Do you feel you are living better than 5 years ago? Do you think Government is doing all it should to protect its citizens? Or is it providing for the big companies and multinationals instead? Is austerity a necessary step towards a better growing economy or just an excuse to devaluate labour salaries while companies’ profits rise?
For many years societies fought for their labour and social rights through mobilisations in the streets and working places. Unions were created to guarantee minimum safety rules at places of work and minimum salaries that allowed a decent life. Economies were growing bit by bit through a moderated consumerism, but it was not fast enough for some. Mrs Thatcher was the first proposing in the 70’s that governments shouldn’t provide subsidies or benefits for jobs; she reduced the amount of public jobs available whilst privatising and deregulating many industries in particular the financial sector, under the pretext that companies know what is best and they can regulate themselves. USA (with Ronald Reagan first and Alan Greenspan and others repeatedly using the same argument) and many industrialised countries followed that approach. However whilst they were promoting this change as a necessary step to guarantee fast economic growth, people failed to realise that companies base their existence in obtaining profits at all cost and without rules to control their actions a voluntarily morality check wouldn’t do the trick. Banks, one of the deregulated industries that has impulsed the world economy over the last 20 years is the perfect example; they started creating their own products and marketing them as if they were the safest thing on earth and anyone that wouldn’t invest in the stock market or a mortgage was not of this age.
Then Leman Brothers fell, all banks took their investments away leaving “poorer” banks with huge holes provoked by foreign banks over exposure that governments decided to cover, because after all they were playing with everyone’s money. Now that workers have bailed them out and their deficits have come up to the surface it seems they have found a new way of filling their void and help multinationals at the same time which are their main partners in the world economy. They are obtaining more profits while consumerism stays the same by reducing worker’s salaries and benefits so they could pass those savings into their pockets as profits. A clear example of this strategy is strongly happening in South Europe with examples across the continent.
Due to a lack of stimulation of innovation and industry South of Europe based all its economy around the housing and construction bubble, which was the easiest option in our culture since everyone prefers putting the same money towards owning the house rather than renting and it is easier for politicians letting the bubble grow instead of finding ways of developing innovative industry like Northern countries which requires more thinking. In Spain in particular, for 30 years our politicians had been selling public industry at a low price, building disproportioned infrastructures to give contracts to big construction companies keeping a part of the investment for themselves, privatising all they could and keeping a close relationship with multinationals and banks modifying labour and social laws to their benefit. When the financial crisis started and our banks lost all the foreign capital that they had been misusing to invest into more houses, we had to bail them out. This investment of public money hasn’t been returned nor is flowing into the economy (as we were promised to give credit to small companies) it has stayed within the banks so they could cover their indecencies and pay back their creditors. Now since millions are out of job companies with politicians’ help are blaming all our problems on our lack of productivity, saying that we were living above our possibilities and they need to cut our salaries and the benefits we had paid for during years with our taxes to pay for the financial debt and become competitive. All with the excuse stated in an Excel document that to have a prosper economy national debt should be under 3% of GDP. The same document that a University student was able to dismantle finding inconsistencies in the method of calculation; history has shown that in a time of reduced private investment governments are the ones that have to invest in the economy to provide jobs for people and for private companies, otherwise less jobs lead to less demand, which leads to less jobs in an infinite down way spiral.
Everyone from a Southern European country would admit that we are not as organised as in the North. We work many hours a day but we don’t manage our work as efficiently as we could; partly because we are quite good at improvising at the last minute and we rely on that gift to loose a bit of time and then do everything the last days and partly because while North European societies were learning management methodologies for projects (PRINCE2, PMBOK) or for processes (Six Sigma, Lean) most of South European companies decided not to invest in high technology nor training for their employees, assuming that they would get efficient by force of working less people the same amount of work instead of learning efficiency techniques. If the root of the problem is our productivity, why aren’t we trained on how to improve our work instead of devaluating our salaries and make us poorer?. If the reason is that we lived above our possibilities, why there is no punishment for banks lending above their possibilities and giving loans to people that clearly were not going to give it back? Why there hasn’t been implemented any new strong regulation that prohibits this from happening again? People spend because banks gave them loans even to go on holidays, and banks gave it to gain more profit not to make a favour to a greedy person (that leaving a side the millions of people that got a loan to pay normal things because they live on a minimum wage that is not enough for the cost of living nowadays). I would like that everyone had common sense but not everyone has the same level of intelligence or self-control. Governments should regulate industries to protect societies from big bullies like banks or multinationals and silly greedy people that spend more than they have or want to steal another’s savings.
One can conclude that multinationals want cheap working labour in Europe; governments scared under the perspective of all companies outsourcing their jobs to developing countries accept these new measures and apply them. At the end this is a problem between rich and poor. Until there are no poor countries willing to accept any deal because a bad deal is better for their economy than no deal, industrialised countries will have this dilemma. That doesn’t mean there aren’t other solutions. I wouldn’t suggest that people have to stop buying from those companies because that would imply that our shopping list would become much more expensive, and being realistic we have to look for our money. But there is something that would force companies to treat every country with more respect: governments could demand that every company that wants to sell its products in their country must have a manufacturing facility in that country and apply the same selling prices in all countries with similar GDP to avoid they inflate the price and pass on the cost of production in that country to the buyer. This would work for final products such as clothing; for other products as groceries another measures could be put forward like requiring distributers to invest part of their profits in each country where they sell because not every country can grow potatoes but we all consume them. To guarantee that companies provide national decent wages while selling at a competitive price the law should include the obligation of doing so unless they have had four consecutive quarters of net loss, in which case a new salary could be negotiated always with workers approval and being applied to all roles, to minimise job cuts or depreciation of low skilled jobs as unique measure. This way we are also protecting companies profits allowing them to renegotiate and also workers. As for banks and remaining deregulated industries, they need to be regulated again strongly in every country to guarantee they grow applying economic principles instead of dubious techniques.
For some this may be an interventionist state, maybe some called it communism or something worse. After this crisis and all the suffering is bringing to millions of people I think it is better having a government protecting its working force’s rights to a proper salary and decent way of life rather than companies using salaries and prices only to their best convinience. We have to keep in mind that companies earn because we buy, we should use our power as buyers and stop being taken advantage of, with companies taking our money from their sells and now from our salaries while we are making them profitable. Otherwise we will keep transferring wealth from the middle and working classes to the elites until there are only two classes, very poor and very rich.