Davos: Unions warn of unrest

A leading trade unionist attending the World Economic Forum in Davos has warned that the current wave of social unrest roiling north Africa may spread to Europe unless governments get to grips with rising joblessness.

Philip Jennings: UNI global union

Speaking on the sidelines of the annual elite gathering at the weekend UNI global union secretary-general Philip Jennings observed that the frustration born of chronic unemployment was one of the main drivers behind the uprising that unseated former Tunisian president Zine El Abidine Ben Ali.

Mr Jennings said that with unemployment rates averaging around 10 per cent in European Union member states governments should reconsider their "socially unacceptable" austerity policies and form a new social contract with workers.

"The financial and business elite have acted like a huge suction pump and taken a great deal of wealth being produced. The middle class is shrinking into a rump, while a plutocracy at the top are cut off in their own countries," he noted.

“The G20 priority must be jobs. We need inclusive growth and fairness to push up the share of wages as a share of income,” Jennings said. “Sarkozy needs to find his jobs mojo for the G20 process.”

He said that there should be a new bargain and unions should have the ability to push up the share of wages through collective bargaining.

"Every worker should have an adequate social protection floor,” he said. “This is affordable. We need active labour market policies."

Jennings was surprised to hear a private equity spokesperson singing the praises of the worker representation on supervisory boards in Germany, which he said helped companies make better decisions.

He said that it was unacceptable that in the last 20 years in the US, 56 percent of all income gains went to the top 1 percent of wealthy Americans, and more than a third went to the top one-tenth of one percent.

"The Western economic model that we’ve seen of this reliance on the market has failed. We need a new inclusive model of economic development," Jennings said. “It is unsustainable."