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The Promised Recovery in Europe Won’t Save Workers

Europe continues to be wrecked by an economic crisis that threatens further unemployment, recession and outright social turmoil. Much time has been devoted to detailing the potential disaster in the weeks ahead as Spain faces a potential banking meltdown and Greece struggles with a major political crisis following the collapse of the post-dictatorship ruling consensus. I, however, wish to dwell on what the alleged salvation will look like for countries at the epicenter of the global financial crisis.

It is worth examining Estonia first, a country that has received the fawning praise of the most neo-liberal of policy advocates. The country has experienced a painful “internal devaluation”, a euphemism for policies that are unrepentant class warfare against workers. Unemployment soared and wages crashed in 2008 and 2009 from austerity policies. Having experienced a massive economic contraction of 14.3% in 2009, the economy saw a recovery in 2010, a recovery that is still being promised to countries like Greece and Portugal who’ve wielded similar austerity policies against workers and the wider public.

But that light at the end of the tunnel isn’t what it’s made out to be. While Estonia’s unemployment rate has fallen from over 18% to 12.1% in 2011, It has since stalled around the 12% mark compared to the pre-crisis level of 4.7%. It’s only a partial recovery as unemployment remains stuck between crisis peak and pre-crisis low. We can see a parallel story in the U.S. which hasn’t even faced Europe’s twin monetary and financial crisis:

For countries like Greece and Spain with unemployment rates above 21%, with still more contraction and austerity to come, the promised recovery will have a resemblance to the ongoing crisis. What growth there will be will materialize in bonuses for executives while the recovery in employment will be minimal as companies rely on existing work-forces and internships so profits aren’t dented.  High unemployment, reduced wages, and hollowed out public services make up the new normality from which future recessions will start.

It isn’t hyperbole when pundits warn that younger generations will experience a reduced standard of living from that of their parents. The middle class is being phased out. After all, in a country like Greece the middle class was built out of the public sector that is now being dismantled by the IMF and European Union. In Spain and Portugal the dismantlement of the middle class is achieved through labor reform laws that enable further downsizing and increased work hours for those who aren’t laid-off.  Under the Tory government in the United Kingdom there is a workfare program that gives companies free labor from the ranks of the unemployed. In nearby Ireland, the country’s low corporate tax rate was left untouched while the Irish public endures a new property tax to bailout out their rotten banking sector. All of this amounts to a one sided class conflict in which the wealthy annex more of the economy by socializing loses and generating new profits through free labor or reduced wages.

Economic growth and competitiveness will remain the buzzwords of political and economic discussion, but to make a real difference in the standard of living of working people we’ll have to find new objectives. The much sought economic alternative isn’t in a political party or a collection of tents. It’s the class leverage of workers to shape policy in their own flagrant self-interest.


Globalizing a May of Worldwide Protests

The month of May will be of great significance to the struggle between the privileged ranks of society and the precarious generations who are most exposed to impoverishing winds of the economic crisis. There has already been multiple spikes in social tensions over the past year. The mass protests by indignant Europeans, the United States Wisconsin and Occupy protests, the student strikes in Chile and Quebec, February’s unrest in Greece, all of these events failed to alter the degree of power held by the privileged ranks atop society, but these events have rallied strength behind new opposition forces like Occupy and Indignados, strength that is to be redeployed throughout May.

May 1st, long a traditional day of international protest, will have renewed energy this year with Occupy calling it a day without the 99%.  In Quebec, labor unions will join events held by the tens of thousands of striking university students. In the U.S., protests will span across the country’s length. There will be numerous actions taking place in New York City alone. Counting the more annualized May Day protests in Europe and South America, the day initiates a month of mobilizations.

On May 2nd  and 3rd, attention shifts to Catalonia where the Spanish authorities have been trying to stem the arrival of protesters for the European Central Bank summit in Barcelona. On May 12th, Spain’s indignados will retake the streets in a global day of protests called by the movement. Three days later, the movement plans to reoccupy the iconic Puerta del Sol to mark the movement’s one year anniversary. The NATO summit in Chicago on the 20th will draw further protests in the United States. This is but a brief summary of what’s on schedule for May.

This month is crucial for globalizing the act of protest. This is highly necessary in an age when globalized economic and political institutions overwhelm localized forms of resistance, whether they are indigenous groups, students or labor unions. However, we must not confuse global protests with the ultimate objective of globalizing protest. One country copying the protests of another is hardly a new phenomena. In 1848, it took only weeks for a revolution in France to be followed by revolutions in central Europe. Today, the challenge is not to replicate but to achieve the combinations of struggles.

Many will be provoked into the streets this May by shared economic conditions of unemployment and stagnant and declining wages. The scheduled protests across the globe will give participants a rush of strength and encouragement, but this is a momentary effect as months if not years pass between global days of actions. The movement has grown rapidly over the past year and May will demonstrate its growth, but the largest hurdle remains ahead. The practice of solidarity alone still maintains the isolation of protests to their individual countries while market forces alter economic conditions of the whole globe on a daily basis. The ultimate hurdle is to develop the globalized protest out of solidarity and into a common function for collective benefit. This common function can start with globalized policy demands to elevate people from both the developed and developing world.

Neoliberalism is Incompatible with Better Policy

The following is one of those ideas that sounds very much necessary and would do a great deal of good but has no chance of being implemented unilaterally by any country:

“A thinktank, the New Economics Foundation (NEF), which has organised the event with the Centre for Analysis of Social Exclusion at the London School of Economics, argues that if everyone worked fewer hours – say, 20 or so a week – there would be more jobs to go round, employees could spend more time with their families and energy-hungry excess consumption would be curbed. Anna Coote, of NEF, said: ‘There’s a great disequilibrium between people who have got too much paid work, and those who have got too little or none.'”

With chronic unemployment across the West, particularly among youths, reducing hours to create more job positions sounds highly rational. Instead, we have work hours being extended in Portugal, not reduced, giving employers the same amount of laborers to work additional unpaid hours. How is this supposed to motivate employers to hire new workers, let alone create the economic demand that leads to job creation? It won’t and can’t.

Policy is being driven entirely by ideology. It might even be better called mythology than ideology. It’s nonsense that says pain will in the end lead to pleasure. By punishing oneself -and oneself deosn’t truly apply since the policy makers spare themselves of the “shared sacrifices”– you will have demonstrated your faith in the markets and the markets will reward you by restoring “confidence”. The problem is the markets don’t operate by this mythology. They’ve read the austerity program in Europe and see it for what it is: a self inflicted recession. It’s why Italian ten bond yields remain at or above 7%, exactly where they were before the austerity package.

But there’s more to this than the absurdity of policies centered on economic pain. It’s the supremacy of the markets over the state that effectively rules out a policy like the one I began my post with. The market is beyond one state’s ability to set a common standard upon. The U.K. imposing this 20 hour work week would, in fact, make the economy unable to “compete” because no other country would be operating under the same standard. It’s not that the policy wouldn’t work and wouldn’t bring about a better existence for people. The problem is that the market is beyond any mechanism that could establish socially justice standards as a starting point for market activity.

Under these circumstances, we’ve inevitably found ourselves with economic imbalances. On one end, there’s this pursuit for the lowest common denominator in labor and environmental standards as countries inevitable lose and seek to regain their status as “competitive”. On the other end, there’s the escalating compensation on Wall Street to attract business executives who can best exploit this incoherent model that is failing so many around the globe. It is imperative, then, to meet a globalized capitalist model running unrestrained with a globalized social struggle that with enough conviction can see workers in both Bangladesh and the United Kingdom working less hours in countries with less unemployment.

Generation Without a Frontier

It’s one of those mornings when I permit myself to consider how truly precarious the world is and will remain for a great duration of our lives. For those of us barely into our twenties, we face a decade if not decades of continuous economic insecurity and the risk of political turmoil that is closely associated with economies in crisis. As I suggest in the title of the article, we are a generation without a frontier,  both a metaphorical and physical frontiers.

Personally, I’m glad there’s no physical frontier left on this planet.  For centuries, it was a means of delaying the disestablishment of an exploitative model by simply departing to the “New World” and to find a space for additional exploitation, inevitably at the expense of indigenous people. Our world can do without those frontiers. But we can’t do without a purpose, and we are facing a period in time in which a generation is discarded, whose lives are delayed by unemployment, an end to which is not in sight.

I’ll have Ambrose Evans-Pritchard of the Daily Telegraph explain what looks to be another immediate period of sharpening economic crisis:

“It will be a global downturn on all fronts, aborting what remains of recovery even before industrial output in the OECD bloc has regained its pre-Lehman peak.

The second wave will hit with youth unemployment already at 45pc in Greece and 49pc in Spain; and with the US labour participation rate already at depression levels of 64pc.”

Those are terrifying numbers. If you’re a Spanish youth today, you have a 50% chance of being without a job. If you have a job, you’ll certainly have friends and siblings without one through whom you’ll have just a small experience of the distress such a state can cause. And this before the second official recession and further rise in unemployment. Soon, youths will be more likely unemployed than employed.

There’s this static nature to this crisis, a permanency that is only challenged by a worsening of conditions. Maybe I’m wrong in saying we are without a frontier. The gradual, sometimes hastened, approach to the abyss is our frontier. Some may see a chance for a hopeful future amid this discouraging present state of ours. The system is reaching another profound crisis, maybe its ultimate crisis, which means an opportunity for the much awaited alternative to the hegemony of neo-liberalism. I too share the sense that bright, energetic graduates without jobs are a potential source to enact great transformations. But it would be wrong to subscribe to the belief that enormous numbers of youths can overcome our own system as the masses of young people have done during the Arab Revolutions. Historian Eric Hobsbawn did well in a recent BBC interview in explaining the differences:

“The most effective mass mobilisations today are those which start from a new modernised middle class, and particularly the enormously swollen body of students.

“They are more effective in countries in which, demographically, young men and women are a far greater part of the population than they are in Europe.”

We can’t rely on a hope that a tide of revolution transfers itself from the Arab World to the Western World. We must, instead, fully appreciate our own conditions and find and forge our own coalitions across generational, social-economic, and racial divides that characterize the West. We are still very much in the bunker, as youths waiting through exams and college for the better future, we are assured, will follow; and as our parents wait through austerity, hoping it passes them by completely, or affects them temporarily. These notions give us a false sense of security, or more accurately, distract us from our insecurity. We cannot wait this crisis out, or assume the inevitability of the economic model being toppled. It must be done by a great number of people choosing to abolish the model and realizing that years of perpetual crisis are to be lost in doing so. Our frontier must be internal, it must be at the edge of  this system and must be built beyond the alienation, discrimination, dispossession, and exploitation we dwell in now and creates our collective and varying degrees of suffering.