Why the economy, wages, redistribution and the fight against unemployment must be at the heart of our program
The Socialist Party is it always late? Advocating revolution when social democracy was successful and now advocate social democracy when it fails. The change in policy statement of the PS revealed that he was more concerned with responding to past issues (remake of the battle Mitterrand-Rocard) than present and future. Winbacks says in his contribution that the future of socialism can not be moved from social democracy. Little economic analysis mainly the recent changes that make a consensus Social Democratic light can not be valid and that alternatives exist.
A. The end of economic growth and the correlation increased wages
In all the speeches of Democrats in the U.S., and should not be mistaken they are far left they are talking about rising inequality and problems of capitalism . Kruckman Paul, an American economist, continually recall that for the first time since the installation of the capitalist system there may be economic growth and increasing wealth without the average level of living of the majority population increases. ... worse poverty increases. There was a historical correlation between economic growth and slight decline in poverty and increasing wealth for the richest but also the middle classes. This correlation is reduced to nil.
can say without too much difficulty that the social democratic paradigm is constituted around the idea that the profits of today were the jobs of tomorrow ... it should promote economic growth by creating jobs and wealth . Except that here too it is no longer the case, there may be economic growth without increasing jobs and there may be economic growth in the short term future employment without the long term because the investment decline. We must keep in mind that the declining share of wages in the division of the VA is accompanied by a slight but significant decline in the share of investment in VA. Falling wages in no way allowed increased investment or job creation fostered by the least "cost" of work.
B. Capitalism under the weight of finance
1. In finance that funds to finance that punctures.
What is finance? Finance is required in the system builds. If someone has a great idea and wants to create a business that it is necessary to gain access to bank credit to finance it. There is a risk to the lender, it is normal that there is interest payable. But today
finance is not so much in debt and the capitalization which means that the financial control in fine company. It will repay a loan, the cost of risk is the interest rate and is known in advance. Conversely capitalization that even when there is more risk (after 5 or 10 years), the financier continues to grow, it makes money either against payment risk but only because he had money initially. Keynes's thesis has never been as relevant, the annuitant is the cancer of capitalism, it must be euthanized (this is not about excessive on my part but those of the bourgeois Keynes). The funding is no longer solely a matter for banks.
Secondly, financiers have significantly increased their rate of return is no longer the rate of 5 to 7 percent profit, but rather 14-15 percent per year. This means that perfectly profitable businesses but do not meet these objectives are pressured to do so. The only possibility for the company to meet these goals is to play on the only adjustment variable as are the employees and their salaries. Indeed one can not dismiss a machine or save the purchase of a machine necessary to produce when it is possible to make pressure on employees by relocating blackmail to continuously raise rates, deny any increase salary, without compensation board from 35 to 39 hours and of course dismiss. You end up with the heresy that a company wants to take the value at the announcement of a plan termination and that the decline in employment is presented as a benefit at meetings of shareholders as on bulletin it is presented as a lower cost.
Pension Fund, traps con *
Heresy with absolute when pension funds through share ownership or incentive wage workers are asked to vote in favor of lower costs. Do not forget that the number of shares under the offer and u the employee base is far from being the same, only if it is only because he can not afford. Second it cuts the link-wage work. Just one example: two people with exactly the same pay, but that one just had a child and not the other. One can only buy 50 shares because he spends most of her child and one can buy a 500. They work and their incomes are much different. Also note that normally in enterprise agreements can be a tendency to focus on wage agreements which will promote more then the lowest salaries, with the share it will pay those which have the highest salaries and thus have the largest numbers of shares that will be the biggest beneficiaries. The absolute horror that the pension fund ... American workers have little awareness of how they impact the lives of French employees. A worker who operates the other worker that is the genius of financial capitalism. It also demonstrates the importance of a public pension system and shows how a private system is inefficient because not only the issue of pensions is very poorly managed in the USA but the consequences for French employees are disastrous. Finally, we must stop to believe that these firms operates at lower cost than the state when they must also generate so much profit for shareholders.
* Pension Fund, trap stupid? Mirage of shareholder democracy. LORDON Frederick LIBER / REASONS FOR ACTION, Collection: REASONS FOR ACTION, 06/2000, 124
Ultimately the problem of finance is that instead of funding the capitalist system so that it prosperous she punctures.
2. Some lessons learned from the subprime crisis
can not speak of global finance without referring to the subprime crisis. This raises two central questions:
- moral hazard and banks or risk management
- why the subprime
wages of the majority of people in the United States have stagnated or even declined slightly while income ( and not SALARY) of the richest have extremely increased. If incomes are rising and some of the income of employees consisting only of wages stagnate or fall while employees face a downgrade. The explanation of why the U.S. economy continues to grow despite the increase in wages not lie in the importance of borrowing. We talk much of the public debt and we talk a lot less private debt. It is over 100 percent. It is still rated as the heresy of controlling public debt and private debt ... not when there are much more likely that a household facing bankruptcy a State (nobody serious believes that the state could go bankrupt ... which only happened twice in the history of France).
The subprime crisis is to allow households with insufficient incomes to become homeowners: interest rates are zero in the early years but rises sharply (up almost 50 percent) after 3 or 5 years. The idea is that the household is after 3 or 5 years left his home, sells, and affects the capital gain that may be important with the housing bubble. ... Except that the bubble has burst. As always with a bubble, the last to have retired before the bubble exploded and he who earns a lot does not withdraw if it is only some hours after the explosion of the bubble can lose a lot (beautifully explained in the Antimanuel of Economics Bernard Maris). These households have not only failed to sell their homes but finds himself more with monthly payment of huge pay .... some are going bankrupt and they are huge losses for other financial reach the monthly payments but have nothing to buy a car, DVD player, computer, clothes again ... c ' is a significant drop in consumption that has set back the growth. The important thing to keep in mind is that in this crisis, which we always talk of a financial standpoint, there are hundreds of thousands of people who are doing and expropriated hundreds of thousands of people struggling to keep a home. There are many cities in the United States of entire neighborhoods or nearly people do live, which have become ghost towns when there are many people homeless. Municipalities need to manage and secure these areas for fear of looting and squats are also great difficulties because their spending on police and interviews while increasing their revenues decline significantly with hundreds of departures. Do not forget that when they sold the product, vendors are more stress on the possibility of added value of the house as the risks ... these people are often very precarious employees. Some lessons learned from all this:
- The reason for growth in the USA, Spain and Great Britain last decade is primarily a housing bubble, the growth of financial sector and the considerable increase in household debt to offset the decline in wages.
- An economy can not grow without an increase in household income that is the salary or the debt is the debt but when the risk is enormous. Second
the subprime crisis reveals the total lack of control over banks. In science (human!) Insurance-economic theories have gained much importance. The idea is well known malus-bonus, the teachers seriously savings explain that without it a car driver is more likely to drive anyhow, is moral hazard. If there is no risk of penalty, the driver assured knowing take on more risk than those who are not insured. The difference between the financier and the driver of car ... is that in an accident the driver may break an arm while the banker / financier in connection with an accident and although he does not suffer (unless disaster and loss job ...). The problem of banks is that they know what going on the state come to their rescue as lender of last resort. Indeed nothing would be worse than a failed bank, because there is a risk of infection because it does not pay its debts to other banks, but there also those who had money in that bank would lose everything. Banks are therefore encouraged to be totally irresponsible, to take unnecessary risks because they know that whatever happens the state will come to their assistance and especially that there are no penalties (or bonuses for those who meet the rules). Hence the nationalization of several banks around the world. This is another great success of the ultra-liberalism have convinced that nationalization was the absolute evil except when it is to nationalize losses. Privatize profits and nationalize losses that is the creed of the early twenty-first century. How to respond to this moral hazard is a key issue for socialists ... it will bring maybe not immediately, but many voices is a must. Especially if we consider to be right on this issue we have proved our seriousness and our understanding of the issues at stake. Except that it means limiting money creation by banks, deposit requirement largest banks, the takeover of BCE to enhance its supervisory powers and punishment, taxation on financial flows. The homos economicus does not exist except perhaps in the financial ... they really understand the signals and their property must send a signal that they are under control and they can be punished. Finally, it is an area where we expect the PES and the Socialist International to agree on a new Betton Woods.
C. Wage, redistribution, employment growth the three priorities of socialist
Controlling Finance, answer to the problem of low incomes of employees and respond to unemployment and job insecurity Employment is not just socially fair is an economic imperative.
1. Restore the share of wages in the distribution of value added
Sharing the wealth here is what must be the heart of a leftist agenda. Achieve a better distribution of wealth not to play the camp of one class against another, but simply because more and more people are earning lots of money on the backs of the French economy and its employees without work . Rehabilitating work is above all raise wages but also to end the unjust enrichment work.
An example of the cultural battle (in the Gramscian sense of the word)
The importance of the cultural battle is perceived to lead when we see that the right has managed to convince the majority of the population that parasite on society and the economy is the recipient of the RMI and the unemployed, not the few tens of thousands of people who live on their incomes and who think their work in managing pensions when they produce neither good nor services. The denunciation of RMI has replaced that of 100 families. We will follow the advice of Keynes: "We must euthanize the rentier."
Increasing the minimum wage is an imperative and an increase in all salaries below € 3000. Inflationary risks are much lower than in the past because if firms raise their prices in the European common market they will lose many market share. If they wish not to increase their prices they will maintain their prices and thus reduce slightly the share of their profits. It is also not excluded that a dynamic economy will emerge from these wage increases which will swell the backlog of employees. It will also necessary to redistribute, particularly to correct the huge increase in inequality of wealth (drastic increase inheritance taxes beyond 75 Wealth 000 per child). Finally it will develop a great stimulus and adapting our economy to sustainable development issues. This plan will be twofold boost our economy and adapt them to the challenges of the twenty-first century. The aim of socialists is to create hundreds of thousands of green jobs. Obviously, such a plan could address the critical issue of housing and that of transportation.
2. RSA: symbol of a left surrendering.
Regarding the salary issue the Socialist Party must clarify its position on three areas: increasing wages, the issue of tax credit and wage supplements devices (RSA and PEP). We will present the debate on the RSA that we think best illustrates the different positions within the Socialist Party and the obvious choice.
At the heart of RSA is the idea that the main reason for not returning to work is the lack of monetary incentive. Idea that the PS should recuse himself and yet is growing. The differential between the one who touches the RMI and the one who takes a part-time employment (part-time or less) is often very low ... it is much more important for a full time job. The problem is not the difference but weak job creation in full-time.
We believe this is not the lack of incentive to work that fact that 4 million people are without jobs and that nearly 80 percent of jobs created in the services has a working time of less than 15 hours a week. Responding to the fact that someone working 12 hours a week can lose money compared to the RMI is substantially mistaken problem. Why most of the jobs created are jobs that most precarious?
The RSA is a typical example of a left that has accepted the inevitability of working poor and unemployed, who considers that the purpose of government is to help people come into these situations and not answer the why of the situation. RSA is a statistical treatment of poverty and perpetuate a system that allows the emergence of the working poor.
A number of questions illustrate the negative effects of RSA
- What is the minimum number of hours that the RSA can be triggered? The RSA does he not allow companies to develop jobs for less than ten hours per week. The minimum wage was defined by Marx as the salary to survive and reproduce here. With RSA, we allow companies to pay jobs so far below the living wage and that public money makes this possible. The potential windfall for companies is enormous, it could reinforce the trend of job growth of less than 15 hours a week.
- The number of RSA will he limited companies? The RSA can also be a boon for the company which may be can have as many jobs she RSA and may wish to repeat this device for use as many times as they wish. It is astounding that the socialists who advocate control of precarious employment, return to the Commission as the standard allows companies to increase employment precarious given that the state will supplement the low wages to enable these workers to survive. The RSA without an ambitious policy to develop decent work and fight against precarious employment is actually decomplex businesses in the use of such jobs.
- Is there not a danger of creating a new door or wages earned no more be between 30-32h a week and touch the RSA and pass the minimum wage? The RSA does he not support the trend that the majority of employees is between -20 and +10 percent of SMIC. Finally
RSA as the EPP is an expensive policy that does not create jobs unless extremely precarious jobs that can be created only through the RSA. Even if it means using public money to create jobs that not only would be more interesting to use it to finance an economic recovery plan creator of full-time job to fund the wage structure of the poor. The RSA will cost 2.5 billion per year, how many new jobs would be created if all of this money was used annually in building green to build homes or rehabilitate old housing? Politics is about making alternative choices with limited resources, the selection of the left must be to create growth, create jobs, improve our living conditions and do not support businesses in creating poor wage. PEP and RSA creates effects offset is just the minimum wage level for the RSA is just one level or toggle between the category of one who handles the EPP and the one who does not touch her. While the effects of levels are raised but they have an extremely negative effect maintain that the vast majority of employees in wage levels around the minimum wage. The RSA and PEP have absolutely no effect on the fact that the share of wages in the VA decreases because their funding is not provided principally on businesses. RSA and PEP is extremely costly to the state without this policy is job creation or improved conditions of employment. In our
:
- the issue of low pay must be settled solely by raising wages because it focuses the effort on business and creates no greenhouse alleviate. Especially it gives employees the share of wealth they create businesses that have their confiscated incidentally 20 years. We favor a substantial increase in the SMIC (1500 euros net 2012), have no collective agreement could have a base salary below the minimum wage for the first year of service the employee should be increased to encourage the conclusion of Agreement branch under the threat of legislative intervention that will increase all wages above the minimum wage to 3000 euros and 200 euros per month. We recall here that these wage increases, unlike the RSA and PEP have the great advantage of massively increase social contributions employers and thereby contribute to the recovery of social security accounts (even if this effect will be less for mergers of the income tax with the CSG and the foundation of a CSG employer sitting on the VA and non- not payroll)
- Taxes and public spending should not be impacted by payment of compensation for low wages. The tax is intended to create jobs and promote growth. That particular enable the implementation of a comprehensive economic recovery plan that must adapt our economy and our lifestyles to sustainable development issues.
The example of RSA and PEP shows that the Socialists have a tendency to accompany poverty or with the low pay and the concentration of earnings around the minimum wage. Sharing the wealth must be at the heart of our program in particular because we have shown that private indebtedness, particularly among the disadvantaged classes, is not only unfair but few have disastrous effects on the economy. Examples English, English and U.S. shows that low pay is offset by household debt, but that it can be much more harmful than higher wages because there are important risk of default of payment. The wage increase also has a large advantage is to reduce the share of corporate profits because they will be sentenced between lower profits or lose market share if they raise their prices. It will be necessary to take the necessary measures to stop companies relocating because their salary increases. The sharing of wealth has always been a fight and the boss has always led its class struggle. Finally the redistribution of wealth through rising wages, which already allows to boost growth by an increase in consumption must be accompanied by a large stimulus package economy. It must invest heavily in research for all that socialism is the redistribution of that production. This recovery plan should also allow us to meet the challenges of our time: the housing issue with the fight against substandard housing, providing shelter for all and life is good and drastically reduce the impact of housing on the environment . This recovery plan must also adapt the rest of our economy and our way of life to the realities of the XXIst century it is about water, recycling, energy production or transport modes.
Provide responses to the financial crisis and the system capitalist overcome unemployment, to finally emerge a middle class that lives off his salary, improve our living conditions by adapting to environmental realities, fighting against poverty and enable a new universal access to health and a decent retirement that is the goal of the Socialists. The objective is clear, the means are just as important. It remains for us to gain the courage, will and heart.
Sources: Many economic data come from the contribution of Peter Larrouturou that if it does not bring much response establishes a very correct diagnosis. A must read and reread. http://www.nouvellegauche.fr/ . I refer also to note the founding of Terra Nova on the RSA which I do not share all the views but still interesting. http://www.tnova.fr/index.php?option=com_content&view=article&id=276 . I am also referring to various articles dl'économiste Michel Husson including "the credibility of the program" and "the true story of the wage share" http://hussonet.free.fr/
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