‘Crisis may cost twenty thousand jobs’

The economic crisis may cost as many as twenty thousand jobs in Amsterdam, city council member Michiel Mulder (PvdA) says. He is working on a TV programme in which he will answer questions of Amsterdammers on the crisis. By email, he explains his plans.

It is as yet unknown when the programme will be broadcast. However, it has been announced that well-known economists will be invited, including PvdA members Willem Vermeend and Rick van der Ploeg. Does this mean that only PvdA members will participate, or will there also be room for a debate with the SP, a party Mulder has criticised in the past?

“Guests will not be selected on the basis of being a member of the PvdA, but because they can provide information for Amsterdammers on how the crisis will affect their personal lives. So the intention is not to have political debates between different parties in the programme”.

How bad will the crisis be for Amsterdam? How many jobs may be lost?

“A report by the ING found that the crisis may cut deeper in Amsterdam than in the rest of the country, because the size of the financial sector is relatively large here. However, preliminary data on the rise of unemployment don’t show this yet: for example, it’s rising faster in Rotterdam than in Amsterdam.

The Netherlands Bureau for Policy Analysis expects that unemployment will rise by 200,000 in the Netherlands. Personally, I expect that Amsterdam’s share will be some 8-10%, so that would amount to 16,000 to 20,000 jobless. However, this is based on a negative economic growth of 0.75%, which the European Commission a rather positive estimate for the Netherlands. So it’ll be less rather than more”.

Some say that municipalities should invest more in order to fight the crisis. You are not enthusiastic about such a Keynesian approach?

“Anti-cyclical Keynesian policies to boost demand will have little effect. Last year, some 200 billion euro in market value evaporated. Our municipal budget amounts to ‘merely’ 5 billion, so as you can guess, we’d have to increase that at least fourfold in order to compensate the drop in demand. Even so, much would leak away to other regions or neighbouring countries. So for local parties, this is not a successful approach.

What you should do is continue investing in the economic structure, that is, the supply side of the economy. Now more than ever, we need clarity as regards the plans for the Second Sea Lock and the Zuidas business district. This will create confidence and confidence is crucial for economic recovery. Similarly, investments in the Top City and plans for SME’s, as developed by the city administration and the PvdA, should now be forcefully implemented. That’s why I criticised the SP: they are questioning these investments precisely now, which is extremely unwise.
 
In addition, you should intensify your specific municipal activities and make sure these are carried out well; this regards for example labour market policies. In collaboration with businesses, the municipality should make sure that people are led to a job, or else to training, so as to make sure that people continue investing in themselves”.

Photo: municipality website