Coronavirus Has Provided A Wake-Up Call For Workers (GLOBAL)
FINANCIAL TIMES
By News Room
Last updated Jan 4, 2022
It is often harder to identify tipping points while they are happening than after the fact. But that has not stopped people from questioning whether a lasting shift in the labour market is under way. After 40 years in which capital has had the whip hand over labour, is worker power on the rise?
If so, it would mark a profound change of economic direction for much of the rich world. Since 1985, trade union membership has halved on average across OECD countries, while coverage of collective agreements signed at the national, sector or company level has declined by a third. At the same time, workers have been taking a smaller share of the pie. Real median wage growth has failed to keep pace with productivity growth on average across 24 OECD countries over the past two decades.
But the pandemic has precipitated a shortage of workers in many countries that caught employers off-guard. Migrants have returned to their home countries, older people have retired early, and childcare or health problems have led others to exit the labour market.
Workers have sought to capitalise on their sudden scarcity value. In the US, unionised workers have launched a series of strikes, from John Deere to Kellogg. Workers have also begun trying to organise in low-paid sectors without a history of union presence, from Starbucks to Amazon. In the UK, the proportion of employees who are union members has begun to creep higher after decades of decline. Workers are also finding new ways to fight for what they want. Organise, a UK-based worker campaign platform, now has more than 1m members after growing rapidly through the pandemic.
Policymakers in some countries are trying to help tilt the balance. Joe Biden, US president, has promised to be “the most pro-union president you’ve ever seen” and wants to pass legislation to make it easier for them to organise. The European Commission has published draft legislation which it says will put a stop to gig economy companies wrongly classifying people as “self-employed” to avoid giving them worker rights and protections.
Slow-moving demographic factors could contribute too. Some economists believe a global glut of workers in recent decades is set to end as population growth slows and the global share of working-age people begins to shrink. This could bolster wage growth by making staff relatively harder to find.
Alternatively, workers might find their moment of leverage proves shortlived. More jobs and tasks are likely to become susceptible to automation as robotics and artificial intelligence improve. The rise of remote working and crowd platforms, which break jobs into small tasks, could lead to a fresh wave of globalisation that hits white-collar staff in the industrialised world.
Increased use of algorithms to hire, assess and monitor workers is already beginning to feel disempowering for those on the receiving end. Gig workers managed by algorithms have told this news organisation how frustrating it is to be disciplined by machines that cannot be appealed to nor questioned.
Whether or not the balance of power between capital and labour has changed for good, the pandemic has been instructive for both sides. Employers have discovered that staff availability is not a given, but a business risk to mitigate against. Many are paying more attention to recruitment and retention, and not just in the professional world. And a new generation of workers, from shelf stackers to delivery drivers, have learned just how essential they really are.
It is often harder to identify tipping points while they are happening than after the fact. But that has not stopped people from questioning whether a lasting shift in the labour market is under way. After 40 years in which capital has had the whip hand over labour, is worker power on the rise?
If so, it would mark a profound change of economic direction for much of the rich world. Since 1985, trade union membership has halved on average across OECD countries, while coverage of collective agreements signed at the national, sector or company level has declined by a third. At the same time, workers have been taking a smaller share of the pie. Real median wage growth has failed to keep pace with productivity growth on average across 24 OECD countries over the past two decades.
But the pandemic has precipitated a shortage of workers in many countries that caught employers off-guard. Migrants have returned to their home countries, older people have retired early, and childcare or health problems have led others to exit the labour market.
Workers have sought to capitalise on their sudden scarcity value. In the US, unionised workers have launched a series of strikes, from John Deere to Kellogg. Workers have also begun trying to organise in low-paid sectors without a history of union presence, from Starbucks to Amazon. In the UK, the proportion of employees who are union members has begun to creep higher after decades of decline. Workers are also finding new ways to fight for what they want. Organise, a UK-based worker campaign platform, now has more than 1m members after growing rapidly through the pandemic.
Policymakers in some countries are trying to help tilt the balance. Joe Biden, US president, has promised to be “the most pro-union president you’ve ever seen” and wants to pass legislation to make it easier for them to organise. The European Commission has published draft legislation which it says will put a stop to gig economy companies wrongly classifying people as “self-employed” to avoid giving them worker rights and protections.
Slow-moving demographic factors could contribute too. Some economists believe a global glut of workers in recent decades is set to end as population growth slows and the global share of working-age people begins to shrink. This could bolster wage growth by making staff relatively harder to find.
Alternatively, workers might find their moment of leverage proves shortlived. More jobs and tasks are likely to become susceptible to automation as robotics and artificial intelligence improve. The rise of remote working and crowd platforms, which break jobs into small tasks, could lead to a fresh wave of globalisation that hits white-collar staff in the industrialised world.
Increased use of algorithms to hire, assess and monitor workers is already beginning to feel disempowering for those on the receiving end. Gig workers managed by algorithms have told this news organisation how frustrating it is to be disciplined by machines that cannot be appealed to nor questioned.
Whether or not the balance of power between capital and labour has changed for good, the pandemic has been instructive for both sides. Employers have discovered that staff availability is not a given, but a business risk to mitigate against. Many are paying more attention to recruitment and retention, and not just in the professional world. And a new generation of workers, from shelf stackers to delivery drivers, have learned just how essential they really are.
