Collective Bargaining Is Our Greatest Weapon Against Inequality
New research shows that when collective bargaining agreements decline, inequality rises – proof that trade unions are key to fighting for justice in our economy.
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The concentration of wealth into the hands of a few is possible only because they exercise constant power over the rest of us. Identifying where that power lies, and how it has been established, is key to challenging it.
Looking back at how income distribution has changed over the years can tell us a lot about the events that shifted the dynamics of that power. UNI Europa recently mapped income inequality against rates of collective bargaining coverage for countries across Europe—and our findings are stark.
The key finding is this: wherever policies have been brought in to weaken working people’s ability to bargain collectively, inequality has risen. The inverse is also true: countries that have maintained collective bargaining coverage at a high level have kept inequality at bay.
In the UK, the Thatcher government’s onslaught against trade unions and collective bargaining is well-known, and its consequences continue to reverberate across workplaces and communities. Seventy percent of UK workers in 1960 had a collective agreement, which meant that their working conditions not only depended on their individual negotiation, but were set through a collective process. Almost six decades later, in 2017, only twenty-seven percent of the workers in the UK were covered by a collective bargaining agreement.
Mirroring bargaining coverage, about a quarter of the national income of the UK went to the people with the top ten percent of incomes in 1960. By 2017, this had grown to more than a third.
The pattern in the UK is particularly striking, but we can see the same process happening in countries like Germany and Ireland, too: when collective bargaining goes down, inequality goes up. Meanwhile, in those countries where collective bargaining coverage remained stable—like Austria, Belgium, and France—inequality has also been stable.
A Perversion Sold as a Solution
This decrease in collective bargaining coverage is far from automatic or inevitable: it was, and is, a political choice. In the UK and many EU countries, government policies were designed with the full intention of weakening union organising, multi-employer bargaining, the right to strike, and the power of collective agreements.
One common argument used to legitimise these policies is that they somehow free us from unnatural constraints. ‘Labour market liberalisation measures’ are presented as the solution to the rusty industrial-era structures that obscure workplace decision-making.
The reality is the opposite. These forms of collective power respond to the societal need for equity. Acting together is hardwired within us—so much so that many people experience their first collective action as emancipatory. Giving people a very tangible sense of collective agency is the answer to rebuilding both communal trust and civic pride. After all, the essence of democracy is not just the freedom to speak: it is the right to have a say.
Inequality, meanwhile, has devastating effects on our societies. Mental health, crime rates, social mobility, gender discrimination: all are dramatically worse in more unequal societies, as evidenced in Richard G. Wilkinson and Kate Pickett’s seminal books The Spirit Level and The Inner Level.
Rather than collective bargaining, it is the suppression of our predisposition to find fair solutions that is entirely artificial. By hacking away at those structures of collective decision-making won initially through workers’ struggle, the individuals and institutions that pursue anti-union measures are suffocating a natural instinct for collective agency and replacing it with individualism and with powerlessness. The ensuing tide of frustration is in turn driving erratic lunges for power—ones as often misdirected as they are impassioned.
Forward Through Collective Bargaining
Today, after a devastating pandemic, and in the face of decades of wage stagnation and rising prices across the board, working people in the UK and Europe are fighting back. New waves of collective action are a clear sign that the workplace is being recognised as a site of power, and workers are channelling their frustration into collective action that strikes at the core of the inequality epidemic.
Bridging local actions to sectoral, national, and even international strategies will be crucial to locking in and expanding union victories everywhere. The target is clear—strengthening collective bargaining—and the method to reach that goal is triple.
First, there is the foundational need to organise workers on the company level. For that, engaged and mobilised trade unionism is essential.
Second comes sectoral or multi-employer bargaining. Multi-employer bargaining takes wages in different companies out of competition with each other, strengthening collective bargaining everywhere. Instead of incentivising corporations to find novel ways of circumventing democratic decision-making, it rewards the companies with more constructive labour relations, giving them a mechanism to lift minimum conditions across the sector and push out corporations that seek to undercut workers’ conditions.
Third, multinational corporations are critical both in the sheer number of people who work for them and in the influence they wield in our societies. Like competition between companies, competition within companies’ different sites should not be based on undermining wages and working conditions—instead, solidarity and joint action through international alliances are essential.
Electoral politics is vital for changing the law. But as so many workers across the UK and Europe are now proving, we don’t have to wait for the elusive ‘greener pastures’ to come for us to get to work. From the workplace to the company to the sector, the labour movement is building power right now—and to achieve a fairer future, it has to keep pushing ahead.