Juan Somavía is the director-general of the International Labour Organization. He previously was an academic lecturing on economic and social affairs, and has served in various diplomatic and advisory roles for Chile and the United Nations.
“Tens of thousands of people around the world are taking to the streets today to mark May 1st. What else is new? Well, plenty.
The continuing economic crisis is hitting workers hardest. It also highlights how the macroeconomic policies of the past decades have downgraded the meaning of decent work.
The current growth model considers work as a production cost that must be as low as possible in order to raise competitiveness and profits. Workers are seen as being consumers of all sorts of loans rather than as having a legitimate share through wages in the wealth they contribute to create. Certainly a vision where capital has the upper-hand.
Lost in translation is the fact that quality work is a source of personal dignity, family stability, peace in the community and, certainly, a source of credibility for democratic governance. However, in too many places we have lost the basic notion that labour is not a commodity.
So, this is no ordinary 1 May. It comes at a time when deep-rooted interests are pushing to go back to business-as-usual, arguing that this is just another crisis that can be solved applying the same old recipes. It is not.
This trend is especially visible in advanced economies and particularly in the eurozone, where policies that are trying to cope with very high levels of public debt are generating even higher social deficits that will also have to be addressed.
When youth unemployment rates hover around 50% in Spain and Greece, it is obvious that we have reached the limits of this austerity-induced recession. This ignores the EU’s foundational values of justice and solidarity that have been enshrined in all major European treaties, from Rome to Lisbon.
It also ignores the fact that paying back debt needs growth and jobs. Policies are also departing from ratified ILO conventions and disregarding the crucial role that social dialogue can play in times of crisis.
We need a socially-responsible approach to fiscal consolidation. In a democracy, it is more important to retain the long-term trust of people – especially the most vulnerable groups – than to gain the short-term confidence of financial markets.
Globally speaking, most large companies and the financial system in general have bounced back from the crisis, although some pundits claim that there are still some ‘fragile’ banks.
Governments spent billions of dollars to ensure their recovery. Workers have not received the same treatment. It is understandable that people marking this first of May feel that while some banks are too big to fail, they are too small to matter.
So what do we do? I believe we need to change the current global growth model. True, this is a model that has created huge amounts of wealth, but it is wealth concentrated in very few hands. This model has failed to generate the type of inclusive growth we were led to believe it would.
We need a different type of growth that is environmentally conscious and focused on people. This means a model whose main aim is to increase the general well-being of people and reduce inequalities, that measures success by the number of good-quality jobs generated, not the percentage of GDP growth.
The financial system has to be at the service of the real economy, not playing around with other people’s money. Banks have to go back to their original and valuable role of lending to sustainable enterprises so they can invest and create jobs. Employment, social and environmental policies need to be as relevant as macroeconomic policies. This is not the case today.
Back in the days of the so-called Washington Consensus, conventional wisdom said that inclusive labour markets, which provide quality jobs, social protection and workers rights, would perform poorly.
The fact is that countries that invested in long-term social policies and capacity-building have experienced more stable growth. Many have even become more competitive and are recovering quicker from the crisis than countries that chose the fiscal austerity path.
We must move to a fairer, greener and more sustainable globalisation capable of meeting people’s aspirations for a decent life. That means progressive access to a good-paying job with labour rights.
That’s how middle classes emerged at different stages in different countries. That’s also why middle classes are now under threat, because it is increasingly difficult for people to find a decent job and to work their way out of poverty.
This concern applies to all countries. And no country or region can lead on its own. Moving towards a new era of social justice requires cooperation, dialogue and, above all, leadership. Leadership fired by human values – key among them, the respect for the dignity of work and workers.”