TUAC General Secretary Veronica Nilsson warned of growing inequality and workers’ rights challenges during the World Economic Forum’s “Closing the Jobs Gap” panel today. Speaking alongside the ILO Director-General and business leaders, Nilsson highlighted growing inequality’s threat to democracy:
"The poor are getting poorer and the rich are getting richer, with the number of billionaires increasing every year. It's a threat to democracy - the gap between those who have and those who have not is just too big."
Her warnings about growing inequality are supported by recent ILO data. The ILO’s 2024 World Employment and Social Outlook shows an unprecedented $2.4 trillion annual shift from labour to capital income. The analysis shows that the global labour share of income has fallen 1.6 percentage points since 2004, with nearly half this decline concentrated in the three pandemic years from 2020-2022. Rising corporate profits, rather than workers’ wages, have contributed significantly to recent years’ inflation – accelerating the shift from labour to capital.
This shift coincides with persistent employment challenges across developed economies. With unemployment across the OECD at approximately 5 per cent and expected to rise this year, skills and training have become critical issues. Nilsson noted that:
"Governments are investing just 0.01% of GDP in vocational training, and it's declining in many countries -- at exactly the time we need it more than ever."
The training gap has become especially critical given the rapid transformation of traditional employment relationships. Nilsson warned that the rise of non-standard employment and precarious work is undermining workers’ rights and social protections.
A key focus of Nilsson’s intervention was the challenge of precarious work and its impact on workers’ rights. “Our big challenge is the rise of non-standard forms of employment,” she noted, pointing to zero-hour contracts and platform work. She highlighted the example of retail workers taking gig work through platforms to work shifts for a variety of shops.
She also highlighted the problem of misclassification, where workers who lack genuine independence are incorrectly treated as self-employed. “They don’t get social protection, they don’t get all the benefits and pension entitlements,” Nilsson explained. These challenges of worker protection are becoming even more pressing as new technologies reshape the workplace.
Addressing the growing role of artificial intelligence, Nilsson stressed that workers must be involved in how AI is introduced to workplaces:
"When you introduce AI in the workplace, it has to be done in dialogue with workers,"
However, she warned that while discussions of AI at Davos promise increased productivity and prosperity, the evidence suggests these gains are not being shared fairly. The pattern of unequal distribution risks being repeated with new technologies, she cautioned, as companies prioritise profits over fair compensation for workers.
Tackling these interconnected challenges needs joint action between governments, companies, trade unions, and legal frameworks, Nilsson emphasised. As TUAC has consistently advised the OECD, without strong collective bargaining and proper regulatory frameworks, both AI and the rise of non-standard work risk further accelerating the shift from labour to capital income.
Image source: OECD database on public expenditure on labour market programmes
