01 October 2010

Foule esclave, debout, debout

The International Labour Organization has released its annual World of Work report for 2010, highlighting the impact the current global economic crisis has had on the workforce and drawing particular attention to the increasing risk of (and actual) civil unrest in developed economies arising from the various measures undertaken by national governments in response to the crisis, and particular attention is drawn to Ireland.

The report analyzes instances of social unrest and determines that:
"Higher risk of social unrest is associated with higher income inequality ... Moreover, experience from past economic downturns shows that low-income households (lower percentiles in income distribution) are the ones most severely affected by a crisis. Rising unemployment causes the bottom of the earnings distribution to fall off relative to the median, which in turn increases inequality in earnings (Heathcote et al., 2010b). In the absence of targeted social measures to cushion the fall in earnings for these households, income inequality could worsen.

Government and private transfers, such as unemployment insurance, welfare and pension income, are some of the counterbalancing sources of income that tend to increase when earning fall, thus damping the increase in income inequality.

An original analysis, using a methodology developed for this report, shows that the risk of social unrest is highest with increase in unemployment rate (see figure 2.7). For example, a 1 unit increase in unemployment increases the odds of being at higher risk of unrest by a factor of 1.2. The second important contributor is income inequality, as measured by the Gini coefficient. A 1 unit increase in Gini coefficient increases the odds of being at high risk of social unrest by 1.1. Decline in GDP does increase the odds of unrest, but the effect is weaker compared with unemployment and income inequality. A 1 unit decline in percentage change in GDP increases the odd of social unrest by 0.7. The findings presented in this section reveal that a job-rich recovery is the way to reduce social tensions and lower the risk of unrest.

Interestingly, among the advanced economies, the ones with the biggest increases in unemployment rates also saw larger proportions of people reporting declining quality of life (figure 2.8). For example, Ireland and Spain, which had the largest increases in unemployment rates among the advanced economies, had the largest proportions of people who said that their lives were getting worse. The story is similar for the United States. In general, pessimism about the economic future is most prevalent in countries with high rates of unemployment."
Thus the UN is clearly drawing a link to cuts in the basic protections of a welfare state as the main triggering actions for widespread social unrest in developed economies where there exists substantial levels of inequality in wealth distribution. Given that Ireland has possibly the greatest levels of wealth inequality in the EU and, as the above chart illustrates, a population that are clearly aware of this and unhappy with the situation, it would not be unreasonable to suggest that the potential for major unrest here is greater now than at any period in our recent history.

Its a good thing that the government doesn't have any more bad news for us, news that will potentially cripple our economy for generations to come.


The ILO report also charts existing documented instances of social unrest between 2009 and 2010 in developed nations, as illustrated below:

While I'm not sure what instances of "Violence or property damage" they are referring to, unless they are counting the half-hearted attempt by the SWP to storm the Dail in May, but the public protests against the austerity measures and the protests against employers are both well covered by last years Teacher's marches and the general union-driven Public Sector national day of protest. Conspicuous in its absence is a more general protest against the Government's response to the crisis, though I imagine as we get closer and closer to the December budget, our 4th in two years, we might just see some change in that.

The latest MRBI poll suggests that 61% of the population want Brian Cowen to step down, with a further 57% demanding an immediate election in such an event, but to be honest no-one in the Government is going to pay a blind bit of notice to this, or any other poll. The unique aspect of Ireland's crisis is two-fold, the complete disregard with which the populace is held by the political leadership, and the passivity with which the populace have reacted. The Government acts as if it is no longer accountable to the people because the people do not aggressively hold the Government to account.

By the time the outstanding by-elections are held in 2011, the Government will have prevented the citizens of three constituencies from having their voices heard for almost two years. This clearly illustrates the contempt that the Government holds for both the will of the people and the mechanisms of a functioning parliamentary Democracy. The only way that the Government will listen to the voices of the citizenry is if those voices emanate en masse from the street.

However on the day of EU-wide protest over 70% of the Spanish workforce went out on strike, here at home we could barely muster 1,500 people to march on the Dail. To echo Fintan O'Toole's thesis that the worst affected always leave Ireland, rather than stay and fight, The Guardian today reports that an expected 100,000 will leave the country by 2012. If even half those future-emigrants went on the streets, and stayed on the streets, and stood shoulder-to-shoulder with their Public Sector and Union companeros y companeras as has happened in the rest of Europe then true change, and radical change, would occur.

Eighteen months ago we joked that the only difference between Iceland and Ireland was one letter and eighteen months. The Icelanders took to the streets, their government bowed to the pressure and resigned, and now eighteen months later their economy is stronger and well on the way to recovery, and the politicians that enabled the crisis are facing criminal charges. We, however, are in a situation so dire not even the worst nay-sayer or doom-monger could have predicted it.

The time for passive moaning and bitching over pints and on the airwaves is long over. Our nation is being called to the streets, but do we have the collective strength to act or will we all flee as individuals?

Depressingly, I'm already pretty sure I know the answer.

(and yes, these last few bits do sound a bit pompous and overblown, but in my defense I have had possibly one too many coffees this morning. Still, seriously, what are ye all waiting for? Take to the streets now folks, and stop waiting for someone else to make the first move. Seriously, off ye go now...)

Update: Well, it looks like I spoke too soon on the whole "Iceland being on the road to recovery" thing, for a few hours after I wrote this reports started coming in about protesters disrupting the opening of the Icelandic parliament today, hurling eggs at MPs and the Prime Minister. About 2,000 people took to the streets of Reykjavik outraged over the new Government's handling of the ongoing financial crisis, and more specifically the fact that to date only the former Prime Minister Geir Haarde has been charged for his part in the events that led to Iceland's financial crash, the citizenry want to see many more politicians held accountable.

2,000 people out of a population of 320,000 were angry enough to take to the streets, and out of our 4.5 million we couldn't even manage more than 1,500. Iceland's former Prime Minister is charged with criminal negligence, ours sits in a kitchen cupboard in an ad for a tabloid newspaper, while remaining a serving TD.

Eighteen months on and there is way more than a single letter between us and Iceland.

Way more.

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At 4:59 pm, Blogger Kate said...

Great minds - I had an idea on the drive from Dublin - I needed something to keep me awake while driving through the rain at 5.30am! A Real Idea - but I need your help. I'll phone you this evening. Kate


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