Social Europe

politics, economy and employment & labour

  • Themes
    • European digital sphere
    • Recovery and resilience
  • Publications
    • Books
    • Dossiers
    • Occasional Papers
    • Research Essays
    • Brexit Paper Series
  • Podcast
  • Videos
  • Newsletter

A Global Agenda For Labour

Pranab Bardhan 11th April 2018

Pranab Bardhan

Pranab Bardhan

Along with rising income and wealth inequalities, the share of labour (particularly of unskilled labour) is declining both in rich and poor countries. The institutional factor behind this is, of course, the systematic weakening of labour organisations. Outside of the Nordic countries, union membership among workers is now often in dismal low percentages. In rich countries unorganised labour is growing particularly in the ‘gig economy’ of free-lancers and ‘independent contractors’. In poor countries the number of workers in the traditional informal sector often exceeds those in the formal sector.

Without the disciplining influence of worker associations many blue-collar workers are falling for the seductively simple solutions offered by political demagogues. So, in a way, both the rising inequality and the resurgence of right-wing populism – the defining twin menace facing the world today – are enabled by the weakening of labour organisations.

How to reverse this trend? Here are some suggested steps toward coping with the challenge.

  • The main threat capital wields to domestic labour in a global economy is that of taking their business elsewhere. Without relaxing on the general commitment to relatively free trade, countries can try to move toward a system of more restricted international capital flows, as was the case under the postwar Bretton Woods system. Many otherwise free-market economists agree on the need for some capital controls, though disagreeing on their desirable extent.
  • Corporate shareholders need to be persuaded that stability of employment and worker welfare negotiated with labour organisations may be good for long-run productivity and profits, in contrast to the short-run focus of managers on the next quarterly earnings. Unions may put pressure on the big pension funds for more long-term investment goals, and may actually help in ‘saving capitalism from capitalists’.
  • Workers often care less about the top 1% making more money (the topic that preoccupies the ‘occupy’ movement), and more about their own job insecurity and the precariousness that technology and competition have brought about. In poor countries the main concern of most informal workers is being trapped in low-paying dead-end jobs. For both these groups of workers a universal basic income supplement can provide some minimum security, allowing them to look for better jobs and entrepreneurial opportunities. If labour organisations lobby for such universal programmes (universal basic income, universal health care, free vocational training), they can also build a bridge across a labour movement that is now divided, between the formal and informal workers, between ‘insiders’ and ‘outsiders’. Such measures of economic security may also make labour unions less hostile to the reform of labour laws like the stringent ones in France, Italy or India.
  • Labour organisations should try to move away from decentralised wage bargaining and toward a more Nordic-style confederate model, which will not merely improve their collective bargaining power, but may encompass the larger macro-economic realities so that aggregative compromises between capital and labour in line with those realities are achievable.
  • Some form of wage subsidies can encourage hiring of more labour in the formal sector. This may be funded by redirecting some of the current budgetary subsidies in most countries like capital subsidies or tax concessions for investment or fossil fuel subsidies, which induce more capital-intensive or energy-intensive methods of production.
  • Labour organisations should demand a greater say in the internal governance of firms, so that they have some influence on the firm’s decisions to outsource or relocate. (A possible example is the German Works Council).
  • Finally, if political parties are to win blue-collar workers back from the pied pipers of populism, they have to be aware that workers today are angry about their cultural distance from the footloose cosmopolitan professional liberal elite who seem to dominate the opinion-making circles of social democratic parties. Trade unions, instead of just being narrow wage-bargaining platforms or lobbies, may try to take an active role in the local cultural life, involving the neighbourhood community and religious organisations, as they used to in some European and Latin American countries. This is one way trade unions enabled workers to tame and transcend their nativist passions and prejudices against minorities and immigrants. Both on local delivery of social services and environmental protection, labour and religious organisations can find some common cause. On policies like affirmative action for under-privileged groups, a more open attitude to including poor workers from the majority ethnic groups may assuage the feeling (among some sections of whites in the US and UK or the Hindus in India) that the liberals only care for the minorities, but not for “us”. Trade unions can try to accommodate such policies of economic justice and relieve some identity-based tension.

It’s a steep uphill task to revive the strength of today’s beleaguered labour organisations. But considering the importance of resisting the twin menace of rising inequality and intolerance, few other tasks are as imperative.

This post originally appeared on the European Politics and Policy (LSE) blog.

Our job is keeping you informed!


Subscribe to our free newsletter and stay up to date with the latest Social Europe content.


We will never send you spam and you can unsubscribe anytime.

Thank you!

Please check your inbox and click on the link in the confirmation email to complete your newsletter subscription.

.
Pranab Bardhan

Pranab Bardhan is a Professor in the Department of Economics at the University of California, Berkeley. He is also the author of 14 books, mostly on the political economy of development and globalisation. He was BP Centennial Professor at the LSE in 2010-11.

Home ・ Politics ・ A Global Agenda For Labour

Most Popular Posts

schools,Sweden,Swedish,voucher,choice Sweden’s schools: Milton Friedman’s wet dreamLisa Pelling
world order,Russia,China,Europe,United States,US The coming world orderMarc Saxer
south working,remote work ‘South working’: the future of remote workAntonio Aloisi and Luisa Corazza
Russia,Putin,assets,oligarchs Seizing the assets of Russian oligarchsBranko Milanovic
Russians,support,war,Ukraine Why do Russians support the war against Ukraine?Svetlana Erpyleva

Most Recent Posts

Sakharov,nuclear,Khrushchev Unhappy birthday, Andrei SakharovNina L Khrushcheva
Gazprom,Putin,Nordstream,Putin,Schröder How the public loses out when politicians cash inKatharina Pistor
defence,europe,spending Ukraine and Europe’s defence spendingValerio Alfonso Bruno and Adriano Cozzolino
North Atlantic Treaty Organization,NATO,Ukraine The Ukraine war and NATO’s renewed credibilityPaul Rogers
transnational list,European constituency,European elections,European public sphere A European constituency for a European public sphereDomènec Ruiz Devesa

Other Social Europe Publications

The transatlantic relationship
Women and the coronavirus crisis
RE No. 12: Why No Economic Democracy in Sweden?
US election 2020
Corporate taxation in a globalised era

Hans Böckler Stiftung Advertisement

Towards a new Minimum Wage Policy in Germany and Europe: WSI minimum wage report 2022

The past year has seen a much higher political profile for the issue of minimum wages, not only in Germany, which has seen fresh initiatives to tackle low pay, but also in those many other countries in Europe that have embarked on substantial and sustained increases in statutory minimum wages. One key benchmark in determining what should count as an adequate minimum wage is the threshold of 60 per cent of the median wage, a ratio that has also played a role in the European Commission's proposals for an EU-level policy on minimum wages. This year's WSI Minimum Wage Report highlights the feasibility of achieving minimum wages that meet this criterion, given the political will. And with an increase to 12 euro per hour planned for autumn 2022, Germany might now find itself promoted from laggard to minimum-wage trailblazer.


FREE DOWNLOAD

ETUI advertisement

Bilan social / Social policy in the EU: state of play 2021 and perspectives

The new edition of the Bilan social 2021, co-produced by the European Social Observatory (OSE) and the European Trade Union Institute (ETUI), reveals that while EU social policy-making took a blow in 2020, 2021 was guided by the re-emerging social aspirations of the European Commission and the launch of several important initiatives. Against the background of Covid-19, climate change and the debate on the future of Europe, the French presidency of the Council of the EU and the von der Leyen commission must now be closely scrutinised by EU citizens and social stakeholders.


AVAILABLE HERE

Eurofound advertisement

Living and working in Europe 2021

The Covid-19 pandemic continued to be a defining force in 2021, and Eurofound continued its work of examining and recording the many and diverse impacts across the EU. Living and working in Europe 2021 provides a snapshot of the changes to employment, work and living conditions in Europe. It also summarises the agency’s findings on issues such as gender equality in employment, wealth inequality and labour shortages. These will have a significant bearing on recovery from the pandemic, resilience in the face of the war in Ukraine and a successful transition to a green and digital future.


AVAILABLE HERE

Foundation for European Progressive Studies Advertisement

EU Care Atlas: a new interactive data map showing how care deficits affect the gender earnings gap in the EU

Browse through the EU Care Atlas, a new interactive data map to help uncover what the statistics are often hiding: how care deficits directly feed into the gender earnings gap.

While attention is often focused on the gender pay gap (13%), the EU Care Atlas brings to light the more worrisome and complex picture of women’s economic inequalities. The pay gap is just one of three main elements that explain the overall earnings gap, which is estimated at 36.7%. The EU Care Atlas illustrates the urgent need to look beyond the pay gap and understand the interplay between the overall earnings gap and care imbalances.


BROWSE THROUGH THE MAP

About Social Europe

Our Mission

Article Submission

Membership

Advertisements

Legal Disclosure

Privacy Policy

Copyright

Social Europe ISSN 2628-7641

Social Europe Archives

Search Social Europe

Themes Archive

Politics Archive

Economy Archive

Society Archive

Ecology Archive

Follow us on social media

Follow us on Facebook

Follow us on Twitter

Follow us on LinkedIn

Follow us on YouTube