The creation of JOBS AND GROWTH becomes more urgent than ever!
Tragically, this is prevented by the fact that the global economy is still extremely vulnerable.
We all know that unemployment, slow growth and inequality remain critical factors driving both economic and social effects of the crisis.
Austerity policies continue to bite in Europe and growth slows in emerging economies with the past seven forecasts for growth from the OECD and the IMF being successively revised downwards.
Unemployment will not be falling next year in most G20 countries and will even be rising in some. This creates a dangerous situation reinforcing the falling confidence and trust of citizens in institutions and governments in many countries. The ITUC Poll shows that while only 13% of people think that governments govern in the interests of working people, a further 28% think they don’t govern in the interests of either business or workers.
Meanwhile, inequality continues to cause economic and social instability. It is exacerbated by a prolonged global wages slump, a global social protection deficit, a near universal crisis in youth unemployment and falling rates of female participation in labour markets.
In this context the L20 recognizes the significant outcomes on employment from both the G20 Finance and Labour Ministers’ Meeting in July and the Saint-Petersburg Summit in September.
In following up on the implementation of these commitments taken in the Leaders’ Declaration, the G20 Australian Presidency needs to deepen and strengthen its work on Jobs and Growth.
JOBS, JOBS and JOBS
The central priority is indeed the follow-up actions to create jobs and demand. A jobs plan in every nation with monitoring arrangements is essential to lift ambition and integrate necessary measures to drive jobs. These measures include critical areas on the Australian G20 agenda: namely investment, participation and informality.
Attention to these measures will require a shift from damaging structural reform policies to smart and sustainable investments and strengthened collective bargaining and labour market institutions.
There is a strong case for a second edition of the joint Labour and Finance Ministers’ meeting in 2014 and we urge the Australian Government to hold at least overlap sessions at the Finance Ministers and central bank governors meeting in September to address these issues in a coordinated manner across policy areas:
Investment in infrastructure will both enable production, trade and services but also drive direct and indirect jobs.
Supporting the participation rates of women and young people will raise GDP but also drive jobs in the care and education sectors.
Scaling up apprenticeships is a unity ticket between business and unions.
Furthermore, formalising work in the informal sector creates sustainable business and shores up the tax base.
The L20 is in dialogue with the B20 internationally on all these fronts.
The L20 is ready to work with B20 and civil society partners as well as governments to ensure that it is possible to leverage private investment including trillions of dollars in pension funds, which is why we support the OECD’s Long Term Investment Principles. We want a new model of investment – which has patient capital and industry engagement at its core.
Our partners in Europe, the ETUC have put forward a European investment plan equivalent to 2 per cent of GDP per annum for ten years that could increase employment by up to 11 million.
The imperative for leveraging investment also requires repairing public sector investment which has collapsed since 2006. The OECD’s recommendations on Effective Public Investment adopted by OECD Ministers last week in Marseilles and supported by both business and labour groups – BIAC and TUAC – must add to the domestic and global discussion and action.
We would also urge that the G20 Employment Task Force works with the MAP Framework Group in the Finance track to both ensure employment and social protection are embedded as risk factors and to assess the implementation of the key commitments in the employment section of the Leaders’ Declaration and the Saint-Petersburg Action Plan.
The Australian G20 priorities leave out climate risk with the exception of climate financing. One month from COP 29 in Lima and one year from the Paris agreement, people will expect serious coordinated commitments from the leaders of major economies in Brisbane. Within these commitments, there must be the imperative to drive transformational change in our industries. If the world needs to stabilise at 44 giga tins of carbon emissions and business goes on as usual, we will see us at 59 giga tons by 2020 – to put it bluntly: time is running out. This is an imperative but also an opportunity. We can see that the decision to shift to renewable energy in Germany has already resulted in 400,000 new jobs.
There are also several other key issues: the need for social protection floor to be delivered in the Development Group’s work, the unfinished agenda of financial regulation and taxation and the follow up to the BEPS action plan adopted in Saint Petersburg.
These issues are essential elements of any stable and inclusive economy.
OUTREACH
During the Russian Presidency, the L20 was pleased to be part of a productive outreach process and participated in consultations with the Employment Task Force and Sherpa meetings, Labour and Finance Ministers meetings and the leaders at Saint Petersburg G20 Summit to ensure that key messages of the labour movement on “Jobs and Growth” were conveyed to governments.
It is essential that this consultation process is continued and strengthened under the Australian Presidency. Further we request a continued balance between the B20 and L20 given the importance of the relationship as joint actors in the real economy.
Much attention since 2010 has been given by the G20 to trying to gain the confidence of financial markets. However, we fear that you are losing the confidence of citizens and that cannot be allowed to happen. Therefore, coordinated action to ensure a narrative of hope is critical.
