January 2021, Volume 27, Number 1
European countries responded to a second wave of Covid-19 infections in fall and winter 2020 by closing bars and restaurants but leaving factories and schools open. France, Germany and the UK closed restaurants and bars, gyms, and non-essential businesses in November 2020 to slow the rapidly rising number of Covid cases.
Genetic analysis suggests that one of the reasons for Europe’s Fall 2020 Covid wave was an outbreak among the 40,000 farm workers in Spain’s Catalonia and Aragón regions who harvest tree fruits. Many migrant farm workers from Eastern Europe and Africa reported sleeping in crowded housing, which allowed the virus to spread among workers who took the virus home after the harvest. Over a third of the 4,000 farm workers tested around Lleida in July-August 2020 had Covid.
The French effort to close non-essential businesses prompted complaints from small businesses that were forced to close while large superstores that sold food and TVs were allowed to remain open. To level the playing field, the government ordered the superstores to rope off the TVs and other non-essential items. Amazon may be the winner of this French micromanagement, as its online sales rose.
Germany allowed stores to remain open in November 2020, closing only bars and restaurants. In December 2020, the government ordered nonessential stores, schools and hairdressers to close as Covid cases climbed. Indoor and outdoor New Year’s celebrations were largely banned as the number of new daily Covid infections surpassed 20,000.
Most EU countries kept unemployment rates lower than in the US through short-time and similar programs that subsidized employers who kept employees on the payroll to ensure a fast restart when the economy rebounds. Many young people without long-term employment contracts were laid off and faced difficulties finding new jobs.
Britain. A Romanian smuggler and a British driver were convicted in December 2020 for attempting to smuggle 39 Vietnamese migrants in October 2019 in a refrigerated container; the migrants died. Several others were also convicted of people smuggling, which carries a maximum 14-year sentence.
Britain and the EU reached an agreement for Britain to exit the EU December 31, 2020. A majority of British people voted to leave in 2016, and disputes over how to end the 47-year relationship while facilitating $900 billion worth of trade each year between the UK and the EU made negotiations difficult. The UK will continue to abide by most EU regulations to preserve a level playing field between British and EU businesses.
Fishing proved to be a last-minute sticking point. After Britain joined the EU in 1973, ships from EU countries were allowed to fish in British waters. French fishing ships are especially dependent on fishing in British waters, but will gradually have their fishing quota reduced by 25 percent. Britain is a net importer of fish, and exports 80 percent of what its own fishing boats catch.
France. High school teacher Samuel Paty was decapitated in October 2020 after showing caricatures of the Prophet Muhammad in class on free speech, prompting widespread demonstrations aimed at protecting secularism in public schools and a crackdown on extremist groups. In December 2020, a Paris court convicted 14 people of helping the shooters who carried out the 2015 attacks on the Charlie Hebdo magazine office that published the cartoons and a Jewish supermarket.
The killing of Paty unleashed a discussion of whether France’s public schools could continue to assimilate newcomers to accept the secularism or laïcité taught in schools, under which faith and ethnicity are subsumed by a shared commitment to the rights and responsibilities of French citizenship.
President Emmanuel Macron has declared war on “Islamist separatism” and defended the republican values enshrined in the 1905 law separating religion from the state. However, supporters of Muslims say that laïcité anticipated a level playing field, with peoples of all faiths mixing regularly, while France has become a country of Muslim ghettos where youth do not have equal opportunity.
EU leaders in December 2020 endorsed security checks for asylum seekers at the EU’s external borders and more surveillance of radical groups to identify potential terrorists. Macron said that Europe’s generous asylum policies could be abused by terrorists, and wants people suspected of being security risks flagged at external borders and detained.
French police cleared a migrant camp of asylum seekers from Place de la République in November 2020, unleashing a debate over security as the Parliament considered bills to restrict public filming of the police, who regularly remove tent camps housing migrants. Displaced asylum seekers are supposed to be provided with housing, often in remote locations that prompt migrants to rebuild tent camps. France received 178,000 asylum applications in 2019.
Security cameras caught three Paris police officers beating a Black man for not wearing a mask in November 2020, forcing a reconsideration of the no-filming-police bill. The camera footage showed that the officers lied about what occurred in the report they filed on the incident. France has the highest ratio of police and other security officers to population in Europe.
The Macron government introduced a bill in December 2020 to ban home schooling, ensure that organizations that receive government funds adhere to “the values of the republic,” and increase penalties against polygamy, which is already illegal. Critics of the new laws asserted that President Emmanuel Macron was moving right ahead of 2022 elections.
France is providing $1.2 billion in government aid to keep strategic industries in the country. The Covid pandemic caused some multinationals to rethink the resilience of Asia-based supply chains, but the quick recovery in Asia dampened plans to more production to Europe. The French government wants to slow the exodus of manufacturing jobs that employers attribute to high wages and payroll taxes.
Germany. Chancellor Angela Merkel called Covid-19 the challenge of the century in her 16th New Year’s speech. Merkel’s year-end speech in 2019 called for action on climate change and tolerance for immigrants and minorities in Germany; the 2020 speech warned of the dark winter ahead before Covid is defeated.
A Turkish immigrant and his ethnic Turkish wife who founded Mainz-based BioNTech used messenger RNA technology to rapidly develop a vaccine in conjunction with Pfizer that proved to be 90 percent effective against Covid. Pfizer’s CEO is Greek, and attributed the cooperation that undergirded development of the vaccine in record time with BioNTech in part to the immigrant backgrounds of key players.
Some 76,100 foreigners made first applications for asylum in Germany in 2020, and another 26,500 asylum applications were made on behalf of children born in Germany to foreigners. BAMF made decisions on 145,100 asylum applications in 2020l and granted full refugee status to 26 percent and subsidiary protection to 13 percent. Another four percent could not be deported to their countries of origin. Fewer than 1,000 rejected asylum seekers a month were deported in 2020 due to closed borders.
A lieutenant in the German Army, Franco A, applied for asylum in December 2015 as a Syrian, but was exposed as a German army officer in April 2017 bent on committing terrorist acts that could be blamed in refugees to show that anyone could enter Germany by claiming asylum. Franco A had an Italian guest worker father and German mother, and became convinced that immigration was diluting the purity of the German race. After applying for asylum, he was housed with Syrians who had middle-class lives in Syria and won the subsidiary protection given to foreigners without papers to live and work in Germany.
Germany’s skilled worker immigration law (Fachkräftezuwanderungsgesetz) that went into effect in March 2020 aimed to expedite the entry and employment of skilled foreigners arriving to fill vacant jobs, especially those with vocational qualifications rather than college degrees. Covid closed borders to most foreigners, but 500 skilled worker visas a month were issued in 2020 under the law, mostly to foreign nurses and other health care workers.
Germany developed the world’s first gasoline-powered automobiles, but lost the lead in luxury battery-powered cars to Tesla, whose $660 billion valuation at the end of 2020 exceeded the combined valuation of the world’s leading car companies. Audi, Mercedes-Benz and Porsche are developing luxury electric cars to compete with Tesla, and they expect 2021 to be a breakthrough year for German-built electric cars.
Audi and Porsche are subsidiaries of Volkswagen, the world’s largest car maker. Volkswagen aims to use a common modular toolbox or platform of components to reduce costs and allow electric car interiors to be more spacious. About 10 percent of the cars registered in the EU in 2020 were electric.
Ireland. The Irish government is considering raising the minimum wage from E10.20 to E12.30 an hour in order to raise the earnings of low-skilled workers and reduce inequality.
Italy. Romania, Poland, and Italy are the EU countries that send the most workers to other EU countries. Italy sends a high share of college graduates abroad, but in 2020 many educated Italians 18 to 34 returned as covid led to remote work. Returned Italians say that their quality of life is better in Italy, but that opportunities remain better abroad.
An Ethiopian-born cheesemaker was killed by a Ghanaian immigrant employee in a dispute over money in December 2020. Agitu Ideo Gudeta studied in Italy, and returned as a refugee after protesting against land seizures in Ethiopia, opening La Capra Felice (The Happy Goat) in Trento to sell goat cheese, yogurt and beauty products from the goats she kept in a nearby mountain valley. Media mourned Gudeta’s death in front-page stories.
Italy has national health insurance, but much of the health care system is managed by profit-seeking firms that specialize in dealing with complicated and profitable specialties rather than basic care. The Lombardy region in 1995 allowed private medical providers to collect payments from the tax-supported regional health system, increasing investment in cancer treatment but reducing investment in general family medicine.
Spain. Spain’s Canary Islands, 60 miles off the Moroccan coast, attracted more migrants who set off from Senegal in 2020. Some 36,000 migrants arrived in the Canaries in 2006, but only 2,700 in 2019 after Senegalese authorities cracked down on smugglers. In 2020, over 20,000 migrants made the trip, paying about $500 each for seats on fishing boats; many are Moroccans and Senegalese. Over 500 migrants died trying to reach the Canaries in 2020.
Smugglers unable to move migrants from Libya to Italy switched to the Senegal-Canaries route. The Spanish government wants other European countries to accept the migrants who arrive in the Canaries and are deemed to be refugees, and wants African governments to accept the return of their citizens who are not refugees.
The Canary Islands normally receive 13 million tourists a year. With tourism down, the government provided E45 ($55) a day to hotels willing to provide food and lodging to the migrants. Local residents' dependent on winter tourists want the migrants out of hotels, saying “tourism and migration are simply not compatible.”
Sweden. Sweden adopted a laissez-faire policy toward covid, allowing schools and businesses to remain open and eschewing masks and restrictions on gatherings. The government expected Swedes who trust public agency guidelines to obey social distancing recommendations and to stay home if they are sick.
In November 2020, the government changed course after recording over 6,000 new cases in one day and 200,000 among the country’s 10 million residents. The goal of the Swedish policy was to avoid an economic free fall, but since most Swedish firms are part of global value chains, the Swedish economy contracted along with the economies of its trading partners.
Switzerland. Swiss voters on November 29, 2020 rejected the Responsible Business Initiative that would have made Swiss-based companies liable for human rights violations and environmental damage committed by their subsidiaries abroad. The RBI would have required them to report on potential risks in their supply chain and what they were doing to address them. Victims abroad could have sued Swiss-based companies for damages in Swiss courts.
Almost 51 percent of Swiss voters approved the RBI, but the RBI won a majority of votes in only a third of Swiss cantons, making the RBI one of the few initiatives to win a majority of the popular vote but fail for lack of a majority vote in enough cantons. NGOs and churches launched and supported the initiative, while multinationals opposed it; spending on both sides made it the most expensive initiative in Swiss history. To head off the RBI, the Swiss government approved a law with fewer requirements that will now go into effect.
The US Supreme Court heard arguments in December 2020 in a case involving six Malians who said they were trafficked to Ivory Coast cocoa farms. The workers want to sue Nestle USA and Cargill in the US for their failure to monitor labor conditions on the Ghana and Ivory Coast farms that produce two-thirds of the world’s cocoa with help of 1.6 million farm workers, including children.
Multinationals oppose suits in US courts under the 1789 Alien Tort Statute for labor law violations in their supply chains abroad, arguing that holding them responsible for violations committed by independent suppliers in other countries could deter investments in those countries. The US Supreme Court has already ruled that the 1789 law cannot be used when the conduct in question was almost entirely abroad or where the defendant was a foreign corporation. The US Supreme Court is likely to further narrow the scope of the 1789 law when it issues its decision in the cocoa case.
A DOL-funded NORC survey released in October 2020 estimated that 1.6 million child workers were employed in West African cocoa production; child workers were those under 12 and those between 12 and 18 who have hazardous tasks such as carrying heavy loads on farms. The World Cocoa Foundation did not dispute the number of child workers, but said that it is very difficult to eliminate child labor in areas where poor families want their children to work. The so-called Harkin-Engel protocol signed by major chocolate buyers in 2001 promised to reduce child labor in cocoa production.
China. China pledged to eliminate extreme poverty by the end of 2020, and reported that 10 million farmers and their families a year were lifted from extreme poverty over the past five years. Extreme poverty is living on less than $1.70 per day per person. The government spent over $100 billion a year providing grants and loans, as well as animals, seeds and fertilizers, to help poor and isolated farmers.
Gansu, China’s poorest province located in northcentral part of the country, announced in November 2020 that extreme poverty had been eliminated. The nonfarm jobs created in Gansu rely heavily on government subsidies.
Over half of Chinese adults are overweight, including a sixth who are obese, a near doubling over the past two decades. A Healthy China 2030 initiative aims to persuade food manufacturers to reduce sugar, salt and fat in processed foods, and to reduce food waste by discouraging the practice of ordering many dishes in restaurants to demonstrate wealth.
India. The BJP government imposed a lockdown March 24-April 14, 2020 that sent rural-urban migrants back to their home villages, spreading Covid and making even more Indians dependent on farming. Two-thirds of Indians are employed in agriculture, which generates a sixth of GDP.
In a bid to restart economic growth, the government in September 2020 enacted legislation that allows farmers to sell crops directly to consumers or food processors rather than only through government-approved wholesale markets that set minimum prices for commodities. The government also revised labor laws to make it easier for employers to terminate workers without government permission and harder for unions to organize and strike.
These marketing changes led to protests. Wholesale markets shut down to protest the prospect of new buyers, who did not appear immediately. Sikh farmers from the Punjab and elsewhere in December 2020 and January 2021 blocked the four major entrances to New Delhi to protest the elimination of minimum prices for their crops.
Some 60 percent of India’s 1.3 billion people are dependent on agriculture for most of their income. However, agriculture contributes only 15 percent to GDP, so farm incomes are lower than nonfarm incomes. Many farmers have taken out loans to expand or sustain their operations, leaving them in a precarious economic situation and fearing changes to farm policies.
India has a complex food supply chain. Most food is transported from farms to consumers with trucks on an almost just-in-time basis, since cold storage facilities are limited. At least a sixth of fruits and vegetables,, and up to 40 percent of all farm commodities, are lost to spoilage in the food supply chain.
A study of the prices of potatoes, onions, and tomatoes in spring 2020 found a spike in prices of up to 50 percent, followed by a return to pre-lockdown prices.
Japan. After WWII, major firms developed lifetime employment systems that provided regular or seishain workers with bonuses equal to two months salary and assurance that they would not be laid off and would receive retirement benefits. There were always some non-regular or short-term employees, but their share of workers has been rising, so that over a third of Japan’s 56 million workers in 2020 are non-regular, meaning they do not have lifetime job security and do not earn retirement benefits.
Half of the women in the Japanese workforce are non-regular. A 2013 law required employers to convert non-regular into regular employees after five years, and to keep differences between regular and non-regular employers “reasonable.” Recent court cases rejected non-regular workers’ claims that their treatment was unreasonable despite growing wage and benefit differences between regular and non-regular workers.
Malaysia. Top Glove, which makes a quarter of the world’s disposable gloves, relies on migrant workers in its factories, some of whom contracted Covid at work or in their hostels. At one Top Glove’s factory complex with over 11,000 workers over half of employees tested positive for Covid, prompting the government to order Top Glove factories to close until more safety precautions were in place.
Migrants employed in Top Glove factories earn $300 a month and live in dorm rooms with up to 20 workers, which is $7,200 to $9,600 over two or three years. Migrants from Nepal report having to pay up to $5,000 to Nepalese recruiters get two- or three-year contracts at Top Glove. Malaysia has several other disposable glove manufacturers that also depend on migrant workers, including some that offer lower wages and worse conditions than Top Glove.
Singapore. The city-state of 5.7 million has one of the highest shares of migrant workers in its labor force. Many households have domestic workers, and most construction and low-level service jobs are filled by migrants.
Covid was rampant in some of the migrant worker dorms in April 2020. By the end of 2020, over 93 percent of Singapore’s 58,000 Covid cases were among migrant workers. The government reacted by locking workers in their dorms except for going to work and other essential tasks, promising to reconsider tight restrictions on migrant worker movements in 2021 if Covid infections remain rare.
Singapore in fall 2021 allowed the resumption of cruising, with ships leaving for three days and returning without visiting any ports abroad. Passengers wear contact pods and practice social distancing in half-filled ships that promote themselves as Covid-free vacation destinations.
South Korea. The country’s population of 51.8 million at the end of 2020 was almost 21,000 less than the population at the end of 2019, as deaths outnumbered births. The government is offering payments for babies, including a two million won or $1,828 bonus and 300,000 won or $274 a month for the first year. However, rising education levels and demanding careers make it hard to persuade women to have more children; fertility is about one, meaning that the average woman has one child in her lifetime, half of the 2.1 rate needed to replace the population.
ANZ. Australian backpacker hostels advertised for Working Holiday Makers in New Zealand in November-December, 2020, offering A$2,000 for those willing to travel to Australia and do farm work. The number of WHMs fell from 140,000 at the end of 2019 to 50,000 at the end of 2020, as border closures made it harder for new WHMs to enter Australia.
Employment of seasonal farm workers peaks in March, and employers predict labor shortages in March 2021 unless more Pacific Islanders are admitted under the Seasonal Worker Program.
The Australian Workers Union (AWU) commissioned a study that found some contractors offering WHMs A$3 an hour to pick blueberries, far less than the going A$24 rate, by manipulating piece rates to keep earnings low. WHMs rarely complain because of their need to complete 88 days of farm work to obtain another year’s permission to remain in Australia and fill nonfarm jobs.
Some farm employers want labor-hire firms (labor contractors) to be licensed by the federal government; Queensland, South Australia and Victoria have state licensing systems. The Fair Work Ombudsman enforces labor laws, and there is agreement that the FWO needs additional resources.
New Zealand’s Recognized Seasonal Employer admits Pacific Islanders to do farm work in New Zealand, and 6,500 were allowed to remain in New Zealand after their contracts ended in March 2020. The 11,000 WHMs in New Zealand have been allowed to remain through June 30, 2021 if they work in agriculture.
PM Jacinda Ardern’s Labor Party won 64 of the 120 seats in the New Zealand Parliament in October 2020 elections, winning re-election on the strength of a science and solidarity platform that kept covid cases low.