Create an economy that works for working people
by Sharan Burrow
ILO, International Trade Union Confederation (ITUC)
30 Nov. 2022
Rising inflation brings striking fall in real wages, ILO report finds. (ILO News)
The severe inflationary crisis combined with a global slowdown in economic growth – driven in part by the war in Ukraine and the global energy crisis – are causing a striking fall in real monthly wages in many countries.
According to a new International Labour Organization (ILO) report, the crisis is reducing the purchasing power of the middle classes and hitting low-income households particularly hard.
The Global Wage Report 2022-2023: The Impact of inflation and COVID-19 on wages and purchasing power , estimates that global monthly wages fell in real terms to minus 0.9 per cent in the first half of 2022 – the first time this century that real global wage growth has been negative.
Among advanced G20 countries, real wages in the first half of 2022 are estimated to have declined to minus 2.2 per cent, whereas real wages in emerging G20 countries grew by 0.8 per cent, 2.6 per cent less than in 2019, the year before the COVID-19 pandemic.
“The multiple global crises we are facing have led to a decline in real wages. It has placed tens of millions of workers in a dire situation as they face increasing uncertainties,” said ILO Director-General, Gilbert F. Houngbo.
“Income inequality and poverty will rise if the purchasing power of the lowest paid is not maintained. In addition, a much-needed post pandemic recovery could be put at risk. This could fuel further social unrest across the world and undermine the goal of achieving prosperity and peace for all.”
The cost-of-living crisis comes on top of significant wage losses for workers and their families during the COVID-19 crisis, which in many countries had the greatest impact on low-income groups.
The report shows that rising inflation has a greater cost-of-living impact on lower-income earners. This is because they spend most of their disposable income on essential goods and services, which generally experience greater price increases than non-essential items.
Inflation is also biting into the purchasing power of minimum wages, the report says. Estimates show that despite nominal adjustments taking place, accelerating price inflation is quickly eroding the real value of minimum wages in many countries for which data is available.
The analysis shows there is an urgent need to apply well-designed policy measures to help maintain the purchasing power and living standards of wage workers and their families.
Adequate adjustment of minimum wage rates could be an effective tool, given that 90 per cent of ILO Member States have minimum wage systems in place. Strong tripartite social dialogue and collective bargaining can also help to achieve adequate wage adjustments during a crisis.
Other policies that can ease the impact of the cost-of-living crisis on households include measures targeting specific groups, such as giving vouchers to low-income households to help them buy essential goods, or cutting Value Added Tax on these goods to reduce the burden inflation places on households while also helping to bring down inflation.
“We must place particular attention to workers at the middle and lower end of the pay scale. Fighting against the deterioration of real wages can help maintain economic growth, which in turn can help to recover the employment levels observed before the pandemic. This can be an effective way to lessen the probability or depth of recessions in all countries and regions,” said Rosalia Vazquez-Alvarez, one of the report’s authors.
Create an economy that works for working people, by Sharan Burrow. (ITUC)
Workers across the globe are struggling to make ends meet under the weight of a worldwide cost of living crisis.
The International Trade Union Confederation (ITUC) Global Poll 2022 provides a stark insight into a precarious world on the brink of recession.
Two in five households (43 per cent) have experienced a loss of jobs or working hours, and one in two (51 per cent) say their income is stagnating or falling behind the cost of living.
The inequalities and injustices that are at the heart of the failed economic system, with huge deficits in corporate and financial regulation, have been brutally exposed and massively deepened by the Covid-19 pandemic.
Deficient government responses to the ongoing pandemic are driving further precarity, inequality and a deep public health crisis.
The very foundations of democracy and the global economy have been shattered. Governments, cowered by corporate greed, have failed to act in the interests of working people.
When 56 per cent of people polled say that fear of repercussions would prevent them from reporting corporate malpractice, we know that corporate social responsibility has failed, with repercussions across the foundations that working people need for a new social contract:
• Jobs: 66 per cent are worried about people losing jobs.
• Rights: 55 per cent of people are worried about the weakening of labour laws, while 53 per cent say rates of violence in the world of work have increased.
• Wages: One in ten (13 per cent) do not have enough money for basic essentials like housing, food and electricity. Three-quarters of people (72 per cent) think the minimum wage is not enough to live a decent life.
• Social protection: 87 per cent support affordable access to healthcare, but 67 per cent worry about the capacity of healthcare systems to cope.
• Equality: 66 per cent are worried about inequality in earnings and opportunities between men and women.
• Inclusion: 69 per cent believe the economic system favours the wealthy.
The Poll (which was carried by the global polling company YouGov on behalf of the ITUC) shows clearly that working people know that economic and social progress has stalled or is in reverse.
The economic system favours the interests of the few, while government services are stretched to breaking point and workers’ rights are attacked, with violence and harassment at work increasing.
But working people are clear in their demands. They know that the answer is a new social contract based on climate-friendly jobs, rights, wages, social protection, equality and inclusion:
• Some 60 per cent would trust their government more if they increased the minimum wage and committed to decent work.
• 69 per cent want governments to do more to make sure companies pay their fair share of tax.
• More than 80 per cent support social protection: affordable healthcare, decent retirement incomes, maternity leave and unemployment benefits.
• 62 per cent want their government to promote peace, jobs and human rights.
• 46 per cent would trust their government more if they planned a just transition to climate-friendly jobs.
We support working people in their goals of peace with inclusive social and economic progress that delivers prosperity and a sustainable future.
Right now, these objectives are out of reach for many people. But, with the application of these clear demands, with a new social contract, we can turn the tide and create an economy that works for working people.
This is urgent. Governments and companies need to set out an action plan now to deliver a new social contract and to start to repair the damage.
* Sharan Burrow is General Secretary of the International Trade Union Confederation (ITUC). The global Poll was carried out across 17 countries: Argentina, Australia, Belgium, Brazil, Bulgaria, Canada, Egypt, France, Great Britain, Germany, India, Indonesia, Japan, Mexico, South Africa, South Korea and the United States.
http://www.equaltimes.org/ituc-global-poll-2022-a-world-on http://www.ituc-csi.org/itucglobalpoll2022-en http://www.ituc-csi.org/World-economy-faces-historic-downturn http://www.ituc-csi.org/2022-global-rights-index-en
Agreement reached to resume Ukraine grain export deal
by UN News, agencies
15 Nov. 2022
UN Secretary-General's remarks to the G20 session on food and energy crises:
We are on the way to a raging food catastrophe. People in five separate places are facing famine.
Simultaneously, we are witnessing a crunch in the global fertilizer market. Without coordinated action, this year’s crisis of affordability may become next year’s global food shortage.
The Black Sea Grain Initiative, and the agreement to facilitate the supplies of Russian fertilizers, including ammonia, to global markets are essential.
Our contacts with the European Union, the United States, the United Kingdom and others have succeeded in removing many of the obstacles to the free flow of Russian food and fertilizers to global markets.
Today, a first shipment of Russian fertilizers donated by Uralkem and managed by the World Food Programme will start to be loaded in a Dutch harbour. Food and fertilizers are not subject to sanctions, but suffer indirect impacts. We are working nonstop to resolve all remaining issues, chiefly around payments, and to renew the Black Sea Grain Initiative. I count on all of your to support these efforts.
A second major cause of this food crisis is lack of financing. Many governments in the Global South, battered by the COVID-19 pandemic, the inequality in resources available for the recovery, and the climate crisis, have no fiscal space to help their people deal with rising food and fertilizer prices accelerated by the war.
My call for an SDG Stimulus is aimed at providing these countries with adequate liquidity, through a wider reallocation of Special Drawing Rights, concessional financing to Middle Income Countries in distress, and effective mechanisms of debt relief and restructuring.
Transformational investments in agriculture, particularly in Africa, are essential to prevent future crises. But they need the resources, to be implemented.
The climate crisis is the third factor pushing people into hunger. Changing weather patterns, droughts and storms are disrupting crop cycles and fisheries.
Eighty percent of global emissions are sitting around this table. There is no way we can defeat climate change without a Climate Solidarity Pact between developed countries and large emerging economies. Developed countries must take the lead in reducing emissions.
They must also mobilize, together with international financial institutions and technology companies, to provide financial and technical support so that large emerging economies can accelerate their transition to renewables.
Which brings us to the energy crisis. Many developing countries cannot afford soaring energy prices. We must avoid an energy scramble in which developing countries will come off worst – as they did in the competition for COVID-19 vaccines.
Doubling down on fossil fuels is not the solution. If, in the last two decades, the world had massively invested in renewable energy, rather than its addiction to fossil fuels, we would not be facing the present crisis.
To summarize: we need unity, solidarity and multilateral solutions to address the food and energy crises, and to eliminate the trust deficit that is undermining global action across the board. Multilateral solutions can only be built on fairness and justice. I urge G20 countries to consider these fundamentals in your decisions.
The Global Humanitarian Impact of High Food, Fertilizer and Fuel Prices - Inter-Agency Standing Committee
The IASC is alarmed at the effects of a super-crisis driven by lack of accessible and available food and energy and coupled with economic shocks. As humanitarian agencies, our mission is to protect the lives and livelihoods of the poorest and most vulnerable people, including refugees and the internally displaced. These messages are about what the crisis means for these people, and our efforts to help and advocate for them.
High food, fertilizer and fuel prices contributed to intensifying a global crisis that is driving up global humanitarian needs and costs and erasing hard-won development gains, particularly in countries affected by climate shocks, conflict, and economic upheaval including as a result of the Covid-19 pandemic. This is due in part to the ripple effects of the war in Ukraine. Millions of people are being pushed into extreme poverty and hunger by rising inflation and interest rates.
The increased cost of living disproportionality affects the most vulnerable, among them refugees, the displaced, and women and children.
The international community must act now and at scale to save lives and invest in solutions that safeguard human rights and humanitarian principles and stability and peace for all.
* The Inter-Agency Standing Committee (IASC) is the highest-level humanitarian coordination forum of the United Nations system.
* Food Security Update (World Bank 10/11)
Domestic food price inflation continues to remain high in almost all low- and middle-income countries and high-income countries. Uncertainty surrounding the Black Sea Grain Initiative continues to affect international grain prices. Despite minor decreases in global food prices since their peak in April, multiple risks threaten any downward trend in prices. Expanding the coverage of social protection schemes such as cash or in-kind transfers will allow more people to access diets sufficient in energy and nutrients.
2 Nov. 2022
Russia agrees to rejoin Ukraine grain export deal. (News agencies)
Russia has said it will rejoin a UN-backed agreement to allow the export of grain from Ukraine via a safe Black Sea corridor, with shipments expected to resume on Wednesday.
Russian government officals said they had received guarantees that the Black Sea grain corridor would not be used for military operations, and that it is resuming the implementation of the agreement.
The deal, overseen by the Joint Coordination Centre in Istanbul, has allowed more than 9.7 million metric tonnes of grain and other foodstuffs to leave Ukrainian ports. This has brought some relief to a global food crisis triggered by the Russian invasion of Ukraine, a key grain exporter.
Under the terms of the deal, which was agreed on in July, ships moving to and from Ukraine are inspected by a joint team of Russian, Turkish, Ukrainian and UN officials.
The Russian blockade of Ukrainian exports has exacerbated food shortages and a cost of living crisis in many countries, as Ukraine is one of the world’s biggest suppliers of grain and oilseeds. Countries particularly in Africa and the Middle East have faced shortages of food imports and dramatic food inflation impacts.
According to the UN Under-Secretary-General for Humanitarian Affairs and Emergency Relief Coordinator, Martin Griffiths, “thirty-eight countries have purchased some nine million tons of grain from Ukraine under the Black Sea Grain Initiative.”
The blockade of shipments from Russia and Ukraine – which supplies nearly 30 percent of the world's exported wheat and barley, as well as other cooking oils and fertilizer – severely impacts global food prices and has had a particularly devastating impact on efforts to deliver aid to the most vulnerable communities around the world.
http://news.un.org/en/story/2022/11/1130107 http://news.un.org/en/story/2022/11/1130092 http://reliefweb.int/report/ukraine/remarks-security-council-under-secretary-general-humanitarian-affairs-and-emergency-relief-coordinator-martin-griffiths-delivered-31-october-2022
30 Oct. 2022
UN chief ‘deeply concerned’ by stalled Black Sea Grain Initiative. (UN News)
UN Secretary-General António Guterres has expressed deep concern at Russia’s decision to suspend its involvement in the Black Sea Grain Initiative, a deal set up to reintroduce vital food and fertilizer exports from Ukraine to the rest of the world.
On Sunday, UN Spokesperson Stéphane Dujarric said, in a statement for the Secretary-General, that Mr. Guterres has decided to delay his departure for the Arab League Summit in Algiers by a day to focus on the issue.
Following Russia’s invasion of Ukraine in late February 2022, mountains of grains built up in silos, with ships unable to secure safe passage to and from Ukrainian ports, and land routes were unable to compensate.
This contributed to vertiginous rises in the price of staple foods around the world. Combined with increases in the cost of energy, developing countries were pushed to the brink of debt default and increasing numbers of people found themselves on the brink of famine.
The Initiative was due to run out in the second half of November, but there was an option to extend it, if all parties, including Russian and Ukraine, agree.
The deal was demonstrably successful in bringing down prices, allowing millions of tonnes of grain to be safely transported from Ukrainian ports. By September, Rebecca Grynspan, the head of the UN trade body, UNCTAD, and Amir Abdulla, the UN Coordinator for the Black Sea Grain Initiative, could proudly announced that prices had come down five months in a row, and that the Food Price Index, which measures the monthly change in international prices of a basket of food commodities, had decreased nearly 14 per cent from its March peak.
According to UN estimates, the Initiative has indirectly prevented some 100 million people from falling into extreme poverty.
However, on Saturday Russia announced that it was suspending its involvement in the deal, citing an attack the same day on ships in the Ukrainian port of Sevastopol in the Crimean peninsula, which was annexed by Russia in 2014.
The move reportedly took traders by surprise, and raised fears of another steep rise in food prices. Arif Husain, Chief Economist at the World Food Programme (WFP), reportedly warned that Russia’s decision poses a danger to a large number of countries, and should be resolved as soon as possible.
Mr. Dujarric said that the Secretary-General is continuing to engage in intense contacts aimed at ending the Russian suspension of its participation in the Initiative.
This engagement, he explained, also aims at the renewal and full implementation of the initiative to facilitate exports of food and fertilizer from Ukraine, as well as removing the remaining obstacles to the exports of Russian food and fertilizer.
29 Oct. 2022
UN chief reaffirms support for deals to ensure export food and fertilizer from Ukraine and Russia. (UN News)
UN Secretary-General António Guterres has reaffirmed his “unwavering commitment” to agreements aimed at ensuring that grain and fertilizers from Ukraine and the Russian Federation reach global markets at the speed and price needed to avert a global food crisis and ensure food security.
The Black Sea Grain Initiative, an agreement brokered by the UN and Türkiye in July, which was set up to reintroduce vital food and fertilizer exports from Ukraine to the rest of the world, is due to run out in the second half of November, but it can be extended, if all parties, including Russian and Ukraine, agree.
In a statement, Mr. Guterres promised that the UN is continuing its active and constant engagement with all parties towards that goal. “We underline the urgency of doing so to contribute to food security across the world”, he said, “and to cushion the suffering that this global cost-of-living crisis is inflicting on billions of people.”
“If food and fertilizers do not reach global markets now, farmers will not have fertilizers at the right time and at a price they can afford as the planting season begins, endangering crops in all regions of the world in 2023 and 2024, with dramatic effect on food production and food prices worldwide. The current crisis of affordability will turn into a crisis of availability.”
Russia halting Ukraine grain exports will most heavily hit those already facing extreme hunger, warns IRC.
The International Rescue Committee (IRC) is warning of the catastrophic consequences of Russia suspending its participation in the UN-brokered grain deal. With the war in Ukraine altering the global patterns of food production and supply, the inflation in low-income countries has surged to almost 90%, with 345 million people estimated to experience acute food insecurity this year. Critically, as tens of millions of people continue to experience extreme hunger in East Africa and Somalia teeters on the brink of famine as a result of the worst drought in 40 years, the renewed blockade will continue to impede the import of 80% of grain imported from the Russia-Ukraine region, thereby driving further hunger.
Shashwat Saraf, IRC’s East Africa Emergency Director, said:
“The renewed blockade is prompting grave concerns about the growing global hunger crisis, especially in East Africa where over 20 million people are experiencing hunger or in places like Yemen which relies on Russia and Ukraine for almost half its wheat import and where over 19 million people need food assistance. The UN-brokered deal brought a ray of hope - now this hope is shattered again - the recent suspension of grain exports will hit those on the brink of starvation the most. Like Yemen, the East Africa region relies on Russia and Ukraine for much of its wheat imports and as Somalia teeters on the brink of a catastrophic famine, a further disruption of critical grain exports could push Somalia over the edge by impacting affordability and availability of grain within the region.”
According to official reports, since lifting of the blockade on 1 August, 8.5 million tonnes of critical foodstuffs has been shipped from ports to countries in Africa, Asia and Europe, unlocking almost half of wheat previously held at the Ukraine's Black Sea ports. Amidst the recent escalation of violence in Ukraine, the IRC calls on the international community to ensure regular and predictable food shipments urgently reach those who need it most, including those on the brink of starvation in regions such as East Africa and Yemen.
Renewed shipments will again provide a fraction of ease to the world’s most vulnerable, but a joint global response and focused attention and resources for areas most at risk of famine and hunger including those in East Africa is critically and urgently needed. With a fifth failed rainy season on the horizon in East Africa, it is imperative that families most in need can access nutritious food.
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