Perusing through my morning news digest, I came across an article from The Daily Mail featuring a story on the employment of child labor in cobalt mines in the Democratic Republic of Congo (DRC).
While I can be chillingly apathetic to social plight, especially, when it doesn’t concern my loved ones: something I impute to my upbringing in a third world country; I was deeply moved by this story, which shed light on the horrors of artisanal cobalt mining, employing children, working in dangerous conditions, with no safety measures, and being paid a pittance.
The kicker, though, of this story was that much of this cobalt would go into battery packs that would be installed in electric cars marketed to gullible, do-gooders around the world.
But, why would one want to buy cars that take hours to refuel and can only be refueled at specific points, thus, imposing a massive time cost on their usage? These contraptions don’t match in utility to gasoline-powered cars, let alone surpassing them. No wonder governments around the world are trying to get consumers to buy electric cars through purchase subsidies and tax exemptions of all sorts.
Ever heard of an iPhone or a Mac being subsidized or tax exempted by the government to boost sales? You won’t because products that offer value sell like hotcakes; it’s only products that don’t offer any that need government interventions to hard sell them.
Another way of hard selling electric vehicles is through ‘virtue signaling.’ The sales pitch involves promises of reducing users’ carbon footprint, stemming the tide of climate change, and protecting the environment. But most importantly, it involves washing your hands off of gasoline, a product bloodstained due to the endless wars fought over it, one of the major promulgators of environmental and social injustice and displacement of indigenous folks.
Buying electric cars is thus, a route to salvation, accumulating good Karma, penitence, and all other moral goods. More importantly, it is also a way of segregating oneself from the ranks of the ignorant, irredeemable, hopeless, uneducated folks who drive around in gasoline powered vehicles polluting the environment, melting the ice caps, perpetuating wars and injustice, and pushing the world one step closer to Armageddon. Electric cars make the do-gooders feel good about themselves.
But are electric cars the solution to environmental problems and a way to jack up one’s moral credit score?
Most electric cars run on Lithium-ion batteries because of their energy holding capacity and low-weight characteristics. As environmentalism garners mainstream acceptance and more and more people buy into its narrative, the market for these vehicles is exploding and so is the demand for Lithium-ion batteries.
Contrary to the name, Lithium-ion batteries contain not just lithium, but also cobalt, nickel, manganese, aluminum, and graphite. While nickel, manganese, and aluminum have a relatively stable supply, it is cobalt, lithium, and graphite that present predicaments that are incompatible with the narrative of environmentalism.
Most of the lithium used in electric car batteries is mined in the Lithium triangle of Latin America: an area embedded in the salt flats of Argentina, Chile, and Bolivia. Several mining companies from around the world have started operations in this region, but the news for the indigenous people isn’t good. Lithium is so valuable that it has been dubbed ‘white gold,’ but the local residents bemoan that they haven’t seen any returns from the mining operations flowing their way; despite the fact that the prized mineral comes from lands that are under their possession.
A lack of formal process to negotiate property rights between the indigenous peoples and the mining companies, compounded by lack of accountability and communication gaps has left the communities short-changed. Many indigenous representatives, who excitedly agreed to the mining operations, now regret as they grapple with reality.
One of the companies – Exar – that will begin operations in 2019 is projected to reap $250 million (in 2016 dollars) annually. The contract also requires Exar to make annual payments to the local communities – a clause that the official leader of these communities wasn’t aware of, until one of the reporters investigating the issue, enlightened him.
More worrisome than missing out on the windfall is the fear of water depletion from sources that the local communities depend upon for their survival. Scientists seem divided on this contentious issue. Regardless, locals are justified in their concerns over water, as lithium mining is a water intensive process and the region has faced persistent drought over several years.
The Democratic Republic of Congo (DRC), an impoverished country in sub-Saharan Africa, contributes to around 60% of the global supply of cobalt, an essential element in the Lithium-ion battery.
The state of affairs of the artisanal cobalt mines of DRC was the subject of an extensive article in The Washington Post. Miners, of whom children make a significant portion (about 40,000 according to UNICEF in 2012), work in unforgiving and dangerous conditions with hand tools, no safety measures, and very little oversight. Mining accidents and related deaths are common and so are the long-term health effects of coming in contact with heavy metals.
While the DRC has both industrial and artisanal mines, suppliers prefer cobalt from the latter due to the lower cost, especially when global cobalt demand is on the uptick. A major hurdle in disincentivizing artisanal operations is the inability of cobalt to be designated as ‘conflict-mineral,’ as it doesn’t fuel a war or internal conflict.
China’s record on air quality hasn’t been lustrous, with widely circulating reports of smog engulfing its major cities. But the residents of some towns in north-eastern China, much to their despair, literally get to see a special kind of luster in the air at night, when faint light hits graphite particles floating in the air.
Graphite is an indispensible element in Lithium-ion batteries and its growing global demand has lead to China’s rise as the top supplier in the market.
The Washington Post, about a year ago, published a detailed report on the effects of Chinese graphite plants on nearby villages. The presence of graphite dust on crops and in the air presents the likelihood of this toxic substance being ingested or inhaled leading to heart and lung diseases. Locals have also complained of graphite plants releasing industrial waste into nearby rivers, polluting the local water supply. This has significant effects, not only on the human population, but also on the flora that grows around these water bodies.
According to The Post, their efforts to get major firms in the consumer electronics and electric vehicles business to comment on these revelations in their supply chains were met with generic responses of appeasement or refusal to disclose suppliers or complete silence.
But, investigative reports aside, there are two big elephants in the room. First, electric cars can deliver on their claim of reducing carbon footprint, only if they are run on electricity generated from renewable energy. That seems unlikely given that only around 15% of total US electricity generation is from renewable sources (2016); the picture does look brighter across the Atlantic in the EU-28, where renewable sources produced around 29% of total electricity (2015).
The second problem is slightly complex and involves a weighing of the total fossil-fuel based energy and products that go into producing electric cars (from mining to assembly line), including individual components, against the purported energy savings and environmental benefits. In the grand scheme of things, it’s highly unlikely that electric cars will produce a net good or that they will fare any better than regular cars.
Another embarrassing problem for the Church of Environmentalism is the hypocrisy of its clergy. Al Gore, the patron saint of the green movement, according to a recent report, lives in a house that in the past year burned enough energy to power a typical American household for 21 years. Just the outdoor heated swimming pool ended up consuming energy that could power 6 typical homes. This was revealed after the release of his new documentary film, “An Inconvenient Sequel: Truth to Power,” which has him fly over melting icebergs in an aircraft running on petroleum-derivative fuel.
But Gore claims that his donations to Green Power Switch, a scheme to separate green-minded folks from their money, purge him of his sins towards Mother Nature.
Actor-turned-environmentalist Leonardo DiCaprio made headlines when he made a round trip from France to New York to accept a ‘green award.’ The close to 8000-mile long journey, completed on a private jet, didn’t please the environmental laity. But worry not because his charitable foundation, in 2016, pledged £10 million to various green initiatives.
Environmentalism, thus, is nothing but a way to feel good about yourself, to wash off the supposed sins of driving around in a gasoline powered car and using incandescent light bulbs. It’s also a great way to make bucket loads of money and undertake lucrative career transitions.
I don’t mean to suggest that oil drilling and petroleum products are good for the environment and don’t bear any social costs. They might, but they don’t push a holier-than-thou narrative and actually have to undergo strict environmental and health and safety audits, something that is lacking in the supply chain of green products.
The impact of labour market trainings on unemployment process in the global labour economy
Since the 1990s, the persistence of high unemployment has been followed by two downturns, which affected an economic life over the world across the nation-states. The overt consequences cost unpleasantly social and economic outcomes for the states as well as societies. Henceforth, activation turn has observed once more shifting passive employment policies within the active policy actions of countries upon labour market at the beginning of a new millennium. It was supposed that the activation of jobless people through keeping employees occupied, job-search assistance, job creation and work experience programs, training and invest in up skilling, is an open way to fight against high unemployment and secure economic growth as well. Hereby, the idea of an active labour market policy (ALMP) became again pivotal tool in the domestic policy agendas of states in order to engage in new challenges of labour markets. Since the 1950s,it is an apparent fact that in Europe and the Nordic countries that the effectiveness of ALMPs engenders diminution in a structural and long-term unemployment and leads to increase net income together with the employment ratio of targeted groups in national economies.
With the XXI century’s new technological vicissitudes and industrialization, the active employment policies have been designed to support people with monetary (income) and non-monetary (education) incentives in order to reduce inequality, keep the balance of social inclusion, and stimulate market beyond to decrease unemployment. Consequently, labour market training grew into to become an important measure of ALMP strategies in the background of “welfare to workfare policy approach” to create better-skilled workforce as well as to surge adequate match between skilled manpower and needs of progressive demand in labour markets.
In fact, the scholarly studies state significant impacts of training and vocational programs in the activation of the workforce. For example, the 1950-1960s – Post War Era characterized with the rapid economic growth and labour supply shortage in the European industry. And as a solution, national employment policies started to focus on labour trainings. So that Sweden with its successful retraining system has been the pioneer of ALMP idea in the history. On the other hand, Germany with 1969`s Employment Promotion Act considered training as a principal component of active employment policies to upskill workforce in terms of new industrial needs by market demand.
The UN 2009 reports that education is considered one of the main indicators of poverty reduction: education and human resource investments contribute to an economic development of nation-states and societies. Higher educated people or up-skilled workforce boost up productivity and react the positively to technological changes. Some scholars and interlocutors claim that in long-term perspectives ALMPs should have to aim to develop an education and training system that enhances the productivity and employability of a labour force. Because of the fact that the skilled manpower is one of the cornerstones of the higher employment, developed economy, higher net income and well-being of the whole society.
Many types of research have been carried out to identify the prominence of labour market training, however, the Katz`s study (1993) shows the significant point of job market training as turning “unskilled labour” into “skilled labour”. Perceptibly, the unemployment problem is more common among less skilled individuals and new entrants to the market. Shifting in demand against unskilled labour force causes an unemployment among those people. In contrast to unskilled force reservation wage and labour demand is high for skilled manpower in the market. Here, the training policy helps turn out unskilled to a skilled workforce and to increase total employment in order to decrease unskilled unemployment. Research argues that training policy extends the skilled labour force and close the gap between the unskilled and skilled workers. Caruana and Theuma (2012) refer to Katz (1993) argue that in order to push jobless people towards work, some trainings improve the qualification of those workers who are already in the market. Hence, Katz (1993) emphasizes the importance of labour market training in reducing the unemployment rate of unskilled labour by transferring more workers to the skilled labour pool. They also underline the significant role of a training policy in improving the skills of employees and increasing, the supply of skilled manpower in the economy. The following figure “Development of Unskilled Labour Force” visualizes Katz`s statement andshows how training measure affects the job market in both ways. The points where demand curves intersect supply curves, which are given wages for skilled and unskilled labour respectively. As the author explains, the wages represent the remuneration of foregone opportunity costs that, logically, is higher for skilled labour than for unskilled one. Since labour demand for the skilled labour is stronger than that of unskilled labour, thus, the demand curve for the former one is more elastic. As the figure illustrates, after the implementation of training, part of unskilled labour is moving up to the skilled.
At the same time, scholar states that wage setting regulation, training, and education systems affect differently net income and employment perspectives. Consequently, education and labour training policies create an equal distribution of skills and able to reduce supply and demand shifting on wages and employment. Another study by Calmfors et al., (2001) argue that training programs increase the reservation wage of attendees. However, salary growth and employment perspectives are possible by time after long run participation in the program.
To sum up, the training policy is considered as a main supply-side policy tool of activation to tackle unemployment. Scholars argue that training programs are useful to prevent the long run unemployment and to keep unemployed active in the market via participation. However, ex-post evaluation of training programs is controversial. Country case studies show that training programs are more effective in the background of vocational education reforms and collaboration with demand-side active labour market policies.
- , Forslund A., &Hemstrom M., (2001), Does Active Labour Market Policy Work? Lessons from Swedish experiences, Swedish Economy Policy Review, 85, 61-124
- Caruana C. &Theuma M., (2012), The next leap – From Labour Market Programmes to Active Labour Market Policy.
- Katz, F.L., (1993), Active Labor Market Policies to Expand Employment and Opportunity.
- United Nations, (2009), Rethinking Poverty: Report on the World Social Situation 2010, Retrieved from http://www.un.org/esa/socdev/rwss/docs/2010/fullreport.pdf
Paid and well-designed internships work
“Before, they would ask for your diploma and maybe your grades. Now, when you are entering the labour market, you are asked for multiple internships and work experience here and there so I feel the pressure to intern so as to be better prepared for the labour market.”
That was what secondary school student, Georgia, told me while I was carrying out some focus group research last year for an ILO survey on youth aspirations.
Her frustration and worry are typical these days of many young people entering the labour market. They face the daunting task of finding a decent job and then keeping it when they do.
Unemployment and the proportion of young people not in employment, education or training are high, and new and emerging forms of ‘non-standard’ employment such as temporary, part-time and gig work are rapidly expanding.
These types of ‘non-standard’ jobs now dominate young people’s early labour market experiences, along with internships, which are becoming ever more common – not only in high income countries where they originated but also in low and middle income countries.
The idea is that internships help break that Catch 22 that many young jobseekers face – not having enough experience to get a job and not being able to get the experience needed because of not having a job.
But, just how effective are internships as a means of promoting the long term job prospects of young people like Georgia?
The fact is, there hasn’t been much solid research. Above-all, very little at all is known about the impact of so-called ‘open-market’ internships which are not undertaken as part of either an educational course or as part of an active labour market programme. In many – if not most- countries, these remain under-studied and under-regulated
This is the question that my colleague Luis Pinedo and I set out to answer in a new ILO working paper, “Interns and outcomes: Just how effective are internships as a bridge to stable employment?”, which reviews existing studies and analyses primary data using surveys of interns undertaken by the European Commission and the Fair Internship Initiative (FII), an intern advocacy coalition.
We came to three main conclusions:
Not all internships improve career prospects
The impact of internships on the longer term integration of youth into work appears to be modest. Internships are, on average, less effective than either student jobs or apprenticeships as a means to bridge the gap between education and regular employment.
Paying interns pays off
It is clear, however, that paid internships offer better job prospects for youth in the long run than unpaid ones and that paid interns are more likely to find a job than those who were not remunerated. This may be because the payment itself may be linked to other positive features of a well-designed internship programme. These include the presence of a mentor; similar working conditions as regular employees; access to health insurance, and internships that are long enough for the young person to acquire and improve their skills. In addition, formal certification of the completed internship and/or undertaking the internship in a big firm both influence employment prospects and can also have a positive long-term impact. However, the likelihood of finding a job does not increase in relation to the amount paid to the intern.
More and better research is needed
As yet, far too few studies have been carried out and those that do exist rarely make a serious attempt at identifying the causal links between internship programme features and post-internship labour market outcomes. Moreover, analyses of open market internships are even rarer. The task is clearly made more complicated by the fact that there is no agreement about what precisely is an internship. However, the lack of analysis is particularly worrisome not least because it is precisely open market internships which are least covered by existing forms of regulation. This paper, along with its two companion papers listed below mark a first step by the ILO to rectifying this information gap.
See the two other working papers that are part of the series:
Employment working paper no. 240: The regulation of internships: A comparative study Andrew Stewart, Rosemary Owens, Anne Hewitt and Irene Nikoloudakis
Employment working paper no. 242: Does work-based learning facilitate transitions to decent work? Laura Brewer and Paul Comyn
Trade Negotiations: Geo-economics and Geopolitics
Trade negotiations have been increasingly used as a political tool. This is the first thing that comes to mind when one is trying to understand what is happening around the trade war unleashed by the administration of Donald Trump practically on all fronts: against the EU, China, Russia, Mexico and Canada.
On the eve of a visit to Washington of the European Commission President Jean-Claude Juncker, Donald Trump suggested that the EU, at the same time as the USA, abandon customs duties, barriers and subsidies. He said in his Twitter account that he suggests this because they will refuse just the same …
The visit ended with the conclusion of a trade deal, including the deal on duties on car industry products, but the question remained: of course, geo-economics and geopolitics are strongly interrelated, but is it permissible to use trade negotiations as an instrument of political bargaining, and why do we increasingly see this?
Just before Junker’s visit the European Union and Japan signed world’s largest free trade agreement, the volume of which is estimated at one-third of the World gross product (GWP), and which directly affects about 600 million people. In contrast to the actions of the Trump Administration, which recently tightened import tariffs, this was seen as an important step in protecting free trade.
It was also reported that the European Commission is completing negotiations on the establishment of a free trade zone (FTA) with MERCOSUR, which in its scale can exceed the FTA with Japan (the members of this trade and economic union account for 250 million people and over 75% of Latin America’s total GDP ). Again, the question arises: is there still an immediate political context here, since the negotiations on the establishment of the FTA have been going on for years, if not for decades, and why is it announced right now about their triumphant conclusion?
The USA has a recent experience of large-scale trade negotiations, the politicization of which ended in a fiasco. The issue is the establishment of the Trans-Pacific Partnership (TTP), which implied the borders expansion and the deepening of interstate agreements on the unification of the legal field. It was planned to supplement the agreements on the liberalization of trade in goods and services under the norms of free trade agreements with the legal regulations on investment, innovation exchanges, protection of intellectual property, labor relations, management of migration flows, environmental standards and competition standards.
The USA tried to involve many Asian and Pacific countries in the creation of the TTP, but China, the main economic entity in Asia, was excluded from this union. For China, with its state protectionism in sensitive industries that provide economic growth and employment (and therefore important for political stability), the conditions of the TTP were initially unacceptable. Beijing, not without reason, suspected that the USA wanted to create a trade bloc in Asia without the participation of the PRC in order to kick China out of integration processes. That’s why China has tried to create an alternative to the TTP by promoting its project – the Regional Comprehensive Economic Partnership (RCEP).
As we recall, Donald Trump “buried” the TTP as a legacy of Barack Obama, and now this partnership under the “TTP Plus” brand is already living its life without the participation of the United States. The main thing is that after the TTP deal any other initiative of this kind (for example, the idea of the Indo-Pacific partnership) automatically raises fears among its potential participants: whether they will be drawn into confronting China, whose trade and economic relations are so important for many countries in South-East and South Asia.
The experience and lessons of US trade negotiations are, of course, important for Russia, but mainly in “how not to do.” In the same Asia-Pacific region, a large number of trade agreements operate, differing in the depth of liberalization and in the number of participants, which creates the potential danger of dividing the region into separate competing associations. Therefore, for Russian participants in trade negotiations, the choice is unambiguous: to avoid their unnecessary politicization and to act on the basis of transparency and openness, with mutual consideration of the interests and capabilities of the parties, by relating any possible agreements with the multilateral trading system of the WTO.
Russia’s participation in the negotiations on the creation of free trade zones and integration projects is determined by its long-term geo-economic and geopolitical considerations, and at present, when Russia is in search of an “entry point” to this process, the latter can be assessed as the most relevant.
Equally, and perhaps even more important for Russia is the fact that, unlike such trade and economic “giants” as the United States and China, it is now not so much interested in the development of liberalization of regional trade (trade liberalization), as in the strengthening of its transparency and trade-economic interconnection (trade facilitation), the creation of a fair, stable and balanced trade and economic system, including in Eurasia and the Asia-Pacific region, which responds to the priorities and development level of the Russian economy, especially its export-oriented commodity-producing industries.
That is why Russia has taken a course in upholding the priorities of transparency and interrelatedness of trade and economic relations since this is what helps it become an active and interested participant in the discussion of new rules for regional and world trade.
Such a course is consistent with the long-term geo-economic and geopolitical interests of Russia, primarily in such a priority area as Eurasian integration and the development of the Eurasian Economic Union (EEU).
And here it is necessary to remember the lessons of the recent past connected with excessive politicization. The intensification of Russia’s and the EU policy towards the countries of the region of their “common neighborhood” led to the fact that some of them (Ukraine, Georgia, Moldova) were faced with a tough choice in favor of the priority development of relations with the EU or the Eurasian association. In a number of countries, this has greatly reduced the opportunities for the traditionally conducted by their governments maneuvering strategy between Moscow and Brussels and led to an internal political escalation.
In Moscow, this was well understood, and there were no contradictions between the processes of Eurasian integration and the development of relations with the European Union, if the EEU and the European Union began to base their interaction on the principles of free trade and compatible regulatory systems.
However, the European Union held the view that the obligations within the framework of the Customs Union exclude for its members the very possibility of introducing a free trade zone (FTA) with the European Union – in contrast to the CIS Multilateral Free Trade Zone (based on a treaty signed in October 2011 by Kazakhstan, Russia, Byelorussia, Kyrgyzstan, Tajikistan, Armenia, Moldova and Ukraine), which does not presuppose the work of supranational bodies. From Moscow’s point of view, such obstacles can be lifted if one follows the path of establishing an FTA between the EU and the EEU.
In the article published by the German newspaper “Süddeutsche Zeitung” in November 2010, Vladimir Putin (at that time the Russian prime minister) put forward a long-term plan for the construction of a free trade zone between Russia and the EU (by the way, at that time the World political vocabulary acquired the term “conjugation”).
Unfortunately, this idea, dictated by absolutely economic logic, was coolly received in European political circles, and the reply from Brussels was, not without political arrogance, that the EU’s relations with the above countries do not require Russia’s participation. Show Europe then a little more foresight, many undesirable events in the post-Soviet space could have been avoided …
Russia is still trying to convince its partners to abandon the opposition of European and Eurasian integration in favor of conjugating both projects. So far, unfortunately, neither the post-Soviet integration, nor the EU is consistent with these aspirations.
However, the dynamic development of integration processes in the Asia-Pacific Region offers Europe and Eurasia a new challenge. Given the geographical situation of the post-Soviet countries between Europe and Asia, the development of infrastructure networks and cross-border transport projects with access to China and other countries, the APR would create conditions that would ensure a more favorable external environment for the conjugation of Eurasian and European integration and strengthen the competitiveness of these integration entities.
And here economic logic would help to gradually overcome political contradictions. The solution of the accumulated geopolitical problems could be the creation of a common free trade zone of the EU, the EEU, Ukraine and other Eastern Partnership countries associated with the EU. However, in addition to political will, it takes time to solve a large number of purely economic and technical issues. Effectively, such a project can be facilitated by the fact that all the countries involved are either WTO members or are planning to become them in the near future.
First published in our partner International Affairs
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