Belfast & District Trades Union Council invite you to their Annual May Day Lecture:
Who Profits from Peace?
Thursday 2nd May at 7pm to 9pm
Belfast Unemployed Resource Centre
45/47 Donegall Street, Belfast , BT1 2FG
Will decent manufacturing jobs be replaced by low paid jobs in the finance and services industry?
The ‘double transition’ – towards peace and neo-liberalism – has been evident in the world of politics, finance, law and accountancy. This talk will examine who the winners and losers are in the peace process and will also explore ‘who really profits from peace?’
All welcome and talk will include a Q&A session.
Speaker: Dr Conor McCabe
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1913 Unfinished Business, Youth Bloc is hosting
We're Not Leaving': public meeting of young people to fight forced emigration.
Monday, April 29th, 7PM – Wynn's Hotel, Lower Abbey Street.
Paul Dillon (Unite Youth); DaraAnn O'Malley (Student Officer, Irish Nurses and Midwives Organisation); David Gibney (Mandate Youth); Laura McKenna (SIPTU Youth); Derek Keenan (Chair, Communication Workers' Union Youth); Seamus Reynolds (President, NUI Maynooth Students' Union).
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In the April edition of the Monthly Review John Bellamy Foster has a piece called Marx, Kalecki, and Socialist Strategy on the Polish economist Michal Kaleck that is well worth getting stuck into – particularly given the outright assault on worker incomes ongoing in Ireland at the moment. It’s also struck me as worth reading in light of Ken Livingstone’s comment today which correctly contrasts the viciousness and failure of Thatcherism with the Post-World War 2 settlement.
Foster first refers to the profit-squeeze theory which is often used to explain why capitalists try to resist full employment, as rising wages hurts profits. He refers to a 1974 article by Raford Boddy and James Crotty’s “Class Conflict, Keynesian Policies, and the Business Cycle” which was developed counter to Kalecki’s suggestion that the pressure from capitalists to reduce wages stemmed not from a concern for profits, but as a form of social control. Writing in the 1940s Kalecki said that with full employment profits would ultimately not be affected. However, what was more important was removing the opportunity for workers to exercise any form of power.
“Kalecki’s views on the profit-squeeze argument, the political business cycle, and socialist economic strategy were rooted historically in his close observation of the French Popular Front government led by Leon Blum in 1936–1937. Kalecki had spent the summer of 1937 in Paris witnessing developments there. In what came to be known as the “Blum experiment,” a concerted attempt was made to implement a forty-hour working week, two weeks of paid vacation time for all workers, and collective bargaining rights. As part of these reforms the Popular Front initiated a substantial increase in the money wages of manual workers, which rose by about 60 percent over the course of a year. This increase in money wages did not, however, have a negative effect on overall output and employment, since wholesale prices were raised proportionately. However it did produce substantial net benefits both for manual workers and large capitalists, and for the industrial sector in general—at the expense of rentiers and other income groups. Yet, despite the fact that big capital had significantly gained from the redistribution toward industry that the wage increase had brought about, it allied itself with rentiers to resist the wage increase, complaining of a profit squeeze. The Blum government eventually succumbed to these pressures, leading to a fatal dampening of the aspirations of workers.
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This post was originally published Unite the Union’s Croke Park Report blog today.
It is difficult at times to understand what the Government is at. The weekend papers were full of analysis showing why growth was essential, if only to avoid another banking crisis (the IMF has warned of a €16 billion black hole if growth does not return to the economy). And yet Minister Brendan Howlin is threatening a 7 percent across the board-cuts in public sector wages if workers don’t vote for the current pay-cut proposals. There is nothing more certain to ensure we don’t return to growth than to cut wages.
We’re back in recession, according to the CSO (though you wouldn’t know this from reading media commentary which claims growth is on target). This occurred in the latter half of last year – the latest period we have data for. So what’s been happening so far this year? Are there signs of recovery on the horizon?
- Retail Sales Index has fallen in the first two months of this year.
- Industrial production is down (though there was a marginal increase in February).
- Property prices are back in decline – having fallen in each of the last three months.
- Manufacturing exports (which makes up most of our exports) fell in January by an annual 17 percent in value.
- New vehicles licensed are down in the first two months by 14 percent over the first two months last year.
- The Monthly Services Index fell in both January and February of this year.
The Live Register has fallen by 3,000 in the first three months of this year but how much of this is due to people moving into labour activation schemes, returning to education or just emigrating we don’t know.
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The Irish government has made much of the fact that it now holds the EU Presidency, chairing meetings of the European Council. It has been proudly proclaiming success in negotiating a new EU budget for 2014 to 2020 (the so-called Multiannual Financial Framework – MFF). What they don't say, however, that in the position of Presidency, they are pursuing the same austerity policies that they implement in Ireland – imposing unprecedented levels of cuts to the EU budget.
Two weeks ago the European Parliament voted for a resolution that rejected, in its current form, the proposed MFF. The proposal comes from the February summit of the EU Council and was a product of horse trading and negotiations between the EU's 27 heads of state.
This Summit was presented as showdown between Hollande on the one hand and Merkel and Cameron on the other. In reality, it was a discussion on how far to stick the knife into workers and poor people, with Herman Van Rompuy, backed up by the Irish Presidency, presenting a draft proposal for a second round of cuts. This was then amended to reflect the various political pressures on the heads of states. Despite these competing pressures, all heads of states feared an open conflict over the EU budget that would rattle the markets at a time they seemed to be calming. They also no doubt feared such open division could give confidence to workers and those opposed to austerity that they face a divided enemy and give impetus to new struggles.
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This post was originally published on Unite the Union’s Croke Park Report blog today.
It is interesting that the big news of yesterday made so little news. The CSO revealed that the economy fell back into recession in the latter half of 2012 but you will have to look hard to find much reporting on that. Maybe it’s because this inconvenient fact cuts across the official narrative. And while there was growth in three out of four quarters in 2010 and 2011, there was only one quarter of growth in 2012. That, too, didn’t get much coverage. That, too, may be inconvenient.
So what does this tell us about Croke Park 2? It tells us that it is irrational to cut wages and, so, spending power with an economy falling back into recession. Consumer spending and domestic demand has been stagnating for the last three years.
The domestic economy has flat-lined, suffering under a weight of austerity measures. This year alone there is the impact of the PRSI cuts, the property tax along with cuts in Child Benefit, investment and public sector employment – which will reduce disposable incomes further. Now the Government is proposing to cut the incomes of nearly 300,000 workers. Would anyone be surprised to see this stagnation continuing?
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The Office of National Statistics (ONS) in the UK have today released regional economic indicators. By bringing together data from a variety of sources, they provide a partial but very useful snapshot of where the economy under the jurisdiction of the Northern Ireland Assembly sits in relation to the British economy. The entire dataset is here and is very useful.
Below is the ONS chart on employment.
Oddly, repeated attempts to copy the full chart failed because the last item on the legend (directly below Scotland) kept dropping off. It’s Northern Ireland. In the chart, it is the orange line. Clearly, someone at ONS has a sense of humour.
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Paul Murphy MEP and David Murphy of the Socialist Party provide a critical appraisal of the government’s Action Plan 2013 and argue that Ireland needs a radically different action plan.
Another year and another instalment in the Action Plan for Jobs from the government. After the self-proclaimed sensational success that was the 2012 action plan, with 92% of its targets being hit, unemployment still stands at over 14%. Self-congratulation is no congratulation.
With over 87,000 people having emigrated since the last Action Plan was launched, what does Action Plan for Jobs 2013 have to offer? Well, not a lot, despite containing 333 ‘actions’ to build on last year’s 270 ‘actions’. It continues to outline the next steps in the government’s plan to create 100,000 new jobs by 2016 and makes a big effort to be savvy by using the latest business jargon like “Disruptive Reforms”.
It contains some of the government’s favourite catchphrases like “governments don’t create jobs…but create the environment for jobs to be created” and Enda Kenny’s mantra of making Ireland “the best small country in which to do business”. It contains lots of lofty ambitions, but in effect doesn’t contain a lot of ideas to actually get people back to work. It is a plan firmly anchored within a neo-liberal framework, calling for less regulation and tax cuts for businesses together making Ireland more 'cost competitive', while hoping for a major increase in Foreign Direct Investment.
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In a recent article on this site, Miriam Cotton took me to task for 'intellectually-rationalised paralysis' in light of the current crisis. Her article -written with admirable openness and honesty- is an acid criticism of the failure of the Irish Left to put together a coherent response to the present crisis.
I disagree with many aspects of her analysis. I don't believe what she describes as 'rapacious, international financial corporatism' is 'worse than capitalism': it is capitalism. I certainly wouldn't treat my own writings as indicative or representative of tendencies on the Irish Left -for good or bad. Indeed, if what I write ends up getting treated in that way, it highlights one of the serious problems of the Irish Left: in public, it is either very small, or very quiet, or both.
Miriam's analysis proceeds from the view that there ought to be a development similar to what has happened in Greece, as described by Helena Sheehan's recent piece on Greece: a proliferation of strikes at general and local level, resulting in an increasing convergence of the politics of the street with the politics of the ballot box.
By contrast with Greece, Miriam says Ireland's 'austerity and financier-facilitating ‘trade unions’' have 'have stood aside in pale and limp demur', as the austerity regime of bailouts, cutbacks and the destruction of social rights extends itself. No arguments from me here.
Given this context, she believes that my claim, made at the end of my ICTU piece in relation to 'the climate of grim sacrificial inevitability' (my words) that 'we need imaginative ways of communicating the conflict, of capturing people’s commitment to a struggle for democratic rights' is 'lobbing cold water over any idea' of calling for strikes.
She suggests that in effect I am saying 'sit down again everybody. As you were. We need to do lots more talking and thinking before we act.'
Let me address this as clearly as I can.
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With negotiations over an extension of the Croke Park Agreement starting today, it is helpful to remind ourselves how daft it is to downsize the public sector payroll in the hopes it will reduce the deficit.
There are two ways to downsize the public sector payroll: cut public sector employment and/or cut public sector pay. Since the crisis began, we have been doing both. Public sector pay has been cut twice through the pension levy and the wage cuts of Budget 2010. Public sector employment has been cut by approximately 29,700 since late 2008, or 9.3 percent.
Yet, the Government finds that it must cut more than it had already planned. It needs €1 billion more in austerity measures to achieve their targets. It’s like running in quicksand – cut, sink, cut some more.
Yet, downsizing the public sector produces little benefit in stabilising public finances. Why? Because it is so darned deflationary – it bleeds the economy of employment, consumer spending and growth. When you factor in the economic consequences of the cuts, you find the Exchequer hasn’t saved as much as it hoped.
Let’s look at the estimates from the ESRI.
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The Independent has published leaked budget proposals (but, as always, check against delivery). There are three issues covered: cuts in Child Benefit and medical card prescription charges, and the imminent property tax. Here is what the parties and the Government said about these issues in the recent past.
There are so many U-turns on this issue, I’m surprised Government Ministers haven’t fallen down from dizziness. The fact is that both Government parties actually campaigned against the property tax they are now going to introduce.
Fine Gael actually opposed the introduction of an annual household property tax. This is from their election manifesto:
Fianna Fail’s proposal, now endorsed by the Labour Party, to introduce by 2014 an annual, recurring residential property tax on the family home is unfair. But as we tackle the fiscal crisis, we will have to cut central exchequer funding for local authorities, and we recognise that local authorities will have to find more sustainable sources of revenue appropriate to local circumstances. What will be viewed as fair in South Dublin might be viewed as unworkable in rural Clare.
In this context, we will empower local authorities to put in place, following the 2014 local elections, fairer alternatives to Fianna Fail’s and Labour’s recurring annual tax on the family home. The options would include:
- No extra local taxes, forcing local authorities to close non-priority services and / or to deliver increased efficiencies;
- Increased local user charges for waste etc.; or
- The option of a local “site sale profits tax”. Such a tax would be levied on the profit made from the site value on the sale of a residence (sales proceeds, less cost indexed by inflation, less stamp duty paid and less home improvements)
The final measure might be considered as both fairer and more economically sensible than an annual recurring property tax.
There is no question – Fine Gael campaigned against a property tax. It called for alternatives (the site sale profits tax could be a positive measure) but committed that those alternatives would not be introduced until after the 2014 local election.
Yet now they are introducing a property tax. This is similar to their opposition to a Household Charge and their u-turn on the issue when they introduced . . the Household Charge.
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It’s official. The Government’s employment policy is failing. This finding comes from the Government itself, in the form of projections contained in yesterday’s Medium Term Fiscal Framework. The projections are chilling and depressing. Let’s first turn to employment.
In April last year, the Government was somewhat bullish about employment growth; projecting that the numbers at work would grow by 102,000 by 2015. After the launch of the Jobs Initiative and the Action Plan for Jobs, the Government lowered their forecast to 67,000. Yesterday, they lowered their forecast again – to 18,000.
In 2011, there were 1,810,000 people working (this includes full-time and part-time). By 2015, the Government expects this to rise to 1,828,000. After all the Government’s initiatives, IDA job announcements, protestations that jobs remains at the core of public policy – the Government itself admits that net job creation will only be 18,000 by 2015.
Let’s look at the annual projections.
In April last year, the Government expected employment growth to start this year, increasing by 37,000 in 2015 alone. Now, the Government accepts that employment will fall this year (by 22,000) and won’t start growing until 2014. In 2015 alone net job creation will only be 24,000.
This is grim. During the life-time of this government, employment will rise only marginally.
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Submissions Not Enough, We Need to Mobilise, writes Jimmy Kelly, the Regional Secretary of UNITE the Union in Ireland.
UNITE has published its pre-budget submission – ‘7 Steps to Make the Budget Better’. We put forward proposals that will end austerity, promote growth and employment, raise living standards and put the economy and society on a different path.
The Irish people know that austerity is not working. They see it in their workplaces, the dole queues, their homes and communities, the hospital wards and school classrooms. Still, the Government insists on pursuing a futile strategy. Since the crisis has begun nearly 400,000 full-time jobs have been lost. Over a million people suffer from multiple deprivation experiences, including over 350,000 children. Public services have been cut beyond breaking point while supports for the disabled, the elderly and children are being removed. The domestic recession continues. Hope has emigrated, along with thousands of young people.
We can see who is paying for the crisis. And it’s not the bondholders who took a bet, lost and still managed to get the Government to pay them off. It’s not the financial institutions, who have received, so far, over €60 billion in public subsidy. It’s not the highest income earners who have seen their living standards rise while everyone else’s has fallen. This, alone, tells the story.
It’s time we had a budget that promoted the interests of working people.
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