Who is shouldering the burden of the recession? The Irish Congress of Trade Unions has this month released a report which seeks to answer this question.
The report argues that at the heart of government policy is a ‘determination to load the full cost of the collapse onto working people and the poor.’
The consequence of this strategy, argues ICTU, ‘could turn Ireland into a social and economic wasteland for a decade or more.’
In support of their argument ICTU examine the impact of recent budgets on wages, social welfare and pensions. The report outlines the loss of real income experienced by workers and the unemployed while highlighting those sectors of society who are gaining from the recession.
In 2009 300 individuals held a person wealth of €50 billion. Despite this, the total tax take from these millionaires was just €73 million. In the same year the budget took €760 million from social welfare claimants in cuts.
In 2009 the share of national wealth going to wages fell by €5billion while profits from trade, farming and rents are expected to rise by €3 billion.
These figures, and the disparities they highlight argue ICTU, are the consequence of a government policy that is determined to lower the cost of labour. And there is more to come.
Shifting the Burden details Government plans to; further reduce social welfare payments; cut the minimum wage and other sectoral wage rates; and reduce the size and cost of the public sector.
All of this is being done in the name of restoring Irish competitiveness, and is the key plank of the governments plan for economic recovery.
Yet the National Competitiveness Council (NCC), established to advise government on competitiveness policy, doesn’t share the governments concern with wages.
Successive NCC reports argue that costs such as rents, energy, health insurance and childcare are primarily responsible for the economy’s loss of competitiveness in recent years. The government has brought forward no proposals to address these issues.
In opposition to the governments deflationary economic strategy ICTU quotes Nobel Prize winning economist Joseph Stiglitz who argues that, ‘In a recession you want to raise (and not decrease) the level of total spending – by households, businesses and government…’
In response to what it believes is the governments failed economic strategy, ICTU outlines its alternative which it believes would not only share the burden of the recession more fairly but also address the causes of the recession.
Among the measures proposed are:
- Increased investment in job protection and creation
- Protecting incomes
- Ending social welfare cuts
- Protecting peoples homes
- Safeguarding public services
- Reforming the tax system
- Protecting pensions
- Enhancing workplace rights
- Stronger regulation of the banks
- Extending the estimated period of time for economic recovery.
At the core of Shifting the Burden is a call for a significant shift in social and economic policy. ICTU want an end to those policies which privilege the wealthy in society at the expense of equality and long term social and economic sustainability.
Shifting the Burden can be read here.
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