Sunday, March 26, 2017
Cloudy future for EU; Populism as the result of global economic failure; Gender equality at work may take years to realise
1 Cloudy future for EU (Jonathan Eyal in Straits Times) The past 60 years were about Europe's glory; the next 60 could well be about Europe's survival. The European Commission, the bloc's executive body, released earlier this month a White Paper identifying five "pathways" for the future of the EU. The Commission argued that EU governments could either carry on as they are now, concentrating on just a few areas of cooperation, or abandon all efforts at integration and just try to defend their single European market.
Carrying on as before after Britain leaves is not feasible, if only because the disappearance of Britain as a member-state - when it is the world's fifth-largest economy and responsible for paying about 12 per cent of the EU budget - will necessitate some painful adjustments inside Europe.
Concentrating on just a few areas of cooperation won't work either, because governments cannot agree on which areas are essential and which are desirable, or which matters are best done by the EU as a whole and which are better left to nation-states.
And just defending Europe's single market while abandoning everything else is also nonsense, since the single market is not an abstract expression of economics, but the outcome of political coordination. Abandon that, and the single market will collapse as well.
In reality, there are only two potentially feasible approaches if the EU is to survive: Either all remaining EU member-states agree to pool together even more of their sovereignty, or those countries willing to do so are allowed to proceed, while others stay behind, resulting in a so-called multi-speed Europe.
The reality is that the EU is stuck with its existing structures, which no longer answer its needs but cannot be modified. It is also stuck with a deep divide between a poor south and a rich north, and between its eastern and western halves, which have different attitudes and aspirations. The Union won't disintegrate. But it risks being paralysed in endless discussions about reforms that cannot be realised.
2 Populism as the result of global economic failure (Larry Elliott in The Guardian) Populism is the result of economic failure. The 10 years since the financial crisis have shown that the system of economic governance which has held sway for the past four decades is broken. Some call this approach neoliberalism. Perhaps a better description would be unpopulism.
Unpopulism meant tilting the balance of power in the workplace in favour of management and treating people like wage slaves. Unpopulism was rigged to ensure that the fruits of growth went to the few not to the many. Unpopulism decreed that those responsible for the global financial crisis got away with it while those who were innocent bore the brunt of austerity.
Anybody seeking to understand why Trump won the US presidential election should take a look at what has been happening to the division of the economic spoils. The share of national income that went to the bottom 90% of the population held steady at around 66% from 1950 to 1980. It then began a steep decline, falling to just over 50% when the financial crisis broke in 2007.
Unpopulism was touted as the antidote to the supposedly failed policies of the postwar era. It promised higher growth rates, higher investment rates, higher productivity rates and a trickle down of income from rich to poor. It has delivered none of these things.
Populism is seen as irrational and reprehensible. It is neither. It seems entirely rational for the bottom 90% of the US population to question why they are getting only 2% of income gains. It hardly seems strange that workers in Britain should complain at the weakest decade for real wage growth since the Napoleonic wars.
The good news is that the casting around for new ideas has begun. Trump has advocated protectionism. Theresa May is consulting on an industrial strategy. Even if the polls are right this time and Marine Le Pen fails to win the French presidency, a full-scale political revolt is only another deep recession away. And that’s easy enough to envisage.
3 Gender equality at work may take years to realize (Andy Campbell in Gulf News) The World Economic Forum (WEF) has predicted that it will take more than 100 years before the gender pay gap is closed. Even if we account for a large margin of error, this points to a sobering outlook for women in the workplace.
A major roadblock to improvement has been a lack of accountability for employers. Private organisations have historically only had to answer to themselves with regards to their hiring, pay and benefits approaches.
Some might argue that unless they impose sanctions on companies with a large gender pay gap governments cannot hope to effect change. However, this push for greater transparency should motivate organisations to tackle inequality in the interest of being viewed as an employer of choice and, one would hope, to help address wider gender issues.
Of course, fair pay is only one element of an equal opportunity workplace. Just as important are policies that allow male and female employees to thrive while enjoying a rewarding personal life. Programmes like shared maternity and paternity leave or flexible working schemes allow workers to focus on both their professional development and their families.
Importantly, they do not force women to bear more responsibility than men for raising their children and allow fathers to spend as much time with their newborns as mothers.