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The Progressive Economics Forum

Global Unions and the G20

Global Unions ‘Pittsburgh Declaration’

Global Unions’ Statement to the Pittsburgh G20 Summit

(24-25 September 2009)

I. EXECUTIVE SUMMARY

1. The G20 leaders are meeting in Pittsburgh amidst reports that the global recession is bottoming out, with the massive decline in output in most major economies slowing, and that governments are preparing their strategies for exiting from the fiscal stimulus measures. This would be dangerously premature. The outlook for recovery, which is still uncertain, is at best modest and the slowing of the decline is due almost exclusively to government stimulus measures. As yet, there is no sign of a self-sustaining economic recovery.

2. Moreover, as regards unemployment, the worst is still to come. Experience of past crises clearly indicates that unemployment is a lagging indicator with the latest forecasts confirming high unemployment extending well into 2011. The International Labour Organisation (ILO) estimates that unemployment is likely to increase by up to 59 million worldwide by the end of the year. Unemployment in the OECD countries is likely to almost double over the next eighteen months and to continue rising with rates of double figures remaining well into 2011. Over 200 million workers could be pushed into extreme poverty, mostly in developing and emerging countries where there are few or no social safety nets, with the result that the number of working poor may rise to 1.4 billion globally.

3. Unemployment now represents the largest single threat to recovery. It is imperative that G20 countries continue and extend their fiscal stimulus measures until there is real recovery. At the same time, G20 governments must take immediate action to finance the growing public debt through progressive fiscal reform, rather than the implementation of austerity plans. This would place the burden on those companies and executives who created the crisis in the first place, rather than on workers – the innocent victims. Measures should include the design of a global tax on financial short-term transactions.

4 Finally, G20 leaders must ensure that there is no return to ‘business as usual’. While this crisis was precipitated by the collapse of the housing bubble in the U.S. and propagated by reckless financial speculation, the underlying causes lie in fundamental economic and governance imbalances that are the direct result of three decades of neo-liberal economic policies, with the effect that the fruits of growth have not been distributed to workers. Now is the time to learn the lessons of this crisis and build a more sustainable and just future.

5. The Pittsburgh G20 Summit must, first and foremost, be a ‘Jobs Summit’ to tackle the deepening global jobs crisis. The global trade unions are calling on leaders to introduce a coordinated and jobs-orientated international recovery and meet the following policy challenges:

– Jobs – the First Priority: The G20 members must take immediate action to implement their London commitments to taking further fiscal stimulus action, ensuring that greater focus is placed on maintaining and creating jobs, providing adequate social protection and investing in the green economy. They should convene a G20 Labour Ministers’ meeting to address the employment impact, which should involve the social partners. G20 leaders must establish a Working Group on Employment and endorse and implement nationally the Global Jobs Pact negotiated by the ILO. They must take urgent steps to address the growing crisis in youth unemployment; (§8 18)

Rebuilding Momentum to Reform the Financial System: The G20 must use their position as major investors in the banks to fully implement the commitments made at the London Summit to re-regulate the financial system. They must take urgent action to resolve the problem of insolvent banks in the U.S. and Europe, cap executive pay and crack down on indefensible bonuses. G20 governments should also implement tax reforms, moving beyond tax havens, including progressive tax reform, stopping regulatory arbitrage and creating a global tax on financial transactions, which should be used to finance the public debt incurred in fighting the crisis; (§19 24)

Tackling the Impact of the Crisis on Development: Support is needed for expansionary recovery programmes in developing countries in line with the commitments made at the G20 London Summit. The International Financial Institutions (IFIs) must end their misguided structural adjustment conditionality and allow developing countries the policy space to pursue effective stimulus programmes. The G20 countries should engage in reform at an international level so as to reduce developing country vulnerability to instability and crisis, in cooperation with the Ad Hoc Open-ended Working Group of the UN General Assembly on the World Economic and Financial Crisis and its Impact on Development; (§25 29)

– Climate Change: G20 leaders must pave the way for an ambitious agreement at the Conference of the States Parties (COP) in Copenhagen in 2009. They must commit to emission reductions, promote Green Jobs, support the costs of adaptation in developing countries and endorse the concept of ‘just transition’ so as to protect workers in the shift towards a ‘green economy’ in the negotiating text of the United Nations Framework Convention on Climate Change (UNFCCC). (§30 34)

6. Leaders meeting at the Pittsburgh G20 Summit must also muster the political will to break with the policies of the past so as to ensure that there is no return to ‘business as usual’ and:

– Build a new model for a balanced economy: Policy must support a new model of economic development that is economically efficient, socially just and environmentally sustainable. This model must rebalance the relationship between public intervention and market forces in the global economy; the financial and the real economy; labour and capital; trade surplus and deficit countries; and industrialised and developing countries. Above all, it must bring to an end the policies that have generated massive inequality between and within nations over the past two decades and that are the root causes of the current global crisis. A fairer redistribution of wealth is the only sustainable route out of this crisis – and the only way to restore the trust of working people in the economic and financial systems; (§35 38)

Improve global governance: G20 governments must finalise the development of the Charter for Sustainable Economic Activity and the Global Standard on Propriety, Integrity and Transparency. The Charter must incorporate the Decent Work agenda of the ILO: rights at work, employment and income opportunities, social protection and social security and social dialogue and tripartism. At the global level, the IFIs should engage in dialogue with trade unions through a formal trade union advisory structure. (§39-41)

7. Trade unions and the workers we represent, however, have no confidence that this time governments and bankers will get it right. It is essential that the voices of working people in developed, emerging and developing countries are heard in the G20’s discussions. The Global Unions organisations are ready to play their part in building this stronger, fairer and more sustainable future for the global economy. They must be given a seat at the table.

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