The most widely-planned austerity measures around the world include:
- Capping or cutting the public sector wages
- Eliminating or reducing subsidies for food, fuel and electricity (especially in developing countries)
- Reforming and reducing benefits for old age pensions and health systems
- “Rationalizing” social safety nets
- Labour market reforms to increase “flexibility” and reduce job security
- Increasing consumption taxes
Privatizing public services and assets
Analysis by the International Labour Organization (ILO) of International Monetary Fund reports for 187 countries calculates that austerity will decrease world economic growth by 5.5 per cent over the next five years and reduce employment by 12 million worldwide.
This is a very disturbing trend as countries around the world struggle with already slow economic growth after the 2008-9 financial crisis and the austerity measures that were introduced after it. The coming austerity measures could have an even more severe impact than the ones that were initially introduced in 2010 and 2011.
Canadians elected a new federal government with a platform to stimulate the economy, expand social protections and reverse the austerity of the Harper years. Unfortunately many provincial governments in Canada continue to implement damaging austerity measures.
As the ILO report emphasizes, austerity doesn’t need to happen and shouldn’t be done. Instead governments should focus on promoting socio-economic development with job growth and by expanding social protections. It’s a lesson we’ve learnt at the federal level; now provincial governments need to catch up.