From the TUC

We know what would solve global inequality: so why isn’t anyone doing it?

17 Nov 2015, by in International

I wrote yesterday about the outcome of the Turkish G20 summit, which got close to  addressing the gathering economic storms of global recession, but fell short of the action needed. But one area where the G20 did indeed get things right was identifying inequality as one of the main things holding the global economy back, as the global union assessment of the summit communique said.

The OECD has identified the main problem caused by increasing inequality: slower, less sustainable growth. OECD Secretary General Angel Gurria was unequivocal when he addressed the L20 summit of union leaders from around the world this weekend, saying simply that “high inequality reduces growth.” Actually, he was so emphatic that he repeated it, in case people weren’t listening. And Max Lawson recently repeated Oxfam’s concern that the global super-rich are as much of a problem as the poor, reporting that the growth of global inequality had raced ahead of what Oxfam were told a year ago was alarmist propaganda. Two US families now have as much wealth as 150 million of the world’s poorest.

We even know what has caused the growth in global inequality over the last twenty to thirty years (before then, global inequality had been steadily decreasing, ever since World War II.) As reports from the ILO and IMF have demonstrated, it is the decline in power and influence of trade unions that has accelerated the growth of inequality. Note that this isn’t just an association: the IMF’s paper identifies the effect is causal, and that declining trade unionism accounts for 40% of the growth in inequality – the largest single causative element.

There are several ways that declining trade unionism causes inequality. The first and most obvious aspect is that a decline in the coverage of collective bargaining allows top bosses to increase their remuneration and reduce that of the majority of workers. The second is that strong unions promote government policies that redistribute wealth through taxation, good public services, minimum wages and job-rich growth.

But beyond advocating ‘inclusive growth’, neither the G20 nor any of the global economic institutions are doing anything to implement what we know would solve the problem of growing inequality. At the L20 summit this weekend, TUAC General Secretary John Evans asked OECD Secretary General Angel Gurria directly: if you know what would reduce inequality, why don’t you advocate it? What, as John said, is the blockage?

Gurria suggested that the simplest solution to inequality was not necessarily the right one, and that there were other possible solutions. For example, he suggested (as he has done to us when visiting the TUC) that inequality results from things like a lack of skills, despite the current generation being the most skilled in history. Even the IMF paper mentioned above, despite crystal clarity about the causes of inequality, equivocates when it comes to solutions, suggesting that the solution will depend on national circumstances (rather than – oh, just an idea – the evidence!)

Could it be that the reason for not doing the obvious thing and taking steps to restore strong unions and collective bargaining – what John Evans called ‘the blockage’ – is that the main economic institutions and governments have been captured by an ideology that acts in the interests of the rich rather than the many?

3 Responses to We know what would solve global inequality: so why isn’t anyone doing it?

  1. Tony Hart
    Nov 18th 2015, 8:24 am

    You appear to say that a rise in the power of trade unions would be the solution to rising inequality. Is that correct? If so, exactly how might this be achieved? Would it lead to more strikes or is there another, better way to get fairer wages?

  2. Kenneth Toulson
    Nov 18th 2015, 8:40 am

    It would be a start if the TUC did something about the inequality in this country instead constantly wringing its hands and doing nex to nothing.

    I make no apology for once more posting a previous comment that the TUC seem loath to respond to.

    The trade union movement should not be too surprised at this vicious government’s latest attack on unions and workers after their at least 30 years of mind-numbing complacency.

    Thatcher’s anti-trade union laws were never repealed despite 13 years of a New Labour government’s opportunity to do so. The TUC and most of the trade unions’ leaders’ complacency and Labour’s neglect to repeal these laws when it had the chance clearly emboldened this vicious Tory government and laid the foundations for them to further build on and escalate the attacks.

    It need never have got to the stage of this vicious Tory government’s all-out attack on unions’ right to strike if the TUC and most trade union leaders had not squandered multiple opportunities to take them on.

    Organising hundreds of thousands protesters in rallies, protests and short-lived ineffective strikes is futile if the actions are not meaningfully followed up.

    Millions marched and took strike action over March, June and November 2011 only to be betrayed by the climb down of the Unison and GMB unions signing the ‘heads of agreement’, and in doing so, isolated the PCS union, the only union willing to fight on. Encouraged by this, Danny Alexander, in Parliament at the end of December 2011 gloated that the ‘heads of agreement’ deliver the government’s key objectives in full, and do so with no new money since our November offer.”

    And then, among other failures to rise to the occasion, health unions suspended the further NHS strikes planned for the 29 January and 25 February 2015 leading to acceptance of an inadequate offer.

    Similarly with the local government workers in 2013.

    For the TUC and trade union leaders to continually lead working people, who have invested so much time, money and effort in strikes, rallies and protests, up the hill, only to lead them back down again not only betrays their trust but serves to sap any confidence in a fightback.

    So inevitably, after years of unfulfilled action, facing such little opposition and emboldened by their previous unchecked successive vicious attacks on working people’s lives it’s hardly surprising that these cold, hostile, callous, calculating Tory spivs have the confidence to mount, the biggest ever attack on trade unions rights in the Trade Union Reform Bill.

    The Jeremy Corbyn phenomenon now shows graphically that there is a massive appetite for sustained, purposeful, undiluted action and it is now time for the trade union movement to get behind this mounting rank and file pressure and show its mettle.

    However, only when the whole trade union leadership stands for election as a workers’ representative on a worker’s wage will they find the incentive to fight back meaningfully.

  3. Owen Tudor

    Owen Tudor
    Nov 18th 2015, 8:57 am

    Tony, the main way that unions raise wages is collective bargaining – it takes place all the time (though not in enough workplaces) and involves a few meetings – of the workforce and with management – and some research. It needs to be backed up with the right to strike, as that is often the only thing that gets managers to genuinely negotiate.

    But strikes are rare, and in some of the most powerfully unionised societies like Sweden, rarer than in countries with very weak trade unions. Striking can as often be a last ditch demonstration of weakness as it is a demonstration of strength, and trade union members would far prefer to get the increased pay without losing the wages of a strike!

    Kenneth, you know I’m not going to agree with you. It’s the job of leaders to know when to fight on and when to settle, and the membership always has the option of electing replacements if they feel their interests are not being served.