IMF’s Strauss-Kahn backs ITUC analysis on global threat of unemployment and inequality

kristy Reforming Global Finance



IMF’s Strauss-Kahn backs ITUC analysis on global threat of unemployment and inequality

Brussels, 14 April 2011 (ITUC OnLine): As the World Bank, the International
Monetary Fund (IMF) and G20 finance ministers meet this weekend to discuss
the state of the global economy and priorities for development cooperation,
the international trade union movement is calling on the international
financial institutions (IFIs) to change course in their policy directions
and to pay as much attention to employment deficits as they do to fiscal
deficits by taking coordinated action to support job creation as well as
education and skills training.

Parallel to these meetings, ITUC General Secretary Sharan Burrow took part
in a debate in Washington with IMF Managing Director Dominique Strauss-Kahn
on Wednesday to voice trade union views about the IFIs? responsibility to
adopt economic recovery programmes consistent with a more equitable and
sustainable growth and development model.

Emphasizing the failure of G20 countries to reduce the number of unemployed,
which is currently at the highest level ever recorded, Burrow said: ?The G20
in 2011 must mark the defining moment that things start to change, or
otherwise the world will see just another failure in global governance.?
She challenged the G20 and all IMF member countries to incorporate
employment targets into national economic programmes and to work in
establishing a global social protection floor, for which she invited the IMF
and the ILO to jointly develop sustainable financing mechanisms.

Burrow further urged the IMF to recognize ?the growing political momentum in
favour of financial transactions taxes? and to support the FTT so that the
financial sector makes a contribution to public revenue ?to match the costs
it imposes each time it triggers a crisis in the real, productive economy.?
[Web link for Burrow?s speech:

At the debate, Strauss-Kahn noted the record levels of unemployment and
inequality and stated: ?Just as we managed to tame inflation in the 1980s,
this decade should be the one that takes full employment seriously once
again.? To combat growing inequality, Strauss-Kahn emphasized the
importance of ?strong social safety nets combined with progressive taxation,
? investment in health and education, and collective bargaining rights ?
especially in an environment of stagnating real wages.? He spoke of the
joint work that the IMF has undertaken with the ILO in the past year and
said that ?employment and equity are the building blocks of stability and
prosperity,? which go ?to the heart of the IMF?s mandate.?
[Web link for Strauss-Kahn?s speech:

A statement from Global Unions to the IMF/WB spring meetings [web link] as
well as the G-20 Finance Ministers? meeting puts forward specific trade
union recommendations on how the IFIs can begin to adopt a new approach for
achieving more equitable and sustainable growth. In such a model, workers,
pensioners and the unemployed ? the principal victims of the global economic
and financial crisis ? should not disproportionately bear the burden of
national ?fiscal consolidation? plans. Such plans should only be applied
when national recovery is well under way and they should not focus
overwhelmingly on expenditure reductions, as has been the case in many
countries, but comprise tax measures that have least impact on employment
levels and help reduce inequality. They should include new sources of
revenue, notably financial transactions taxes, which for the first time
would ensure substantial contributions from the financial sector for
resolving the economic and fiscal crisis that it caused. Oxfam?s release on
Wednesday of signatures from one thousand economists around the world is a
sign of the global momentum in favour of the adoption of such a tax for
financing employment creation, development goals and climate finance

More robust social protection systems should be developed to mitigate the
impacts of the continuing employment deficit, and the World Bank and the IMF
should collaborate with the International Labour Organization?s initiative,
endorsed by the entire UN system, to establish a global social protection
floor. To achieve equitable and sustainable growth, both IFIs must act
responsibly to protect quality public services vital to societies?
development, such as education and health care. Furthermore, the IFIs must
ensure that their operations comply with core labour standards and
contribute to efforts to achieve climate resilience and the reduction of
greenhouse gas emissions.

The ITUC represents 175 million workers in 151 countries and territories and
has 305 national affiliates. Website: and

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