TUAC strongly contests the OECD’s push for deregulation in the latest Economic Outlook, warning that weakening worker protections will not drive innovation and risks increasing inequality.
The Economic Outlook, published today, projects global growth of 3.2% in 2025, slowing to 2.9% in 2026 – well below the 2024 level of 3.3%. The OECD confirms that economic slowdown is translating into labour market weakening, with unemployment rising in major economies. In response, the OECD calls for “ambitious structural reforms” including deregulatory measures, fiscal “discipline” and “vigilant” monetary policy.
Trade unions reject the case for deregulation as a path to sustainable growth, warning against over-simplifying the links between regulation and economic performance. The real barriers lie elsewhere: weak household spending, and corporate strategies that prioritise shareholder payouts and set excessive hurdles for new investment. The claim made by deregulation advocates – that Europe’s employment protections explain the AI investment gap with the US – does not hold up. Investment patterns are shaped by US-China competition and structural factors far beyond labour market rules, and countries with weak and strong protections alike show similarly limited investment.
More fundamentally, TUAC argues that deregulation risks letting dominant companies tighten their grip on markets and workers, weakening bargaining power and driving up inequality, in turn harming economic growth. Besides, the case for regulation does not rest on growth. It rests on protecting workers and the environment – which are non-negotiable.
On macroeconomic policy, the Outlook fares no better. Its emphasis on budgetary “discipline” contradicts the OECD’s own research showing that stronger growth is a better driver of declining debt ratios than fiscal consolidation. Signals that rate-cutting cycles may be ending prematurely, while monetary policy remains in contractionary territory, are equally concerning – and risk pushing inflation below target.
High interest rates have constrained governments’ ability to invest in recent years. With price pressures now largely under control, the policy priority should shift toward growth and quality job creation. TUAC urges governments to seize this window for well-targeted public investment in education, health, social protection, active labour market programmes and green infrastructure – building resilience and laying the foundation for inclusive, sustainable economies.
"Deregulation is not the answer. Governments should focus on what actually works: public investment in education, health and infrastructure that boosts demand and builds resilience for the challenges ahead."
Read TUAC’s full report on the Economic Outlook here.
Image credit: OECD
