PSI blog on the Financial Crisis

Anguilla: Civil servants question legality of salary cut

Members of the PSI affiliate Anguilla Civil Service Association have chided the government for not consulting them before taking austerity measures including a 10 percent reduction of salary for grades A-F, a 5 percent reduction for grades G-M and a 5 percent reduction for wage workers.

The membership of the Anguilla CSA expressed its “deep dissatisfaction with the overall economic direction” charted for Anguilla over the past twelve years. The Anguillian government unilaterally cut public servants’ salaries and reduced fringe benefits/allowances including telephone and travelling allowances. In response, Chief Minister Fleming said that the government gave the union the assurance that the money that is being taken from them will be repaid when the government of Anguilla's financial situation improves. CSA President, Gerard Gumbs, said in his letter to the government leader that the association expects “full reimbursement and will pursue such until it materialises.”

“We believe that sound economic opportunities have been squandered and that we have also forfeited too much for too little in return….This modus operandi we believe is a major contributor to the present financial position and it should not be attributed to the world economic melt down alone.” the CSA said in its letter to the government.

The pay cuts have meant that several public servants with commitments to commercial banks and other institutions have had to re-negotiate their loan and mortgage arrangements.

In its communication with the government, the CSA stated that it “promotes accountability and transparency and as such will be holding government accountable going forward.”

At a recent meeting of Caribbean Public Sector trade unions, delegates gave examples of the dangerous emerging trend of governments trying to hide behind the world crisis and not observing established and agreed procedures to engage in genuine consultation with trade unions. Delegates described the situation as one in which some governments are using the crisis “as an excuse to lay-off workers.”

Iceland’s debt repayment limits will spread

Can Iceland and Latvia pay the foreign debts run up by a fairly narrow layer of their population? The European Union and International Monetary Fund have told them to replace private debts with public obligations, and to pay by raising taxes, slashing public spending and obliging citizens to deplete their savings.

Full text here: http://www.ft.com/cms/s/0/f3a6cf22-8a8b-11de-ad08-00144feabdc0.html

FSA backs global tax on transactions

In an interview published on 27 August by the magazine Prospect, Adair Turner, the head of Britain's Financial Services Authority expressed support for an international financial transactions tax, or Tobin tax (named after the economist James Tobin).

The proposed tax, which has previously been championed by development economists and the French government as a means of funding the developing world, has been fiercely opposed by the finance industry.

Lord Turner appears worried about a return to “business as usual” in the banking sector, suggesting that new taxes may be necessary to curb excessive profits and pay in the financial sector. “If you want to stop excessive pay in a swollen financial sector you have to reduce the size of that sector or apply special taxes to its pre-remuneration profit,” he says.

Read full Financial times article here: http://www.ft.com/cms/s/0/08943b5a-926a-11de-b63b-00144feabdc0.html

FSA’s Turner Wades Into Political Debate With Tobin Tax Comment

FSA Chairman Adair Turner proposed a “Tobin Tax” on banking deals in a Prospect magazine interview. This would redistribute bank profits to the poor and to “public goods” like fighting climate change. The remarks grabbed the attention of lawmakers and bankers who say the regulator might have a short political future.

Poverty campaigners say the tax would raise money to help developing economies, and they welcomed Turner’s most recent comments.

“As well as restraining bank excesses, such a tax could generate billions for developing countries to use in the fight against poverty,” John Hilary, executive director at War on Want, a charity that fights poverty, said yesterday in a statement. “We call on Gordon Brown to implement this tax as an urgent measure amid the growing world economic crisis.”
Full article from Bloomberg.com here: http://www.bloomberg.com/apps/news?pid=20601102&sid=aJqRedRZpa5c

Treasury frowns on ‘Tobin’ proposal

When Jacques Chirac, the former French president, proposed in 2005 a “Tobin tax” on financial trans-actions to address the ex¬cesses of “liberal globalisation” his ideas were scorned by Britain. Times have changed since then.

Today the man charged with regulating the City of London makes exactly the same suggestion, arguing that such a tax might help to curb excessive pay, profit and activity in a “swollen” financial sector.
 Read full Financial times article here: http://www.ft.com/cms/s/0/f37bd90e-9286-11de-b63b-00144feabdc0.html

The Tobin tax explained

Here is some background information on the Tobin Tax which appeared in an article published by the Financial Times on 27 August. Click here: http://www.ft.com/cms/s/0/6210e49c-9307-11de-b146-00144feabdc0.html

The ILO Global Jobs Pact and the global economic and financial crisis

The ITUC has published a circular highlighting the importance of the ILO Jobs Pact in particular given its advocacy of a strong trade union role in all efforts to design and implement national responses to the global economic and financial crisis. The circular provides concrete guidance on how to use and advocate the various aspects of the Pact.

The ILO Global Jobs Pact (GJP) was negotiated by Governments, Workers and Employers during the June 2009 ILO International Labour Conference and was adopted formally on the 19th of June. It provides a framework for a comprehensive tripartite response to the crisis with the objective of maintaining and creating employment. The GJP is based upon the Decent Work Agenda and the 2008 Social Justice Declaration and therefore the four pillars of Decent Work form the basis for the actions proposed in the GJP.

The full ITUC circular can be accessed here.

Click here to access a copy of the Global Jobs Pact.

Facing the global jobs crisis: Migrant workers, a population at risk

The global economic crisis is posing new challenges for the world's 100 million migrant workers. They may face reduced employment and migration opportunities, worsening living and working conditions and increasing xenophobia. Although no massive return of migrant workers has been observed so far, the crisis is having repercussions on their earnings and the remittances they send home. Ibrahim Awad, Director of the International Migration Programme at the International Labour Office, published a new study entitled "The global economic crisis and migrant workers: Impact and response". 

Click here for the interview with ILO Online: http://www.ilo.org/global/About_the_ILO/Media_and_public_information/Feature_stories/lang--en/WCMS_112537/index.htm

ITUC/Reuters: Unions favour deep CO2 cuts and green jobs

Copenhagen cannot simply be about the environment with the exclusion of social and employment questions

Trade unions are supporting deep cuts in greenhouse gases as part of a planned U.N. climate pact and want to ensure jobs are preserved in a shift to a green economy, a leader of a global labour group said on Tuesday.

More jobs could be created than are lost if governments are serious about promoting a switch from fossil fuels to a low-carbon economy, said Guy Ryder, General Secretary of the International Trade Union Confederation (ITUC).

"We are aboard. It’s a fragile consensus but it is there," Ryder told Reuters of an ITUC endorsement in 2008 of cuts in greenhouse emissions as part of a planned treaty to help avert rising sea levels, more heatwaves, droughts and floods.

More here: http://www.ituc-csi.org/spip.php?article4192

UN and Republic of Korea partner to boost 'green' growth

The United Nations Environment Programme (UNEP) has joined forces with the Republic of Korea (ROK) to support the East Asian nation’s quest for a sustainable ‘green’ economic future in the midst of a global recession.

UNEP Executive Director Achim Steiner noted that Asia – particularly the ROK, China and Japan – as well as Australia have seen the greatest share of economic stimulus packages channelled into environmental investment.

More here: http://www.un.org/apps/news/story.asp?NewsID=31814&Cr=unep&Cr1=green