Trade unions from G7 countries have issued a joint Labour 7 (L7) statement ahead of the G7 Finance Ministers and Central Bank Governors meeting, calling for faster interest rate cuts and increased public spending to stimulate demand and quality employment.
The Labour 7, the official trade union engagement group of the G7, warns that workers have faced a series of compounding shocks in recent years, including the 2022-2023 inflation surge which led to a pronounced cost-of-living crisis that remains ongoing. While inflation is easing, previous interest rate hikes continue to weigh down the credit supply, with many households and businesses facing refinancing at higher costs.
The threat to workers today isn't inflation – it's overly restrictive monetary policy combined with inadequate public investment undermining job security and economic growth. The G7 must act decisively to lower interest rates, strengthen collective bargaining, and invest in a green economy that delivers quality jobs and shared prosperity.
The L7 raises concerns that keeping interest rates high while cutting government spending could slow economic recovery and push inflation below targets in G7 economies such as Canada, Germany, France and Italy. It advocates for quicker interest rate reductions and a broader approach that strengthens workers’ bargaining power and addresses excessive corporate pricing.
To finance needed investments, the L7 outlines several tax policy reforms, including taxation of wealth and capital income, increased corporate tax rates, a financial transaction tax, and taxation of windfall profits. These measures should fund increased investment in public services, job creation programmes, affordable housing, clean energy, and green infrastructure.
Fair and progressive taxation is fundamental to reduce inequalities and improve living standards. The G7 needs to put forward ambitious fiscal measures that put job creation and workers’ needs at the centre of economic policy.
Finance ministers will consider the L7’s recommendations at their upcoming meeting in Banff, Canada. The L7 has been actively engaging with G7 governments throughout the Canadian presidency, with a key focus on economic recovery, workers’ rights and climate action.
Read the full L7 statement here.
