Address by Sharan Burrow to the Brookings Institution Conference on Employment - Washington, 13 April 2011


Mr. Managing Director, Ladies and Gentlemen,

First let me bring you greetings on behalf of the 175 million workers organised worldwide in the International Trade Union Confederation. Kemal Derviş, allow me to thank you for the opportunity to address this timely discussion organised with the Brookings Institution.

I would like to begin by paying tribute to the leadership of the IMF, Mr. Dominique Strauss-Kahn and ask all Government leaders to reflect on his call to action around unemployment and inequity.

It is just over three years since Dominique first warned at Davos that the world stood on the brink of a precipice of accelerating recession, unemployment and instability. Sadly, his call for urgent action was not heeded before the world economy had fallen into a steep decline from which it is only now starting to emerge – feebly, and with significant risk of resuming its downward slide and with increased unemployment and greater inequity. This is a bleak and uneven financial and social picture without factoring in the tragedy of natural disasters, particularly in Japan.

The greatest risk now is the unresolved crisis of unemployment and inequity. Unemployment stands currently at over 205 million worldwide, its highest ever recorded level – and even that is a significant underestimate of its true depth since many millions of people seeking work, particularly women, are not registered and the informal economy is growing with the struggle to soak up these unregistered individuals who have given up hope of secure, formal livelihoods. It is a worsening long-term problem too, with some 45 million young people joining the labour market each year – many increasingly desperate for opportunity as we have seen in Tunisia, Egypt, Yemen and neighbouring countries but also Spain, Ireland, the US, Africa, Latin America, Asia; youth unemployment is a global fear for our young people who risk finding a jobs market with no vacancies for them.

G20 Leaders seem to have turned their back on this problem and we ask them to take another look. In London and Pittsburgh in 2009, the Leaders and their Finance Ministers clearly understood the vital role that employment played in ensuring recovery – not just to mitigate social costs and prevent an explosion of anger from workers, indeed from young people, but because wages actually constitute the basis for a stable and shared consumption-based recovery and not the return of the inequitable and misery creating boom-and-bust economies that we knew before the crisis; the vulnerability that let the greed of the finance sector driven crisis. However by Toronto and again in Seoul we had to fight just to get reference to quality jobs back into the commitments.

And yet, with no serious action on jobs to date, certainly no coordinated global action – not even a jobs target to mirror growth targets, when G20 Finance Ministers last met, in Paris in February, the paucity of reference to jobs in their final declaration provided even further evidence of that failure of comprehensive action. Of greatest significant was that they omitted jobs from their indicators of external imbalances, even though clearly employment is the major element of the aggregate demand that determines economic growth prospects and so inevitably is, more than anything else, the ultimate factor influencing external imbalances.

The G20 in 2011 must mark the defining moment that things start to change, or otherwise the world will see just another failure in global governance. With too little action on financial regulation the bankers are back in control and sucking public funds – workers’ taxes – dry as they demand bailouts still, while in turn demanding public sector jobs and fiscal austerity to satisfy the short term profiteers of their bond market cousins driven by the same ratings agencies who got it so wrong before the crisis. We must go beyond merely reacting to the short-term expediencies created by the crisis and look to coordinated employment and social protection plans as the basis for productivity, growth and fiscal consolidation.

At the unprecedented Conference organised by the IMF and the ILO in Oslo last year, Juan Somavia and Dominic Strauss-Kahn agreed that the world needed leadership on the fundamentals of an income led recovery – quality employment and a social protection floor. Workers and their families are looking to them to construct the evidence, detail the costs and advocate the strategies to advise Governments of a better and indeed a sustainable pathway to growth.

The world needs a new growth model. Our leaders must decide now that they WILL support a global social protection floor and provide kick-start funding for the poorest countries – a global fund to both lift people out of poverty and establish a demand floor; they must decide now that they WILL restructure our economies to create the green jobs that can achieve the low carbon economy that the planet needs; and they must decide now that they WILL prevent the levels of inequity that allowed the crisis to fester and explode. This requires wealth distribution mechanisms that ensure affordable finance for the real economy, a minimum wage on which working people can live and good faith collective bargaining.

Trade unions are there already, willing to be partners in global coherence. We need to promote a society in which workers’ representatives, trade unions, can ensure that workers are protected and that the benefits of growth are shared equitably among all people; closing the divides that have opened up in too many countries between young and old, rural and urban, “insiders” and “outsiders”, women and men. In short, we need a wholesale structural regeneration of our economies, a new vision for growth supported by genuine social dialogue with the actors in the real economy: workers and employers.

But will we see the necessary leadership from the G20?

It was again Dominique Strauss-Kahn who argued the added value of coordinated stimulus measures at the height of the crisis. These measures staved off the worst of the financial crisis, bailed out the banks and with the support of trade unions secured a future for many enterprises.

Today the message is the same with the same urgency: Courageous, coordinated leadership globally with employment targets, real action on jobs and social protection!

This requires the G20 Finance Ministers to recognise the urgency when they meet here this week and likewise the support of all IMF member countries when they meet in the days to come. The IMF, working with the ILO and other IFIs can play a significant role if Government leaders are serious about these two priorities.

As a start, we need a return to the recognition in London and Pittsburgh, and in the far-sighted G20 Labour Ministers’ conclusions at their Washington meeting in April 2010, of the core role of employment if recovery is to be maintained.

We need to see employment targets incorporated into national economic programmes and unemployment and social protection, included among the indicators of risk for peer review purposes under the G20 Mutual Assessment Process.

We call on the IMF to involve the ILO fully in providing analysis of employment and social protection in the Mutual Assessment Process.

In regard to the IMF, we welcome the start that has been made by the IMF working with the ILO and with the support of the ITUC in a number of countries in order to build a national social dialogue that can ensure that recovery is pro-growth and based upon the increased purchasing power of jobs and wages, strengthened social protection, and investment in value added industries including critical infrastructure, quality public services, skills, green energy and production.

By contrast, the rush from stimulus to austerity is counterproductive. In countries such as the UK, austerity measures are making victims again of the most vulnerable and risk triggering a significant economic contraction that will then be transmitted around the entire global economy. We need G20 governments to commit to reduce deficits as and when there is a recovery of employment rates and not before. Once again, the world needs a timely warning, a reality check, for those governments that would like to ignore the evidence that in trying to cut public spending too savagely and too ideologically, they not only gamble with their own citizens’ jobs and livelihoods but risk derailing recovery for both themselves and other nations.

As I have already indicated, we must see progress on global social protection. A start has been made through the work of the ILO over recent years and is currently being expanded by the UN Commission chaired by Michelle Bachelet, to be reported back to the G20 in September. There are objections from a number of G20 governments, yet these governments built social protection systems when their economies were vulnerable and they not only afforded their people dignity but have provided economic stabilisers through many transitions.

A social protection floor is fully within our means. In this regard, we look to the work being undertaken by the IMF and the ILO to show in a range of developing countries of varying regions, sizes and levels of development – including the poorest – just how universal social protection can be established and how it can be financed, both now and through sustainable revenue streams for the future. In the longer run, more social spending such as education and health is positively correlated with higher growth levels too. We thank the IMF for its support in this area and we call for it to continue to keep making the case publicly for such social areas to get priority when governments assess how they should allocate their budgetary resources.

We need to establish a source of stable international revenue to tackle the growing number of areas where joint international action will be necessary, ranging from climate action to social protection and other development challenges. In this regard, we have had some differences with the IMF in regard to the nature of the tax but I know, Dominique, that you agree with me that the financial sector needs to provide a much greater contribution to public revenue to match the costs it imposes each time it triggers a crisis in the real, productive economy. There is a growing political momentum in favour of financial transactions taxes, which just last month were endorsed by the European Parliament for implementation at a European level as well. Further, we need to look to other global sources of taxation where there are global sectors such as transport that can contribute, for little impost, to global funds. Likewise a price on carbon is inevitable.

The massive challenge posed by climate change is, in fact, an opportunity for both jobs and development. Speaking in this country, with what seems like an army of climate deniers at every level, this is clearly not the easiest issue to raise. And yet if we are to protect our common future, governments must find political courage to ensure the economic shift to a green economy, an investment strategy that could see employment increase between 5 and 15% in all nations within two decades. The ITUC will release a green jobs target later this year.

In a few weeks’ time a number of key meetings will take place in France including the OECD Ministerial Council in Paris and the G8 Summit in Deauville. The week begins with a G20 conference on the theme of Coherence. For the trade union movement, it is virtually a sine qua non that governments need to operate integrated economic policies that incorporate employment, labour rights – that’s rights that are social rights but also economic tools, environment, social protection and investment programmes into whole-of-government policy; and we believe the same sort of coherence is vital internationally as well.

Under your direction, Mr. Strauss-Kahn, the IMF has begun for the first time to work significantly with the ILO in a way that supports the translation of such coherence from the national to the international level as well.

The ITUC will be making a full contribution to the conference on coherence next month; we would like to be working on a parallel track to the IMF in helping to build the foundation for the kind of joined-up multilateral architecture, with decent work as its underpinning, that can correspond to the challenges of the globalised world for the 21st century.

Mr. Strauss-Kahn, we appreciate your remarks today and the leadership they portray and hope to work with you to bring that about. For us the imperative is jobs, decent work, social protection and environment - a new growth model! We cannot settle for less.

Thank You