Upstream - Sneak Peak: Why we need a 21st Century Labor Movement (Wilkinson & Pickett)

Episode Date: June 29, 2016

Inequality reduced dramatically from around the 1930s to the 1980s, when it suddenly started rising again to levels not seen for almost a hundred years. What happened? Richard Wilkinson and Kate Picket, authors of the influential book The Spirit Level, explain what happened and how worker-owned cooperatives can serve as a countervailing force to neoliberalism.

You're listening to an Upstream Sneak Peek with Richard Wilkinson and Kate Pickett, co-authors of The Spirit Level. But in a way, the main thing is building a sort of social movement that's able to start to shift policy related to income differences. Basically, you asked me about politics earlier in the end of the Spirit Level book. We do talk about ways of reducing income differences. Basically, two ways. You can redistribute people's incomes through taxes and benefits. That's rather the pattern of the Scandinavian countries.

But you can also start off with smaller differences in earnings. And, of course, one of the major reasons why inequality has increased so much in many developed countries is that the rich have run away from the rest of us, you know, the bonus culture and those huge salaries at the top. And that disease has spread downwards a little bit. So more inequality. And I think that it does take a large social movement to make a major difference and if you look at income differences in most of the developed world in the 20th century the very high inequalities in the 1920s but in the 1930s they start coming down in the United

States under Roosevelt but inequality has gone reducing almost continuously until the 1970s. And it's from about 1980 on that you get the modern rise of inequality with neoliberalism, Reagan and Thatcher. But if you look at a marker of the sort of strength of the social democratic movement, the strength of the labor movement, or what I call the countervailing voice in society, trade union membership as a proportion of the labor force, you find it's exactly the opposite of that U-shaped distribution of inequality during the 20th century. Inequality comes down when the labor movement is becoming stronger, and inequality rises again when the labor movement gets weaker. And that's a very strong relationship, and you

see it in lots of different countries. And it tells us something about the scale of movement we need to really shift to a different kind of society that we have to do not just for the sake of inequality, but also to move towards sustainability. But I don't think we're going to be able to recreate strong trade unions to the extent that we had them. I think we have to move to greater economic democracy, by which I mean not only employee representatives on company boards, hopefully larger and larger proportion over time until employees perhaps a majority control, but also giving more incentives to cooperatives and employee-owned companies, which increasingly evaluations show that they do better in productivity terms and socially they do better as well because they change the relationships between employees. No longer divided quite so rigidly in terms of order givers and line management and so on.

It becomes more of a community. Did you see the report today from UK cooperatives? No. did you see the report today from uk cooperatives no oh i got an email massive growth in cooperatives huge growth just over the last year and increasing evidence that cooperatives are productive efficient yeah and i believe particularly in recessions, they're better at coping with... And cooperatives are just one sort of flavor of economic democracy. So the whole social enterprise movement is growing and growing. The sharing economy is growing. But about half the members of the European community,

half the countries in the European community, have some legislation for requiring employee representatives on remuneration committees or company boards. It's weak in many countries, but strong in Germany, for instance, where there are different requirements in terms of levels of employee representation in different sized companies. But when they get to 2,000 employees, half the representatives on the remuneration committees have to be employee representatives. And of course that means that they haven't had quite such a big rise in inequality,

and so those firms not only do better, but they're fairer. © BF-WATCH TV 2021