In Paris on Tuesday, AFL-CIO President Richard Trumka warned the leaders and policymakers of the Organization for Economic Cooperation and Development (OECD) that the financial austerity measures, like those taken by European nations, destroy jobs, increase inequality and likely feed the public’s mistrust of government.

Taking part in the OECD forum “Austerity Versus Growth,” Trumka—a member of the OECD’s Trade Union Advisory Committee—slammed the idea that austerity measures will move nations out the economic doldrums.

Is austerity vs. growth a false dilemma? This is a foolish question in the same way that it is a foolish question whether the earth is flat, or whether the sun goes around the earth or the earth goes around the sun. And people who still maintain that austerity leads to growth do so for the same reason the Inquisition insisted the sun went around the earth—to maintain themselves in power.

Austerity measures—such as those imposed in the United Kingdom, Spain and Greece—are, said Trumka, “driving a vicious cycle of spending cuts crushing economic growth, which shrinks revenues, leading to larger deficits and more spending cuts—resulting in increased debt ratios and permanent mass unemployment.”

With economic carnage in such plain site, he asked, “Why do political and financial elites keep it going?”

The answer isn’t pretty—they keep it going because austerity serves an agenda—the agenda of destroying social solidarity, of concentrating power in financial elites and taking power away from democratic institutions, the agenda of rising economic insecurity and most of all the agenda of weakening workers’ bargaining power so that wages will fall and business profits will rise.  

Trumka offered a number of policy alternatives to “kick-start job-rich inclusive and sustainable growth,” including:

• Fiscal and monetary policy focused on job creation and growth;

• Job creation through investment in infrastructure, green growth and sustainable development;

• Employment and real wage growth through active labor market policies that provide income, training and job search assistance for the unemployed and help labor markets support technological innovation throughout the economy;

• Financial regulation that has as one of its goals ensuring that the financial system reinforces small- and medium-sized enterprises' capacity to grow and create quality jobs;

• Public policy that aims to restore social trust by improving working conditions, imposing more control on financial markets and enhancing growth through sustainable innovation policies and investments. The goal of financial regulation and taxation should be to make the financial sector serve the needs of the real economy and prevent financial speculation from damaging sustainable growth prospects.

You can get a recap and follow the OECD sessions via Twitter with the hashtag #oecdwk. Also, Damon Silvers, director of policy and special counsel for the AFL-CIO; William Spriggs, AFL-CIO chief economist; and Cathy Feingold, director of the AFL-CIO’s International Department, are tweeting from the meeting. Click on their names to go to their Twitter feeds.