Union of Labor and Growth

IMF Blog, March 31, 2017

Source details

Author/Presenter: John Evans, Head of the Trade Union Advisory Committee to the Organisation for Economic Cooperation and Development, which represents some 65 million organized workers worldwide.
Publication: The Editors, March 31, 2017.
Format: Podcast discussion on labor markets, inequality, unions, technology, and policy.

The labor market is driven by supply and demand; demand is very dependent on how well the economy is doing.
Global labor markets have not fully recovered from the Great Recession after the [U.S. investment bank] Lehman Brothers crash in 2008.
Current global unemployment: 200 million people unemployed.
Growth conditions described as very sluggish.
Increase in income inequality observed globally, and particularly in certain countries, over the last 30 to 35 years.
Historical context: post-World War II years saw falling income inequality; recent levels have jumped back toward levels that existed in the 1920s.
IMF analysis of advanced economies attributes half the increase in inequality between the top decile and bottom decile to weaker unions and declining unionization.

Weaker unions and declining unionization are identified as major contributors to rising inequality (half the increase between the top decile and bottom decile).
Strong case made for advocating more broadly-based inclusive growth as a policy priority.

Sixty percent of people globally work outside formal employment.
Re-attaching informal workers to the labor force via labor market institutions is described as crucially important.

Technology is transforming the labor force.
Short-term impact: technology will have less impact on increasing jobs.
Quality and distributional impact: technology will have more impact on the quality of work and potentially on income distribution.
Historical experience: past waves of technological change show outcomes depend on policies to provide new skills, help workers move to new jobs, and offer security and protection during transitions—sometimes managed well, sometimes badly.

Governments view labor markets as crucial to delivering jobs and reducing inequality.
Research by institutions like the IMF and World Bank has produced new results about labor markets that policymakers are listening to.
Models cited as effective: good social dialogue, social partnerships, high levels of trust between management and workers/unions, and recognition by governments—these factors improve the process of managing labor market change.

Source: Union of Labor and Growth — The Editors, March 31, 2017.