Austerity policies predominantly involve welfare erosion (reducing social support for individuals) and fiscal consolidation (minimising deficits while limiting the buildup of more debt).
After the global financial crisis, pensioners became a target of government spending cuts. One austerian measure was a pension levy introduced in Ireland, amounting to 7.5% of pay, and the minimum retirement age was raised from 65 to 66. These government spending cuts are a major way of achieving the goals of austerity. However, the income of society’s most disadvantaged and vulnerable (such as pensioners) is often sacrificed in order to achieve this end.
For a long time, public sectors have retained employment security and benefits while private sector benefits have been whittled away. However, after the financial crisis public sector jobs also experienced an erosion of these privileges. Public sector job cuts in the US, the UK and Spain amount to 2.2 million together. Hence, people from almost all income levels are exposed to loss as a result of austerity.
Most shockingly, in the US, a $200 billion subsidy was given to sovereign creditors — the richest 5% of people in the country who hold 70% of all financial wealth — from taxpayers’ money. These types of policies, where subsidies go to big business or to the rich from the pockets of average citizens, are common under austerity.
Most austerity measures are aimed at cutting welfare, public spending and public services. Some, on the other hand, have seen money being given by government to big business or the most wealthy individuals.