Current economic model has run its course - UNI Global Union
Thursday 26 January 2012, 10am
Philip Jennings, UNI Global Union General Secretary, tells leaders gathering in Davos that the current economic model has run its course and needs to be reset. Addressing a Davos session with the Amnesty International Secretary General, Salil Shetty and leading economist, Professor Nouriel Roubini, Jennings warned that social cohesion would be shattered unless there was a change in direction.
He said that social dystopia was driven by unemployment, inequality, insecurity and a growing gap between rich and poor. He further warned that the eurozone governments’ sole emphasis on austerity policies and a demolition of the welfare state meant they were playing with political gunpowder. He added that the potential for social unrest should not be underestimated.
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Job creation is the key to transforming the capitalist system he said during the “The Seeds of Dystopia” session on the first day of the World Economic Forum’s Annual Meeting.
Jennings said, “Austerity measures have failed to create growth. Human capital is the key to recovery. CEO pay is out of control and is having a negative effect on the chances of recovery. The winner takes all society for the benefit of the few is leading to insecurity and inequality and destroying social cohesion.”
Leading economist Professor Nouriel Roubini agreed on the urgent need for change. He said that inequality is not only bad for individuals it was bad for the economy as a whole and that the business and political communities have become disconnected from the people.
Jennings said the solution is a systematic investment in job creation.
“By growing jobs, we grow demand. We already have an ILO jobs pact now we need to invest in it. These millions of unemployed, including 80 million young people, and the one in three people on the planet living in poverty are a source of untapped talent going to waste. Let’s get them back into decent work so that they can contribute to the recovery,” Jennings added.
Jennings called for a new vision on jobs to drive global growth and a focus on key sectors including services which UNI Global Union represents and where nine of out ten new jobs are expected in the next five years.
“We need 80 million new jobs in the next two years to get employment back to the level before the 2008 financial crisis. At the current rate of investment, the ILO says, only about half that number will be created. We do have the means to achieve that target. In the US alone business is sitting on a cash mountain of two trillion dollars which should be ploughed back into growing the economy and jobs and not in share buy-backs and financial speculation.”
Jennings called for a higher income tax for top earners, a Financial Transactions Tax & and a fairer system of corporate tax, as well as an end to tax havens which further fuel inequalities and drain public budgets. He urged politicians and business leaders to embrace a new social contract.
“Governments and business leaders must engage with unions and civil society and not only listen but act on what they hear. The cold war against union organisation has to end. The labour movement is part of the solution. We need a sustainable vision that has a jobs plan for decent and stable work at its core. It is time for a return to fair wages, social protection and collective bargaining which recognise that we are mutually dependent on each other. Good jobs will drive up demand.”
Jennings said the US’s attitude to unions is self-defeating and its political system in jeopardy.
“In the US the price of union busting over the last thirty years has swung the pendulum to the top 1% and almost wiped out the middle classes. The US should also beware the privatisation of its political system – it could result in only the private equity hawks having the funds to run for high office and the politics of the US being sold to the highest bidder.”