Empower Unions

A somewhat belated welcome to 2026 after a few weeks in Japan and getting myself moving again.

I thought I would start the New, and more importantly, Election Year with a reminder of the vital role trade unions play in ensuring a fair distribution of wealth and income in societies. In the lead up to an election, and the policies parties will take to the election, it is important to make the point that enabling institutions, and especially trade unions, can be more important than focussed policies.

So, a big picture start before moving to other issues in future posts -whatever else one might say about the Coalition Government, they are providing plenty of fuel for such posts.

Two significant groups stress the need for stronger unions and enhanced collective bargaining.

The OECD

Perhaps most significantly the OECD, long the advocate of deregulated labour markets, has come to the conclusion, to cite its website:

Collective bargaining and social dialogue are key labour rights and have the potential to make job markets more inclusive. As major demographic and technological changes are re-shaping the labour market, collective bargaining is well placed to generate solutions to emerging collective challenges. However, its capacity to deliver is threatened by the weakening of labour relations in many countries and changing employment trends.

Its most recent Report on collective bargaining it stresses the importance of collective bargaining stating:

Without underestimating the challenges ahead, this report argues that collective bargaining can and should be mobilised to address issues emerging in the changing world of work; in fact, these changes also offer social partners opportunities to revitalise collective representation and actions. …Collective bargaining, providing that it has a wide coverage and is well co-ordinated, fosters good labour market performance.

The London Consensus

Last year the London School of Economics published The London Consensus, a work which arose out of a collaboration of some 50 leading economists and policy experts. The blurb for the book states:

A generation ago, the so-called Washington Consensus laid out a series of dos and don’ts for policymakers around the world. Today, that vision is recognised as having fallen short in a number of ways – particularly in its neglect of the social and institutional factors that are indispensable for achieving sustained growth and for building fairer and more cohesive societies.

The immense challenges humanity faces are easy to list: climate change, pandemics, social inequalities, the far-reaching effects of the tech revolution and AI, a fragmenting world economy, and a wave of populism and political polarisation that has undermined support for liberal democracy in many countries. It is much harder to identify a set of new ideas – and policies – that will solve these seemingly intractable global problems.

In this new world, political leaders and policymakers need guidance and principles that can assist when choosing among policy alternatives. … The London Consensus: …. is not intended as a one-size-fits-all set of economic remedies, but an exercise in assembling the best available evidence and ideas to foster dialogue, and ultimately to develop a set of principles that can address the urgent political, social and economic tasks ahead.”

One of the first thoughts that occurred to me was that the authors would of course have considered the role that trade unions might play in this brave new world – so I turned to the index only to be disappointed and to find that “trade unions” was indexed three times, only two of which made any reference to the role unions might play in the world imagined by the 50 contributing authors.

The first, in the introductory chapter by two of the editors, Tim Besley and Andres Velasco (both at the LSE) refers to unions under the sub-heading of “Empowerment” making the point that, while the Washington Consensus saw trade unions as part of the problem of inflexible labour markets, their view was that” labour market flexibility and strong unions are by no means contradictory” and that ”the London Consensus envisions empowered unions playing a role that goes far beyond the traditional role of bargaining over wages.”

“Trade unions” as term does not make a second appearance until another 588 pages and even then only in the penultimate subsection of the book, an “Afterword” by Pranab Bardham, Distinguished Professor Emeritus of Economics at University of California (UC), Berkeley. In a section entitled “Improving the voice of labour organisations and other associations that enrich democracy.” Bardham envisages trade unions having an expanded and more significant role in the future stating:

We need to restructure labour organisations and redefine their goals, such that they are not just wage bargaining institutions, but also play a larger role in corporate governance and provide, in collaboration with other community institutions, an anchor for the shared identity of workers and citizens.

Bardham notes the fragmentation of workers as a political voice and asserts the need “to think in terms of universal policies that can bridge the gulfs between the different segments of workers.” Among such policies he includes minimum wages, social insurance, the reduction of capital subsidies and higher taxes on the rich, universal health care, universal access to vocational training, and, in the context of large masses of informal workers in poor countries, some form of universal basic income supplement.

It is hard to disagree with any of these and as he notes “The list goes on.” Bardham particularly stresses the need for unions to have a voice in corporate governance.

Unions are a solution, not a problem

I am sure most readers will have no problems with the idea that trade unions should be central to any agenda that seeks to reduce inequality, ameliorate poverty and create a more just society.

However to play such a role the legal and organisational base of unions needs to be seriously strengthened to promote and protect membership and to allow the strong exercise of worker voice.

Political parties have no problem with creating that foundation for capital – lets make sure that the policies put forward this election provide the same powers for labour and working people.