This is very typical of the social democratic view of the world... what I find interesting is the statement from these trade union organizations which continue to support and advocate for capitalism come up with this conclusion:
"The Global Union organisations are ready to play their part in building this fairer and greener future."
There is a real problem with this conclusion because the working class has had no part in creating this economic mess.
Capitalists created the problems in quest of greater and maximum profits so why should working people have to shoulder any of the burdens in solving the problems... obviously these union leaders never consulted with rank-and-file workers before issuing this statement.
For a long time now the International Trade Union Confederation has been pretending to support the United Nations' Universal Declaration of Human Rights; but, when it comes to using the Declaration of Human Rights as a guide to action regarding how to solve the problems of working people the Declaration of Human Rights is forgotten by these apologists for capitalism.
In solving the problems created by capitalism, working people across the globe have to keep two important factors mind:
1. Standard of living;
2. Cost of living.We are either entitled to wages which will enable us to live meaningful and decent lives in keeping with what is articulated in the United Nations' Universal Declaration of Human Rights; or, we are entitled to adequate social programs which help us achieve a standard-of-living in keeping with the requirements stated in the United Nations' Universal Declaration of Human Rights... in reality, it will take a combination of real living wages and adequate social programs for workers in all countries to attain the rights and standard-of-living articulated so eloquently in the United Nations' Universal Declaration of Human Rights which should be our guide to extracting us from this economic quagmire we are bogged down in.
The International Trude Union Confederation, like its capitalist counterparts of the G-20 and other capitalist governments brings out--- if they even bring it out--- the United Nations' Universal Declaration of Human Rights every December 10 to mark its approval and signing by world leaders... just as world leaders, including President Bill Clinton, signed the Millennium Statement pledging to uphold the Declaration of Human Rights and declared their intent to end poverty.
Well, common sense tells us that we are far from the target and goal they established for ending poverty.
To end poverty requires a minimum wage and/or a living income for all working people that makes the United Nations' Universal Declaration of Human Rights a living reality for everyone. In keeping with this, I am releasing part of an exchange between myself and Guy Ryder who heads up the International Trade Union Confederation:
Brother Ryder;
Yes, the ITUC response in opposing Israel’s actions in Gaza Strip was most welcome and a parting with imperialism. I have attached the personal letter Ken Georgetti sent me along with the official position of the CLC which I distributed widely along with your own. However, as you must be fully aware, the AFL-CIO has remained silent. I sent you my communications and telephone journal from my discussion with Josh Scannell.
[…
…]
I am glad you appreciated my sense of humour regarding what I consider the short-comings of the ITUC.
On the serious side, I do think that working people are going to have to take a good hard look at our demands to increase unemployment compensation as a package tied to how the minimum wage is established.
I think the minimum wage should be established by national legislation (actually globally). Here is what I have been arguing for:
If a job needs to be done, the employer hiring workers to do the job/s should have to pay a real living wage/s to the worker/s doing the job/s or let the employer/s do the job/s themselves.
That real living minimum wage should be based upon all cost-of-living factors.
Those cost-of-living factors should be all those factors monitored and recorded by the Federal Department of Labour (those factors important when not presently included in calculations should be added).
The minimum wage should be adjusted quarterly or when the cost-of-living is reported in each nation; computer technology makes this all easily possible.
All forms of welfare including unemployment compensation to Social Security (Social Insurance/pensions) should be no less than the real living minimum wage.
I made a presentation to the Minnesota State Legislature based on these five things while going through all the points in the United Nations’ Universal Declaration of Human Rights as being the primary points which should be considered when factoring cost-of-living and talking about standard-of-living; arguing that this would be the only way to arrive at real living incomes for working people all over the world in order to try to prevent outsourcing and run-away plants and industries a major factor in high unemployment rates as well as the one and only way to eliminate poverty. I argued that every single job is a good job provided:
* It pays at least a real living wage;
* There are adequate benefits;
* Workers are employed under adequate health and safety protections;
* A freely negotiated union contract is in place.
* All anti-labor legislation from "right-to-work" to "at-will hiring and at-will firing" should be removed as the major impediments to union organizing.
A good union contract is usually better than any government anti-poverty program, which is usually nothing approximating a living income.
I pointed out that labor creates all wealth as far as I know; and, if anyone could prove otherwise I would be willing to modify my proposals to share some of the wealth with them; otherwise I didn’t believe in free lunches except for children going to school and in pre-school and child care programs; however if the state legislator wanted to mandate free meals for all workers I wouldn’t object.
A small group of progressive legislators said it was the best and most articulate presentation they ever heard; the head of the Minnesota AFL-CIO said it was just more Communist propaganda from a guy trying to paint Minnesota red again, and a Republican said it was my way of driving businesses out of business so Communists could take over without a revolution. One state representative who has a great big picture of Che hanging in his office then suggested that Minnesota’s Minimum wage should be raised by $5.00 an hour to “get us on the right track the way Maki is talking about.”
I explained to the legislators that by using my formula to establish the minimum wage I was actually helping employers reduce the minimum wage.
A Republican said, “Maki, you are an idiot. If we raised the minimum wage to the level you are recommending it would be $25.00 an hour; do you really think someone sweeping floors should get $25.00 an hour?” I responded, “Since you get paid more than $25.00 an hour for doing nothing I can’t see why someone sweeping a floor shouldn’t get paid more than you do.” I continued, “Wow, I didn’t know there were such brilliant Republicans who can calculate so well without a calculator.” I then went on to start explaining how the minimum wage could be lowered and he got up and left the room because the Chair of the Committee would not stop me from talking.
So here is how I explained it:
I told them if they instituted adequate social programs, the more social programs they implement this would drive down the cost-of-living while raising the standard-of-living for working people while reducing the minimum wage as everyone has a real living income: free health care, free college tuitions, free school breakfasts and lunches, free pre-school and child-care, lower mass transit fees, more heavily government subsidized low and moderate-income public housing, etc.
I told them they could charge for all these social programs but the more they charged the higher the minimum wage would have to go and we don’t want to upset the Chamber of Commerce or the National Association of Manufacturers or the Summit Hill Club (that’s the high income neighborhood in St. Paul, MN USA)
One of the remaining Republicans asked me where the money was going to come from.
I told him, “Well, all these rich people Bernie Madoff swindled have so much money they didn’t even know they had been swindled for over twenty years. Why should they mind if we taxed them at the same rate Madoff swindled them since they would at least get something like free health care and free college tuitions for their children instead of getting nothing from their investments with Madoff?” Like you I agree the Madoff swindle is only the tip of the ice-berg.
Then I told them to cut the military budget and let the generals hold bake-good sales and sell candy bars and flower seeds from door-to-door to finance their military madness and stop the wars and close down the more than 800 U.S. military bases on foreign soil we need like we need holes in our heads made from shrapnel from cluster bombs. I suggested they get together with federal legislators and set up 800 health care centers across the United States based upon the Mt. Carmel Clinic model in Winnipeg, MB, Canada to replace the 800 foreign military bases... pointing out that Minnesota’s share would be at least sixteen of the centers, maybe more if Rhode Island didn’t need as many.
And I told them, “If this won’t cover the costs of such social programs, than increase the taconite tax on the mining industry and stumpage fees on the forestry industry… Now, since I have solved all your problems when you get your next government payroll check can you have my name put on it for doing your job in solving all the problems for you.”
Then a “moderate” Democrat said, “It sounds to me like you are trying to get out of us what you have failed to win at the bargaining table for casino workers.” I said, “Bingo!… you are a genius. I might as well be sitting here representing the entire working class since the President of the Minnesota AFL-CIO isn’t doing his job, either… let me see if I get my name on his pay check, too; it looks like I am going to walk out of this hearing a wealthy man.”
I do intend to re-submit these ideas as part of my testimony for the “Minnesota People’s Bailout” which has now been introduced in the Minnesota State Legislature by a handful of progressive politicians.
I will pass that on to you; it will also be posted on my blog along with other info on the “Minnesota People’s Bailout” posted in the upper right-hand corner of my blog.
I guess I better resend this to everyone in case anyone else got the wrong idea, too.
Hopefully, I have ended any confusion.
I appreciate the opportunity to discuss and float these ideas with you and the ITUC even though we have some major disagreements about replacing capitalism with socialism and over China.
If you have questions, suggestions, criticisms further comments, let me know. I appreciated you circulating this communication further. Ken Georgetti is very sympathetic to this approach to unemployment compensation.
You will find that our Organizing Council endorsed your petition for “Decent Work, Decent Life” long ago… I believe on the day you introduced it. Again, my problem with this is not that it is wrong-headed--- I never implied that--- but, rather, that you have not released the funding or put the required resources forward needed for making this a real international working class campaign. I don’t think this is a matter of difference of opinion, as you suggest; it is a fact anyone can see.
Fraternally,
Alan
Alan L. Maki
Director of Organizing,
Midwest Casino Workers Organizing Council
58891 County Road 13
Warroad, Minnesota 56763
Phone: 218-386-2432
Cell phone: 651-587-5541
E-mail: amaki000@centurytel.net
I think it is very important to point out that the "London Statement" below completely evades the issues of militarization, preparation for war and wars. One wonders what the heads of so many labor unions are thinking when they address these capitalist governments about these issues and do not even mention the need for peace since there is no more waste of human and natural resources than what comes from militarization and wars.
For instance, if the 800 U.S. foreign military bases around the globe were closed and abandoned, we could establish 800 community health care centers across the United States--- 16 in each state where health care would be free of all charges without the need for any premiums... we would be keeping the American people healthy and have a better chance of getting people well when sick. A network of 800 public health care centers would create over four-million jobs providing people with decent jobs and real living wages... this is what a real "stimulus program" would be like.
If wars and militarism would come to an end these kinds of health care programs could be established in every country... instead, the militarization of outer space is being contemplated as wars engulf many countries today, with the Obama Administration leading the way to militarization of outer space and the drive to wars.
One of the worst examples we see of this militarization is with the Israeli killing machine being financed by the American tax-payers to thwart the democratic aspirations of the Palestinian people to live in peace in their own homeland.
It does little good to talk about:
"The Global Union organisations are ready to play their part in building this fairer and greener future."
when the world's resources--- human resources and natural resources--- are being squandered on militarization and war... the very resources required to begin creating socially and economically just societies these social democratic trade union leaders say they are for.
We cannot have social and economic justice AND huge expenditures on militarization and wars.
In addition to ignoring wars and militarization, the "London Statement" does not articulate specific solutions to any problems. For instance, solutions like "The Minnesota People's Bailout" are completely ignored... this is legislation which could pretty much be used as a template for legislation in any country in fighting against the very worst problems working people are experiencing as a result of this global capitalist recession/depression.
Read the statement below, or go to the ITUC web site with the link provided where it will be easier for you to read the entire "London Statement."
Progressive trade unionists need to provide a united response and vigorously involve themselves in this discussion, dialog and debate. The battle of ideas in our modern world is nothing to shy away from.
There is nothing fair for working people when it comes to capitalism... and, the only thing "green" capitalists comprehend is money.
These trade union leaders from the International Trade Union Confederation seem oblivious, unaware and unmindful to the fact that capitalism is on the skids to oblivion and we are all on the very dangerous, bumpy road to perdition... it is like they don't even understand that working people don't have to go to the end of this road to perdition... we can take a "left" turn towards socialism--- before the end of the road to war, poverty and untold human misery--- without the permission of our capitalist masters.
Alan L. Maki
Below is the
Statement to the London G20 Summit GLOBAL UNIONS
LONDON DECLARATIONhttp://www.ituc-csi.org/IMG/pdf/No_16_-_G20_London_Declaration_FINAL.pdfApril 2009
I. Introduction and Summary
1 The world economy is in the midst of an all-encompassing, triple crisis,
which started in the U.S. housing market, spread through the un-regulated
shadow financial system and resulted in first the credit market crisis
and then the employment crisis. It has now evolved into a complex and
dangerous vicious circle, with falling house prices and rising unemployment
combining to feed the crisis in the credit market. This crisis is
extending across industrialised, emerging and developing economies.
2 When the G20 Leaders first met in November 2008 in Washington, the
world was already facing an unprecedented slowdown in growth with
output falling in the industrialised countries. The situation is now dramatically
worse. Staggering falls in GDP were recorded in the final quarter of
2008. At an annualised rate, GDP shrank by 6 per cent in the G7 economies,
the European Union and the OECD as a whole1. These are the worst
figures ever recorded. The contagion has spread to emerging and developing
economies where growth has now stalled and GDP per capita is
falling. The impact of the recession is rapidly intensifying in developing
regions in 2009, because of the sharp decline in exports and a drying up of
private capital flows. 26 low-income developing countries in Africa, Asia,
the Americas and Eastern Europe have been identified by the International
Monetary Fund (IMF) as being “highly vulnerable” to the adverse
effects of the global recession in 20092. The achievement of the Millennium
Development Goals, which set minimum objectives for a global
1 OECD, Quarterly National Accounts, 18 February 2009
2 IMF, The Implications of the Global Financial Crisis for Low-Income Countries, 2009
I. Introduction and Summary 1
II. A Coordinated International
Recovery and Sustainable
Growth Plan 3
The need for coordination 3
Public Expenditure Targeted on Employment 3
Green Investment and Jobs 4
Quality Public Services 4
Active Labour Market Polices 4
Support for Emerging and Developing
Economies 5
Restore Public Support for the Global Trading
System 6
III. New Rules for Global Financial
Markets 7
Restore Confidence, Nationalise the Banks 7
Reform the Financial System 7
Protect Workers’ Pensions 9
IV. Stopping Wage Deflation and
Combating the Crisis of Distributive
Justice 10
V. Laying the Foundations for an
International Agreement to Mitigate
Climate Change 11
VI. Effective and Accountable Global
Economic Governance 12
VII. Conclusion 13
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effort to tackle many of the root causes of poverty, is being jeopardized by
the economic crisis. Ten years of progress in poverty reduction has been
undone in just a few months.
3 Unemployment has continued to surge in the first months of 2009. It
now appears likely that the ILO’s ‘worst-case’ scenario of unemployment
increasing by 50 million worldwide in 2009 will turn out to be over-optimistic3.
Over 200 million workers could be pushed into extreme poverty,
mostly in developing and emerging countries where there are no social
safety nets, meaning that the number of working poor – earning below
2 USD per day for each family member – may rise to 1.4 billion. 60 per
cent of the world’s poor are women. Workers around the world, who are
losing their jobs and their homes, are the innocent victims of this crisis:
a crisis precipitated by greed and incompetence in the financial sector,
but which is underpinned by the policies of privatisation, liberalisation
and labour market deregulation of recent decades. The effects of these
policies – stagnating wages, cuts in social protection, erosion of workers’
rights, increased precarious work, and financialisation – have combined
to increase inequality and vulnerability. The scale of this crisis serves as
testimony to the failure of these policies. Without a radical response by
governments, this most serious economic crisis since the Great Depression
of the 1930s will transform into a social and, ultimately, political
crisis as well.
4 When our economies begin to recover there can be no return to ‘business
as usual’. The crisis must mark the end of an ideology of unfettered
financial markets, where self-regulation has been exposed as a fraud and
greed has overridden rational judgement to the detriment of the real
economy. A new national and global regulatory architecture needs to
be built, which restores financial markets to their primary function of
ensuring stable and cost-effective financing of productive investment in
the real economy. Beyond this, there is a need to establish a new model
of economic development that is economically efficient, socially just and
environmentally sustainable. It must bring to an end the policies that have
generated massive inequality over the past two decades. This requires a
paradigm shift in policy-making. G20 Leaders must begin a multilateral
process, working together with other governments, the UN and other
institutions, to redraw the governance of the global economy such that
social and environmental issues are assigned the same level of priority as
trade and finance.
5 The global trade union movement therefore calls on G20 Leaders, working
with other governments and international institutions, to develop a fivepoint
strategy, to first tackle the crisis and then build a fairer and more
sustainable world economy for future generations. The strategy must:
mm implement a coordinated international recovery and sustainable growth
plan with maximum impact on job creation focussing on public investment,
active labour market policies, protecting the most vulnerable
through extended social safety nets, and ‘green economy’ investments
that can shift the world economy onto a low-carbon growth path.
3 ILO Global Employment Trends, 28 January 2009
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Developing and emerging economies must be given the resources and
the policy space to undertake counter-cyclical policies (§ 6-17);
mm nationalise insolvent banks immediately so as to restore confidence
and lending in the financial system and beyond this establish the
new rules and mechanisms to control global finance with full stakeholder
engagement. We propose an eight point-action plan to this end
(§ 18-22);
mm combat the risk of wage deflation and reverse the growth of income
inequality by extending the coverage of collective bargaining and
strengthening wage setting institutions so as to establish a decent floor
in labour markets (§ 23-26);
mm prepare the ground for a far-reaching and ambitious international
agreement on climate change at COP15 in Copenhagen, in December
2009 (§ 27-29);
mm establish a legal benchmark of norms and instruments of the international
economic and social institutions – the ILO, IMF, World Bank,
WTO and the OECD – and beyond this reform these institutions and
build effective and accountable global economic governance (§ 30-33).
II. A Coordinated International Recovery and Sustainable Growth Plan The need for coordination
6 The first priority for G20 leaders must be to restore confidence by halting
the freefall in world growth and reversing the decline in employment.
Governments must take all necessary measures to this end and must use
their leverage with the banks to get credit moving again and provide additional
liquidity. Since November 2008, most G7 countries and others in the
G20 and beyond have announced or implemented fiscal measures to boost
growth. These measures would have twice the impact on jobs and growth
if they were coordinated and complemented internationally4. So far such
coordination is missing: the US stimulus amounts to at least 2 per cent of
GDP per year, whereas the EU country measures announced by the beginning
of February 2009 amounted to less than 1 per cent of the EU’s GDP.
The G20 must get the current “free-riders” to act and take coordinated
measures to stimulate the world economy – with those with trade surpluses
taking the lead. We reiterate our call for a global recovery plan amounting
to a least 2 per cent of world output. Central banks should continue to cut
interest rates and undertake quantitative easing of monetary policy so that
government investment can be financed at a low interest rate cost.
Public Expenditure Targeted on Employment
7 Measures must also be targeted within countries so as to have the biggest
impact on growth and employment. There is a need to draw a new
economic map, which identifies the sectors that provide the greatest opportunities
for future growth. Governments should bring forward infrastructure
investment programmes that stimulate demand growth in the short
4 IMF, Fiscal Policy for the Crisis, December 29, 2008
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term and raise productivity growth throughout the real economy in the
medium term. Measures should be introduced to support the purchasing
power of low income earners, including single earner households, which
are predominantly female-headed. Putting more money into the pockets
and purses of people on low incomes will boost the economy as they are
more likely to spend any extra cash quickly, ensuring that it helps beat the
recession. This can be done through increasing benefits, direct job creation
schemes and changes in tax. Resources should not be wasted on ineffective,
generalised tax cuts: during a downturn, spending on social safety
nets and transfers for local government services, including education and
health, will have almost twice as much impact as tax cuts.
Green Investment and Jobs
8 There has never been a better time to launch the ‘Green New Deal’ called
for by the United Nations Environment Programme (UNEP). The ‘Green
Jobs’ agenda requires governments to undertake large-scale investment in
green infrastructure, such as energy efficiency and renewable energies
– thereby stimulating the creation of high quality employment across a
range of sectors – as well as to scale-up financial resources for research
and development, diffusion and deployment of new technologies, and to
upgrade skills development schemes.
Quality Public Services
9 As part of a new development model governments must enhance the role
of the public sector – national and municipal – in the provision of quality,
essential services such as education, health, water, sanitation, law, safety and
security, fire-fighting and civil protection. Quality public services can make
a vital contribution to social cohesion and equity, which alongside effective
and ethical administration of legislation and the application of regulatory
frameworks are the cornerstones of healthy democratic societies.
10 This is also the time to invest in people – in their education and health, and
in care for the very young and the aged. Given the accelerating job losses
in industries affected by the crisis, there is a clear rationale for investing
in education and training so as to support the transfer of workers into
sectors where there is a need for more jobs. In the health/care sectors, for
example, due inter alia to the ageing population, the World Health Organisation
(WHO) estimates a need for an additional 4.2 million jobs worldwide.
In education, an estimated eighteen million new teachers must be
trained to meet the goal of providing quality education for all primary
age children by the year 2015. Millions more teachers and instructors are
needed for vocational education and training for skills that underpin the
real economy and for retraining of working people as economies restructure.
In addition, governments must step up efforts to reduce poverty
among women, who today constitute the majority of the world’s poor.
Active Labour Market Polices
11 The priority must be to keep people at work, workforces together and
workers in activity. Active Labour Market Policies (ALMPs) have a crucial
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role to play, yet spending on ALMPs has been only a tiny part of the
fiscal packages adopted by most countries. Programmes must be implemented
to reduce the risk of unemployment and wage losses, as well as
to provide income support. In these difficult times, companies must be
socially responsible and retain their workers as long as possible. At the
ILO, workers, government and employers have agreed that “restructuring
should be based on dialogue between management, unions and workers’
representatives”5. Those companies receiving public assistance need to
respect agreements with governments and trade unions to undertake
agreed restructuring programmes that include employment and training
components.
12 Governments must put in place labour market policies that:
mm discourage companies from hitting the redundancy button at the first
signs of trouble and provide support for businesses affected by temporary
credit difficulties;
mm focus on groups most affected by the crisis, such as the young, older
and unskilled workers, temporary and part-time workers, women and
migrants;
mm increase efforts to eliminate the gender pay gap, which is estimated to
stand at more than 22 per cent6;
mm provide income support, in particular through expanded unemployment
benefits;
mm ensure full respect of national and international standards on workers’
rights regarding termination of employment;
mm promote investment in people and offer improved training opportunities
in order to facilitate the acquisition of new skills by workers of all
ages;
mm assure migrant workers the same rights as other citizens, as their stigmatisation
not only leads to xenophobia, but ultimately exacerbates
poverty.
Support for Emerging and Developing Economies
13 As global unemployment surges, most of the world’s workers do not have
recourse to unemployment benefits when they lose their jobs and can rely
only on their own savings or their family’s support when they reach old
age. The crisis presents both an obligation and an opportunity to establish
decent social safety nets that can act as automatic stabilisers in countries
that do not currently have them, irrespective of the level of development.
14 Increasing workers’ incomes and expanding social protection will be
particularly important for the recovery of emerging economies that had
achieved high growth through export-led development but are now facing
a collapse of their major export markets. Economic recovery in these countries,
and also the achievement of sustainable longer-term growth, will
depend on their capacity to build up a stronger domestic demand base. This
5 ILO Global Dialogue Forum on the Impact of the Financial crisis on Finance Sector Workers 24-25 February
2009
6 ITUC, Gender inequality in the labour market: an overview of global trends and developments, 2009
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will require improved observance of workers’ rights so that trade unions
can negotiate wage increases commensurate with increased productivity,
and more comprehensive social protection through programmes, such as
old-age pensions and health care. Such strategies will help to correct the
‘global imbalances’ in trade and financial flows and reverse the increased
income inequality experienced in many of these countries.
15 As industrialized and emerging economies strive for recovery there is a
risk of leaving the low-income countries on the sidelines. The poor are
still reeling from the food crisis. Whilst food and commodity prices
have moderated with the global recession, the effects continue to be felt:
cereal prices, for example, today are still 71 per cent higher than in 2005.
The economic crisis will through falling incomes further exacerbate the
effects of the food crisis, with the most affected being the rural and urban
poor, landless farmers, female-headed households and those recently
made unemployed, including migrant workers. It is absolutely critical to
maintain and enhance levels of official development assistance (ODA).
Development assistance budgets, particularly for the Least Developed
Countries (LDCs) need to be maintained with the adoption of binding
commitments and a timetable to meet the UN target of 0.7% of GDP.
Governments must keep food security on the agenda and work together
to build longer term agricultural resilience to ensure that people can afford
basic staples and enjoy secure and sustainable access to food.
16 Most developing and some emerging countries are operating pro-cyclical
fiscal policies, because they are pressured by the International Financial
Institutions (IFIs) to practice ‘fiscal discipline’ at times of crisis. The international
community must support expansionary recovery programmes
in developing countries, which are necessary to prevent poverty from
growing further and to contribute to global demand. The international
and regional development banks, as well as other agencies, have an important
role to play in ensuring that all regions of the world take part in the
recovery effort. This requires both increased financial assistance from IFIs
and donor countries and an end to the harmful economic policy conditionality
attached to assistance from the IFIs. The IFIs should expand
their debt relief initiatives and undertake governance reforms so that the
countries most affected by their actions have a greater say in setting their
policies.
Restore Public Support for the Global Trading System
17 Trade is collapsing, but more due to the shrinking of the real economy
than protectionism. We must avoid the mistakes of the crisis of the 1930s
of reverting to ‘beggar thy neighbour’ policies. Trade can boost economic
growth, recovery and development, but only under the right conditions.
Restoring the legitimacy of, and public support for, the world trading
system and concluding the Doha Round of trade negotiations, requires
progress on the enforcement of the protection of fundamental workers’
rights. It also requires ensuring that developing countries are able to
achieve economic recovery, decent employment and future industrial
development and where necessary control short-term capital flows to
meet development objectives. It would also require developing further
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mechanisms, including buffer stocks and compensatory mechanisms, to
protect low-income countries against primary commodity market volatility.
III. New Rules for Global Financial Markets
18 G20 Leaders must take immediate action to restore liquidity and solvency
in the banking system so that it fulfils its essential role of financing productive
investment. Beyond this, G20 Leaders must start the process of fundamental
reform of the global financial system, so as to bring to an end the
financialisation that has devastated the real economy. Governments must
ensure that a crisis on this scale never happens again.
Restore Confidence, Nationalise the Banks
19 The banking sector contains a large number of insolvent banks, which
would have already gone out of business were it not for the magnitude of
the crisis and the fact that some are simply ‘too big to fail’. Governments
are faced with two options: (i) create taxpayer-sponsored ‘bad asset’
pools, where bankers can dispose of their toxic assets; or (ii) nationalise
all weak banks on the basis of the risk they present to the system. The first
option will neither separate the ‘bad’ assets from the ‘good’, nor restore
confidence, serving only to worsen the state of the public finances. Also,
such ‘bailing out’ of bank shareholders would amount to a transfer from
working people to the world’s wealthiest households, who are disproportionately
represented among the shareholders of financial institutions.
Under current circumstances, nationalisation is the only way to restore
confidence, provide fair risk-sharing and ensure that taxpayers benefit
from any gains once solvency is restored.
Reform the Financial System
20 Governments must also correct the democratic deficit that has characterised
efforts to re-design the post-crisis financial architecture. They should
not leave the reform of the financial system to the experts of the Financial
Stability Forum (FSF) – the same experts who created the current system
that has now collapsed so disastrously. Furthermore, the FSF has failed in
the past to engage with trade union, civil society or other stakeholders,
including the UN and the ILO, and does not have the appropriate governance
structure, expertise or resources to enable it to do so in the future.
21 The current crisis has revealed the limits of the ‘delegated supervision’
approach, which prescribes that only a small part of the financial
system (e.g., commercial banks) requires proper oversight. Several post-
September 2008 initiatives have identified the need to reverse the light
regulatory approach to global finance of the past7. Now is the time for
binding regulation to ensure public control and oversight of all financial
7 Modernizing the American Financial Regulatory System, Congressional Oversight Panel (COP), Special Report
on Regulatory Reform, January 2009: http://cop.senate.gov/documents/cop-012909-report-regulatoryreform.
pdf ; Principles for a New Financial Architecture, Stiglitz, UN Commission of Experts of the President of the
UN General Assembly on Reforms of the International Monetary and Financial System, January 2009; http://www.
un.org/ga/president/63/commission/newfinancialarchitecture.pdf
Page 8 www.ituc-csi.org www.tuac.org www.global-unions.org
institution, products and transactions. We propose the following eight
point action plan:
> Clamp down on the ‘shadow’ financial economy. Governments must
ensure full regulatory coverage of all institutions, products and transactions.
In particular, private pools of capital (hedge funds and private
equity) must not be exempted from regulation that applies to other asset
management entities, which provides for accountability to investors,
transparency and, where needed, employer responsibilities. All forms of
credit-related, off-balance sheet transactions must be prohibited. Financial
products that transfer credit risk (such as credit default swaps and
obligations) and other opaque ‘structured products’ that are securitised
on the markets must come under the oversight of public authorities. As a
general rule, trading should be tied to beneficial ownership. Credit rating
agencies must be properly regulated so as to avoid conflicts of interest in
the valuation of products and institutions.
> End tax and regulatory havens and create new international taxation
mechanisms. G20 Leaders must agree on international cooperation
measures so as to bring tax havens, offshore financial centres (OFCs) and
bank secrecy jurisdictions – including but not limited to the 38 territories
on the OECD watch list – in line with international standards. They
must also act to stop the ‘race to the bottom’ between tax jurisdictions,
which is eroding the tax revenue source of many countries. Governments
should develop a package of sanctions to protect their tax base, including
investment restrictions for institutional investors and higher penalties for
tax crimes. Moreover, international taxation of financial transactions, such
as on short-term movements, should be introduced in order to finance
taxpayer funded public debt incurred as a result of the crisis. Such a tax
could help protect developing countries against global market volatility.
> Ensure fair and sustainable access to international finance for developing
countries. Developing countries should be given access to credit
lending terms that are commensurate to their needs and capacities.
Measures include activating the IMF Special Drawing Rights (SDRs)
programme, accelerating regional currency cooperation, and re-directing
the capital flows of current account surplus countries, including their
Sovereign Wealth Funds, towards development objectives.
> Reform the private banking business model to prevent asset bubbles
and reduce leverage risks. Capital adequacy rules – the amount of capital
banks are required to put aside as collateral for their lending – must be
further tied to the growth of the bank’s holdings in assets and to the degree
of risk borne by those assets. This would discourage banks from exposing
themselves to excessive asset risk. It would also help drive asset allocation
towards socially desirable goals and facilitate the control of asset price
inflation by central banks.
> Control executive, shareholder and other financial intermediary
remuneration. Remuneration schemes must be regulated by law to reflect
and promote long-term economic, social and environmental performance
and allow companies to allocate profits to the company’s reserves for reinvestment
in productive assets. Remuneration of management and traders
Page 9 www.ituc-csi.org www.tuac.org www.global-unions.org
should be capped in line with workers’ pay and pensions and, in the case
of financial services, linked to responsible sales and lending practices. The
cashing-in of bonuses and other performance-related schemes within five
years should be prohibited. Shareholders must be prevented from plundering
the wealth of companies during growth times through dividends
and ‘share buy-back’ programmes, which leave companies with undercapitalised
balance sheets during economic downturns. Private equity in
particular has put millions of jobs at risk due to its unsustainable, leveraged
buy-out takeover model.
> Protect working families against predatory lending. Governments
should take steps to increase the security of lending for working families
by providing for the transparency of financial contracts (housing, credit
cards, insurance), access to effective recourse, proximity of services and
affordability (ceilings on interest rates and fees). The remuneration and
incentive schemes of banks, their employees and other credit-suppliers
should be designed to ensure responsible sales and lending practices,
which serve the interests of customers.
> Consolidate and enhance the public accountability, mandate and
resources of supervisory authorities. Governments must act to end the
fragmented approach to financial regulation, which is currently divided
according to business activity and national jurisdiction. There must be
supra-national consolidation where needed, notably in Europe. Supervisory
authorities must be assigned sufficient enforcement powers and
resources that are commensurate with their tasks. In particular, their
mandate should be extended to cover monitoring of asset price inflation.
A trade union voice must be heard in their governance structure. In
addition, the supervisory framework, including ‘colleges of supervisors’,
should provide for the cooperation of financial authorities with trade
unions and other workplace employee representative structures in the
financial sector: e.g., works councils and international framework agreements
that are drawn up between Global Union Federations and multinational
companies.
> Restructure and diversify the banking sector. A diversity of business
models and legal forms is needed to help build balanced and robust
domestic financial services that serve the real economy and meet the
needs of working families. Governments should promote alternative
models to for-profit banking and insurance services, such as credit unions,
cooperative banking, mutual insurance, and other community-based and
public financial services. They should also take steps to ensure that there
is no future creation of large conglomerates that are either ‘too big to fail’,
or which combine different types of business: banking, insurance, investment
banking, etc. Restructuring must be carried out on the basis of the
highest standards of social dialogue and any employment impacts must be
mitigated.
Protect Workers’ Pensions
22 G20 Leaders must also take action to protect pre-funded pension
schemes. The crisis has revealed the danger of unlimited investment of
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workers’ pensions in the ‘shadow’ financial sector. OECD-based pension
funds have declined in value by over USD 3.3 trillion, 20 per cent in real
terms, in 2008, due to the fall in value of equity, fixed-income assets, hedge
funds and structured products. The immediate impact of the crisis will
be felt most by those nearing retirement age, whose pensions fall under
un-protected ‘defined contribution’ schemes, where the final level of
pension depends on the performance of the pension fund. Governments
should take steps to ensure an adequate retirement for workers under
pre-funded schemes, including ensuring employers take their share of the
pension risk and funding, strengthening existing government guarantee
schemes and pension fund investment regulation at large.
IV. Stopping Wage Deflation and Combating the Crisis of
Distributive Justice
23 The ‘flexibilisation’ of labour markets that has occurred in most economies
over the past 25 years has increased the risk of wage deflation contributing
to the crisis due to purchasing power being cut and increasing insecurity.
Governments must not make the same mistake as in the 1930s and allow
competitive wage cuts. Rather than pursuing policies that weaken worker
protection and increase the precariousness of work, governments must
ensure that floors are put in labour markets to prevent a worsening spiral
of deflation of earnings and prices. They must act to protect workers’
core rights and the extension of collective bargaining and encourage the
rebuilding of the institutions that help distribute income and wealth more
fairly. Minimum wages need to be high enough to ensure that workers
and their families have decent living conditions, so as to prevent further
increases in the number of the working poor. Women represent the
majority of those for whom working conditions are the most precarious
and achieving gender equity and the elimination of discrimination against
women in employment must become a priority of the national and international
policy agenda.
24 Prior to the crisis, income inequality had risen both within and between
nations. Increases in wages had fallen behind wider growth rates in productivity
in two-thirds of the wealthiest countries that make up the OECD8,
and the share of wages in national income had fallen in all countries for
which there are data. In developing nations, even before the food price
crisis of 2007-2008 and the current financial crisis, the World Bank noted
that in 46 out of 59 examined, inequality had increased over the previous
decade. The worsening economic situation, on top of the crisis in the
world food system, will exacerbate these existing inequalities. Instead
of steady economic growth built on investment, productivity and the
growing prosperity of working people, we have had a series of speculative
bubbles that have increased the wealth of the few, but are now being paid
for by the many. We need a new model of economic development that
is environmentally sustainable and ensures balanced real wage growth, in
line with productivity increases. We also require a fairer tax system, which
tackles inequality by shifting taxation from labour on to capital.
8 “Growing Unequal”, OECD October 2008
Page 11 www.ituc-csi.org www.tuac.org www.global-unions.org
25 In most developing countries, labour market institutions are even weaker
than in industrialised countries and large proportions of the labour force
are sidelined in the ‘informal economy’, where workers have no protection
of any sort. Basic labour market regulations – such as minimum wages,
maximum hours, severance pay in case of job loss and limitations on the
use of short-term contracts – are essential for protecting workers against
abuse, as is full respect of the core labour standards so that workers can
organise and bargain collectively to improve their wages and working
conditions. The IFIs should not promote further labour market deregulation
in developing countries during the current crisis, as this will only
exacerbate the situation of workers, especially since the vast majority of
developing-country workers have no income support programmes to
fall back on. The IFIs should work jointly with the ILO in its efforts to
promote the creation of safe employment with adequate wages, social
protection and rights.
26 Looking to the longer term, the tripartite structures for economic and
social consultation and policy planning that provided the springboard
for the 30 years of high economic growth and improving living standards
of the post-war period need to be recreated. Involving representatives
of working people in the decisions that determine employment and
economic growth is not only consistent with democratic principles, but
makes good economic sense. The alternative neo-liberal model condemns
us to repeating the mistakes of the 1920s and 1990s and maintaining the
levels of spiralling inequality that resulted in financial instability and ultimately
stock market crash.
V. Laying the Foundations for an International Agreement to Mitigate Climate Change
27 G20 Leaders must ensure that the urgent measures needed to tackle
climate change are not derailed by this crisis. Rather, as called for in this
declaration, governments must use the coordinated global fiscal response
to the crisis to move ahead with the ‘green economy agenda’, thus preparing
the ground for an ambitious climate agreement this year in Copenhagen.
These are essential steps if we are to prevent the world’s average temperature
rising more than 2 per cent and to avert widespread climate disaster:
at best, the loss of 5 per cent global output “now and forever” according
to the Stern report, or, at worst, the collapse of societies as predicted by
current models of long-term environmental and economic interactions.
It is essential that the G20 meeting sends a strong message on the need
to reach an agreement in Copenhagen. Such an agreement must include
ambitious targets for Greenhouse Gas (GHG) emission reduction in
developed countries, as well as effective action for achieving GHG emission
reduction or controlled increases to bring about low carbon development
in developing countries.
28 Governments must recognise that reaching such an agreement on climate
change depends on building a broad and sustainable political consensus on
goals, as well as the means of achieving them. The agreement must show
that signatory governments recognise the social and economic impacts of
its implementation by providing a clear strategy for addressing them since,
Page 12 www.ituc-csi.org www.tuac.org www.global-unions.org
to date, the employment challenges, together with the potential benefits,
have remained unaddressed. Furthermore, the new climate change agreement
must call on governments to consult on, plan and implement a ‘just
transition’ strategy, aimed at protecting the most vulnerable from climate
change risks and from the consequences of climate change adaptation or
mitigation measures. These ‘transitional’ strategies must include, inter alia,
provision for consultation with unions, business and civil society, skills
development schemes, social protection policies and economic diversification.
29 Developed countries should make financial and other support available
to the poorest countries to enable them take up the challenges of climate
change, including through the United Nations Framework Convention on
Climate Change (UNFCCC) Adaptation Fund.
VI. Effective and Accountable Global Economic Governance
30 In 1944 the world’s major countries came together in Bretton Woods to
set up new global financial arrangements that would support economic
recovery. Today we need to show greater ambition: change must go
beyond financial regulation. The crisis has revealed serious weaknesses in
the governance mechanisms for the global economy. While there is no one
blueprint for optimal world governance, governments can start by identifying
the requirements of global coherence in areas such as environment,
finance, development assistance, migration, labour, health and energy,
where it is self-evident that national governance alone is deficient and that
a new world institutional architecture is required in a ‘grand global deal’.
If the trade agenda is to move forward, a much stronger social pillar is
needed in order to anticipate and smooth the employment shifts that more
intense competition will provoke. The G20 process contains some of the
necessary elements, but remains heavily weighted towards finance issues.
The real economy, decent work and poverty reduction are currently being
treated as marginal to its discussions. Furthermore, countries representing
one third of the world’s population are not represented at the table and
have no means of influencing the G20’s work.
31 There is a need for a new decision-making forum on economic and social
policies at a global level which combines effectiveness, legitimacy and
accountability. A possible starting point is the charter or legal instrument
on global economic and social governance based on OECD, WTO, ILO,
IMF and World Bank instruments proposed by the German Chancellor
and the Italian Minister of Finance. This Charter would provide a synthesis
of the guiding principles of these bodies, referencing standards such as
the core labour standards of the ILO and the OECD’s MNE Guidelines,
Anti-bribery Convention and Principles for Corporate Governance. This
would combine rules concerning market behaviour with the “complementary
elements regarding employment and enterprise development,
social protection, humane working conditions, sound labour relations and
rights at work”9, of the ILO’s Decent Work agenda. We urge G20 leaders
to give serious consideration to this proposal and to begin the process of
9 Statement by the ILO, WTO, IMF, OECD, World Bank and Germany February 5 2009.available at http://
www.oecd.org/document/32/0,3343,en_2649_34487_42124384_1_1_1_1,00.html
Page 13 www.ituc-csi.org www.tuac.org www.global-unions.org
consultation that is required to build support for the truly authoritative
global summit of world leaders that is needed to manage our increasingly
interdependent world economy.
32 Governments must start the work, but it cannot be left to bankers and
finance ministry officials meeting behind closed doors. Trade unions are
ready to engage constructively in this process and call on governments
to give trade unions a seat at the table. Trade unions need to be a full
part of new governance and advisory structures to international organisations,
just as they are at the OECD. In line with the mandate provided
by the Declaration on Social Justice for a Fair Globalization adopted by the
International Labour Conference in June 2008, the ILO needs to be at the
centre of a new multilateral architecture that can respond effectively to
the current crisis in market-driven globalisation by placing employment,
social priorities and the promotion of decent work at the heart of decision-
making.
33 There is need to increase the representation and strength of the poorer
countries in global institutions and processes. Emerging economy and
developing country governments must play a full part in the institutions
of a new economic order. In particular the World Bank, whose focus is
developing countries, must give them voting rights – based on economic
but also social criteria – that are at least equal to those of the industrialised
countries. The IMF is equally in urgent need of reform and should change
its governance structure to increase the representation of the low-income
‘client’ countries, and of the emerging economies whose role in the global
economy has increased over the past several years. G20 Leaders have
already agreed to commit greater resources to the IFIs10, but in return, both
the Bank and the IMF must stop imposing the conditionality on developing
and emerging countries that pushes them in to pro-cyclical policies.
For example, emergency IMF loan agreements negotiated with several
governments since October 2008 included interest rate hikes, reduction
of wages and pensions, increased fees for public services and privatisation
of state-owned entities with several agreements including the obligation to
carry out reforms of social protection that could eliminate its availability
to those who are not among the most vulnerable. Instead the attainment
of decent work and observation of core labour standards must underpin
the new arrangements. Regional bodies such as the African Union (AU),
the Association of Southeast Asian Nations (ASEAN) and the Organisation
of American States (OAS) should have a place in the G20, just as the
European Commission (EC) does.
VII. Conclusion
34 Trade unions have long been critics of the imbalances in the relative
priority given to economic and social institutions and the growing dominance
of unregulated and unmanageable financial markets to the detriment
of the financing needs of the real economy, undermining its ability
to provide decent work for all. Governments, working together with the
social partners and with the input of relevant international organisations
10 G20 Finance Ministers’ and Central Bank Governors’ Communiqué - 14 March, 2009
Page 14 www.ituc-csi.org www.tuac.org www.global-unions.org
such as the ILO, must create a new economic world order. This requires
a paradigm shift in policy-making that ‘puts people first’. Trade unions
and the workers we represent, however, have no confidence that this time
governments and bankers will get it right. Working people must have a seat
at the table. There must be full transparency, disclosure and consultation.
The Global Union organisations are ready to play their part in building
this fairer and greener future.
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Crony communism or crony capitalism...
Perhaps you could explain where this "crony communism" comes from?
It sounds to me like you are trying to confuse an already complex problem.
As a proud "red" Finn I take great exception to the cheap manner of injecting anti-communism into a discussion about such an important topic.
Obviously you really are writing under the illusion that capitalism can be "regulated" out of this mess.
I think the way to address this issue is to first start by asking the question:
From a working class point of view, who is suffering most as a result of this economic mess and how do we relieve the problems of working people, first?
Obviously, working class people trying to put a roof over the heads of their families are the primary victims here so we should first, and foremost, be concerned to keep these people in their homes... no matter what happens to the economy as a result... the last thing we need in this country is a new wave of homelessness. Any country that can squander billions of dollars on wars in Iraq and Afghanistan can subsidize housing.
This means, the first step--- and the first step now, not after Obama is elected tens of thousands of foreclosures and evictions later--- there needs to be a federal moratorium declared on home foreclosures and evictions.
Second step. The federal government should purchase each and every home mortgage as it comes up for foreclosure. The mortgage should be adjusted based upon present market value and the former mortgage holders should have to eat the difference.
Third. Interest payments on these mortgages should be based upon a sliding income scale taking into consideration any other extenuating circumstaces of the family--- unemployment, health care expenses and bills, educational expenses, etc--- interests should range from Zero to 4%.
All interest should be used to establish a federal bank along the lines of the State Bank of North Dakota.
After this is done, the Wall Streeters should be told to take care of their own mess... they can make some withdrawls from their accounts in the Cayman Islands where Goldman Sachs seems to enjoy fun in the sun.
As for you, as a progressive, injecting this kind of pathetic and shameful anti-communism into this discussion; you can take your anti-communism and shove it where the sun never shines.
This is corrupt, crony capitalism; nothing more, nothing less.
If the entire capitalist system, which has obviously turned cannibalistic, collapses, I say, "good riddance;" working people will establish a healthy democratic socialist economy in its place without all the pain of going through another massive capitalist economic depression.
Working people are not stupid when it comes to solving problems; why do you think management has a "suggestion box" next to every time clock in every mine, mill and factory in this country?
Now is the time to have a good open debate in this country: Which way America... capitalism or socialism?
This is supposedly a democracy... let's vote :)
I am insulted and offended that Barack Obama would find such urgency in caring for the Wall Street coupon clippers while telling the rest of us that our problems can wait until after he gets elected. We have all heard this line of bull before.
Alan L. Maki
Director of Organizing,
Midwest Casino Workers Organizing Council
http://thepodunkblog.blogspot.com/