PSI blog on the Financial Crisis

Economic Climate for Bargaining - December 2009

The December 2009 issue of CUPE’s Economic Climate for Bargaining includes an article arguing that we need major structural changes to our economy to move forward and that the same business-as-usual policies won’t deliver sustainable growth. The facts on deficits and debts, explains that Canada is in by far the best fiscal situation of all G7 countries and deficits and debts shouldn’t be used as an excuse to cut public services. It also includes a summary of recent forecasts of major economic indicators for Canada and the provinces and an analysis of recent employment, inflation and wage trends.

Canada is slowly emerging from the global recession, with both the economy and employment marking some signs of growth towards the end of 2009. But the economic recovery is expected to be slow and bumpy in the years ahead. Ongoing public stimulus spending will be needed to for the economy to keep growing.

The December 2009 issue of CUPE’s Economic Climate for Bargaining can be accessed here.

Green policies and jobs: a double dividend?

Nearly 40 per cent of all jobs worldwide are in high carbon intensive sectors. If we want to arrest climate change, this will inevitably create an employment challenge as workers will have to move to different jobs and sectors. And it raises the question to what extent “green” policies can produce a double dividend, in terms of environmental and employment goals.

As part of packages to overcome the ongoing global economic and jobs crisis, countries have launched infrastructure investments designed to promote transitions to a greener economy. Such efforts would at the same time serve social objectives to the extent that spending on green projects promotes recovery and job creation. They would also help reduce the length of the labour market recession.

Click here on the ILO website for a series of questions and answers on climate change, green policies and jobs.

2010 a chance for new direction on public policy, economy

“The last decade will be remembered as a time when a select few profited at the expense of many. The next decade should be about giving back,” says CUPE National President Paul Moist. “Those hit hardest by the recession will need help getting back on their feet, while newer, better social policies must be put in place for the security of generations to come.”

The financial crisis created heavy insecurity for Canada’s working people – from massive job losses to pension scares few Canadians ever imagined they’d see.

“The recession has revealed our current employment insurance and pension systems to be inadequate. And the deregulation that helped create a speculative and financial market boom is a deeply volatile way of doing business. We need to fix these public policy and economic problems,” said Moist. “We shouldn’t rebuild our economy to suit the old model.”

Moist also urges Canadians to defend their public services. “As Canada’s great equalizer, public services allow all Canadians a decent quality of life, while doubling as the best source of stimulus and stability for the economy,” says Moist.

The full article can be accessed on the CUPE website here.

The Poor Should Not Pay the Price for the Crisis

In the December 2009 issue of the quarterly magazine, Finance & Development, published by the International Monetary Fund, Barbara Stocking of Oxfam makes a forceful case for stepping up to help the most vulnerable around the world hit by the economic and financial crisis.

The economic crisis forces us to confront chronic vulnerability and damaging inequality, writes Stocking. A crucial aspect, for Oxfam, is that the impact is most catastrophic for those at the margins. People living at or under the poverty line, without a safety net, are the most vulnerable. This is especially true of women, who make up the majority of the world’s poor. Stocking questions what what the financial world can do to pay for the damage inflicted.

The full “Straight Talk” column can be accessed here.

No End To Unemployment Crisis

The recession won’t be over till people get back to work

The next time someone says the “recession is over,” ask them exactly what they mean. Because it’s increasingly clear that it means different things to different people. And it’s equally clear it doesn’t usually mean that the unemployment crisis is over.

Many economists, politicians, journalists, and corporate executives are now fervently repeating the mantras “recovery” and “recession is over.” But what they mean is almost always that some indicator of economic growth is either not falling as quickly as it was last month or that growth of some sort has actually increased, even if very slightly.

Click here for the full text from the Canadian Centre for Policy Alternatives.

Jobs growth welcome but it would be dangerous to prematurely wind back stimulus spending

A small fall in Australia’s unemployment rate in November shows that the Australian Government’s economic stimulus and infrastructure program is working and should not be wound back, say unions.

Unemployment fell to 5.7% last month, but we must not lose sight of the fact that there are still 653,100 Australians out of work.

The ACTU says a major new international report warning that an early exit from economic stimulus programs could postpone or set back the jobs recovery from the Global Financial Crisis adds weight to union calls for the stimulus to be maintained.

Read the full article on the ACTU website here.

ILO has issued report on status of global jobs crisis

The International Institute for Labour Studies of the International Labour Office (ILO) has launched a new study, entitled World of Work Report 2009 – The Global Jobs Crisis and beyond on Monday 7th of December.

Published annually by the Institute, the research arm of the ILO, this year’s “World of Work Report” assesses the current state of labour markets worldwide amid the economic crisis and analyses the economic and social implications of phasing out stimulus packages and employment support measures.

The report also examines the potential impact of the ILO’s Global Jobs Pact on overcoming the jobs crisis quickly and durably, and assesses the employment impact of measures to be considered at the UN Climate Change Conference in Copenhagen.

The report can be accessed on the ILO website, click here.

The war on public-sector unions

State and local governments are making deep spending cuts wherever they can, and taking aim at the power of public-sector unions. Lee Sustar documents this latest turn in the long war on labor--and talks to activists who are putting forward an opposition.

THE LONG war on unions is escalating in the public sector as the recession wipes out tax revenue and triggers deep budget cuts in states, large and small.

The biggest headlines have come out of California, where 193,000 state workers have suffered pay cuts of at least 14 percent because of "furlough" days, while thousands more have endured layoffs.

But the picture is similar everywhere...

Full text here.

TUC warns that spending cuts will prolong recession

In its Speaking up for public services: The Vital Role of the Public Sector in and Beyond the Recession pamphlet, the Trades Union Congress (TUC) said that any cutback in public spending would prolong the UK's economic agony, limit the country's ability to haul itself out of recession, reduce key services at a time when they are most in need and lead to thousands of job losses.

According to the pamphlet, for every £1 of public money invested in public services through direct employment and through procurement of supplies and services, a further 64p is generated in the local economy.

More here: http://www.tuc.org.uk/publicsector/tuc-17221-f0.cfm

A copy of Speaking up for Public Services: The Vital Role of the Public Sector in and Beyond the Recession is available at http://www.tuc.org.uk/extras/speakingupforpublicservices.pdf

ILO says economic crisis eroding real wages for second year running

Global growth in real wages slowed dramatically in 2008 as a result of the economic crisis and is expected to drop even further this year despite signs of a possible economic recovery, the International Labour Organization said. “The continued deterioration of real wages worldwide raises serious questions about the true extent of an economic recovery, especially if government rescue packages are phased out too early. Wage deflation deprives national economies of much needed demand and seriously affects confidence”, said Manuela Tomei, Director, ILO Conditions of Work and Employment Programme and lead author of the study.

Read the full ILO press release here: http://www.ilo.org/global/About_the_ILO/Media_and_public_information/Press_releases/lang--en/WCMS_116503/index.htm

The Global Wage Report: Update 2009 can be accessed here: http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/documents/publication/wcms_116500.pdf