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Remarks of Richard Trumka President of the Trade Union Advisory Committee to the OECD and President of the AFL-CIO

07 June 2017

Good morning everyone, and thank you to Angel, to Prime Minister Rasmussen and to the Panel.

Let me begin by complimenting Catherine Mann and the team here at the OECD. The Economic Outlook for 2017 and the Stocktaking Paper for the Ministerial on Globalization really do grapple with the core economic problem OECD countries face—the vicious cycle of stagnant wages and low growth. The Stocktaking Paper tells us globalization has meant rising inequality. The cause of rising inequality turns out to be the decline in workers’ share of income and wages not keeping up with productivity.  That turns out to be because of the decline in workers’ bargaining power as a result of globalization being managed in ways that pit workers’ against each other. Underneath all of this is the decline of the percentage of workers belonging to unions and covered by collective bargaining. Now I want to be clear, this is not my explanation—this is what the OECD says in the Outlook and the Note.

The challenge from here is that we must on the one hand get to the root causes of this low growth trap in policy choices. We must stop trying to marginalize the crisis of low wages and stagnant growth as merely regional, or treat it as if it were somehow inevitable rather than being the product of policy choices. Then we must actually bring the OECD’s policy prescriptions into line with our economic analysis.

Because I am afraid Angel that though today is Wednesday we are still dealing with a Monday OECD and a Tuesday OECD that just refuses to go away– the Economic Outlook is now clearly the Monday OECD—really digging in to the problem of wage stagnation—and for that we are all thankful.  But when we look at country specific policy prescriptions in Going for Growth its still very much Tuesday—meaning we still see the recommendations to weaken collective bargaining, lower the minimum wage and weaken unemployment insurance—exactly the policies that have produced the serious economic and political crisis we now face.  This schizophrenia really must stop if we are to solve this crisis.  Because as we sit here today we face a crisis not just of the project of globalization but of democracy itself — in a way we haven’t seen since the 1930’s.

Anti-democratic forces are able to gain ground fundamentally because ordinary people believe democracy has come to mean inequality, poverty, and rising economic insecurity.  In the United States, a recent Harvard University public opinion study found only 30% of people born since 1980 think democracy is necessary for a good society, and 24% think democracy is harmful.

This is precisely why we must not allow the policy debate to become one between neo-liberals and authoritarians.

We must have a humane economic vision AND a human political vision.  That requires rebuilding the collective power of working people, both in the workplace and in politics.  Because in a world of global corporations and big data, of Nissan and Uber– collective power is the only form of empowerment that actually exists for ordinary people.

The first steps though are that we must stop making excuses and stop making policy recommendations that amount to ripping out the economic foundations of democracy.

We must stop trying to make excuses by referring to megaforces such as technology or globalization and get serious about the fact that policymakers are responsible for the way megaforces are harnessed—either to enrich a handful of people or for the broader good.

We must stop marginalizing the problem—while regional issues are important, wage stagnation is a global issue and at the very core of our crisis.  It also does not help to talk about “compensating the losers” when the majority of the working population in OECD countries are the quote “losers.”

We must stop the double standard where we refer to the employer community and the investor community, but then talk about solutions for workers as if we can make it on our own as isolated individuals.

We must stop with the narrative that somehow in dramatically wealthier world we cannot afford the economic dignity and security for ordinary people that policymakers took for granted when the OECD was founded.

We must move on from policies that attack the working people of the OECD that go by code words like “structural reform” and “flexibility” and instead get serious about protecting democracy by building social solidarity.  The OECD should be in the business of helping people build democratic institutions that give them economic and political voice—guardians of equality and democracy.

And please, please understand, the alternative to addressing wage stagnation and the status of working people in the global economy is not more of the same elite dominated globalization. The alternative is an escalating crisis where the false promises of authoritarianism and racism threaten to overwhelm the democratic ideal.

Thank you very much.