Public services should not be the victims of inflation – Irene Ovonji-Odida

On United Nations Public Service Day, many public service workers and the services they provide remain unnecessarily impoverished.

Health workers have been exhausted by a prolonged pandemic hitting wards relentlessly (insta_photos/shutterstock.com)

The phrase “the summer of discontent” began to appear in the British press, a direct reference to the “winter of discontent” and the social unrest that rocked the country in 1978 and 1979. More than 40,000 workers in the railways and the London Underground have gone on a series of 24-hour strikes, to denounce the deterioration of their purchasing power in the face of 9% inflation and to demand wage increases.

In the wake of this movement, nurses, as well as telecommunications, postal and airport workers have announced their intention to do the same. The education sector is expected to follow suit as schools, libraries and municipal swimming pools face budget cuts.

Brittany is no exception. In France, nursing staff are angry, with dozens of emergency services filing strike notices. In Tunisia, the main civil service union is calling for a walkout to obtain higher salaries. Zimbabwean health workers have just gone on strike to force the government to pay salaries in US dollars, as spiraling inflation has eroded their purchasing power.

In Latin America, Peruvians were the first to voice an outcry over inflation, but sharp increases in food and energy prices portend renewed social unrest across the region. In Puerto Rico and Minnesota, teachers took to the streets. In Sri Lanka, the government has just adopted a four-day working week for civil servants, so that they have time to farm at home to support themselves.

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Everywhere, runaway inflation is another blow after more than two years of a pandemic that has tested those same frontline workers.

On your knees

After decades of austerity, precarious contracts and privatization, health workers are on their knees, in poor and rich countries alike. Many have paid with their lives for the fight against the virus. Others have worked endless days without pay raises or social recognition.

It is women who suffer, representing 70% of health workers worldwide. This is made all the more unbearable as they are the ones who, at home, take care of the bulk of unpaid domestic work, a burden that increases as public services on the verge of collapse come to light. unable to perform their duties.

Inflation is back, worldwide, triggered by the pandemic, exacerbated by the war in Ukraine and proving more persistent than major central banks expected. But we are not all equal when it comes to inflation. In the poorest countries, it is already causing an increase in hunger and food insecurity. In rich countries, low-income households are the first to suffer, with rising food prices weighing more heavily on their food basket than on that of the wealthiest.

As the world celebrates the United Nations On Civil Service Day, the images of myriad civil servants protesting the ravages of inflation are a reminder that there are growing numbers of poor and precarious workers in their ranks, even in the world’s most powerful countries. It is not surprising that it is becoming so difficult to find candidates in many for nursing or teaching positions.


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The resources exist

Precarious working conditions, budget cuts, transfer of control to the private sector, none of this is inevitable. The resources to increase salaries and hire more people exist. They must be drawn from where they are, from the accounts of multinationals and the richest discreetly housed in tax havens.

Since the start of the pandemic, the fortunes of the ten richest individuals in the world have doubled, while the incomes of 99% of the world’s population have decreased. The health crisis has only deepened a basic trend: since 1995, the richest 1% have monopolized almost 20 times more wealth than the poorest half of humanity.

As for the multinationals, most of them have taken advantage of the pandemic, but they continue to take advantage of the system to pay almost no taxes. Amazon, for example, avoided about $5.2 billion in U.S. federal taxes in 2021. The company reported record profits of more than $35 billion, 75% above its sales figure. 2020 business, itself a record, but it only paid corporation tax at an effective rate of 6 percent (the official rate is 21).

pay a fair share

There is an urgent need to rethink international taxation so that multinationals finally pay their fair share. Even the G20, which brings together the 20 richest countries in the world, last year championed an agreement to introduce a global minimum tax of 15% on the profits of multinationals.

This is a step in the right direction, but the agreement is not ambitious enough: it will only generate 150 billion dollars in additional tax revenue, which, according to the distribution criteria adopted, will go mainly to rich countries. However, this would reach 500 billion dollars with a rate of 25%, as recommended by the Independent Commission for the Reform of International Business Taxation (of which I am a member).

Governments also have the option of making the super-rich contribute more. A handful of them, the “patriot millionaires”, are aware of the urgency of doing so. “Tax us, the rich, and tax us now,” they recently said in an open letter, calling for the introduction of a “permanent wealth tax on the wealthiest to help reduce extreme inequality and to raise revenues for sustainable, long-term increases in public services such as health care”.

Political will

When the political will exists, it is quite easy to identify where the wealth is hiding, as the Russian invasion of Ukraine showed. It didn’t take long for the world to find out all about the yachts and luxury apartments of these Russian oligarchs close to Vladimir Putin. A similar effort must be made to uncover the hidden wealth held by multi-billionaires of all kinds.

With the inflation crisis, it is impossible to continue to avoid the challenge: will states continue to finance themselves through austerity programs, cuts in public services, raising the retirement age and the increase in the contribution of the poorest by consumption taxes inflated by inflation? It’s a recipe for chaos.

The only way to escape it is to restore the confidence of citizens, by rebuilding more resilient, inclusive and egalitarian societies, able to face the existential threat of climate change. To do this, we must radically change course and make all those who have the means, but who today manage to escape their obligations, contribute more.

Otherwise, discontent will last far longer than a summer and on a global scale.

Irene Ovonji-Odida is a lawyer and member of the Independent Commission for the Reform of International Corporate Taxation. She was also a member of the United Nations High Level Panel on International Financial Accountability, Transparency and Integrity for the Achievement of the 2030 Agenda (FACTI).