Education International
Education International

Stop austerity measures and labour market deregulation, say Global Unions

published 11 October 2013 updated 17 October 2013

EI has joined the international trade union movement to urge the International Monetary Fund (IMF) and the World Bank (WB), which are holding their annual meetings in Washington, USA, from 11-13 October, to reverse the harmful austerity and deregulatory policies that have contributed to a new global downturn and continued high joblessness.

The Global Unions’ statement entitled ‘Three years of destructive austerity and labour market deregulation are enough’ explains that “it is high time for the IMF and World Bank to support a genuine global recovery strategy through targeted actions to bolster aggregate demand and increase employment. Instead of promoting destructive and inequality-enhancing labour market deregulation, the Fund and the Bank should support a coherent set of labour market policies for more inclusive growth, and help small and medium enterprises obtain the financing that they need to create jobs.”

Deteriorating jobs market and growing inequality

This statement proposes that the World Bank and IMF should take actions for implementing the global social protection floor, support investments in infrastructure, education and quality public services and support transition to a low-carbon economy.

Global Unions deplore the fact that a deteriorating jobs market, in addition to constraints on social spending as part of the austerity agenda, could also accentuate the alarming increase in income inequality that has taken place over the past decade in most countries, with a few notable exceptions.

The IMF’s emphasis on labour market “flexibility” as an institutional objective is particularly incomprehensible in light of its stated commitment to inclusive growth, they also stress.

“Inequality within countries is also being accentuated by cuts in public services and transfer programmes that particularly affect those on low and middle incomes, even as progressive tax regimes are being eroded”, condemns the statement. “The emphasis on public spending cuts rather than increases tax revenues in many of the crisis countries, some of which have received IMF loans and others which are highly responsive to the Fund’s policy advice, is contributing to this trend.”

On jobs, labour standards and social protection at the World Bank, Global Unions highlight that the World Bank should implement its World Development Report 2013’s recommendation that all Bank-funded projects and activities be subjected to an assessment of their impact on employment.

The statement say that the Bank should also, in the course of its ongoing review and update of its social and environmental safeguards, adopt a labour standards safeguard which would ensure that Bank-financed activities comply with the core labour standards, provision of information to workers on their conditions of employment, retrenchment procedures, grievance mechanisms, occupational health and safety requirements and supply chain standards.

Global Unions further urge the World Bank and IMF to intensify their work in promoting and implementing the social protection floor initiative.

Global Unions’ recommendations

Global Unions have presented a set of measures aiming at supporting economic recovery, creating decent work and reducing inequality, and achieving effective financial regulation and equitable taxation.

The IMF and World Bank should:

·         Oppose austerity measures and corresponding cuts in public spending in areas that provide social support, facilitate productive economic activity and provide the basis for functioning stable government services;

·         Contribute to investments in infrastructure, education and quality public services including in the care economy to improve long-term productive potential, and support the transition to a low-carbon economy;

·         Ensure that women benefit from these policy actions to avoid a further deterioration of gender gaps in employment and income levels;

·         Support the introduction and implementation of financial transactions taxes (FTT) to prevent speculative behaviour and raise new sources of finance, and ban high-frequency trading.

EI: Austerity measures are not a solution to the economic and employment crisis

“For years now education unionists have been warning against brutal economic austerity measures and defending the view that they are not a sensible and reasonable solution to the economic and financial crisis,” said EI General Secretary Fred van Leeuwen.

Commending the IMF for finally acknowledging what unions have been saying about austerity, he nevertheless called on the organisation to end its efforts to reduce protections for vulnerable workers and dismantle collective bargaining institutions.

“Trade unions want to see both the Bank and the IMF place decent work at the centre of their policy objectives,” he underlined. “With our one-year Unite for Quality Education initiative, we are also reminding international financial organisations and governments worldwide that financing quality public services, especially education, is not inessential spending, but an investment in healthy and sustainable societies.”