Is the crisis nearly over? Mixed signals

OECD is seeing some improvements in the global economy. Acting Chief Economist Jorgen Emeskov told the media last Thursday that recovery seemed to be arriving quicker than expected, but that economic activity would remain weak. This followed the annual meeting of Central Bankers held 12 days earlier in the US, commented on this blog (see http://fundingeducation.blogspot.com/2009/08/sustainable-global-recovery.html). The Financial Times leapt on the OECD’s cautious announcement with a front page headline: “G20 plans for stimulus exit”. But when G20 Finance Ministers met in London over the weekend to prepare for their Leaders’ Summit in Pittsburgh on 24-25 September they were more careful, saying stimulus measures had to be kept in place into 2010.

As the OECD released its Interim Assessment, TUAC’s Economic Policy Group worked on the Global Unions’ Statement for the Pittsburgh G20. Our statement, “The Pittsburgh Declaration”, underlines points referenced recently here, most of all that unemployment continues to rise, even as the financial sector begins to recover. “The collapse in employment … has become the single biggest threat to the economy”, we will say. The call from Global Unions will be “The G20 Summit must, first and foremost, be a Jobs Summit”.

Tensions are running high. After top OECD staff saw the working draft for our Declaration, specifically a criticism of IMF and OECD responses to public sector deficits and proposals to curb public spending (sounds familiar?), OECD Secretary General Angel Gurria invited TUAC General Secretary, John Evans, and Economic Policy Group Chair, Ron Blackwell, for a talk. When John and Ron returned to our group they said the talk had been positive, as Mr Gurria understood the support of TUAC affiliates for OECD involvement in the G20 process, but also understood that unions would be especially vigilant about OECD positions, as we will for those of other agencies. It was also understood that OECD will continue to support strongly the involvement of the ILO.

The Head of OECD’s Employment Labour and Social Affairs Directorate (ELSA), John Martin, also told the TUAC group that the Secretariat’s analysis was trying to take into account whether a recovery would begin soon, although he recognized that it is still “difficult to say”. John Martin’s Directorate is responsible for preparing a meeting of Labour Ministers from the OECD countries, to meet in Paris 28-30 September, one week after the Pittsburgh Summit. The Chairs of TUAC’s Economic and Education Working Groups, Ron and myself, will join the TUAC delegation to the consultations and an open forum on “How to help workers weather the storm”.

Education and training – keys to sustainable recovery

Meanwhile, a positive message coming through all the mixed signals leading up to the G20 Summit is that education and training is among the keys to sustainable recovery. One of the problems with the financial markets, Ron told our group, is that they operate much of the time within incredibly short time-frames, and fail to address long-term imbalances. Training strategies, on the other hand are inherently medium to long-term. One proposal being circulated within the US delegation, for Pittsburgh, is that the US host a meeting of Labour Ministers and top education officials early next year, with education and skills development as a major component. AFL-CIO backs this proposal, and EI will talk with US affiliates NEA (which joined EI at the TUAC meeting last week) and AFT (affiliated to AFL-CIO) about how best to marshall support for the US proposal.