Trade unions are calling on the OECD to address record levels of inequality, highlighting the critical role of collective bargaining and worker representation in driving sustainable economic growth.
The case for change was presented at the TUAC-OECD liaison committee meeting on 9th January, where union leaders engaged with senior OECD officials and country Ambassadors on strategies to reverse growing income disparities.
TUAC demonstrated how weakening labour institutions has contributed to the declining labour share of income. While low-income households and increasing parts of the middle-class struggle to make ends meet, the gap between them and the wealthiest continues to widen. Decades of labour market deregulation have weakened workers’ wages, employment conditions and collective bargaining institutions. Inadequate redistribution policies, including weak social protection instruments, low progressivity in personal income taxation and low levels of corporate taxation, have led to widening income and wealth disparities.
These policies were implemented with the promise that higher profits and business-friendly policies would lead to higher growth and employment levels. Instead, higher profits have led to increased shareholder dividends and financial market speculation, rather than investment in the real economy, further exacerbating inequalities and compressing workers’ share of income across OECD countries. This widening gap is reflected in wage statistics: while labour productivity grew by 28% over the past two decades, real median wages increased by just 8%. As a result, workers have lost an estimated USD 2.4 trillion annually compared to 2004 levels – a sum equivalent to Spain’s entire GDP shifting from labour to capital each year.
These growing disparities are not inevitable - they are the direct result of policy choices. The evidence shows that strong collective bargaining systems help ensure economic gains are shared fairly across society, rather than concentrated at the top.
The meeting addressed three interconnected challenges:
- Strengthening labour market institutions to reduce growing inequality
- Ensuring worker voice shapes artificial intelligence deployment
- Developing an OECD development strategy that promotes workers’ rights globally
TUAC particularly emphasised the need for collective bargaining to play a central role in managing AI’s impact on work, highlighting how it can help ensure fair distribution of productivity gains and protect workers’ rights.
Collective bargaining is critical to ensure that AI complements workers' capabilities and that associated productivity gains are passed on to workers through wage increases or reduced working time.
The meeting also addressed rising inequality between countries, with only 17% of Sustainable Development Goal targets currently on track. TUAC called for the new OECD Development Strategy to recognise trade unions as key development actors and significantly increase aid for labour rights and social dialogue, which currently represents just 0.11% of total allocable aid.
For more information see ‘Tackling inequality to boost economic growth and drive sustainable development‘, TUAC’s paper for the meeting with the OECD Liaison Committee.
Photo credit: OECD
