PSI blog on the Financial Crisis

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.

No ‘post-crisis’ recovery in Asia until people get decent work

 

ADB President Kuroda with some members of the trade union delegation

 

In its annual flagship publication, Asian Development Outlook 2010, the Asian Development Bank (ADB) forecasts a ‘robust growth’ of 7.5% in 2010 and a 7.3% in 2011 for developing Asia. Yet, the economic crisis has thrown millions of people out of work and destabilized working conditions for workers around the world. Women, young, older and migrant workers are particularly affected. 

 

The Global Union Federations – including Public Services International (PSI), Building and Wood Workers’ International (BWI) and UNI Global Union (UNI) are urging the Bank to collaborate with trade unions on workable solutions. The crisis is accelerating the shift from secure and permanent employment to that of precarious work. There can be no recovery, post-crisis or otherwise, unless concrete measures to end the jobs crisis are put in place.
 
At the ADB-Global Union Federation Forum in Tashkent on 3 May I gave a video presentation (click here to access the video) and insisted on the fact that any ‘post crisis agenda’ for Asia must include decent jobs, respect for workers’ rights, and the provision of quality public services. Economic stimulus packages must target job preservation and creation and focus on social protection which is central to sustainable recovery and growth.

Public Services International is calling on the ADB to take specific and immediate action to:

• Create a Labour Desk that is adequately funded and supported by experienced staff to ensure ILO core labour standards and the Decent Work Agenda are applied.
• Engage in joint project research with global union federations and our affiliates
• Open opportunities for labour to second staff to the ADB
• Work with us to jointly develop a meaningful social dialogue process.