The other referendum question… May 21, 2015Posted by WorldbyStorm in Economy, Irish Politics.
Elaine Byrne in the SBP points to some curious contradictions when writing about the referendum on the age of Presidential candidates. And she takes it in a most interesting direction in the following:
This is about the ageist institutionalised discrimination when it comes to income, insurance, mortgage eligibility and pension rights. A two-tier Ireland which offers different employment protections to predominantly younger temporary workers.
And she points to the manner in which under the post crisis ‘agreements’ something very strange happened.
The starting salary of teachers who began their career in February 2012 is 34 per cent less than teachers recruited in 2010. The staff rooms of public sector workplaces across the country are populated with people doing the same work but with substantially different take home pay on the basis of age. A policy which will be gradually phased out under the Haddington agreement – but only when new entrants serve their time.
What was the bearded response by the unions to ageist pay scales? Young outsiders were sacrificed for the interests of older insiders. Instead of pay parity across the board, an older generation protected the guts of their pay by forcing draconian cuts on new entrants. “What do we want?” Worker solidarity! “When do we want it?” Once we are inside!
I loathe the outsider/insider stuff, probably more than I loathe the ‘bearded’ line, but there’s a real problem here. A two tier workforce has to be one of the most toxic outcomes of the past seven years, and one that suits the state and seemingly was of no significance at all to those who negotiated the ‘deals’. She notes too…
The first session of talks between the government and trade unions on pay restoration for about 300,000 public service staff ended this week. Unions are broadly in favour of a flat rate increase.
Does this mean that newer entrants will get the same flat rate increase as older workers but that the existing disparities remain? In the public sector, the generous pension scheme for pre-recession public servants is linked to the salary of the person presently occupying their retirement grade. So, if a current public servant has 20 years to retirement, their current pension contributions by the state are at the same rate as if they are at retirement age.
In contrast, pensions for new entrants (like most of the private sector) are based on average career salary rather than final salary.
It is bizarre, but then the emphasis on wages as against conditions has also been bizarre too, allowing extra hours for what was nominal retention of existing wages, when the reality was that these were wage cuts. Moreover, as many versed in union life will attest, pushing for the reinstatement of conditions is a significantly different challenge to reinstating salary cuts. Yet all this was lost on the unions during the crisis period.
And Byrne notes that this is true in different areas too…
The generation constitutionally barred from running for president must now contend with the causalisation of work contracts, minimal job security and access to fewer benefits.
Of course that generation will grow older and those issues contended with will become characteristic of the conditions of workers of all ages, so let’s not get too fixated on the age aspect. It’s about proper pensions, proper wages, proper conditions. It’s about work and all workers.
Conflicts of interest? No way! May 20, 2015Posted by WorldbyStorm in Economy, Irish Politics.
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Elaine Byrne’s reports in the SBP from the Banking Inquiry – week 16, seeing as you were asking – are getting ever more interesting. This week she casts an eye across the sheer lack of interest in what to most would appear to be – at its kindest – potential conflicts of interest evident in auctioneers and valuers, the construction industry.
So bizarrely adrift from what we might like to term reality are those offering evidence that the Inquiry was treated to this:
Eoghan Murphy asked the former director general of the Construction Industry Federation if any relationship existed between donations and decisions taken by the government that would favour the industry by way of tax reliefs or incentives. “No way” was Liam Kelleher’s response.
Byrne notes how the banking industry was entirely uninfluenced and uninfluencing (to coin a phrase) by and on political matters. So they say.
Still, bad and all as that it is, and it desperately bad, there’s more still…
This Thursday, an entire day is dedicated to the former governor of the Central Bank.
John Hurley may provide clarity regarding the ‘he said, she said’ version of events around the alleged Jean-Claude Trichet phone call to Brian Lenihan and the ECB’s refusal to allow Ireland to burn the bondholders.
Trichet maintains he made no such request. But did his office make such a call to Hurley?
Hurley’s successor Patrick Honohan’s previous appearance before the committee and his subsequent letter may also feature.
Was Hurley aware of the powers he actually had to intervene? If so, why did he not use them?
Surely he was aware? Wasn’t he? Did he believe he could? I’m tempted to say… no wa…well, we’ll wait and see.
Business and workers “all in this together”? May 19, 2015Posted by WorldbyStorm in Economy.
Most company boards want to “do the right thing” on pay and conditions for their workers, according to the amply remunerated Lord Rose, chairman of Ocado.
If that’s true, then they seem to be going about it in an unusual way. Only about a quarter of FTSE 100 companies have signed up to the living wage, a measure of the amount required for people to live with dignity, based on research by the respected Joseph Rowntree Foundation. The Guardian and Observer are in the process of applying to be accredited.
And yet, the Observer notes that for all the touchy feeley rhetoric…
Some of the UK’s most respected companies are missing from that list, including all the major retailers. Sports Direct has been vilified for its treatment of staff, the majority of whom are on zero-hours contracts. But others are involved in practices which should make their boards blush.
And it gives this positively Kafkaesque example from the ‘hight street’.
Next – a company led by a man compassionate enough to have handed his bonus over to staff more than once – is one of them. Ten staff at the retailer are holding out against its decision to scrap extra pay for Sunday working – a move that hit about 800 people.
Here’s the kafkaesque bit:
The company deems those numbers a measure of how happy staff are to accept new contracts.
But more than one worker affected by the change described how they were persuaded to give up their extra pay: they were taken into a “forced change” meeting and told that if they did not accept the new conditions, they were effectively resigning. All have worked at Next for at least seven years.
And the leader notes:
Campaigners say that many retailers are now ditching traditional benefits, such as extra evening or bank holiday pay, as companies try to reduce costs in the face of a still-tough consumer market. With no collective bargaining in companies such as Next, staff have little support. The costs and career risks of challenging the company at a tribunal mean few take that route
And the pernicious dynamic which has been noted many times before where the state effectively supports private enterprise in paying wages continues and expands:
It is not just an issue for do-gooders. An estimated £11bn of taxpayers’ money goes towards “in-work benefits” to top up the wages of those on low pay. You don’t need to be an economist to realise that doesn’t add up any more.
We’re not in this together. We’re not even close.
The banking inquiry… May 17, 2015Posted by WorldbyStorm in Economy, Irish Politics.
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We’ve not been covering the banking inquiry in any detail. Frankly my sense is that there are those better equipped to analyse it. That said it’s not something to be ignored. Elaine Byrne in the SBP has been reporting from the frontline, and disquieting reporting it proves to be.
And she points to one very very central problem:
After a while, the bankers blur into one. The sincerity of the apologies varies, as does the extent to which things are recalled and remembered. Much of the evidence has that Groundhog Day quality to it with a nod to the Honohan, Nyberg Regling and Watson reports.
There is a mindset that is stuck in Ireland pre-2008 which still seeks to blame the regulation of the past rather than to prevent the inevitable banking crises of the future.
What’s interesting is where this takes her. Examining testimony from Ulster Bank, which as part of the RBS was not part of the RoI bailout but instead was part of the UK regimen she suggests that the comparisons between the jurisdictions is stark, and not to the favour of this polity.
Although the Irish context is no different to the British context, the rules and mindset post 2008 are.
The British equivalent of the Irish banking inquiry – the UK Parliamentary Committee on Banking Standards (PCBS) – recommended a greater emphasis on personal responsibility of individuals working in banks. MPs John Thurso and Mark Garnier, members of the PCBS, outlined this mindset shift towards individuals rather than institutions in an interview last January with The Sunday Business Post.
Professor Philip Lane and Professor Bill Black’s evidence to the banking inquiry shared the PCBS approach. Both academics advocate the “blame the bankers, not the banks” position.
So does Patrick Honohan. In a speech in Paris last month, the Central Bank governor proposed that the government consider enacting legislation to deal with bankers, not just banks. “The Irish legislative framework deserves to be strengthened to take account of egregious recklessness in risk-taking by those who were in charge of failed financial firms,” he said.
In a way this is so obvious, so self-evident, it’s appalling that the RoI isn’t going down this path, but it makes a sort of sense if one wishes to avoid engaging with the most pernicious aspects of the dynamics in play during the crisis and before, that in particular being the toxic nexus of relationships between state and financial industry and the manner in which the latter was able to shape the responses and regulatory policies of the former.
Instead, this is the mindset that dominates the banking inquiry: if only we’d had better regulation, the banking crisis would not have happened. If only we had known, we could have fixed things. Regulation is fixed now. The crisis is over. Move on.
But it was never just about better regulations, and nor is it clear that the regulations are fixed or that the crisis is over or could not return. Byrne’s implicit line is that in order to ensure that there is no return it is vital to see that individual bankers have some degree of personal responsibility for decision that they make or oversee or wave through. As she says:
Perhaps one way to avert the next crisis is to focus on holding bankers personally responsible, not just regulating and fining banks.
It would be a start, wouldn’t it?
Pension watch! Number 1 of a continuing series… May 15, 2015Posted by WorldbyStorm in Economy, Irish Politics.
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Got to hand it to the pensions industry, they’re busy bees when it comes to self-promotion, and given how… well, tenuous, the benefits they offer they do make the best of it they can with survey after survey that points in but one direction and leads to but one conclusion, that you or I should pour our money into a private pension plan as fast as is humanly possible… They’ll take any opportunity to hold a poll that inevitably points towards that outcome.
The latest communication? This in the SBP:
Three in five Irish adults do not know how much the state pension is, according to a report from the Irish Association of Pension Funds (IAPF).
The national survey, commissioned by the IAPF and conducted by iReach, concluded that many people simply avoid thinking about retirement for much of their working lives.
Amazingly, amazingly, this poll…
…will be published this week to coincide with
the IAPF’s annual defined contribution conference on Thursday in Dublin Castle, only one in five Irish people aged between 18 and 34 know the weekly state pension amount.
And what is the state pension? Many of us, those who will depend upon it, will already know the answer:
The full rate for a contributory state pension is €230.30 per week, which equates
to just short of €12,000 annually. However, those without the required PRSI contributions will receive a lower amount.
Now you might think that not knowing the value might indicate that people were unaware it was low. Not a bit of it for the results are interesting in themselves:
Fifty-six per cent of those surveyed guessed that the state pension was under the actual amount, while 4 per cent guessed that the pension was higher than €230 per week.
In other words most people knew it was either €230 or so or lower. Not that it was higher. There’s clearly no illusions as to its value (bar that 4% – who knows what they’re thinking).
Moreover nor are there any illusions as to the sort of working lives most will face:
The survey also found that almost 40 per cent of people expect to work beyond 70 as they feel they will not be able to afford to retire, with women more likely than men to believe they will be working beyond 70.
More than a quarter of those surveyed said they “will need to work as long as they can” for financial reasons.
Bizarrely though the response from IAPF is as if those polled believed the state pension was much greater than €230 or that they could walk away at 55 years of age from the world of work.
“Burying our heads in the sand and simply committing to work forever can’t replace sensible retirement planning,” said Jerry Moriarty, chief executive of the IAPF.
But who is burying their heads in the sand? Granted he does note that…
“While it’s relatively late in the day, those over 55 facing retirement appear to have greater awareness, with over 60 per cent knowing how much they’ll receive from the state when they retire.
“But unfortunately pension statistics show that many will have left it too late to have a meaningful impact on the quality of their life in retirement.”
With what precisely? What funds are there there for most to be able to fund private pension plans? He’s not worried, for it’s all our fault…
Moriarty said that pension participation was “notoriously poor” in Ireland, with just half of workers saving for retirement.
Again, that’s because people aren’t paid sufficient (and that most employers make no provision for their staff in that regard).
And the problem, as always, is that they don’t actually address inability to pay into such plans. But then that’s not the purpose of the exercise which is simply to pry away money from those who might have a little extra floating around and might be convinced that it made sense to give it to them.
Business. As usual.
A good word for the Independents and Small Parties… May 13, 2015Posted by WorldbyStorm in Culture, Economy, Irish Politics, The Left.
At the weekend there was a comment or two on the site about Mick Wallace. I’m not here to defend him, but… I was struck by something Pat Leahy wrote in a piece in the SBP on Independents and small parties where he suggested they now have to offer some answers as to what they would do in government. As he notes:
One of the biggest changes that the Great Recession has wrought on our politics is how it has fuelled the rise of independents and small parties. Never before have independent deputies and small parties played such a role in the Dáil, and in wider politics.
Even before the crash, the number of independents we elected in Ireland was highly unusual. Since then, we’re off the charts.
That’s a most interesting point and one well worth returning to again and again, just what is it about this state that has led to such numbers of independents? My own read, for what its worth, is that it is a combination of a very weak centre left/labour tradition, perhaps an attitude that there’s a partial aspect to the state (conscious or unconscious, and this derived from partition to a great, though not exclusive, extent), obvious failure of the larger parties and perhaps something approaching a localism as a substitute for other isms as they appear to founder. That’s just off the top of my head, no doubt there are many more factors and/or those I point to are over emphasised by me.
And judging by the polls, independents and small parties – the “others” – are set to continue to play a significant role in Irish politics. After the next election, they may play a pivotal role at the very centre of government formation. That is certainly what many of them are gunning for.
Some of them, let’s be clear on that. There are those who have no intention – perhaps sensibly given the degree of support afforded them by the electorate – to attempt to enter government, for whom indeed state power seems so far off as to be unrealisable. That’s not, as it happens, an unprincipled position, or in its own way unrealistic, though whether it can resonate with sufficient citizens to make substantive changes to the way things are run is another matter.
But Leahy takes a line that is refreshingly different in all this, arguing that even in opposition those Independents and small parties – or some of them – have been remarkably effective (though one could cynically argue that so they should be given the number of them).
It is popular and somewhat fashionable to dismiss the role of independents as simply opportunist, seeking to trade their votes for constituency favours from government, classic purveyors of political pork and little else.
But an examination of the record of the current Dáil demonstrates that independent TDs and the small parties have made significant contributions on a variety of issues. For sure, many of them are interested in little more than their own constituencies. But they are hardly alone in that – many party backbenchers (and some ministers) are the same.
Recent events offer some evidence of some independent TDs’ effectiveness.
And he points to the centrality of Daly and Wallace in highlighting this evidence.
The former justice minister Alan Shatter is in the throes of a High Court challenge to the report by senior counsel Sean Guerin which led to his resignation last year. Leave aside for a moment the fairly entertaining consequences if Shatter wins his challenge, and consider how we reached this point.
No senior counsel – or anyone else – would have investigated the events concerned had they not been indefatigably pursued by the independent TDs Clare Daly and Mick Wallace, as part of their continuing campaign against Garda malpractice.
Nor is he unwilling to engage with problematic issues:
Let us observe in passing that – presumably unrelated but coincident with this campaign – Daly was arrested on suspicion of drink driving, handcuffed and the details of the incident leaked to the media. She was subsequently released without charge, having passed a urine test in the Garda station.
In most countries, Wallace would have been forced to resign after the revelation of his tax cheating. Most people would have resigned without being forced, recognising that their actions had brought their status as a law-maker into disrepute. But you can’t dispute that Wallace has done some significant public service since. Remember, both the Garda commissioner and the top official in the Department of Justice have left their posts too.
This is not to cheer for the pointless rolling of heads; merely to point out that Wallace and Daly have been instrumental in the achievement of a level of accountability that is rare in Ireland.
He also points to Catherine Murphy’s – amongst others – championing of questions over Siteserv, and there are other examples too (though the thought also strikes what of high profile Independents who haven’t been quite as… ahem… high profile as one might have expected on substantive issues?).
Leahy argues that as the election approaches the success, as one might characterise it, of these Independents is such that it may lead to a sort of failure if they cannot fashion a means of being relevant. And perhaps small wonder that we see so many vehicles being rolled out by them, albeit in markedly different forms:
For independents and small parties seeking to hold the balance of power, it’s all about the numbers. There are two possible governments that might need the support of one or more of the above groups – the current coalition, or a Fine Gael-Fianna Fáil combination short a few seats of a majority.
In that case, we could see different groups of independents or small parties effectively bidding one another down.
If that happens, the group that has the most discipline, and the cheapest demands, will be the one to join the government. But, one way or another, independents and small parties are here to stay.
But beyond that it suggests that Independents and Small Parties can have a relevance as oppositional forces in the Dáil and Seanad. Question for some is whether they can have a relevance as supporting governing forces. Perhaps a lot rides on whether this is a good election to win or to lose?
Unemployment and the unemployed. May 12, 2015Posted by WorldbyStorm in Economy, Irish Politics.
Those who were taken aback – at least slightly, by Michael Noonan’s curious statement that:
“We all know there will be people who will never work. They’re allergic to work.”
…will find some useful analyses on the internet dissecting it. Not least Noonan’s bizarre pronouncement just after the above that ‘They’re allergic to work. So we’re not including those in the statistics.’ Say what? They’re not including them?
Michael Taft presents sobering figures, not least that for every job vacancy there are 20 people unemployed and more evidence of how emigration since 2008 has managed to keep even that figure of 20:1 lower than it otherwise would be.
As Michael notes:
When there was work available, Ireland had one of the lowest long-term unemployment rates in the EU-15. When there wasn’t work available, that rate increased dramatically. Hmmm. So the illness is not congenital to Irish workers but rather is directly and causatively linked to the availability of work.
Intriguingly Stephen Kinsella in the SBP rips into Michael Noonan’s statement too.
Kinsella, who is no man of the left, rightly takes this to task noting that:
At an unemployment rate of 10 per cent, nobody is seriously saying the people at the end of the queue, those who will get into the labour market when the unemployment rate moves from 10 per cent to 8 per cent, are in that hard core of jobless households. It’s when you get below the government’s full employment target of 7 per cent – more than 150,000 of Ireland’s citizens aged 16 to 64 – that this hard core is supposed to show up. Getting from 10 per cent to 8 per cent is relatively easy. But getting from 6 per cent to 4 per cent is really hard, because both hard and soft skills are absent.
And he also notes there are structural reasons why it gets harder to leave unemployment even when jobs are available:
Ireland has some of the weakest labour market activation programmes in Europe. Despite this, there are more than 89,000 people on training programmes, presumably working hard to get back into the labour force. The people who have been unemployed for longer than 18 months become discouraged and cease applying for jobs they never hear back from or, if they are lucky, going to job interviews where they are rejected.
A newly-unemployed person has a 50 per cent chance of leaving the live register in their first 12 months of unemployment. This chance falls to under 20 per cent during the second 12 months of unemployment, and to less than 10 per cent in the third year. As the duration increases, the chances of getting out of unemployment get lower and lower. This is not an allergy, but a policy failure. Society and the individual suffer.
Just as an aside, the point was made on the CLR recently that in the UK this is a discussion which is all but over. Unemployment just didn’t register as such in the last election. One may not agree with Kinsella’s overall thesis, though few of us on the left would say that if the jobs and conditions are reasonably good greater employment is a bad thing, but it’s good to see that the issue remains live in this state.
During the boom years of 2005, 2006, and 2007, long-term unemployment levels averaged 1.3 per cent. There wasn’t much of an allergy then.
The data shows that, when jobs were there, the vast majority of people took them up. The crisis changed Ireland’s labour market. Since 2009, the absolute numbers of those signing on to the live register has been steadily falling, while those signing on for more than one year rose from 100,000 in 2009 to 200,000 in 2010 and has remained relatively static, only beginning to drop during 2015. As of last month, there are 160,403 people signing on for more than one year.
This is something that has to be underlined at all points. It’s vital to push back against short-term and exploitative work and conditions. When work is available, even not great work, people take it up. The myth of the ‘work-shy’, the ‘allergic’ is just that, bar a tiny fraction. As Kinsella conclusion is interesting:
This government prioritised the nation’s finances and the balance sheets of the banks over the unemployed. That was understandable, but there are consequences.
Noonan’s comments are unfortunate, as they show us that those consequences are not fully understood by the men at the top.
Green shoots? May 7, 2015Posted by WorldbyStorm in Economy, Irish Politics.
I was talking to people over Easter who seemed fairly convinced that matters were improving. Not by a lot, but that there was improvement. And yet, I went looking afterwards for some evidence of same.
Car sales were mentioned. Now, interestingly enough, or not, when I bought the SBP recently there was a free copy of Business Plus magazine (and another this weekend!). And what is on page 10 of same but an article entitled Consumption Mystery which asserts that ‘there’s no doubt that the Irish economy has pieced up speed. So why is personal consumption expenditure still in the doldrums?’
And it notes that ‘retail sales, measure by sales value enjoyed a small fillip in December 2014, but the CSO’s index reveals that consumer spending was lower than last July’. That’s interesting in and of itself, isn’t it. But… it goes on…
Consumer spending is one of the mysteries of the Irish economy at the moment. More people are in work and general indicators are pointing upwards, yet official data indicates that people are reining in their expenditure.
Indeed if it was not for new car sales across last year the picture would be fairly poor – the July peak was strongly assisted by same. Sure, they point to falling rule prices deflating the index.
Car sales were up this year again (so far) but this was after a number of years of much less strong sales. This compares and contrasts with an increase of just .9 per cent in general consumer expenditure when car sales are stripped out on the previous year.
It is possible to view car sales as atypical, with people leaving it until the last moment to purchase replacement cars. Or it could be that those purchasing them new are those with the finances to do so and they may be in a position – for various reasons to do so, which seems to have an unusual relationship to general economic activity.
More broadly personal consumption expenditure continues to lag behind growth. I think the reason for this isn’t hard to explain. Weak services consumption is plausibly a function of people only spending when they have to, in other words discretionary expenditure is reined in and is in any case curtailed by stagnant or falling wages.
More to the point as noted earlier in the week the distinction between IBEC and ISME analyses, even allowing for the tilt they take, is striking. For the latter there is little or no domestic recovery. Indeed as ever these days one has to wonder at what the contemporary definition of the word ‘recovery’ is…
More on the Right2Water conference… May 7, 2015Posted by WorldbyStorm in Economy, Irish Politics, The Left.
Cactus Flower on PoliticalWorld has pulled some of the threads from Friday’s conference together here which is very handy indeed. It sounds like a very interesting event with speakers from Podemos, Syriza and so on. And some fascinating points made.
That document issued on Friday “Policy Principles for a Progressive Irish Government” is available in various spots online, but for the sake of being useful, here it is too. 111930_12796_R2W-Unions_Policies_A5
Quotes from the Democratic Programme, the 1867 and 1916 Proclamations, sections on Right2Water, RIght2Jobs, Right2Health, Right2Debt Justice, Right2Education, Right2Democratic Reform (the proposal to breathalyse TDs ahead of votes is…different). But where does it go from here? The last page suggests:
We want to develop this discussion further and so we are seeking your input.
On Saturday, June 13th, the Right2Water Unions will host a second conference to determine a policy platform ahead of the next General Election.
But is that for a Right2Water electoral vehicle, or some sort of lash-up, however loose or otherwise, that R2W would support? A lot of questions.
What do people think of it?
The bus strike… May 1, 2015Posted by WorldbyStorm in Economy, Irish Politics.
I’m struck by how some media are presenting the strike in a more than usually positive light, as with this piece in the IT.
Has that characterised the tone of other coverage or is it anomalous – it certainly matches what I’ve heard from most people talking about it. Meanwhile:
Workers’ Party Dublin reps extend their full solidarity with striking bus workers
Cllr for Dublin’s North Inner City, Eilis Ryan commented on today’s industrial dispute:
“I extend my full solidarity and support with bus workers on strike today. The irony will not be lost on NBRU and SIPTU members, as they are forced out on strike on International Workers’ Day. The NTA’s decision to put 10% of routes out to private tender is the beginning of a race to the bottom for public transport workers and services”
Workers Party representative for Dublin Mid-West, Lorraine Hennessy, stated:
“Public transport is a vital part of society’s infrastructure and must be funded through public expenditure to ensure quality services are accessible to all. Dublin Bus currently has one of the lowest subvention rates in Europe and public investment is urgently needed to improve struggling services.
“It has been obvious for a while now, that this government was intending to pursue a policy of transport privatisation, as fares hikes have continuously risen at rates far greater than inflation and the Consumer Price Index. This initial 10% is only the beginning and we must fight to halt this policy.”
Workers Party representative for Dublin North-West, Jimmy Dignam ended by saying:
“It is abundantly clear that savings on these routes can only be made through the lowering of working conditions and pay, and further diminishing the quality of services. The government’s guarantees that existing CIE workers’ conditions will be safeguarded are tenuous and the unions are correct not to trust them. What about the guarantees for future workers in this industry?
“The decision by Dublin Bus and Bus Eireann to pursue legal action against these unions is scandalous, that they can even attempt to sue the unions indicates the outdated, Thatherite and anti-worker industrial rights legislation workers suffer under in this country. If the Labour Party stands for anything, it must push for emergency legislation to protect the right of workers to strike. “
Any other statements gratefully accepted.