Global Economy: Globalisation And Technology Drive Insecurity - by Paul Sweeney

People are insecure. Young people worry about getting a decent job, finding a secure home and having to pay off the vast debts run up in the decade of uber-liberal economic policies of European governments to 2007.

Elderly people worry about their security in old age, access to decent health care, about their children getting jobs or being forced to emigrate.

A recent Eurofound study concluded that 14% of jobs in Europe are high-paid good jobs; 37% are well-balanced good jobs; 29% are poorly balanced jobs; and 20% are poor quality jobs. Thus almost half of all those at work are not in good jobs.

Yet we have never had such high incomes or wealth. This is in spite of the six years of the Great Recession. Total national income is substantially higher than what it was a generation ago. Yet only a generation ago too, jobs and pensions were more secure, homes were easier to find and health care was not such a big worry.

What has led to today’s insecurity? The big drivers of insecurity are globalisation and technology. They have shifted low skilled jobs and now even middle income jobs offshore, created intense competition, change and uncertainty. They give great power to large corporations, while undermining the power of states and of organised labour. Crucially, they have also changed the nature of politics.

Globalisation and technology have been key drivers in the three-decade-long (a generation) decline in the share of national income of workers and the self-employed and its corresponding shift to wealthy people and corporations A few countries like Ireland witnessed the boom of catching up with the rest of Europe for 20 years, when overall earnings rose so the seismic shift in income was not so evident, but thanks to the Great Recession, it now is.

Both globalisation and technology have reduced labour’s bargaining power through offshoring, through sectoral shifts in employment from manufacturing to services, from large units to smaller ones and to autonomous, self-employed working. It has facilitated the massive decline in corporate governance – in the way firms are run and what their objectives are. It boosted the pay of the elite to extraordinary levels that have nothing to do with performance. Both have also facilitated financialisation – where finance rules the real economy.

Globalisation has also reduced financial disclosure, blurring our knowledge of the real ownership and control of business. It has led to the privatisation of swathes of public services, and these privatised public services are increasingly run by big, non-competing oligopolies. It has facilitated increased tax evasion and tax avoidance on unprecedented scales by the wealthy and by large companies. The Luxleaks and HSBC exposures are only the tip of this iceberg of tax cheating on an industrial scale in some countries.

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