‘Ill-conceived’ austerity drives social unrest, says ILO

Heinrich Leutemann, Plünderung Roms durch die Vandalen (c. 1860-1880)Harsh economic conditions, elevated unemployment and rising income inequality mean that “the risk of social unrest” has increased in “a majority of countries” in recent times, according to research from the International Labour Organization (ILO).

ILO points the finger at ‘ill-conceived austerity’

The ILO report paints a dismal picture of the state of the global economy, five years on from the credit crunch:

Close to five years after the global financial and economic meltdown, our analysis shows that there is a majority of countries where the risk of social unrest has increased. This is not surprising given that good jobs remain scarce and income inequality is rising. There is a growing sense that those most affected by the crisis are not receiving adequate policy attention.

The ILO says that in Europe, the number one priority for “creating good-quality jobs [...] to reduce the risk of exclusion and promote a sense of fairness” is “avoiding ill-conceived fiscal austerity.”

Will tough economic times lead to social unrest?

Back in January 2012, we posed the following question: “With tough economic times ongoing, how likely is it that we might see further social unrest in 2012?”

Recent weeks have seen these concerns come to the fore in a number of areas. Some examples include the following:

  • A sobering warning that social unrest could follow particularly stringent austerity measures was issued by former Greek minister Michalis Chrysohoidis last week: “If Greece cannot meet its obligations and serve its debt the pain will be great. What will prevail are armed gangs with Kalashnikovs and which one has the greatest number of Kalashnikovs will count. We will end up in civil war.”
  • Leading UK HR blogger Kate Griffiths-Lambeth meanwhile weighs in with the observation that latest OECD data show that “the countries [in Europe] with the highest [youth] unemployment figures [...] have all suffered civil wars within living memory.” Greece registered the highest youth unemployment rate.
  • Deputy Prime Minister Nick Clegg warns that a eurozone collapse could create the “ideal recipe for an increase in extremism and xenophobia.”

Reconsidering austerity?

There are signs that European governments could now be reconsidering their approach to austerity measures. The May 2012 Eurogroup Working Group (EWG) meeting of EU leaders “marked a shift from collective austerity to pro-growth measures following the election of the Socialist François Hollande as French President,” the Independent reports.

But such a modified approach to austerity is akin to a form of cognitive dissonance, argues Warwick University Professor of Political Economy Robert Skidelsky, writing in the Guaridian. Skidelsky says:

In Britain and Europe, policymakers are moving from a state of denying that their policies are wrong to one of cognitive dissonance – holding two contradictory theories simultaneously. The two theories are austerity and prosperity. This is a welcome sign of progress. Above it towers the peak of coherence. Drop austerity, go for growth and the debt will start to come down.

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