Rich get richer from fewer labor unions, study says
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Daughter of Yorkshire


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Rich get richer from fewer labor unions, study says
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A study by the International Monetary Fund tracked three decades of income and found that as unionization declined, the wealth of the richest 10 percent in advanced countries showed a continuous increase.

More specifically, the study’s authors found that when researching income levels during the period of 1980-2010, the decline in unionization explained about half of the rise in incomes for the richest 10 percent, and half of the increase in the Gini coefficient (a measure of income inequality).

“While some inequality can increase efficiency by strengthening incentives to work and invest, recent research suggests that higher inequality is associated with lower and less sustainable growth in the medium run, even in advanced economies,” argued the paper’s authors, Florence Jaumotte and Carolina Osorio Buitron.

The authors said traditional research has argued that the rise of inequality in advanced economies can be attributed to skill-based technology changes – such as new technology displacing workers – and globalization. They found that these developments led to some inequality changes at different rates and magnitudes, but not enough to account for the consistent increase in inequality that was being measured.

Researchers looked for answers in recent studies that made the claim that financial deregulation and lower taxes were another factor – but again, that wasn’t showing the steady increases that researchers were charting.

“…A rising concentration of income at the top of the distribution can reduce a population’s welfare if it allows top earners to manipulate the economic political system in their favor,” they wrote, referring to things such as lower taxes and business subsidies.

Not only this, but highly unionised countries have fewer workers in low-pay, basically dead-end jobs. Unions can definitely be harmful sometimes (see Britain in the 70s and the behaviour of some public sector unions more recently), but here the pendelum has swung too far the other way.
2015 Feb 28 08:43
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Gamera (28-02-2015)

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