TUAC-ITUC Economic Working Group Meets to prepare the L20 input to the G20

The G20 must pave the way for a macro-strategy that restores growth through smart, social and green investments, fair taxation and fairer income distribution according to those attending the Trade Union Advisory Committee (TUAC)/ ITUC Working Group Meeting on Economic Policy held at the OECD in Paris on 18-19 March.

In a special session, the current G20 process including the L20 and the joint Employment and Finance Minister Meetings were discussed by L20 representatives coming from trade unions in OECD member countries, Argentina, Brazil, India and South Africa, and international labour organisations.

Delegates dismissed the present policies of fiscal consolidation through austerity and structural reforms that neglect social consequences. The promotion of labour market flexibility has been an euphemism for reducing social protection and dismanteling collective bargaining. In the meantime, unemployment, particularly of young people, has risen to unprecedented levels in many G20 countries. As time is running out, economic priorities need to evolve to halt the erosion of savings, income and skills and move towards inclusive growth and coherent policies.

The Russian G20 Presidency’s focus on Growth through Quality Jobs and Investment and the initiation of the joint Employment and Finance Ministers meeting were recognised as important opportunities by the Working Group. They were perceived as potentially valuable steps towards greater recognition by both Finance as well as Labour Ministers on how to better link quality employment and growth.

The delegates called for the G20 to shift priorities to supporting aggregate, sustainable demand and reducing inequality by focussing on:

- decent wages and countering the rise in precarious work and informality
- the effects of badly-timed fiscal consolidation and structural reforms on inequality, unemployment and social well-being
- social conditions in global value chains, multinational corporations’ operations and foreign direct investment
- the mismatch between the lack in aggregate demand and excess capital

Based on these points, the following recommendations have specifically been made:

- clear common and country-specific operational commitments that will be subjected to a monitoring process
- commitment to inclusive growth with equitable wages, fair income distribution and tax schemes, and resilient labour markets
- an amelioration of labour market institutions in the process of growth creation
- concrete deliverables for youth unemployment and apprenticeships
- strong emphasis on skills and life-long learning, as well as on gender equality
- prudent financial rules and a financial transaction tax
- the channelling of excess capital into productive investments in infrastructure and green jobs
- sound and sustainable development policies that assess risks in view of investments, trade and social protection
- strengthening of collective bargaining and social dialogue
- an institutional foundation for the G20

These will form the basis of the L20 proposals to the Joint meeting of Labour and Finance Ministers in Moscow in July and beyond that at the St Petersburg Summit in September. Overall, the alignment between growth and jobs, the creation of confidence and social cohesion in the global economy and enhanced, wider cooperation between states and all stakeholders, including labour were mentioned as key aspects for the ongoing G20 process.

Separately the L20 and B20 are seeking to meet to operationalise past agreements to scale up provision of quality apprenticeships as one part of the response to rising youth unemployment.