The IMF and the International Labour Office (ILO) Organization come to hold a joint Summit, the first of their history, to which Terra Nova was invited to Oslo. The two institutions have taken the alarm: mass unemployment could well become the next plague of globalization.
The figures are alarming. They are the consequence, of course, the financial crisis, which has metastasized in crisis economic and social. Unemployment increased by 30 million people since 2008, reaching today 210 million, or 7 of the world's active population. Three-quarters of this increase are located in developed countries, with a leap of 3 points of their rate of unemployment (against 0.25 point only in emerging markets). It is also the result of a dynamic global demographics. The labour market will have to absorb close to 500 million new entrants in the next decade.
The destruction of the global human capital risks are serious. American studies, cited by the IMF and the ILO, emphasize long-term losses. A licensed person is thus: a fall of 20 on average over the whole of his future income. a loss of one year of its life expectancy; a decrease of 10 of the revenues of his children.
These risks are critical to young people. The youth unemployment rate is already particularly high: 13 at the global level-80 million young people around the world are unemployed. They are the variable of adjustment of the crisis. The youth unemployment jumped by 20-25 France. In Spain of 20 to 40! And 50 million additional will therefore reach every year on the job market. As Dominique Strauss-Kahn in Oslo lurks the specter of a "lost generation".
What to do to avoid it The recommendations agreed in Oslo are "non-conventional", as we say coyly in the jargon of international financial institutions.
1. The support of the financial economy must continue. The budgetary consolidation necessary to avert the over-indebtedness of the States, must be gradual. It must not commence before 2011, or exceed 1.25 point deficit, under penalty of squeezing the resumption of growth.
2. The coordination of economic policies during the crisis to avoid a large recession of 1930's type. It must continue to lead the recovery and avoid any relapse. Keynesian economics in a single country struck by globalization. It rises in international cooperation. At this yardstick, the loss of dynamics of the g-20, obvious at the last Summit in Toronto, does not concern. The French Presidency of the G20 in 2011, will be crucial.
3. The mobilization of a new iconoclastic tool should be considered: wage policy. The last thirty years are indeed marked by a major phenomenon: the stagnation of wages of the middle classes. The distribution of value added was captured by the capital against labour: a point of additional growth does more than 0.75 point of salary increase, wages are more evolving at the pace of productivity. And in wages, the inequalities in the distribution of income have soared. In 1980 in the United States, the richest 1 concentrated 8 of revenues; now they cost 24. Beyond the issues of social justice, these imbalances are one of the causes of the Western economic slowdown. They explain the lifelessness of consumption, and therefore growth. They have been unsustainable policies of artificial maintenance of the purchasing power of households: via the private debt and subprime in the United States; via the public debt and social benefits in Europe. Wage compression has been the main tool for external competitiveness for some large exporters, China and Germany countries, leading to massive external surpluses and destabilizing global imbalances. Safeguard the purchasing power of the middle class through a series of levers: activation of the minimum wage, strong unions and negotiations successful to ensure a dynamic wage grid and of the highest income tax distribution. The ILO and the IMF invited especially countries high external surplus, Germany and China in mind, to increase their demand internal by an increase in wages
The international economy has long been marked by the "Washington consensus", a neo-liberal mix combining fiscal discipline, liberalization and unilateral deregulation, wage discipline. Current thoughts are emerging post-keynésiennes requirements: budget voluntarism, international coordination, wage expansion. The emergence, perhaps, a new "Oslo consensus."
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