Dave Tucker describes the devastating impact that neo-liberal policies have had on employment throughout the world – particularly the poorest parts of it
THE world is facing an economic crisis on a scale unseen since the Great Depression in the 1930s. The International Labour Organisation is forecasting that more than 50 million workers could lose their jobs this year and up to 200 million more will be plunged into extreme poverty. By next year, jobless numbers in rich nations could rise by eight million to 42 million, according to the Organisation for Economic Co-operation and Development. British unemployment has already risen above two million for the first time since 1997.
World leaders have responded by trying to preserve the system that is responsible for the crisis. Despite claiming: “The Washington consensus in favour of free markets has come to an end”, in reality Gordon Brown is leading calls for a continuation of these failed polices. Millions of people will lose their jobs in developing countries and millions more in Europe under free trade plans to be promoted by the Prime Minister next month at the G20 summit of the world’s biggest economies.
War on Want’s latest report, entitled Trading Away Our Jobs, is the first-ever study to calculate the numbers of jobs lost globally in the wake of trade liberalisation and analyse the impact of free trade on employment. The evidence shows that free trade is no answer to the current economic crisis. At a time when unemployment levels are already rising sharply as a result of the global recession, further trade liberalisation will only exacerbate the threat to jobs. The report examines the impact of free trade agreements on employment and shows how trade liberalisation caused huge job losses in both Africa and Latin America – the two continents that bore the brunt of early experiments in structural adjustment and other free trade policies.
Following two decades of free market policies, 50 million more Africans are now trapped in poverty than in 1997. Three in four workers in sub-Saharan Africa now face insecure employment as a result of three decades of neo-liberal economics, with only a quarter in waged and salaried posts, according to the study. Malawi’s real wages in manufacturing plunged by 73 per cent between 1990 and 1995, while trade liberalisation in the 1980s and 1990s also brought huge job losses in Côte d’Ivoire, Ghana, Kenya, Morocco and Zimbabwe. Zambia’s two periods of trade liberalisation resulted in major job losses and even now, 20 years later, more than one in eight people are unemployed. And with little or no state support for the unemployed, the stark choice is to find work in any way possible or face starvation. These “working poor” – an estimated four in five Zambian workers – labour in the informal economy with virtually no rights or ability to unionise. A staggering 95 per cent of workers still do not earn enough to lift themselves and their families above the $2-a-day poverty threshold.
Latin America fared little better. During the 1990s, the jobless total in Latin America soared from 7.6 million to 18.1 million, with unemployment increases in Argentina, Brazil, Bolivia, Chile, Colombia, Ecuador, Paraguay, Uruguay and Venezuela. In Brazil alone, net employment fell by 2.7 million between 1990 and 1997, while between the early 1990s and 2006, farming jobs in Mexico slumped from 8.1 million to around 6 million as a result of trade liberalisation. In many countries, trade liberalisation also led to sharp increases in income inequality and to deindustrialisation that continues to affect them today, paving the way for international investors to create sweatshops.
Despite this evidence of the impact of previous trade liberalisation, Brown is still leading calls for a conclusion to the World Trade Organisation trade negotiations – the so-called Doha “development” round. The International Trade Union Confederation has calculated that millions of workers are at risk of losing their jobs under the proposals that are on the table. Even an impact assessment from the European Union predicts significant job losses across the agricultural, industrial and service sectors of the developing world. Completion of the negotiations would put 7.5 million workers at risk in Argentina, Brazil, Colombia, Costa Rica, Indonesia, Mexico, the Philippines, Tunisia and Uruguay, and millions more in other rich and poor countries.
Developing nations have repeatedly rejected the terms as utterly unacceptable. Yet faced with the repeated collapse of the WTO negotiations, the G20 is being cynically promoted as an opportunity to conclude the process.
The EU has rushed even faster into bilateral deals to secure the access to new markets that its companies want. Central to this process is the Global Europe strategy – a vision for a new wave of bi-lateral or regional free trade agreements with as many countries as possible. In these negotiations, the EU is pressing to open up new areas of services and public procurement that have been safeguarded by developing countries up to now. If the EU gets its way, vital policy tools to foster future development by supporting local industries will be removed and key public services like health and education will face privatisation.
Closer to home in Europe, where unemployment is already a significant problem, free trade agreements threaten to bring mass redundancies to agricultural sectors, its remaining manufacturing – already under enormous pressure from China and other rising economic powers – as well as more hi-tech industries. Even the EU’s own impact assessments state that trade liberalisation and globalisation causes “large-scale redundancies” and a “decline [in] employment terms and conditions”.
It is imperative that the British Prime Minister recognises that transformation of the global economy is necessary – there can be no going back to “business as usual” while tinkering with re-regulation in a few areas such as the financial sector. That is why War on Want will be taking part in the “Put People First” demonstration through London tomorrow (Saturday March 28) and demanding the G20 takes immediate action to secure decent jobs and public services for all, to end global inequality and build a green economy.
Dave Tucker is trade campaigns officer for War on Want. Trading Away Our Jobs: How free trade threatens employment around the world is available at www.waronwant.org
