25 April, 2013The International Monetary Fund labour market remedies pose a real threat to collective bargaining systems. Austerity policies, now more than ever, are being challenged after pro-austerity data proves to be based on flimsy facts.

In a recent report, the International Trade Union Confederation (ITUC) caution that IMF labour market advice, as part of the Troika, undermines democracy and risks economic dictatorship across Europe and beyond, and will create more divisions and social unrest, without producing any economic benefits.

The ITUC Frontlines 2013 report, "Ideology without economic evidence: IMF attacks on collective bargaining", was released in April and analyses the actions of the International Monetary Fund (IMF) that have weakened collective bargaining.

“The attacks on collective bargaining and unions also contravene international law. The ILO’s Committee on Freedom of Association reconfirmed that reforms of this nature in Greece infringe on core ILO Conventions concerning collective bargaining and freedom of association,” the report says.

Meanwhile, 2 Harvard economists acknowledged their study used by the IMF to justify austerity policies contained an important mathematical error. In recalculating the data, 3 other economists from the University of Massachusetts showed that data from certain years and certain countries were excluded from the average. When the complete data set is included, it shows that the average growth rate of countries with 90 per cent debt loads is 2.2 per cent — a significant difference from the 0.1 per cent decline posited earlier.

The ITUC, Global Unions and IndustriALL Global Union argue that sustainable growth, decent jobs for all, economic efficiency and greater equity are common ambitions which require comprehensive collective bargaining systems and strong labour market institutions in all countries.

“There is no economic justification for these labour reforms. Countries with little or no collective bargaining do not achieve faster growth, lower unemployment or better export performance than other countries. They do have greater wage inequality. The economic strategy being pursued by the IMF, and in crisis countries with its Troika partners, is deeply flawed,” said Sharan Burrow, ITUC General Secretary.

ITUC Frontlines Report April 2013

ITUC Frontlines Report Summary April 2013