Austerity has become a global phenomenon. The impact of austerity measures touches all fields of our everyday lives, including our labour rights and the social rights we’ve attained over the years.
Austerity measures, what does that mean exactly and how does it affect us?
In November 2013, the Council of Europe released a report in which they described the properties of austerity and what their main characteristics are. Austerity measures are measure that include; public services expenditure cuts, reduced labour protection, disadvantageous pension reforms, tax shifts that are at the disadvantage of specifically the lower income groups, wage bill cuts or caps, cuts in education and healthcare, stricter conditions for social benefits, etc. The primary target of austerity measures has been public social spending. The cumulative effect of all these measures is enormous.
The impact of austerity touches on all dimension of our life. Recently, we published an article outlining the impact on our healthcare systems. However, as previously mentioned, it goes far beyond a single sector.
This evolution has progressed from the start of the financial crisis through now. A UN report published in 2013 has previously condemned and referred to austerity measures as a disincentive to economic, social and human rights. It has adverse effects, and today, we can see that austerity measures still haven’t met the economic goals they were supposed to achieve in Europe.
The labour markets and employment
There are two main perspectives at play on how to approach the crisis. Some identify the cause for the crisis as being only a lack of competitiveness. We, the European Greens, among many others don’t believe this. The austerity approach leads to a model where wages are depressed and corporate profit seems to improve. It targets the European citizen and hits the lower income groups the hardest. Austerity seems to lead to further regression in our economies.
A briefing written by Marcin Szczepański for the European Parliamentary Research Service provides an analysis of the impact of labour market reforms. According to this vision, the crisis can only be addressed through creating more flexibility in labour markets, suppressing labour costs for employers, which in turn leads to a more comparative advantage over time.
Today is 2016. Since the crisis and the continuous implementation of austerity measures we can clearly see that the impact is largely negative. Ultimately, the cuts on wages and benefits like pensions of everyday citizens hit them hard, while it increases corporate profits. The continuation of this trend ends up with several countries getting caught in a negative spiral.
Recently, the International Labour Organisation (ILO) released their World Employment Social Outlook for 2016. In this document they provide additional details on the global outlook for the near future. Between 2014 and 2016 the unemployment rate in European countries averaged between 10.2 and 9.2%.
Countries like Greece, Cyprus, Ireland, Portugal and Spain are affected up to the point where basic rights like access to jobs, the right to work, etc. are under threat. Greece and Spain’s unemployment rates for example are respectively 25.6% and 22.9%.
Work and gender
Equality between men and women at work is also negatively impacted due to austerity. In 2012, the World of Work Report by the International Labour Organisation (ILO)1,stated that women have a higher probability of being unemployed or finding themselves in vulnerable employment positions in comparison to men.
According to the ILO2, they face systemic barriers in nearly all aspects of employment. As a side effect which cannot be underestimated or ignored, the austerity measures further enforce these barriers. These barriers are all in regard to; receiving ample childcare, the level of pay, the access to higher-paying traditionally “male” occupations, job security, pension entitlement, benefits, etc.
When we combine this knowledge with the type of cuts that are typical to austerity measures, it is predominantly women that get hit the hardest. For example, cuts in education have a larger impact on the accessibility to education for women and girls3. This results in a reinforcement of the already existing gender gaps in education and in turn leads to increased difficulty for women later on in their entry on the job market.
The cuts or freezing of wagers have primarily affected public sectors like healthcare and education. Women are very active in these sectors and are a primary victim of these measures. Austerity policies have primarily focused on social and health service sectors where a large portion of the employees are female. It is safe to say that austerity measures have had a more negative effect on the female population as a whole in comparison to the male population.
Over the long term women are more affected due to the general strategies of households to cope with loss of income. When faced with loss of income and living on a single wage, it is more often than not the woman that refrains from making a career. This in turn often leads to a situation where they remain in this situation and are kept from chasing a career due to circumstances.
Women’s freedom to work and exploit their professional capabilities is further hampered by the austerity policies.
Our seniors
A second, major group of people that oftentimes gets overlooked are the seniors. Austerity measures have a big impact on the employment of our elderly.
Losing your job when you’re close to your pension leaves you with fewer opportunities, unfair working conditions and oftentimes diminished salaries4 In turn, this has dramatic effects on the pension rights and by extension, the quality of life in the long term.
It happens frequently that people find themselves in a precarious situation where they’re too old to find a long term job, yet are too young to be eligible to start their pension.
Furthermore, elderly people are oftentimes stigmatised as unproductive, economically uninteresting, slow learners and prone to being sick. Further cuts in pensions and medical security for the elderly will push more people into poverty and seriously undermines their social rights and job opportunities.
Poverty
Social standards have been greatly affected by austerity. The combination of various cuts in social services, social benefits, wagers has led to an increase in overall poverty across Europe. The continuation of this type of cuts is slowly pushing more people into poverty.
More specifically, lower income and socially vulnerable groups are getting hit the hardest. This trend doesn’t limit itself to the countries located in the South of Europe. In 2013, Oxfam conducted a study on the impact on poverty by austerity measures specifically in the United Kingdom. Here, they found that, as a result of the tax and welfare changes between 2010 and 2014, the poorest two-tenths of the UK population will be hit harder in percentage terms in comparison to the richest one-tenth. By the time we reach 2020, they expect an additional 800.000 British children living in poverty. Over the same period, they estimated that 1.5 million adults will fall into poverty.
It is a proven fact that the problem doesn’t limit itself to just a section of Europe, it affects the entirety of Europe.
Ok, but what is our proposal?
We, The European Greens, believe that due to the complexity of the problem we need a shift in direction in how we approach the problem. Yes, reforms are required. But is this the way reforms should be implemented? We are convinced that this is absolutely not the case.
There’s a multitude of things that need to change in order to address the problems we face due to austerity. During our 2015 Congress in Zagreb the Greens voted a resolution on what we think needs to happen in order to replace austerity with sustainability.
Europe will not overcome this challenge unless it also takes into account the social, environmental and long term economic consequences instead of just bureaucratic and financial criteria. It simply has to provide breathing space for economies to recuperate; otherwise economies will slowly get smothered. Keeping the goal of reaching sustainable budgets simply has to be the focus.
We have to turn ourselves towards a better and Greener future. Austerity is not a solution. It has brought us high levels of unemployment, more restricted access to healthcare, decreased wages, restrictions in access to legal aid, decreased life standards and much more. The idea that you can shrink yourself down into growth is simply intellectually dishonest.
Furthermore, we must uphold the fight for equal rights for women on the labour market. The empowerment of women is a vital part in attaining more equality in the workplace.
Austerity is slowly crippling the economy and is eating away at the rights European citizens had acquired for themselves. Austerity is not the solution; we should invest and continue to move forward. We have to strive for a Green transformation of our economies and create sustainable Green jobs. Green jobs are more sustainable, benefit our economy and will allow us to improve equality on the labour market.
We, the European Greens, will always vehemently defend peoples’ rights in Europe.
1 ILO, World of Work Report 2012, “Better Jobs for a Better Economy”, p. 25
2 ILO, “Gender equality at the heart of decent work”, report for the 98th Session of the International Labour Conference, 2009.
3 Report of the independent expert on the question of human rights and extreme poverty (A/64/279), para. 40
4 Report of the United Nations High Commissioner for Human Rights on the rights of older persons to the Economic and Social Council, 2012, (E/2012/5), para. 35
