Tuesday, October 19, 2010

Troubled Global Economies

Workers everywhere are reviling their governments anxious to cut back on spending strategies after the globally severe economic slowdown and stimulus action taken to ameliorate nations' struggles against mass unemployment and loss of consumer confidence. The unions have become grumpily militant as a result of governments like that of France, taking steps to reduce the impact of rising worker expectations and diminishing government ability to meet them.

Reversing the trend that had seen steady increases in workers' benefits is not an easy thing to do. Greece saw rampaging protests that turned violent and anti-government when it attempted to install its economic reforms. And France is still struggling mightily to cope with the trade union responses to President Nicolas Sarkozy's attempt to raise the retirement age from 60 to 62. In Iceland, workers are simply stunned at the failure of their false economy.

In Germany a blow-back of the financial collapse leading to high unemployment rates has seen a return of xenophobia, tangled with sentiments always simmering below the surface of polite society, leading to discrimination and overt symptoms of racism. What better target than immigrants? Since it is the presence of immigrants or refugees, from countries as diverse as South Africa, France, Spain and Germany that is held responsible for a lack of jobs.

Fragile national economies make for uneasy social times. At the best of times, when economies are flourishing, unions make their inroads, demanding reductions in workloads and increased wages, along with more benefits and time off for employees. During the worst of times, when nations find themselves groaning under the impossible weight of pension responsibilities, back-tracking on benefits becomes nigh impossible.

It is relatively easy to be generous; far more difficult to invoke national need and unity in the name of revoking entitlements once given.

The unemployment rate in the United States, traditionally the global leader in growth and viable economic stability, has reached almost 10%, an unheard-of height of social dysfunction, leading to huge numbers of bankruptcy claims and home foreclosures. In cities across the United States, municipal governments find it difficult to balance previously rich entitlements for their workers against the provision of social services in a tight economy.

Benefits packages for the employees of various States of the Union are hampering the ability to plan for renewed infrastructure, understandable when state payroll represents a 41% increase over similar jobs with Fortune 500 companies. New York City can barely finance its schools in view of the burden it shoulders to provide retirement benefits to ten thousand former policemen, retired at age 50.

In California the average corrections officer earns $70,00 annually, plus overtime, while teachers earn significantly less. Prisons are well funded, schools are not. Buffalo has seen a reduction by half of its population in the last fifty years, yet its public working staff is as large as it was with twice the population it currently has. Worker rights become unassailable when unions financially support the candidacy of state leaders who then become indebted to them.

In Canadian cities taxpayers are being squeezed. In good times generous programs were undertaken, and in bad times they still have to be paid for. City budgets are over-strained, and much of that is due to salaries, with too many public employees on the payroll, too many duplicate and costly programs, and too much wastage. Municipalities are facing elections and it's the rare mayor who will be re-elected as voters hope for better management leading to better times.

In Toronto, the left-leaning mayor who many felt was simply a stooge for municipal unions is facing the certainty of being replaced by a more practical-minded right-of-centre politician whom Torontonians in their fatigue with transit and garbage collection strikes, are anxious to offer an opportunity to. In Ottawa, squabbles over tax increases resulting in fewer services, are leading to a replacement of the incumbent.

It's a universal mess, with no nice and tidy end in sight, quite yet.

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