PSI blog on the Financial Crisis

Not on the backs of workers

This past weekend, at the World Economic Forum in Davos, Switzerland, I had the opportunity to speak about the importance of investing in public services and providing social protection in this time of economic crisis. The governor of the Central Bank of Israel, the CEO of the Liberty Mutual Group, and Harvard University professor Larry Summers were among the other speakers on the "Growth versus Austerity" panel, which was moderated by BBC World News editor Jon Williams.

Click here for a news report of the session.

A fight for life

A cholera epidemic such as we are seeing in Haïti is inexcusable in a 21^st century world. History has proven that these diseases can be controlled and eradicated through a public health policy which allows competent staff to provide basic services and clean drinking water. Separate sewage and drinking water systems are not rocket science. They are not even expensive – bearing in mind that even one life lost to impure water is too high a price.

It is no surprise that our Public Services International members were outraged to learn that most of the governments and institutions pledging assistance to Haïti in the wake of the earthquake have in fact failed to deliver. According to the United Nations, less than 20 per cent of the promised assistance for 2010 had been provided at the time of the cholera outbreak. Only four countries had delivered any money at all. Severe pressure should be applied on all the governments in question to honour their pledges to Haïti.

Under these stark conditions, members of our affiliated Haïtian union the CTSP provide healthcare, water, sanitation and related services. Fighting what seem like insurmountable obstacles with insufficient resources, often facing the trauma and anger of their fellow citizens, they have still been able to provide not for profit services to people according to their needs. Working with local community groups and organisations, public sector workers continue to show care, compassion, dedication and professionalism.

Serving the immediate needs arising from the epidemic is a part of our mission. But it does not begin or end there. The cholera tragedy brings into an uncomfortably sharp focus the importance of public services that are affordable and accessible to all.

Quality health care, clean water and effective sanitation are human rights. A system must be built that ensures publicly-provided safe drinking water, effective sanitation and quality health care for all. There is no substitute or alternative to this. A better Haïti is possible – a country that is built on a foundation of quality public services. Working hand in hand with CTSP, our mission is to make this vision a reality – a fight for life itself.

Enough is enough

From Paris to the quiet village of Ferney-Voltaire, where PSI is headquartered, the chants of protesters outraged at the French President’s pension reforms have been resounding for months. PSI affiliate members in CFDT, FO and CGT are at the forefront of these protest actions.

Sarkozy has long been spreading the myth that good social welfare is unaffordable in a global economy. The French, it seems, are no longer buying into that. Taking to the streets in millions, they have demonstrated a lack of confidence in their national leader. But he’s also got the facts against him.

The French can afford the retirement age of 60-65 years. Although the demographic make-up of most Western countries is slowly changing towards more elderly populations, productivity and GDP also increase over time. The increase in life expectancy is small compared to the decline in the number of workers per retiree.

To the plain facts of numbers, add that an increase in the retirement age will hit the poorest—who have the shortest life expectancies—the hardest. The really rich, of course, don’t rely on the public pension system anyway.

The continued French mass mobilisations show that people realize the injustice of this. All over Europe, workers demand a change in European economic policies, but not the change the European Commission is prescribing.

Economics professor Michael Hudson describes the protests as a sane reaction to European governments about to commit economic suicide. Noting the conflict of interests between labour and capital, he describes a crucial crossroads: “At issue are proposals to drastically change the laws and structures of how European society will function for the next generation. If the anti-labor forces succeed, they will break up Europe, destroy the internal market, and render that continent a backwater.” (Who Wins?)

The EU Commission’s arrogant reaction to the mass protests organised across Europe on 29 September was to introduce on the same day a set of new economic sanctions against countries who do not comply with the required reductions in their national deficits. However, the message from the streets of Brussels, Madrid, Athens, London, Riga and Paris cannot be ignored. Enough is enough. It’s time for governments to adjust their course. To this end, they need to involve the trade unions, be it through collective bargaining or other relevant social dialogue mechanisms.

The world needs a financial transactions tax now

Just as the banks were reassuring us that some countries were on the path to recovery from the economic crisis, newspapers have started talking about a double-dip recession. That’s enough to cause panic in the banks once again. The global economic situation will doubtless be a subject of discussion at the United Nations Development Summit, to be held in New York on 20-22 September. The Summit will be reviewing progress on the Millennium Development Goals, the MDGs. There again, the news is not good. In the current circumstances, it is very unlikely that the MDGs will be met by the 2015 deadline.

Fortunately, there is one thing that can help, if put into place – a financial transactions tax (FTT). Of course, it would not cure all the world’s economic ills. But an FTT could raise between US$200-billion and US$900-billion. It would help put establish an economic base for social protection, and provide major funding to address poverty issues.

The International Trade Union Confederation (ITUC), to which PSI belongs, has submitted a statement to the UN Summit that sets out detailed policies and actions which would give a renewed impetus to meeting the MDGs. This includes trade union endorsement of a financial transactions tax.

I urge PSI affiliates to write to your governments now to inform them of the trade union position on an FTT, and send them a copy of the ITUC statement. The more we talk about the FTT, the more quickly it could become a reality.

See the ITUC statement here.

Resolution passes supporting human right to water and sanitation

PSI congratulates the government of Bolivia, the civil society activists and the trade unions who campaigned to pass the resolution on the right to water and sanitation in the United Nations General Assembly on 28 July 2010.  This resolution clearly shows that water and sanitation are inherently political concerns, not just about business opportunities. 

Public service workers and their unions in the PSI family have been leading the fight for the past 15 years to strengthen the ability of workers and citizens to advocate for quality public services for all.  The struggle within the UN system for recognition and implementation of the formal human right to water is an important part of this global campaign, and is being led by the Council of Canadians/Blue Planet Project.  PSI is proud to be associated with this effort.   

Although non-binding, this new resolution points clearly to the urgent need for the UN system (including national governments) to get its act in order.  While we await further negotiations and the long process of drafting the final legal texts that will be required to enshrine the right to water as an enforceable human right  – millions of people continue to suffer loss of life, dignity, and opportunity.  Lack of access to adequate, safe and reliable water and sanitation is a violation of almost every human right.

Access to water and sanitation would largely be solved if we put the same amount of money and political will as we did in bailing out the banks and other financial institutions over the past couple of years.  And I won’t even begin to talk about the military budgets… 

The Resolution endorsed by the UN General Assembly on 28 July 2010 takes us one further step in this direction, but it is not enough.  We call on the various UN agencies, the development banks, the donor agencies and national and local governments to join us in ensuring quality public water and sanitation services for all.

Download UN member states endorse resolution on the human right to water

Colombian trade unionists face threats on personal and economic fronts

During the third week of July 2010, I was part of a mission organised by “Justice for Colombia”, in a delegation that included representatives of British and American trade unions, members of the UK and the European Parliament. The aim of our trip was to investigate the present situation in Colombia, and to promote protection of trade union and human rights in that country.

We met with the newly elected President Juan Manuel Santos and vice president Angelino Garcon who will take office on 7 August. We had meetings with Colombian trade unions, members of the Colombian Congress and representatives of organisations of victims of violence. We had a meeting with the Attorney General regarding the many cases of impunity, but also concerning the graves in Macarena. We visited Macarena and were part of a public hearing on human rights violations. The hearing was attended by some 1000 peasants and small farmers who testified how their loved ones disappeared and later were found killed – civilian victims of the army and the paramilitaries. The graves in Macarena contain an estimated 450 to 2000 unidentified bodies. 

Our delegation also visited political prisoners in two of Bogota’s prisons. We also met with four mothers in Soacha who sons were victims of the so-called false positives scandal, where young men were trapped in what they thought would be an attractive job offer but ended up being killed and dressed in guerrilla uniforms.

This visit came at a timely moment. Leaders of a number of PSI affiliates in Colombia have been receiving death threats from the paramilitary organisation “Las Águilas Negras” (Black Eagles). I met with these affiliates to determine how PSI can most effectively work with them to address these rights violations. I also delivered a letter to the current President of Colombia, Alvaro Uribe, requesting that the state take special measures to fully guarantee the protection of the lives of the trade union leaders under threat, and to protect trade union freedom of organisation.

It is important to question the economic and political motives behind these threats. We had a special meeting with senators and NGO’s on the trade agreements between Columbia and EU and United States.

PSI affiliates in Colombia are battling intensified plans to privatise public services such as water delivery. One of our affiliates SINTRACUAVALLE is raising the alarm about the planned privatisation of the commercial sector of the public water company ACUAVALLE. The splitting of ACUAVALLE’s components into public and private entities will most likely result in higher costs to consumers - as has happened in other areas of Colombia following water privatisation. PSI has issued an urgent action and we are asking affiliates to send a letter of support for our members in ACUAVALLE. Outside pressure and attention may help our unions in Colombia. The model letter in Spanish can be accessed here. 

Global Labor Congress Pushes Back Against ‘Austerity’

On 23 June, World Public Services Day, I made a special address to delegates at the International Trade Union Confederation (ITUC) World Congress meeting in Vancouver, Canada. I insisted that budget deficits and debts must not be used as an excuse to cut public services, and that doing so will simply open the way to privatizing desperately-needed public programmes that will only further benefit financial profiteers at the expense of working people.

I called on world leaders and citizens to mark World Public Services Day by making a commitment to promote visionary economic solutions – with a priority on investing in quality public services to provide the stable jobs and important services that build sustainable and just societies.

I emphasized the role of the public sector and social programmes in fostering economic recovery for all workers. I told In These Times magazine that the silver lining of the crisis has been a growing sense of solidarity. Perhaps for first time in history we are witnessing public and private sector trade unions standing side by side in the call for education for all, adequate social care and health care, access to water and energy, public transportation, and more.

While workers may not be able to fully beat back budget cuts, if labour stakeholders are fully engaged in negotiations, I believe you have a totally different situation than if a government unilaterally goes through a process in the parliament, and comes out with a result that people get extremely angry about.

Read more here.

Deliver commitment on jobs now!

This week I had the opportunity to speak at the International Labour Conference (ILC), the annual conference of the International Labour Organization (ILO), in Geneva. I stressed the fact that Public Services International strongly rejects the government plans to implement fiscal austerity measures across G20 economies that will result in reducing wages, pensions and social programmes that directly strengthen our families and communities.

It is unjust that working people should once again be made to pay for the misdeeds of greedy bankers. We believe that it is time for the financiers to pay. We urge governments to adopt a financial transactions tax, without further delay as one means of meeting public funding requirements. 

I called on the ILO to more strongly promote the Global Jobs Pact, and for governments and employers to effectively put it into practice. Public spending investment and social protection is essential to spur sustainable growth. A growth recovery without jobs can only lead to a longer-term social crisis.

Click here to access the speech I gave at the ILC on 17 June 2010.
 
You can find here the link to the Global Unions Statement, which Public Services International has signed, setting out the key demands from the international trade union movement to the forthcoming G8/G20 Summit meetings in Ontario, Canada on 25-27 June 2010. The statement puts forward a comprehensive plan for growing the global economy out of the recession.
 
Peter Waldorff, PSI General Secretary

Trade unions mobilising for alternate economic strategies

This week I had the opportunity to participate in important meetings at the Organisation for Economic Co-operation and Development (OECD) in Paris. At the same time, a veritable tsunami of austerity measures flooded numerous European countries. These measures appear remarkably similar wherever they are being applied, featuring major reductions in the public sector in the form of cuts to jobs, wages, and pensions, and education, social and health care services.

In the OECD discussions I raised a number of issues relating to PSI policy, such as the need for fair taxation policies to finance our vital public services.

Don’t spoil the upswing by imposing more taxes, say the banks. Our response: don’t spoil any economic upswing by increasing unemployment levels further by cutting stable jobs and training supports.

The financial sector has been extremely successful in lobbying governments. Financiers convinced legislators that self-regulation was efficient and non-bureaucratic, but now they won’t admit that they created an El Dorado for speculation and irresponsibility.

I also noted that the trade union movement is calling for an international Financial Transaction Tax. The fact is that the banks are back in major profit-making mode. It’s time for the banks to “pay back” for the economic mess they have been causing.

I reminded the bankers that a year ago all agreed that there would be no return to business as usual, and asked them what they are doing differently today. “Are you acting more responsibly? How are you contributing to close the gap between the privileged and the under-privileged?” I asked. There was no response.

I concluded my week in meetings with the Executive Committee the European Federation of Public Service Unions (EPSU), PSI’s regional branch. I can assure you that among our affiliate unions the commitment for taking action is there. We will continue to work closely together to launch an alternative economic plan that is a more constructive and convincing effort to strengthen our world.

Economic crisis masks “social war”

This week I took a message of solidarity to the members of Public Service International’s Irish affiliate IMPACT, as they held their conference and voted on whether to accept a proposed agreement with the government, following two pay cuts in the last 14 months.

I told IMPACT members that they are not alone in what they are experiencing in Ireland with a government that is using the economic and financial crises as excuses to cut public services, and slash job security, wages and benefits.

From Canada to Columbia, Iceland, Korea, Greece, Portugal, Spain, to the UK and Ireland – I see that a Social War is being waged.

A “Social War” is what Michael Hudson, a former Wall Street economist and current Chief Economic Advisor to the Reform Task Force of Latvia, calls what we are in the midst of today.

In his words, “a Social War is unfolding on a global scale – not the class war envisioned in the 19th century, but a war waged by finance against entire economies...and governments as well as against labour.”

There would be no economic crisis in Ireland or elsewhere if governments weren’t using taxpayers’ money to bail out the players who’ve caused their own financial crisis.

Meanwhile, financial lobbyists are using the Greek crisis as a lesson to warn about the need to cut back public spending on public services, especially essential social programs like public healthcare, unemployment relief and education.

“This is quite the opposite of what Greek demonstrators are demanding,” Hudson says.

“They want to reverse the global tax shift off of real estate and finance onto the backs of working people.” And further, that what working people want is to see retirement pensions given priority over claims by the banks to get reimbursed for bad loans.

This ideology of the profiteers promotes the mechanism of capitalism as the only viable road to democracy.

But what is democratic about the “Greek bailout”, for example?

How is it democratic when government policy is taken out of the hands of voters?

I know that the citizens of Ireland are concerned, for example, about independence of national tax policy.

Predatory finance. That’s the true name of this game.

And the financial sector’s aim is to take as much bailout money as it can and run.

It is in this climate that the members of IMPACT are voting this week on whether or not to accept a proposed agreement with their employer, the government of Ireland.

If accepted, this agreement would commit the government not to cut pay levels again.

It would also require the government to begin reversing recent pay cuts if sufficient savings flow from public service reforms that are also part of the agreement.

Whatever the members’ decision, they must also be applauded for having initiated pragmatic approaches to public service transformation, even before the collapse of Lehman Brothers.