TUAC NEWS

ej


TUAC ON “GOING FOR GROWTH 2016”: NOT THE PACE BUT THE DIRECTION OF REFORMS MATTERS

26/02/2016


The OECD released its 2016 Going for Growth report today. Its key message is that the pace of reforms is decelerating at a time it should be accelerating.

This view fails to address the real problem the economy is facing. What is holding back the global economy back is not a lack of supply but a lack of demand. More labour market flexibility will make matters worse by dragging aggregate demand further down. With economies already teetering on the edge of deflation, this is the last thing policy makers would want to do.

It is regrettable the OECD reiterates its call for the same structural reforms when its Going for Growth itself is admitting that “‘risks that reforms even further depress demand are highest in case of reforms that initially put downwards pressure on wages” (page 64).

TUAC calls upon the OECD and G-20 governments, whose Finance Ministers are meeting in Shanghai at the moment of the release, to fundamentally shift the reform agenda from one that deregulates labour markets towards an agenda supporting stronger labour market institutions with collectively bargained wages acting as an anchor of price stability and as an engine for demand and growth.