Work Act the panel concludes that since the Fair Work Act came into force, important outcomes such as wages growth, industrial disputation, the responsiveness of wages to supply and demand, the rate of employment growth and the flexibility of work patterns have been favourable to Australia’s continuing prosperity,” it says. It also criticises Work Choices. ”Of the four bargaining frameworks over the last 20 years, Work Choices is least like the others. Its period of effective operation was relatively brief and during that period it was significantly amended.” [emphasis added]

So, there you have the stark choice: the Wal-Mart model of poverty versus the Fair Work model of spreading prosperity.


Putting The Brakes On The Corporate Machine

Aug 16, 2012

Whenever we hear the drumbeat about needing to work harder because productivity is slowing—and that it s a relentless theme emanating from the Coalition and its business allies—it’s always good to stop for a moment and ask: what is the price for working harder for the sake of fattening some CEO’s wallet? Which is why a labor dispute at Hyundai in South Korea is worth paying attention to.

Hyundai workers are pushed, pushed, pushed…so hard that it verges on inhumane. It’s a shiny, buffed-up picture of a sweatshop. But, the union, led by union president Moon Yong-moon, wants to put a stop to this, per this report in The Wall Street Journal (subscription required):

Mr. Moon has brought a decade-long fight to end night-shift production to a head with a series of strikes that have cut Hyundai’s output by 40,000 vehicles worth 804.5 billion won ($712 million.)

A fresh strike is set for Friday and the union says it plans more if the company doesn’t agree to end night-shift work beginning in mid-2013 and meet other wage and hiring demands. The company now runs two 10-hour shifts at its domestic assembly plants and Mr. Moon is pressing for two eight-hour shifts.

Why seems pretty obvious:

While major global car makers including General Motors Co. run plants into the night—as do all of South Korea’s auto companies—Mr. Moon argues that night-shift work is unhealthy. “Working through the night has caused chronic fatigue, sleep disorders and indigestion for workers,” he said in an interview. “In some cases, it is also to blame for family troubles.” [emphasis added]

So, this is important. If a movement of workers, in an industry long at the tip of the sword of the relentless drive by corporations to push human beings to the limit, is saying, “no more”, that demand can, and should, reverberate beyond the auto assembly line and far beyond the shores of South Korea. It can, and should be, a rallying cry for all workers who want to preserve a semblance of control, sanity and reasonable balance in their lives.

Blinding Rhetoric

Aug 15, 2012

Think “juicy steak”. Unless you are a vegetarian, your mouth watered or your stomach told you that you were hungry. “Juicy steak” is a phrase that triggers physical and emotional reactions; it will blind you from thinking clearly about anything else…at least for a minute or two. CEOs who run around tossing out phrases like “surging labour costs” and “lower productivity” are using the “juicy steak” strategy—they want to trigger emotional responses that blind people.

So, when you read this report in the Financial Review about a survey of the CEO Forum Group:

International companies have warned the Gillard government that they may scale back investment plans in Australia due to carbon pricing, surging labour costs, the high dollar and political uncertainty.

Leading executives of multinational corporations claim that Australia’s business-friendly reputation is at risk and parent companies could shift resources to Asian nations.

…Membership to the forum is restricted to the country head, chief financial officer and top human resources executive of multinational subsidiaries operating in Australia, including Coca-Cola, KPMG, Credit Suisse, Citibank, Accenture, GM Holden, Colgate-Palmolive, Campbell Arnott’s, BP and GlaxoSmithKline.

Remember this:

1. The heads of these companies make millions of dollars in pay and benefits and not a one—not a single one—has offered to give back a dime of their obscene compensation.

2. “Surging labour costs” is a crock, if you look over the course of several years. The actual official statistics at the Australian Bureau of Statistics shows that over the period 2008-2011, compensation averaged about 4.4 percent—at the same time that housing costs alone rose more than 3 percent and other costs to just live rose as well, eating up any compensation hikes in real terms. Just in the past quarter, price rises for  medical and hospital services increased 2.8%, rents 1.1% , and vegetables +5.2%. Bottom line: people are not living high off the hog.

3. Not to mention, forty percent of Australians are in insecure work.

4. Carbon pricing, as the Prime Minister correctly pointed out recently, has very little to do with higher electricity prices—which are higher for a whole set of reasons pointed out here.

5. A high dollar is a direct result of a resource industry boom that the elites have embraced without question—which could also be managed and controlled with the right policy…which would bring the dollar back down to a more sustainable level.

6. The threat to to shift production to Asian nations is a coded phrase that translates into “we want to go where we can find slave labor”.

The basic point is: there needs to be a countervailing message to destroy rhetorical themes that trickle into daily conversation, trying to convince people that what we need are more policies that give more to the elite and less to workers.


High Dollar Sings The Blues For Auto Workers

Aug 14, 2012

What do auto workers in Canada and Australia have in common? A high dollar spells bad news for jobs—and, absent government action, is another dagger in the struggle to maintain a middle-class living.

Let’s start with Canada, where auto workers are locked in difficult contract negotiations. The main reason? The stronger Canadian dollar:

But the dollar’s high value, which most economists anticipate will continue, has more than obliterated the traditional cost advantage Canadian auto plants once enjoyed. In 2009, when contracts were renegotiated after the rescue of General Motors and Chrysler, the Canadian dollar was worth about 78 American cents. Last week, it traded briefly at just over $1.

Regardless of the outcome of those talks, the strong currency, and higher wages for Canadian workers, seem likely to continue the shrinking of the Canadian auto industry since its peak in 1999. The underlying issue is how much that decline will continue.

It’s a similar story with the Australian auto industry. The high Australian dollar, driven largely by the resource industry bubble, has eaten away at the Australian auto industry’s sales. But, the answer to that does not have to be surrender. It requires as Paul Bastian, national secretary of the Australian Manufacturing Workers Union, pointed out not to long ago, a national strategy of co-investment and a local purchasing strategy:

Co-Investment in the car industry provides supply-side support – but to properly realise the benefits of the Australian car industry we need to do more on the demand side.

In short, the co-investment scheme must be backed by a plan to buy Australian.

Over the next twenty years federal, state and local governments will purchase around 1.5 million cars. It’s obvious that these cars should all come from Australia – but that’s not the reality.

The bottom line is a question of values that go beyond the price of a dollar and brings one right to the doorstep of the government. Governments can do a lot to bring down the price of its currency. But, absent that willingness, governments can make it a national priority to make sure that industries providing good-paying jobs continue to thrive—no matter what the agenda of lower-wage seeking corporations might be.


Sifting Through The Chaff on Ryan

Aug 14, 2012

What do you really need to know about Paul Ryan?

He’s more conservative on voting than Dick Cheney, if you can believe it (Cheney served in the House of Representatives). But, unlike the dour Darth Vader-image Cheney projected, Ryan is quite good on TV. He is not foaming at the mouth visually, so he actually can communicate to others.

But, like all ideologues projecting certainty, there is more contradiction than consistency. On the one hand, his rhetoric and plan are profoundly anti-government:

It’s a profoundly radical document, its proposals skewed by ideological biases. Raising taxes, of course, is out of bounds. The same goes for using federal power to hold down Medicare costs, which will be the key driver of future budget deficits. Instead, House Republicans would cut spending on almost everything else the government does. According to an analysis by the Congressional Budget Office, the Ryan plan would, by 2050, reduce federal spending to its lowest point, as a percentage of G.D.P., since 1951.

But, hah, his actions are quite different:

Ryan voted for the $700 billion bank bailout, the biggest Medicare expansion in U.S. history, a massive highway bill that included the “Bridge to Nowhere” and other big-ticket priorities when George W. Bush was president — going to bat for a high-spending GOP agenda that the tea party base now looks on with regret.

On the politics, even if Republicans lose the presidential race, Ryan becomes a heir to the throne—the mantle of the leadership of the Republican leadership heading into 2016 White House race. Since he can also, under Ohio law, run for his Congress seat at the same time, either way, he’ll have a base of power so it’s a no-risk strategy for him to team with a candidate (Romney) who is, today, a slight underdog. Leading American pollster Nate Silver says, in a very, very long analysis (for the truly political geeks) about Ryan’s future:

The fact that he is quite young, that the Republican Party lacks an obvious successor other than him, and that he commands the respect of both the party base and the party establishment, all work in his favor in terms of running for and winning future nominations. Whatever happens this year, he is likely to be a major part of the American political landscape for a long time to come.

The underdog status will become even more pronounced if the Democrats are successful at tying Romney-Ryan to cutting Medicare and Social Security. Recall, because Americans are not required to vote, the election is about winning a small slice of swing voters in a few key states. Romney’s electoral path to victory probably has to include Florida, where there is a huge senior vote. If the Democrats can hang future budget cuts—a hallmark of Ryan’s budget plan—to eviscerating Medicare and Social Security, Romney can kiss Florida good-bye and then his path to victory becomes even harder, perhaps impossible (actually, at that point, Obama will probably win in an electoral rout).

Of course, this is assuming all other things remain static (as in that the economy doesn’t collapse in the next 2 months) and, well, in politics, things rarely remain static.


We Still Make Stuff

Aug 14, 2012

If you read the press, you’d think there isn’t a single manufacturing job in any place but China. Truth is, though, lots of stuff is made right in your backyard—it just takes a bit of paying attention. Tim Ayres helps us put on the glasses.

Ayres, the New South Wales secretary of the Australian Manufacturing Workers Union, runs it down in a cogent piece in the Daily Telegraph:

As trains and motorways are funneling commuters east, work is already under way at the thousands of small and medium-sized factories and workshops often hidden from view.

Near Liverpool, workers at HPM make the only Australian-made powerboards, sockets, smoke alarms and switches you’ll find at your local hardware store.

At Minto, workers churn out Streets paddle pops and Cornettos. At Bella Vista, workers at ResMed make devices to treat sleep apnea.

To be sure, jobs are being hit. But, I think Ayres’ spectacular point is that there has to be a strategy to develop manufacturing without taking it out of the pockets of workers:

We won’t get there on labour costs: we’re lucky to live in a country where people earn fair wages. It will be through investment in technology, innovation and skills; a commitment from industry to employ managers who are capable of leading their enterprises in a tough environment; and a serious effort from government.

Government’s role is not to prop up outdated technologies and industries. But it should be fighting for good local jobs, supporting the industries of the future and creating the environment for them to thrive.

Put another way, the easy and lazy way—and the way of The Coalition and its business allies—is the knee-jerk cut wages and benefits. But, that road is a road to destroying the middle class.


The People Don’t Dig Austerity

Aug 14, 2012

No one really knows which way the global economy is headed. Predictions are not a science: one day markets rise because certain people *think* some indicators look good—only to reverse themselves the very next day. But one thing is clear: real people don’t like austerity which will influence the direction of political alignments. Take the Dutch.

The Wall Street Journal wrings its hands today over this (subscription required):

A far-left party is emerging as a front-runner in next month’s elections in the Netherlands, as it benefits from growing voter resentment toward the German-led austerity drive and euro-zone bailouts.

A win by the anti-austerity Socialist Party could threaten to unravel a cost-cutting plan agreed under the current government in April, and also could derail stringent budget targets for 2013 set by the European Commission and fiercely advocated by Prime Minister Mark Rutte.

…But recent polls suggest Dutch voters, frustrated with austerity at home and increasingly wary of bailing out Southern European governments, may reject the package. The Socialist Party, which didn’t support the austerity plan, would win the most seats in the 150-member Parliament—about 37, or seven more than Mr. Rutte’s Liberal Party, recent polls by research firms TNS NIPO and Peil.nl show.

Consider the source—The Wall Street Journal—when you consider the epithet “far left” but pay close attention to this:

The Socialist Party doesn’t shy from controversy: It wants to curtail the European Central Bank’s independence by establishing “democratic supervision” over the bank and to broaden the ECB’s mandate, currently limited to ensuring price stability, to allow it to stimulate the economy to create jobs.

The idea that central banks—whether the Reserve Bank in Australia, the ECB or the US Federal Reserve Bank—should be more democratic and transparent, and, most important, be focused on creating jobs, not just price stability, is hardly radical. If you just pitched that to the average person, without putting the tag of “far left” on the idea, it would be a very broadly supported policy.



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