Austerity and the Labor Movement

Michael Schiavone

Description

Austerity policies have become the new norm throughout both the developed and developing world. Indeed, austerity has become the new buzz word in the lexicon of politicians from across the political spectrum. At the same time austerity measures have been met with mass protest, the most famous example of which is the Occupy Movement. In the not-too-distant past it would have been the labor movement at the forefront resisting policies that arguably disproportionally target working people and their families. Throughout the twentieth century it was the labor movement that fought for all working people. However, there is an increasing assumption that the labor movement is unable to adequately defend workers from the onslaught of austerity measures. Austerity and the Labor Movement analyzes whether this assumption is indeed true. Examining the labor movements in the US, UK, Greece, Ireland, and Spain, Michael Schiavone provides a systematic explanation of the appeal of austerity policies in certain circles and why the labor movement in each of these countries has been largely unsuccessful in overturning such policies. He argues that the labor movement needs to make major changes and embrace social movement unionism if it has any hope to stop its decline and have any chance to successfully fight against austerity and neoliberalism more generally.

This book is freely available in an open access edition thanks to Knowledge Unlatched—an initiative that provides libraries and institutions with a centralized platform to support OA collections and from leading publishing houses and OA initiatives. Learn more at the Knowledge Unlatched website at: https://www.knowledgeunlatched.org/, and access the book online at the SUNY Open Access Repository at http://hdl.handle.net/20.500.12648/1706.
Acknowledgments

1. Austerity and the Labor Movement

2. Austerity in Modern-Day Europe

3. Austerity and the Labor Movement in the United Kingdom

4. Austerity and the Labor Movement in the United States

5. Social Movements, Political Parties, and Social Movement Unionism: Hope for the Future?

Notes
Bibliography
Index

Sujets

• Trade Unions
• Movimiento sindical
• Industrial relations
• Trade union
• Labour

Informations

• Publié par: State University of New York Press
• Date de parution: 10 novembre 2016
• Nombre de lectures: 0
• EAN13: 9781438462950
• Langue: English

Extrait

Austerity and the Labor Movement
Austerity and the Labor Movement
MICHAEL SCHIAVONE
Published by State University of New York Press, Albany
© 2016 State University of New York
All rights reserved
Printed in the United States of America
No part of this book may be used or reproduced in any manner whatsoever without written permission. No part of this book may be stored in a retrieval system or transmitted in any form or by any means including electronic, electrostatic, magnetic tape, mechanical, photocopying, recording, or otherwise without the prior permission in writing of the publisher.
For information, contact State University of New York Press, Albany, NY
www.sunypress.edu
Production, Eileen Nizer
Marketing, Michael Campochiaro
Library of Congress Cataloging-in-Publication Data
Names: Schiavone, Michael, author.
Title: Austerity and the labor movement / Michael Schiavone.
Description: Albany : State University of New York Press, [2016] | Includes bibliographical references and index.
Identifiers: LCCN 2016007687 (print) | LCCN 2016015174 (ebook) | ISBN 9781438462936 (hardcover : alk. paper) | ISBN 9781438462950 (e-book)
Subjects: LCSH: Labor movement. | Neoliberalism. | Economic policy. | Economic stabilization.
Classification: LCC HD4855.S35 2016 (print) | LCC HD4855 (ebook) | DDC 331.88—dc23
LC record available at https://lccn.loc.gov/2016007687
10 9 8 7 6 5 4 3 2 1
For Su Lan and Valentina
Contents
Acknowledgments
1. Austerity and the Labor Movement
2. Austerity in Modern-Day Europe
3. Austerity and the Labor Movement in the United Kingdom
4. Austerity and the Labor Movement in the United States
5. Social Movements, Political Parties, and Social Movement Unionism: Hope for the Future?
Notes
Bibliography
Index
Acknowledgments
I would like to thank the anonymous reviewers for SUNY Press who offered important recommendations on how to improve the manuscript. Moreover, one reviewer read the original draft and the revised version. This reader offered so many useful suggestions and criticisms that I cannot thank him or her enough. If every reviewer was like this person, academia would be a much better place.
Likewise, Michael Rinella, senior editor at SUNY Press, was great throughout. This was the second time I worked with Michael, and I cannot say enough positive things about him. As I wrote in the acknowledgments of Sports and Labor in the United States : “Every author should have an editor like him.”
As always, I would like to thank my wife Su Lan and our daughter Valentina. My wife is an inspiration and brings me so much happiness every single day. Without her, this book would have never seen the light of day. As the book was nearing completion, our daughter Valentina came into our lives. She is an incredibly smart and beautiful baby who can always make me smile. I dedicate the book to them.
Chapter 1

Austerity and the Labor Movement
Austerity is the new “buzz word” in advanced industrialized democracies in academia and the media, and more importantly in the lexicon of politicians from both the Left and the Right. Nowadays it is practically impossible to read a newspaper or watch the news without seeing or hearing the term. Austerity policies have become the new norm throughout both the developed and developing world. In 2009, the soon-to-be United Kingdom Prime Minister, David Cameron, infamously declared that the UK was entering an “age of austerity.” Austerity policies are now almost a given throughout parts of Europe and are the key component of International Monetary Fund’s structural adjustment programs. The United States government adopted austerity measures almost by stealth, whereas following its election in 2013, the Australian Liberal government attempted to introduce a range of austerity measures despite the relatively good health of the Australian economy. Austerity is now seemingly the rule rather than the exception, irrespective of the state of a country’s economy.
As to what austerity is and what it entails, the best definition comes from political economist Mark Blyth, who defines austerity as a
form of voluntary deflation in which the economy adjusts through the reduction of wages, prices, and public spending to restore competitiveness, which is (supposedly) best achieved by cutting the state’s budget, debts, and deficits. Doing so, its advocates believe, will inspire “business confidence” since the government will neither be “crowding-out” the market for investment by sucking up all the available capital through the issuance of debt, nor adding to the nation’s already “too big” debt.
Blyth goes on to quote University of Chicago academic and austerity supporter, John Cochrane:
Every dollar of increased government spending must correspond to one less dollar of private spending. Jobs created by stimulus spending are offset by jobs lost from the decline in private spending. We can build roads instead of factories, but fiscal stimulus can’t help us to build more of both. 1
However, what austerity entails can vary from country to country. The Economist claims that “A government can impose an austerity programme and still spend far more than it receives in the form of taxes; indeed the British coalition government had a deficit of 9.3% of GDP in the first year of austerity, a very high figure by peacetime standards. But because this was less than the 11% of GDP in the year before, it counts as austerity.” 2 Nevertheless, at its heart, austerity advocates believe that a government should intervene as little as possible in the workings of the market. In other words, austerity goes hand in hand with neoliberalism. But it is important to note that under austerity measures governments have generally been raising taxes on individuals. Tax increases are not normally associated with neoliberalism. While governments have been raising taxes, primarily personal taxes, they have also been lowering business taxes. It is the general public who must endure tax increases, not business.
While there is a plethora of news stories and the like regarding austerity, one area that is neglected is the labor movement’s response to austerity worldwide. This book will primarily examine the UK and US labor movement’s efforts against austerity. As we shall see, the labor movement is seemingly powerless in the UK and the US to prevent or even mitigate austerity policies. This has been a major detriment to the lives of the majority of people in both countries. While the focus will be on the UK and the US, the book will also provide an overview and analyze the labor movement’s attempt to overturn austerity in Greece, Spain, and Ireland. The common theme throughout is that, despite mass protests (though these are rare in the US), austerity has continued largely unabated in Greece, Spain, Ireland, the UK, and the US, and has caused much human suffering, while having a limited impact, even on the most optimistic account, on improving the economic well-being of each country.
Neoliberalism and Austerity
What led to the rise of austerity? For us to answer that question we first must understand neoliberalism. Neoliberalism, which is the ideology behind the latest rise of austerity, is a revival of laissez-faire liberalism. The proponents of neoliberalism argue that by removing government involvement from almost all aspects of managing the economy, and allowing the market to perform its “natural” role, this will result in economic prosperity for a country and its citizens. Thus, governments should privatize all public enterprises, slay the inflation dragon, liberalize trade and finance, and embrace austerity policies. Neoliberalism has become such a dominant political ideology that political parties all across the ideological spectrum have adopted neoliberal reforms in both developed and developing countries. Arguably the best analysis of what led to neoliberalism comes from Stephen Gill, who identifies four essential initiators of the neoliberal order: multinational companies, the transnational financial network, transnational elite networks, and the major capitalist countries, such as the US.
Gill argues that multinationals (MNCs) have the power to play off one country against another, and are thus able to get the best deal for their operations. They can do this because they have the power to decide the geographical location of production. They can shift funds from one country to another, or even open a production plant in one country while closing a production factory performing the same task in another. Furthermore, MNCs “through pricing and intra-firm trade, minimize tax liabilities and maximize global profits, implying a narrower tax base for governments than would be the case if production were organized along national lines.” 3 In other words, by threatening a government’s tax base, MNCs give governments an excuse to cut back on health and welfare services and thus please the international elites.
The second initiator of neoliberalism that Gill identifies is the transnational financial network. He argues that due to the mobility of capital, the “investment climate of one country will be judged by business with reference to the climate which prevails elsewhere.” This leads to governments being “pressured into providing an investment climate judged attractive by global standards.” In addition, the mobility of capital makes it easier for MNCs to play off one government against another, and even different regions in the same country, to obtain the best deal for themselves. 4 Of course, MNCs consider that the structuring of the “best deals” is often along neoliberal lines.
The third main initiator of neoliberal globalization,