From the TUC

Canadian G20 gives talking shops a bad name

28 Jun 2010, by in Environment, International

David Cameron went to Toronto last weekend promising an end to Gordon Brown style new initiatives at every G20 summit, and in a feat of post-modernist irony, chose to mark this with a new initiative of his own: he demanded that the G20 should follow up on past decisions and make sure they got implemented. Au contraire, as they say in nearby Quebec. What the Canadian G20 came up with was the most vacuous, indecisive and unfocused G20 declaration in the body’s short two year history. The Washington Post’s Harold Schneider summed up the different positions adopted by governments on their way to the meeting.

As my colleague Richard Exell remarks, virtually every world leader left able to claim victory, because the declaration demands fiscal consolidation and continued fiscal stimulus. If we could manage that, everyone really would be happy, but as they are diametrically opposed, confusion is a more likely response, if not despair that, as the International Trade Union Confederation responded, the G20 leaders fiddled while the fires of unemployment, global poverty and climate change carried on burning.  Richard is right that the only bright spot is the endorsement of the G20 Labour Ministers’ meeting recommendations from April – thankfully both the French and German governments are committed to repeating that meeting. New ITUC General Secretary Sharan Burrow said:

“Jobs and better wages are at the heart of economic recovery, and last year G20 Leaders seemed to have recognized that. This year they are sending mixed and ambiguous signals that risk undermining the weak shoots of recovery.”

And it was mostly thumbs down from the NGO community too – Kel Currah has posted a good summary of responses at The Sherpa Times – although some welcomed the decision to create a G20 working group on international development, previously an issue confined to the G8, and another working group on anti-corruption measures. Many joined with the ITUC in expressing disappointment or more that financial transaction taxes and climate change financing got nowhere.

3 Responses to Canadian G20 gives talking shops a bad name

  1. Sandwichman
    Jun 29th 2010, 5:14 am

    Better Sharon Burrows quote (from Fred Wilson at Rabble.ca):

    “Unacceptable complacency in the face of a worsening jobs crisis, at a time when unemployment risks surging again as a result of premature deficit reduction measures,” – Sharon Burrow

    Don’t you think that one reason for that “unacceptable complacency” is that unions are not proposing anything that they could take autonomous action on? That is, it’s all supplication and no contestation. Unlike public spending or Robin Hood taxes, the demand for shorter hours is something that unions could mobilize independently. There’s a whole history of this in the 19th century and the dirty thirties.

    I received no reply from you to the email I sent last week so I’m reposting it here:

    Dear Owen Tudor,

    I would like to take you up on your non-averseness to pursuing the ideas I propose regarding shorter working time and employment. Over the past fifteen years, I’ve studied the historical debate over working time and have completed the manuscript of a book on that topic, which I am currently shopping around to publishers. In the meantime, I’ve had two papers published in reputable scholarly publications and have presented two conference papers and will be presenting a third at the end of July. In other words, I’ve done my homework on the topic. Now, that doesn’t necessarily mean I’m right but if I am wrong I have at least documented that I am in excellent company.

    In reply to my recent comment on your blog you said that you “don’t think that there is a direct correlation between reduced working hours and increased employment.” Over the long term, the contribution of reduced working time to work reorganization, productivity improvement and economic growth leading to job creation is, as Gerhard Bosch has pointed out, uncontroversial. What is disputed is whether deliberate government policies to create jobs through work-time reduction will have their intended effect. You may be surprised to hear that I don’t think there is a simple answer to that policy dilemma. I do, however, believe there is a complex answer but that economists have resisted that answer and virtually ignored the well-documented arguments for it.

    The relation of the trade union movement in the UK and the US to the question of shorter hours and unemployment presents a paradox. Historically, the eight-hour theory of Ira Steward was the philosophical “touchstone” (if you’ll pardon the expression) in the early years of the American Federation of Labor. Although the idea was disparaged by the press, employers’ associations and traditionalist economists in both the US and UK, unions unequivocally promoted shorter working time as a remedy for unemployment.

    A closer examination of the arguments presented by Steward and his protégé, George Gunton, shows that the rationale for this strategy was not based on some naive belief in a fixed amount of work that could be divided up into more jobs but relied in part on an under-consumptionist argument, not dissimilar to Keynes’s as well as on productivity assumptions about increasing returns to scale of mass production. Dorothy W. Douglas, the former wife and collaborator of economist Paul Douglas of Cobb-Douglas fame, wrote an article published in the Journal of Political Economy in 1932, which vindicated Ira Steward’s theories. Meanwhile, in the U.K., Sydney J. Chapman wrote what J.R. Hicks and Lionel Robbins were to subsequently hail as the definitive neo-classical theory of the hours of labour. Although Chapman’s theory didn’t directly address the issue of unemployment, it did demonstrate the contribution the work time reduction makes to technological progress and the unlikelihood that the bias of the competitive market toward hours of work that were longer than optimal. During the Second World War, Keynes pointedly identified shorter working time as the ultimate cure for unemployment.

    In spite of authoritative validation of their ideas by notable economists, trade unions in both the U.S. and the U.K. quietly abandoned shorter hours as a tool for combating unemployment. Briefly, in the 1990s, the Canadian Labour Congress took up the campaign… but that too has now faded. In 1998, Andrew Jackson, currently the National Director of Social and Economic Policy with the CLC, wrote a policy brief, “Creating More and Better Jobs Through Reduction and Redistribution of Working Time.” The report is no longer available on the CLC website. I have a copy of a Novemeber 1997 draft for comments. In that draft, Jackson wrote, “There is clearly some potential to create more and better jobs by redistributing worktime from those working long hours, to those who are unemployed or working short and unpredictable hours.” I can find no evidence of current interest or activity on this issue by the CLC. What is puzzling, even disturbing, is that this abandonment has taken place apparently without explanation or acknowledgment. Now you see it; now you don’t!

    Meanwhile, ecological economists, from Peter Victor in Canada to Tim Jackson in the U.K. To Gus Speth and Juliet Schor in the U.S. have taken up the call for shorter hours as a way to mitigate the employment effects of slower economic growth. Labor union officials have ignored or even scorned (Nigel Stanley) such advocacy. Dean Baker’s advocacy of a work-sharing program to combat unemployment in the U.S. has met with stony public silence from the AFL-CIO. My own frustration is that apart from Nigel Stanley’s forthright antagonism, I can’t seem to get any response from trade union officials to my questions about WHY they have abandoned shorter hours. Your own response that you don’t think there is a direct correlation is a start. Can you elaborate on your grounds for not thinking there is a correlation? Are you relying on a particular study or studies? If so, are you aware of the results of opposing studies and methodological critiques?

    Best,

    Tom Walker (Sandwichman)

  2. Owen Tudor

    Owen Tudor
    Jun 29th 2010, 7:02 am

    Tom, the key problem with this debate is that trade unionists HAVEN’T abandoned shorter hours as an objective, so debates about what impact those shorter working hours would have on overall employment level are slightly missing the point. We have been campaigning flat out in Europe for years to get the Working Time Directive strengthened so that hours can be reduced by legal means, and many officials spent the whole recession negotiating shorter working time to keep members in jobs. Other than legal methods, we could of course theoretically negotiate such agreements with employers. Historically, of course, we have achieved a great deal on this front, reducing usual working weeks from six days to five, working hours initially down to eight hours a day and for most workers in the UK now, down to seven. Annual holidays have grown as well. But it has become increasingly difficult. To make a real impact, we need to reduce working time while raising wages per hour (otherwise our members are unlikely to support such campaigns). And experience has shown that employers resist fiercely. In the UK, our engineering unions fought a long campaign for shorter working hours, and the result was near bankruptcy and the withdrawal of employers from national bargaining. That’s one of the reasons why we turned to legal limits instead. The issue of what impact shorter working hours would have on employment is interesting of course, but you don’t need to convince us to support working hours for reason a) rather than reason b), you need to find some way to persuade employers to accept our campaigns rather than resist them!

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