The boom in unemployment
By
Ignacio Ramonet Read Spanish Version
Le
Monde Diplomatique
This
needs to be repeated: the crisis still hasn’t touched bottom. And the
next news will be worse. The stock exchanges continue to plummet. The
rescue plans fail, one after another; they don’t keep the world’s
main economies — the U.S., Japan, Germany, Britain, France, Spain —
from spinning into a recession. Large or small, the banks find
themselves in an objective bankruptcy.
Unless
banking is urgently nationalized everywhere, the Western financial
system could collapse.
The
worst is that this new phase of the crisis can drag down a country.
Ireland, for example, which has plunged into a grave recession, with
a banking sector that has been pummeled and a public deficit that
could account for 11 percent of the GDP. Other countries — like
Latvia, Estonia, Ukraine and Pakistan — might declare themselves
bankrupt.
The
economic hurricane has wiped out one fourth of the world’s wealth and
is causing, almost throughout the world, the closing of factories, a
boom in unemployment, an escalation of protectionism, and the
radicalization of social protests.
The
cause of poverty, anguish and exclusion, unemployment spreads like
leprosy. In the United States, the recession has done away with 3.6
million jobs at a speed never before seen. Half of the jobs were lost
in the past three months. The number of jobless is up to 11.6
million. And giant firms — such as Microsoft, Boeing, Caterpillar,
Kodak, Pfizer, Macy’s, Starbucks, Home Depot, SprintNextel and Ford
— plan to drop 250,000 employees in 2009. Consumer confidence has
plunged.
In
China, the drop in exports has provoked a sinking in factory
production and mass dismissals. More than 20 million workers from the
countryside have lost their jobs. In India, 500,000 jobs were wiped
out between October and December 2008.
In
France, one statistic summarizes the magnitude of the quake: the
number of hours of work stoppage went from 200,000 in January 2008 to
13 million in December. [1] The number of unemployed has gone beyond
2.5 million. For workers under the age of 25, the rate of
unemployment reached 20 percent in 2008.
In
Spain last January, the number of layoffs rose by almost 200,000; the
unemployed total more than 3.32 million. In 2009, the paralysis will
affect 850,000 more workers, bringing the number of jobless to more
than 4 million. In more than 825,000 homes, every member of the
household is unemployed.
In
the European Union, the number of jobless is 17.5 million, 1.6
million more than one year ago. The loss of 3.5 million jobs is
predicted for 2009. In 2010, unemployment will rise to 10 percent of
the active population.
According
to the International Labor Organization (ILO), the number of
unemployed in South America will rise by 2.4 million in 2009. While
the Mercosur countries (Argentina, Brazil, Paraguay and Uruguay) and
Venezuela, Bolivia and Ecuador could weather the storm, several
Central American nations, plus Mexico and Peru will have a hard time,
because of their ties to the U.S. economy.
The
ILO’s director general, Juan Somavía, estimates that the number of
unemployed in the world (190 million in 2008) could rise by 51
million in 2009. And he recalls that the number of poor workers
(people who earn barely 2 euros per day) will rise to 1.4 billion, or
45 percent of the world’s active population. [2]
The
brutal boom in unemployment naturally provokes the return of economic
nationalism. Russia has decided to raise the fees for imported cars
and has placed import fees on poultry and pork. Ecuador has taxed
imported mobile phones and transportation equipment. India has
announced that it will ban, for six months, the importation of toys
from China. Argentina and Indonesia have created new import fees to
limit some products.
Greece
has prohibited its bank to come to the aid of branches in other
Balkan countries. The United States has decided to back the Big Three
(Chrysler, Ford and General Motors) but only so they can rescue their
plants in the U.S. mainland. It will not aid the foreign
multinationals (Toyota, Kia, Volkswagen, Volvo) established in its
territory. France and Sweden have announced they will condition their
aid to the automotive industries; only the plants located inside the
country will be supported.
France’s
Minister of the Economy, Christine Lagarde, declared that
protectionism could be "a necessary evil in times of crisis."
Spain’s Minister of Industry, Miguel Sebastián, urges Spaniards to
"consume Spanish products." And in Germany, a major
exporter, a recent survey showed that 78 percent of the small and
middle entrepreneurs favored protectionist measures. [3]
This
burgeoning of economic nationalism is provoking outbursts of
xenophobia. In Britain, one the worst affected countries (labor
inactivity is expected to grow by 2.8 percent), thousands of energy
workers shouting "U.K. jobs for British workers!" went on
strike to protest the hiring of Portuguese and Italian workers at the
Total oil refinery in Lindsey, Lincolnshire. Hundreds of thousands of
Polish workers in Britain were "invited" to return to their
native country. The same is happening in Ireland, where anti-Polish
feeling is growing apace with the unemployment index. In Italy,
Romanians are being expelled without hesitation. And everywhere the
right of residence of legally established immigrants is being
questioned.
In
numerous countries, major entrepreneurs or bankers who demand (and
obtain) million-dollar assistance from the government are taking
advantage of the crisis to fire workers and reduce costs. In the
current context of the uncontrolled spread of unemployment, that
attitude infuriates workers, so social protests multiply. The unrest
already has caused the fall of the governments in Belgium, Iceland
and Latvia. Demonstrations have taken place in France (a national
strike took place Jan. 29), with violent confrontations in Guadeloupe
and new demonstrations set for the 19th of this month. The European
Union’s most vulnerable countries — Hungary, Bulgaria, Greece,
Latvia and Lithuania — also have seen demonstrations and
disturbances more or less violent.
To
citizens, unemployment is one of the worst forms of repression; it is
a demonstration — in the flesh — of the violence of capitalism.
Therefore, the rage. Dark times are near. The concept of crisis is
not enough to explain the moment we’re living through. A change in
era. A mutation of values. Is there hope for justice and progress?
Ignacio
Ramonet is the editor of Le Monde Diplomatique.
Notes:
(1)
Sami Nair, "Xenophobia or a social Europe?," El
País ,
Madrid, 7 February 2009.
(2)
Le
Monde,
Paris, 28 January 2009.
(3) Time
Magazine,
4 February 2009.
