Friday, April 30, 2010

Shifting the Burden by Eoin Broin

Shifting the Burden

WHO is shouldering the burden of the recession? The Irish Congress of Trade Unions has this month released a report which seeks to answer that question.

The report is called Shifting the Burden: Why the Government wants to load the cost of the collapse onto the less-well-off and why their plan will just make things worse.

It 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 personal 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 €5 billion 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 Government’s plan for economic recovery.

Yet the National Competitiveness Council (NCC), established to advise Government on competitiveness policy, doesn’t share the Government’s 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 Government’s 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 Government’s failed economic strategy, ICTU outlines its alternative which it contends 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 people’s 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 downloaded here

1 comment:

  1. How does this excellent piece by the ICTU fit in with the Croke Park agreement, which is simply another attack on workers