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Davos: Time to Break the Vicious Cycle of Austerity
Trade unions are calling for world leaders to adopt a Jobs Plan and build a new model of economic growth built on equity, inclusiveness and tackling climate change.

23/01/2013

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As the business and political elites meet for the annual World Economic Forum in Davos a group of labour leaders will be joining a handful of NGOs such as Oxfam and Greenpeace to raise a cry of alarm on behalf of the 99 per cent of the world’s population who are not part of the elites, but whose lives will be influenced by the Davos discussions.

The central message of labour is that the policies of austerity and structural “reforms” – which weaken unions and worker protection, and which are being pursued in too many countries – are not working so there must be a change of policy.

The jobs outlook is bleak as ever. There are almost 200 million people without work across the world and according to the ILO 40 per cent of those people are under the age of 24.

Almost 75 million young people were unemployed in 2012 and global youth unemployment is expected to increase in 2013.

In developing countries informal activity and under-employment are the norm. This also is set to rise. This cannot be allowed to happen unchecked.

Unions are calling for a plan for jobs to be adopted by the governments and international institutions in Davos.

This will have to be followed up by international institutions such as the G20 that have lapsed into inaction will have to be spurred into action. Yet much of the talk of the elites and policy makers remains complacent, with talk of “recovery” used as an excuse for inaction.

Union calls for action on jobs are also being echoed by some more concerned business leaders and officials. The WEF’s Global Agenda Council (GAC) on employment recently published a report which called for governments to:

·                     Provide adequate resources for cost-effective active labour market programmes

·                     Implement schemes to promote job retention and job sharing until the recovery is secured – including the scaling up of apprenticeship and training programmes and jobs pact for youth

·                     Implement targeted tax cuts to foster job creation and increase cash-transfers to low income households

·                     Ensure that well-set  minimum wage floors are in place to prevent wage deflation

·                     Make targeted investments in infrastructure to improve long-term productive potential and support the transition to a low carbon economy

·                     Shift taxation from employment to environmental “bads” and ally this with policies to promote environmentally sustainable growth

·                     Ensure that finance is available for high-growth small and medium-sized businesses

These proposals are very close to the union agenda.

At the same time there is growing realisation that the growth of income inequality and shift of income from wages to profits has to be brought to a halt.

On the eve of Davos, Oxfam has released a major report calling for action to reduce inequality and return to the balance of wages and profits that existed in 1990.

The model of growth that has to be established coming out of the crisis has to be very different from the one that precipitated the near economic meltdown of 2008.

It must be equitable and inclusive and at the same time bring about the action needed to halt damaging climate change. As the leader of the labour delegation in Davos Sharan Burrow has said, there are no jobs on a dead planet.

And as the Employment GAC concluded our goal is clear: to break the vicious circle of rising unemployment and falling confidence and trust.

We have to take our responsibilities seriously and commit to action a holistic plan for jobs. If more participants in Davos listen, it might just make a difference.

 

This article was published in Equal Times: http://www.equaltimes.org/opinion/davos-time-to-break-the-vicious-cycle-of-austerity