AP Wants to Weaken Workers' Bargaining Power in Europe and Drive Down Their Wages

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Sunday, 04 July 2010 16:38

That is what readers can infer from an article that celebrated efforts by governments to weaken public supports for workers and to undermine their bargaining power. The article is filled with vague assertions about these measures are being celebrated, for example the first sentence telles readers that"

"In the ashes of Europe's debt crisis, some see the seeds of long-term hope (emphasis added)."

It continues:

"That's because the threat of bankruptcy is forcing governments to implement reforms that economists argue are necessary to help Europe prosper in a globalized world – but were long viewed as being politically impossible because of entrenched social attitudes."

The article does not point out that there are actually sharp differences among economists on whether Europe needs to make changes to "prosper in a globalized world." Unlike the United States, which has huge trade deficits, Europe has consistently had near balanced trade.

Some countries like Germany and Denmark have consistently run large trade surpluses, in spite of having very strong welfare states. This is why many economists, including the OECD in its official assessment of member state economies, argue that strong welfare states are entirely consistent with international competitiveness. This article implies that there is a consensus among economists that European welfare states must be weakened. There is not the case.