A recent article by business
columnist Eduardo Porter in the “New York Times” was titled
“Americanized Labor Policy Is Spreading in Europe.”
This is what the “Americanization of
labor policy” means:
“In 2008, 1.9 million
Portuguese workers in the private sector were covered by collective bargaining
agreements. Last year, the number was down to 300,000.
“Spain has eased restrictions
on collective layoffs and unfair dismissal, and softened limits on extending
temporary work, allowing workers to be kept on fixed-term contracts for up to
four years. Ireland and Portugal have frozen the minimum wage, while Greece has
cut it by nearly a fourth. This is what is known in Europe as “internal
devaluation.”
“Tethered to the euro and thus
unable to devalue their currency to help make their goods less expensive in
export markets, many European countries — especially those along the
Continent’s southern rim that have been hammered by the financial crisis — have
been furiously dismantling workplace protections in a bid to reduce the cost of
labor.”
Cutting back on workplace
protections is sure to increase income inequality while shrinking the middle
class.
“The speed of change has
certainly been very fast,” said Raymond Torres, the chief economist of the
International Labor Organization in Geneva. “As far as I can tell, these are
the most significant changes since World War II.”
“While most of the debate over
Europe’s response to the financial crisis has focused on the budget austerity
enveloping the Continent, the comparatively unheralded erosion of worker
protection is likely to have at least as big and lasting an impact on Europe’s
social contract.
“It has a disastrous effect on
social cohesion and a tremendous effect on inequality,” argued Jean-Paul
Fitoussi, an economics professor at the Institut d’Études Politiques de Paris.
“Well-being has fallen all across Europe. One symptom is the rise of extremist
political parties.”
“Europe’s strategy offers a
test of the role played by labor market institutions — from unions to the
minimum wage — in moderating the soaring income inequality that has become one
of the hallmarks of our era.
“Inequality across much of
Europe has widened, but it is still quite modest when compared with the vast
income gap in the United States.
“The question is whether
relative equity can hold as workplace institutions that for decades protected
European employees’ standard of living give way to a more lightly regulated,
American-style approach, where the government hardly interferes in the job market
and organized labor has little say.”
This is a model that will ill-serve
Europe and which should shame our political and economic leaders. Translated,
it means that the rich get richer, the middle class shrinks, and the poor feel
hopeless.
The 1% say that charter schools and
Teach for America will close the gap that their policies created.
They know it
isn’t true, but it changes the subject enough to allow them to keep enlarging
their share of the pie.