Unions to world leaders: Choose “jobs” or “social collapse”

GENEVA, Switzerland – The world’s unions are delivering a strong message to international political and business leaders: Create jobs – millions of jobs – or face the consequences.

Those consequences include everything from a widening income chasm between the rich and the rest of the world to a social collapse, according to a top world union leader, who in turn is backed by a report prepared for the business and political leaders, who will meet Jan. 25-29 at the World Economic Forum in Davos, Switzerland.

Global Risks 2012, released Jan. 11, paints a gloomy picture of the current and future world economy. Philip Jennings, General Secretary of UNI, the international global union organization, says responsibility for pulling the world out of its prolonged economic slump rests squarely with private capital and public investment in the U.S.

The rest of the world neither developed the right policies nor created the political pull to drag the globe and world workers out of the recession, Jennings told Press Associates Union News Service in an exclusive telephone interview from Switzerland.

Jennings is the top union leader who will present labor’s findings at the meeting in Switzerland to both labor ministers from the G-20 – the 20 richest world economies – and to G-20 presidents, prime ministers, and leading business executives.

He says all of them must unite to create jobs, like they did in 2008 to pull the world back from the brink of a second Great Depression, after the financial collapse. The report, prepared by the World Economic Forum’s own staff, says the world needs 80 million jobs to get back to pre-crisis levels of employment, and 600 million over the next decade.

U.S. economists say even though the U.S. economy has created three million jobs, it needs 10 million more. Jennings told PAI that business must invest to provide them.

“What we’re seeing right now isn’t working,” he said, referring to government fiscal retrenchment, tax hikes, and job cuts in European countries and the U.S. “It would be good for your country” and the world “if people raised the question of why U.S. businesses are sitting on $2 trillion” in un-invested capital.

“Your housing system is in trouble, your infrastructure is of third world quality, your unemployment is high. Why aren’t they doing anything about it?” he asked of U.S. businesses and officials.

The Obama administration offered a job-creation package, including rebuilding infrastructure, extending jobless benefits, retrofitting buildings for energy efficiency, and funneling money to state and local governments, all of which organized labor strongly supports.

But the GOP House majority and Senate GOP filibusters stymied all those measures, except jobless benefits. In a separate interview, AFL-CIO Legislative Director Bill Samuel gave a mixed outlook for progressive legislation this year: He said a two-year infrastructure bill is possible and extension of jobless benefits is likely. The rest is not.

That leaves the problem up to private business, which has to weigh the risk – highlighted by the report – that the widening gap between the wealthy few and the rest of the world, along with lack of jobs, could lead to social unrest worldwide.

That’s especially important, Jennings noted, because the current worldwide recession “is not the normal type of business collapse” but caused by the widening income and wealth gap and by the shift of capital to financial instruments and away from productive uses, according to the report. That shift makes recovery harder.

“Does the business community have a grudge” against U.S. unions and workers?” Jennings asked. “We have to get increased job growth back on the world agenda, because that leads to increased consumption,” which leads to more growth.

Besides, he noted, workers’ wages still account for some 70 percent of U.S. gross domestic product, and workers’ consumption here drives the world economy. But U.S. workers’ purchasing power is drained by weakened U.S. unions, which cannot often demand a greater share for workers in the profits of production – though such a greater share would lead to more purchases, consumption, jobs, and investment.

“This is more of a political argument than an economic argument,” Jennings says. “But the U.S. business community has crushed the union movement – and America is paying the price in its economy.”

Jennings said he will tell the world’s political and business leaders there’s a possibility of worldwide social collapse. Academic research, he added, reveals three factors that could lead to such. One is income inequality itself. The second is governmental austerity. And the third is “the perception of unfairness, along with the perception of society not caring about it.”

“They have to realize that what we’re seeing now is not sustainable” for the world, its workers or for their own good, Jennings added. “There’s potential for social collapse as well.”

Photo: Labor leaders are telling world leaders that failure to create jobs can lead to the type of social unrest seen recently in the UK, Greece and elsewhere in Europe. Martyn Hayhow/AP Photos