Research check: we still don’t have proof that cutting company taxes will boost jobs and wages



File 20180510 185500 guowse.jpg?ixlib=rb 1.1
There still isn’t clear research showing company tax cuts will increase employment or wages.
Shutterstock

Ross Guest, Griffith University

If you read these headlines you might think we finally have proof that cutting company taxes will boost employment and investment:

These stories are based on analysis of the 2015 company tax cut by consultants AlphaBeta. But the study, as well as some of the media coverage of it, show a worrying misunderstanding of how company tax cuts work.

Simply comparing companies that receive a tax cut with those that don’t isn’t the right methodology to conclude that the 2015 tax cuts created more employment or higher wages.




Read more:
There isn’t solid research or theory to support cutting corporate taxes to boost wages


Cutting taxes lets companies keep more of their profits, allowing them to invest in new equipment and premises for example. The company then needs to hire more workers to work with these new assets. The newly created jobs require businesses to compete for workers and this increased demand pushes up wages across the entire economy.

Suppose a retail company gets a tax cut and opens a new store. It advertises for workers, many of whom are already employed by a rival store that didn’t get the tax cut. The first company will need to offer the workers higher wages to entice them away. The rival store will need to consider matching the wages in order to keep the workers.

In other words, even workers in companies that don’t receive the tax cut should see a wage rise.

Going through the AlphaBeta report

In 2015, the federal government cut the tax rate from 30% to 28.5% for businesses with less than A$2 million in revenue. Eligible businesses saved around A$2,940 on average because of the tax cut.

AlphaBeta used transaction data from 70,000 businesses to compare businesses just below the A$2 million threshold to companies that were just above it.

The analysis looked at the differences between the two groups of firms in terms of whether they hired new workers, invested in their businesses, increased worker wages, or kept some of the cash as a reserve.

AlphaBeta chalked any differences between companies that received the tax cut and those that didn’t to the company tax cuts.




Read more:
The full story on company tax cuts and your hip pocket


As reported in The Australian, AlphaBeta found that companies that received the tax cut increased their employee headcount by 2.6%. The companies that didn’t receive the cut increased employment by just 2.1%.

This difference turned out to be “statistically significant”, meaning it is very unlikely to be the result of random chance.

As the Sydney Morning Herald pointed out, AlphaBeta also concluded that 51% of the tax cut was kept as cash, 27% went towards new investment, but only 3% was paid to workers in higher wages.

In other words, wages increased by just A$1.44 per week. This is not only a small amount, it was also found to be not statistically significant.

Problematic methodology

The main issue with this study’s methodology is actually noted by AlphaBeta in the report itself (and echoed in the coverage by the ABC and Sydney Morning Herald).

The problem is that we cannot draw any conclusions about the effect of company tax cuts on jobs or wages by studying a bunch of firms that received them and another bunch that did not, even if the firms are only slightly different.

This is because, as noted above, the effect of company tax cuts on jobs and wages take place in the entire labour market. An increase in demand for labour flows through to all business, and therefore, so do higher wages.

So we should not expect to see wages rising only in those businesses that receive the tax cuts. The finding that an increase in wages is small and insignificant is exactly what we would expect to see from this study.

Another problem is that we do not know whether the characteristics of the companies in AlphaBeta’s sample. Were some industries with particularly pronounced employment or wage increases over represented in one group but not the other, for instance?

Studying the effect of company tax cuts on employment and wages also requires a longer time period – sometimes years – and careful control of other factors affecting jobs and wages in some firms relative to others.

Blind review:

The analysis in this review is generally fair and reaches a sound conclusion regarding the AlphaBeta report. However, the logic behind company tax cut raising wages is somewhat simplified.

A cut in company tax lowers the costs of production and can flow to labour, capital (including equipment and buildings) and consumers. Economics tells us that who actually benefits from a tax cut depends on what is more responsive to the tax – labour, capital or output.

The lower production costs from a company tax cut can lead to greater output and lower prices as consumers buy more goods and services. This depends, of course, on how responsive consumers are to changes in price.

In the short-run labour is more mobile than capital, which is usually regarded as fixed. Therefore, in the short-run most of the benefit is borne by owners of capital (the companies) in the form of higher after-tax profits.

However, over the longer term, companies invest their after-tax profits in the business. So most of the benefit of the tax cut goes to workers though higher wages as the increased “capital stock” (such as equipment) makes labour more productive.

The ConversationIt follows that there is no reason to expect a significant increase in wages over a period of one or two years (as the AlphaBeta report covers). Indeed, such a result would be somewhat surprising. – Phil Lewis

Ross Guest, Professor of Economics and National Senior Teaching Fellow, Griffith University

This article was originally published on The Conversation. Read the original article.

Advertisements

Budget policy check: do we need ribbon-cutting infrastructure for jobs and growth?


Hugh Batrouney, Grattan Institute

In this series – Budget policy checks – we look at the government’s justifications for policies likely to be in this year’s budget and measure them up against the evidence.

In this piece we look at the need for infrastructure projects.


We look set for another infrastructure budget: big new projects that will, we’re told, boost growth, create jobs and tackle the pressures of our booming population. For example, the Turnbull government has already pledged up to A$5 billion for a rail link from Melbourne Airport to its CBD.

Infrastructure can play an important role, but behind the rhetoric some fundamental investment principles are missing.

Are investing in infrastructure and economic growth a sort of virtuous circle that feed each other?

Through a stronger economy, you can also invest in important infrastructure that again drives stronger growth in our economy … but also delivers the infrastructure that busts the congestion in cities, that makes rural and regional roads safer.

– Treasurer Scott Morrison

Yes, sometimes infrastructure spending and economic growth form a virtuous circle. In new suburbs and rapidly growing cities, infrastructure is needed to connect people to jobs and that in turn drives economic activity.

But we shouldn’t be fooled into thinking any spending is good spending. There are many examples where the opposite is more likely true: where poorly targeted infrastructure wastes resources and weakens economic growth.

If we want to identify the best projects, a good place to start is our biggest cities. Big cities have a productivity advantage because they match workers to jobs better and faster than smaller cities and towns. Transport infrastructure is key to this matchmaking.

But in many cases, the enormous costs of construction in big cities – acquiring land, disrupting traffic, and the physical challenge of constructing in densely developed places – often makes it hard to justify the incremental increases in accessibility that a project generates.

Instead, policies and projects targeting better use of existing infrastructure can have greater economic impacts. The trouble is, these projects usually don’t involve cutting a ribbon.

Changes to the way we set prices for the use of roads and public transport, for example, can help us get more out of the infrastructure we already have. Charging public transport users different amounts depending on the time of day they travel can reduce peak-period overcrowding on our trains. With much lower capital costs, policies like this often deliver a bigger bang for the buck than major new investments.

Are these road and rail projects the sort of infrastructure that supports growth?

Whether it’s the Tulla Rail or the M1 up in Queensland or indeed in my home city of Sydney around Western Sydney Rail from the airport and the road infrastructure that goes around that in particular, we are making important national investments in infrastructure that will support growth, bust congestion in our cities and make our transport – rural and regional roads – safer.

– Treasurer Scott Morrison

Infrastructure undeniably plays a role in supporting the economy. But not every project will add to the productivity of our economy.

On the face of it, the economics of airport rail in Melbourne look thin. Infrastructure Victoria has said upgrading airport bus services should be investigated first, because at A$50-100 million it’s a much cheaper way to tackle the same problem. It has also said that the rail line should be delivered within 15-30 years.

The perceived urgent need for airport rail in Melbourne may stem from the slow and unreliable travel to the airport over the past 18 months. This is a byproduct of the Tullamarine Freeway widening project, which is now almost complete. Responding to a short-term pressure with a multi-billion dollar investment – in the absence of a detailed business case – is a depressing example of poor policy-making.

And the Treasurer’s enthusiasm for the Western Sydney airport rail is also concerning, given that a recent state government study indicated the project wouldn’t be needed to cater for customers and workers at the airport until 2036, at the earliest. Infrastructure Australia has been clear that a rail corridor, running north-south through the airport site, needs to be preserved for a future rail line. But that is a long way from justifying billions of dollars of infrastructure that isn’t needed for nearly another 20 years.

Does Australia need infrastructure to create jobs?

Our national economic plan for jobs and growth has been getting results…A $75 billion national infrastructure investment plan that is building the runways, railways and roads Australia needs to remain competitive, and create jobs.

– Treasurer Scott Morrison

At certain points in the economic cycle, infrastructure spending can help create jobs. New projects create jobs for workers involved in planning, building and deploying each project, as well as for the suppliers of equipment and materials needed as inputs.

And in the longer term, the Treasurer is right to say that infrastructure is essential if our cities are to remain competitive.

But again, context is everything.

Infrastructure can put people to work when there is “slack” in the labour market – when there is unemployment or underemployment, in other words. But if there is little slack in the labour market, then the workers required to get a project off the ground will be drawn from other productive activities. In that case, there may be no boost to jobs or economic growth, because one activity is merely displacing another.

With national unemployment currently around 5.5%, there does appear to be some slack in the labour market right now. However, firms are now finding it more difficult to access the labour they want. And the slack doesn’t appear to be in the parts of the economy that would benefit most from new projects: as the RBA reports, the construction sector recently reached its highest share of total employment since the early 1900s.

What’s the verdict?

Eminent urban economist Ed Glaeser once said, “if you have a focus on jobs and macroeconomic effects, it leads to infrastructure in the wrong place”. Australia should focus on a project-by-project approach; that’s the only way we can be assured that investments represent the best possible use of available funds.

This means starting with some basics: the government should not commit to expensive new infrastructure projects until it has commissioned a detailed look at the economic impacts of the investments, and it has made public the results of that analysis.

The ConversationThat’s how infrastructure policy would be done in an ideal world. But sadly, in a pre-election budget, we can probably expect politics to triumph over policy, yet again.

Hugh Batrouney, Fellow, Grattan Institute

This article was originally published on The Conversation. Read the original article.

Why we are still convinced robots will take our jobs despite the evidence


Jeff Borland, University of Melbourne

The tale of new technologies causing the death of work is the prophecy that keeps on giving. Despite evidence to the contrary, we still view technological change today as being more rapid and dramatic in its consequences than ever before.

The mistaken view that robots will take our jobs may come from a human bias to believe that “we live in special times”. An absence of knowledge of history, the greater intensity of feeling about events which we experience first-hand, and perhaps a desire to attribute significance to the times in which we live, all contribute to this bias.

History repeating

In the 1930s, John Maynard Keynes envisaged that innovations such as electricity would produce a world where people spent most of their time on leisure activities. In the United States in the 1960s, Lyndon Johnson established a Presidential Commission to investigate fears that automation was permanently reducing the amount of work available.

Australia has not escaped the prophecy, with similar concerns about the future of work expressed in the 1970s.

In their history of Monash University, Graeme Davison and Kate Murphy report that:

In 1978, the historian Ian Turner, organised a symposium on the implications of the new technologies. The world, he predicted, was about to enter a period as significant as the Neolithic or Industrial revolutions. By 1988, at least a quarter of the Australian workforce would be made redundant by technological change…

Some years later, Barry Jones continued the gloomy forecasts in his best-seller Sleepers Wake!:

In the 1980s, new technologies can decimate the labour force in the goods producing sectors of the economy…

Of course, none of this came to pass in Australia; just as work did not disappear in the 1930s in the United Kingdom, or the 1960s in the United States.

Yet today, we are seeing the resurrection of the prophecy. Commentary on the Australian labour market abounds with claims that the world of work is undergoing radical and unprecedented change.

The increased application of computer-based technologies in the workplace is suggested to be causing a reduction in the total amount of work available; or to be bringing a more rapid pace of substitution of machines for humans than has been seen previously.

No evidence for the death of work

In recent research with Michael Coelli, we argue that the prophecy is no more likely to be realised in the 2010s in Australia than in the 1970s.

Certainly, there is no evidence that the death of work is at present underway. Since the mid-1960s the aggregate hours worked by the Australian population (on a per capita basis) has remained stable.

In particular, there has been no long-run decline in the aggregate amount of work that matches the timing of the progressive introduction of computers to the workplace since the early 1980s.


https://datawrapper.dwcdn.net/Oyytg/1/

Source: Borland, J. and M. Coelli (2017), ‘Are robots taking our jobs?’, Australian Economic Review, forthcoming, Figure 3


Moreover, the pace at which workers are churning between jobs in the Australian labour market is not getting quicker. Not only is there no evidence that more workers are being forced to work in short duration jobs, but what is apparent is that the opposite has happened. The proportion of workers in very long duration jobs has increased over the past three decades.


https://datawrapper.dwcdn.net/BnUxP/1/

Source: Borland, J. and M. Coelli (2017), ‘Are robots taking our jobs?’, Australian Economic Review, forthcoming, Figure 9


Why work is not disappearing

There are good reasons why we should not expect new technologies to cause the death of work. New technologies always cause job losses, but that is only part of the story. What also needs to be understood is how they increase the amount of work available.

One way this happens is through the increases in incomes that accompany the application of new technologies. With the introduction of these technologies, it may take less labour time to produce what used to be consumed, but higher real incomes, together with an apparently unlimited human desire to spend, bring extra demand (for existing products as well as for new types of goods and services), and hence for workers to provide those extra goods and services.

As well, new technologies are likely to substitute for some types of workers, but to be complementary to, and hence increase demand for, other types of workers. Computer-based technologies appear to be complementary to workers who perform non-routine cognitive jobs.

In a report on the digitally enabled workforce, Stefan Hajkowicz and co-authors suggest a range of examples for Australia – such as an increase in demand for photographers at the same time as demand for photographic developers and printers has decreased; an increase in demand for graphic designers versus a decrease in demand for printers and graphic press workers; and a decrease in demand for bank tellers simultaneously with an increase in demand for finance professionals.

The ConversationThe end of work is no closer in Australia today than at any time in the past. So, perhaps there is a need to keep disproving the prophecy, to change our mindset.

Jeff Borland, Professor of Economics, University of Melbourne

This article was originally published on The Conversation. Read the original article.

The costs of a casual job are now outweighing any pay benefits


Joshua Healy, University of Melbourne and Daniel Nicholson, University of Melbourne

Low wages growth has been a spectre hanging around the Australian economy for some time. In our series What We Earn we unpick the causes for this and why some workers might be feeling it more than others.


Workers aren’t being compensated as much as they should be for precarious work in casual positions.

One in four Australian employees today is a casual worker. Among younger workers (15-24 year olds) the numbers are higher still: more than half of them are casuals.

These jobs come without some of the benefits of permanent employment, such as paid annual holiday leave and sick leave. In exchange for giving up these entitlements, casual workers are supposed to receive a higher hourly rate of pay – known as a casual “loading”.

But the costs of casual work are now outweighing the benefits in wages.

Costs and benefits of casual work

Casual jobs offer flexibility, but also come with costs. For workers, apart from missing out on paid leave, there are other compromises: less predictable working hours and earnings, and the prospect of dismissal without notice. Uncertainty about their future employment can hinder casual workers in other ways, such as making family arrangements, getting a mortgage, and juggling education with work.

Not surprisingly, casual workers have lower expectations about keeping their current job. For example the Australian Bureau of Statistics (ABS) found 19% expect to leave their job within 12 months, compared to 7% of other workers. Casuals are also much less likely to get work-related training, which limits their opportunities for skills development.

The employers of casual workers also face higher costs. High staff turnover adds to recruitment costs. But perhaps the main cost is the “loading” that casual workers are supposed to be paid on top of their ordinary hourly wage.

Australia’s system of minimum wage awards specifies a casual loading of 25%. So, a casual worker paid under an award should get 25% more for each hour than another worker doing the same job on a permanent basis. In enterprise agreements, the casual loading varies by sector, but tends to be between 15 and 25%.

The practice of paying a casual loading developed for two reasons. One was to provide some compensation for workers missing out on paid leave. The other, quite different, motivation was to make casual employment more expensive and discourage excessive use of it. However this disincentive has not prevented the casual sector of the workforce from growing substantially.

Casual jobs aren’t much better paid

One approach in determining whether casual workers are paid more is simply to compare the hourly wages of casual and “non-casual” (permanent and fixed-term) employees in the same occupations. This can be done using data from the 2016 ABS Survey of Employee Earnings and Hours.

We compared median hourly wages for adult non-managerial employees, based on their ordinary earnings and hours of work (i.e. excluding overtime payments). If the median wage for casuals is higher than for non-casuals, there is a casual premium. If the median casual wage is lower, there is a penalty.

The 10 occupations below accounted for over half of all adult casual workers in 2016. In most of these occupations, there is a modest casual wage premium – in the order of 4-5%.

https://datawrapper.dwcdn.net/9OfmG/2/

The size of the typical casual wage premium is much smaller, in most cases, than the loadings written into awards and agreements. Only one occupation (school teachers) has a premium (22%) in line with what might be expected.

Three of the 10 largest casual occupations actually penalise this sort of work. And overall for these 10 occupations there is a casual wage penalty of 5%. This method of analysis suggests that few casual workers enjoy substantially higher wages as a trade-off for paid leave.

Taking a closer look involves controlling for a wider range of differences between casual and non-casual workers. One major Australian study in 2005 compared wages after taking account of many factors other than occupation, including age, education, job location, and employer size.

All else equal, it found that part-time, casual workers do receive an hourly wage premium over full-time, permanent workers. The premium is worth around 10%, on average, for men and between 4 and 7% for women.

These results imply that most casual workers (who are in part-time positions) can expect to receive higher hourly wages than comparable employees in full-time, permanent positions. However, the value of the benefit is again found to be less than would be expected, given the larger casual loadings mentioned in awards and agreements.

It seems that while there is some short-term financial benefit to being a casual worker, this advantage is worth less in practice than on paper.

A recent study, using 14 years of data from the Household, Income and Labour Dynamics in Australia Survey (HILDA), finds no evidence of any long-term pay benefit for casual workers.

The study’s authors estimate that, among men, there is an average casual wage penalty of 10% – the opposite of what we should see if casual loadings fully offset the foregone leave and insecurity of casual jobs. Among female casual workers, there is also a wage penalty, but this is smaller, at around 4%.

This study also finds that the size of the negative casual wage effect tends to reduce over time for individual workers, bringing them closer to equality with permanent workers. But very few casual workers out-earn permanent workers in the long-term.

Inferior jobs, but fewer alternatives

The evidence on hourly wage differences leads us to conclude that casual workers are not being adequately compensated for the lack of paid leave, or for other forms of insecurity they face. This makes casual jobs a less appealing option for workers.

This does not mean that all casual workers dislike their jobs – indeed, many are satisfied. But a clear-eyed look at what these jobs pay suggests their benefits are skewed in favour of employers.

Despite this, the choice for many workers – especially young jobseekers – is increasingly between a casual job or no job at all. Half of employed 15-24 year olds are in casual jobs.

The ConversationIn a labour market characterised by high underemployment and intensifying job competition, young people with little or no work experience are understandably willing to make some sacrifices to get a start in the workforce. The option of “holding out” for a permanent job looks increasingly risky as these opportunities dwindle.

Joshua Healy, Senior Research Fellow, Centre for Workplace Leadership, University of Melbourne and Daniel Nicholson, Research Assistant, Industrial Relations, University of Melbourne

This article was originally published on The Conversation. Read the original article.

Shifting the tax burden to middle-income earners will undermine jobs and growth


Patricia Apps, University of Sydney

The government’s idea of raising the Medicare levy, while also removing the 2% budget deficit levy on incomes above A$180,000, is less “transformational” and more signature Liberal policy. It shifts the tax burden towards middle income earners, as opposed to Labor’s plan to direct higher tax rates towards higher income earners. The Conversation

Rather than introducing a simple flat rate rise of 0.5% in the marginal tax rate across all taxpayers, the government has chosen to increase the Medicare levy. The reason lies in the fact that the levy contains the equivalent of a low-income tax offset due to the phasing out of the low-income exemption.

For example, in the current financial year, the thresholds for the phasing out of the Medicare levy exemption is A$21,665 for singles and A$36,541 (plus A$3,356 for each dependent child/student) for families. At these thresholds, tax rates rise by the rate of the withdrawal of the exemption, which works out to be 8% (calculated as 10% less the 2% Medicare levy rate).

In the case of a two-child family, this means an 8% rise in the marginal tax rate at an income from A$43,253, to an upper income limit of A$51,803. If a Medicare levy increase of 0.5% were introduced in the current tax year, the upper income limit for the higher marginal tax rate would rise to A$54,066.

In combining a rise in the Medicare levy with the removal of the budget deficit levy, the government is therefore proposing a rise in marginal tax rates across a wide band of middle incomes and a marginal tax rate cut for the top.

This direction of tax reform is a continuation of the incremental shift in the overall tax burden towards middle income earners over recent decades. And because the threshold for the Medicare levy exemption is based on family income, the reform will reinforce the move towards higher effective tax rates on low income second earners in a family.

This shift in the tax burden from top to middle income earners, and to middle income families, will undermine aggregate demand and, in turn, “jobs and growth” in the future.

In contrast to the government’s policy, Labor’s policy limits the rise in the Medicare levy to incomes above the top two bracket points and retains the budget deficit levy. Raising taxes on top incomes is not only a fairer policy, but a more efficient one in the conventional economic sense.

The impact of taxes on hours worked declines as earnings get higher, and has close to no effect on the hours worked by those with top incomes. And by avoiding higher taxes on second family earners, Labor’s policy should have a less negative effect on second earner hours of work and therefore the tax base.

The government’s and Labor’s tax reforms therefore represent very different policies.

Patricia Apps, Professor of Public Economics, Faculty of Law, University of Sydney

This article was originally published on The Conversation. Read the original article.

Three charts on: the incredible shrinking renewable energy job market


Paul Burke, Australian National University

This is the first piece in our new Three Charts series, in which we aim to highlight interesting trends in three simple charts. The Conversation

Australia is embarking on a transition from an electricity system that relies largely on coal to one that may one day be 100% renewable. Last week’s closure of the Hazelwood coal-fired generator was an important milestone on this path.

The development of the renewables sector has not, however, been a smooth ride.

Estimates released by the Australian Bureau of Statistics suggest that the number of direct full-time equivalent jobs in renewable energy activities has continued to fall from its 2011-12 peak. Over a period in which the Australian economy saw around 600,000 additional people get jobs, employment in the renewables sector has been going backwards.

https://datawrapper.dwcdn.net/7pTc0/2/

A small employer

The renewables sector is estimated to have directly provided only 11,150 full-time equivalent jobs in 2015-16. The Australian labour force exceeds 12.6 million people. The sector thus makes a small contribution to national employment, although one that is quite important in some local economies.

Around half of the jobs in renewables in 2015-16 were in installing (and maintaining) rooftop solar systems. Hydroelectricity generation provides 1,840 full-time equivalent jobs, a number that is likely to increase if pumped storage is to make a larger contribution to smoothing Australia’s electricity supply. Biomass provides 1,430 full-time jobs, and the wind industry around 620.

The fact that renewables is a small employer – especially once installations are up and running – is not a bad thing. If renewables were labour-intensive, they would be expensive.

https://datawrapper.dwcdn.net/FS39f/2/

Up then down

The rise and then fall in renewables jobs is primarily a result of what has happened to installations of rooftop solar. The annual number of small-scale solar installations (PV and solar water heaters) skyrocketed over the four years to 2011. This rapid growth was spurred by generous feed-in-tariffs, rebates, and rules for federal government solar credits. There was also a national program to install solar panels on schools.

When these arrangements were curtailed, uptake fell. Annual installations of small-scale solar PV and water heaters are down by more than 60% from their peak. We are still installing a lot of new systems (more than 183,000 in 2016), but fewer than before. Employment estimates for small-scale solar closely track installation rates. The decline in employment in the wind energy sector is also worth noting.

The largest fall in renewables jobs has been in Queensland, a state that substantially tightened its feed-in-tariff scheme for rooftop solar in several steps from 2011 on. Queensland also holds the title of having Australia’s highest residential rooftop solar PV penetration rate (32%). South Australia is not far behind, at 31%.

https://datawrapper.dwcdn.net/NGD1p/1/

Ramping up large-scale renewables

Recent years of policy uncertainty and backtracking have not helped the rollout of large-scale renewables. The termination of Australia’s carbon price and downwards renegotiation of the Renewable Energy Target had chilling effects on investment.

Those events are now behind us. With continued reductions in the cost of renewables, brighter days for the sector appear to be ahead, especially if our governments get policy settings right.

We can expect particularly rapid growth in jobs installing large-scale solar PV. Just last week, for example, it was announced that South Australia is to have a large new solar farm.

Paul Burke, Fellow, Crawford School, Australian National University

This article was originally published on The Conversation. Read the original article.

Article: Are Some Professions Off Limits to Christians?


The following article seeks to discuss the question of professions for Christians and whether any are off limits to Christians – what do you think? Are there some jobs that Christians simply shouldn’t do?

http://www.christianpost.com/news/are-some-professions-off-limits-for-christians-72017/

Thousands of trafficked girls found in Mali slave camps


Nigerian girls are being forced to work as prostitutes in Mali "slave camps," Nigerian officials say, reports CISA.

The girls, many of them underage, are often promised jobs in Europe but end up in brothels, said the government’s anti-trafficking agency. According to BBC correspondent, the brothels are run by older Nigerian women who prevent them from leaving and take all their earnings.

Nigeria’s National Agency for the Prohibition of Traffic in Persons (Naptip) said officials visited Mali in September to follow up "horrendous reports" from victims, aid workers and clergy in Mali.The agency said it was working with Malian police to free the girls and help them return to Nigeria.

They said there were hundreds of brothels, each housing up to 200 girls, run by Nigerian "madams" who force them to work against their will and take their earnings.

"We are talking of thousands and thousands of girls," Simon Egede, Executive Secretary of Naptip, told a news conference in Abuja, adding that they were between 20,000 to 40,000.

He, however, did not give details as to how the figure had been reached.

In a statement, Egede said girls were "held in bondage for the purposes of forced sexual exploitation and servitude or slavery-like practices."

"The madams control their freedom of movement, where they work, when they work and what they receive," he said.

The trade is centred on the capital Bamako and large cities, but the most notorious brothels are in the mining towns of Kayes and Mopti, where the sex workers live in "near slavery conditions," said Naptip.

Many of the brothels there also had abortion clinics where foetuses were removed by traditional healers for use in rituals, said Egede.

Most of the girls were reported to have come from Delta and Edo States in Nigeria.

Many were lured with the promise of work in Europe, given fake travel documents and made to swear an oath that they would not tell anyone where they were going.

On arrival in Mali, they were told they would have to work as prostitutes to pay off their debts. Prostitution is legal in Mali but not if it involves minors.

Naptip said it had also uncovered two major trafficking routes used to transport the women from Nigeria through Benin, Niger and Bukina Faso to Mali.

Egede said Naptip was working with the police in Mali to return the girls to Nigeria safely, shut down the trade and prosecute the traffickers.

Report from the Christian Telegraph

Plinky Prompt: My Greatest Achievement


Magic Garden

My greatest achievement from a purely human perspective would be gaining the top jobs in my chosen field of work – not that they are necessarily the greatest tasks a person has ever had. In the areas in which I have chosen to work and in the two different companies I have now had the top jobs in both. I have been content with that.

Powered by Plinky

New Threats, Old Enmity Pummel Nepal’s Christians


Armed group that forced over 1,500 government officials to quit now threatens pastors.

KATHMANDU, Nepal, September 16 (CDN) — A year after police busted an underground militant Hindu organization that had bombed a church and two mosques, Nepal’s Christians are facing new threats.

An underground group that speaks with bombs and has coerced hundreds of government officials into quitting their jobs is threatening Christian clergy with violence if they do not give in to extortion demands, Christian leader said.

The Nepal Christian Society (NCS), an umbrella group of denominations, churches and organizations, met in the Kathmandu Valley yesterday (Sept. 15) to discuss dangers amid reports of pastors receiving phone calls and letters from the Unified National Liberation Front (Samyukta Jatiya Mukti Morcha), an armed group demanding money and making threats. The group has threatened Christian leaders in eastern and western Nepal, as well as in the Kathmandu Valley.

“The pastors who received the extortion calls do not want to go public for fear of retaliation,” said Lok Mani Dhakal, general secretary of the NCS. “We decided to wait and watch a little longer before approaching police.”

The Front is among nearly three dozen armed groups that mushroomed after the fall of the military-backed government of the former king of Nepal, Gyanendra Bir Bikram Shah, in 2006. It became a household name in July after 34 senior government officials – designated secretaries of village development committees – resigned en masse, pleading lack of security following threats by the Front.

Ironically, the resignations occurred in Rolpa, a district in western Nepal regarded as the cradle of the communist uprising in 1996 that led to Nepal becoming a secular federal republic after 10 years of civil war.

Nearly 1,500 government officials from 27 districts have resigned after receiving threats from the Front. Despite its apparent clout, it remains a shadowy body with little public knowledge about its leaders and objectives. Though initially active in southern Nepal, the group struck in the capital city of Kathmandu on Saturday (Sept. 11), bombing a carpet factory.

The emergence of the new underground threat comes a year after police arrested Ram Prasad Mainali, whose Nepal Defense Army had planted a bomb in a church in Kathmandu, killing three women during a Roman Catholic mass.

Christians’ relief at Mainali’s arrest was short-lived. Besides facing threats from a new group, the community has endured longstanding animosity from the years when Nepal was a Hindu state; the anti-Christian sentiment refuses to die four years after Parliament declared the nation secular.

When conversions were a punishable offense in Nepal 13 years ago, Ishwor Pudasaini had to leave his home in Giling village, Nuwakot district, because he became a Christian. Pudasaini, now a pastor in a Protestant church, said he still cannot return to his village because of persecution that has increased with time.

“We are mentally tortured,” the 32-year-old pastor told Compass. “My mother is old and refuses to leave the village, so I have to visit her from time to time to see if she is all right. Also, we have some arable land, and during monsoon season it is imperative that I farm it. But I go in dread.”

Pudasaini, who pastors Assembly of God Church, said that when he runs into his neighbors, they revile him and make threatening gestures. His family is not allowed to enter any public place, and he is afraid to spend nights in his old home for fear of being attacked. A new attack occurred in a recent monsoon, when villagers disconnected the family’s water pipes.

“Things reached such a head this time that I was forced to go to the media and make my plight public,” he says.

Pudasaini, his wife Laxmi and their two children have been living in the district headquarters, Bidur town. His brother Ram Prasad, 29, was thrown out of a local village’s reforms committee for becoming a Christian. Another relative in the same village, Bharat Pudasaini, lost his job and was forced to migrate to a different district.

“Bharat Pudasaini was a worker at Mulpani Primary School,” says Pudasaini. “The school sacked him for embracing Christianity, and the villagers forced his family to leave the village. Even four years after Nepal became officially secular, he is not allowed to return to his village and sell his house and land, which he wants to, desperately. He has four children to look after, and the displacement is virtually driving the family to starvation.”

Since Bidur, where the administrative machinery is concentrated, is safe from attacks, Pudasani said it is becoming a center for displaced Christians.

“There are dozens of persecuted Christians seeking shelter here,” he said.

One such displaced person was Kamla Kunwar, a woman in her 30s whose faith prompted her husband to severely beat her and throw her out of their home in Dhading district in central Nepal. She would eventually move in with relatives in Nuwakot.

Pudasaini said he chose not to complain of his mistreatment, either to the district administration or to police, because he does not want to encourage enmity in the village.

“My religion teaches me to turn the other cheek and love my enemies,” he said. “I would like to make the village come to Christ. For that I have to be patient.”

Dozens of villages scattered throughout Nepal remain inimical to Christians. In May, five Christians, including two women, were brutally attacked in Chanauta, a remote village in Kapilavastu district where the majority are ethnic Tharus.

Once an affluent people, the Tharus were displaced by migrating hordes from the hills of Nepal, as well as from India across the border, and forced into slavery. Today, they are considered to be “untouchables” despite an official ban on that customary practice of abuse and discrimination. In the villages, Tharus are not allowed to enter temples or draw water from the sources used by other villagers.

Tharus, like other disadvantaged communities, have been turning to Christianity. Recently five Tharu Christians, including a pastor and two evangelists, were asked to help construct a Hindu temple. Though they did, the five refused to eat the meat of a goat that villagers sacrificed before idols at the new temple.

Because of their refusal, the temple crowd beat them. Two women – Prema Chaudhary, 34, and Mahima Chaudhary, 22 – were as badly thrashed as Pastor Simon Chaudhari, 30, and two evangelists, Samuel Chaudhari, 19, and Prem Chaudhari, 22.

In June, a mob attacked Sher Bahadur Pun, a 68-year-old Nepali who had served with the Indian Army, and his son, Akka Bahadur, at their church service in Myagdi district in western Nepal. Pun suffered two fractured ribs.

The attack occurred after the Hindu-majority village decided to build a temple. All villagers were ordered to donate 7,000 rupees (US$93), a princely sum in Nepal’s villages, and the Christians were not spared. While the Puns paid up, they refused to worship in the temple. Retaliation was swift.

The vulnerability of Christians has escalated following an administrative vacuum that has seen violence and crime soar. Prime Minister Madhav Kumar Nepal, who had been instrumental in the church bombers’ arrest, resigned in June due to pressure by the opposition Maoist party. Since then, though there have been seven rounds of elections in Parliament to choose a new premier, none of the two contenders has been able to win the minimum votes required thanks to bitter infighting between the major parties.

An eighth round of elections is scheduled for Sept. 26, and if that too fails, Nepal will have lost four of the 12 months given to the 601-member Parliament to write a new constitution.

“It is shameful,” said Believers Church Bishop Narayan Sharma. “It shows that Nepal is on the way to becoming a failed state. There is acute pessimism that the warring parties will not be able to draft a new constitution [that would consolidate secularism] by May 2011.”

Sharma said there is also concern about a reshuffle in the largest ruling party, the Nepali Congress (NC), set to elect new officers at its general convention starting Friday (Sept. 17). Some former NC ministers and members of Parliament have been lobbying for the restoration of a Hindu state in Nepal; their election would be a setback for secularism.

“We have been holding prayers for the country,” Sharma said. “It is a grim scene today. There is an economic crisis, and Nepal’s youths are fleeing abroad. Women job-seekers abroad are increasingly being molested and tortured. Even the Maoists, who fought for secularism, are now considering creating a cultural king. We are praying that the political deadlock will be resolved, and that peace and stability return to Nepal.”

Report from Compass Direct News