ILO Report Critical of Austerity Warns of Prolonged high unemployment

A new report from the ILO’s International Institute for Labour studies entitled Better Jobs For A Better Economy edited by Raymon Torres and researched and written by a team of economists and labour market analysts including some 13 individuals  has sharply criticized European austerity measures as having been damaging to employment. It is worth quoting a small passage directly from the  editorial introduction to the Report. (quoted courtesy of the authors and publisher)


In addition, as part of the policy shift, the majority of advanced economies

have relaxed employment regulations and weakened labour market institutions

(Chapter 2), and more deregulation measures have been announced. These steps

are being taken in the hope that financial markets will react positively, thereby

boosting confidence, growth and job creation.

However, these expectations have not been met. In countries that have

pursued austerity and deregulation to the greatest extent, principally those in

Southern Europe, economic and employment growth have continued to deterio-

rate. The measures also failed to stabilize fiscal positions in many instances. The

fundamental reason for these failures is that these policies – implemented in a con-

text of limited demand prospects and with the added complication of a banking

system in the throes of its “deleveraging” process – are unable to stimulate pri-

vate investment. The austerity trap has sprung. Austerity has, in fact, resulted in

weaker economic growth, increased volatility and a worsening of banks’ balance

sheets leading to a further contraction of credit, lower investment and, conse-

quently, more job losses. Ironically, this has adversely affected government budgets,

thus increasing the demands for further austerity. It is a fact that there has been

little improvement in fiscal deficits in countries actively pursuing austerity policies

(Chapter 3).

That pretty well says what needs to be stressed. Have a read of the full report its available on the internet.

About haroldchorneyeconomist

I am Professor of political economy at Concordia university in Montréal, Québec, Canada. I received my B.A.Hons (econ.&poli sci) from the University of Manitoba. I also completed my M.A. degree in economics there. Went on to spend two years at the London School of Economics as a Ph.D. student in economics and then completed my Ph.D. in political economy at the University of Toronto. Was named a John W.Dafoe fellow, a CMHC fellow and a Canada Council fellow. I also was named a Woodrow Wilson fellow in 1968 after completing my first class honours undergraduate degree. Worked as an economist in the area of education, labour economics and as the senior economist with the Manitoba Housing and Renewal Corporation for the Government of Manitoba from 1972 to 1978. I also have worked as an economic consultant for MDT socio-economic consultants and have been consulted on urban planning, health policy, linguistic duality and public sector finance questions by the governments of Manitoba, Saskatchewan,the cities of Regina and Saskatoon, Ontario and the Federal government of Canada. I have also been consulted by senior leaders of the British Labour party, MPs from the Progressive Conservative party, the Liberal party and the New Democrats on economic policy questions. Members of the Government of France under the Presidency of Francois Mitterand discussed my work on public sector deficits. I have also run for elected office at the municipal level. I first began to write about quantitative easing as a useful policy option during the early 1980s.
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