- Bryce Covert weighs in on the IMF's latest study showing a connection between stronger trade unions and greater income equality:
While it can be hard to say for sure whether the decline in unionization is a direct cause of growing income inequality, they found that it is a “key contributor” to steep increases in income at the top, which holds true even after they controlled for other factors such as shifts in political power, labor market trends like the growing power of Wall Street and deindustrialization, and top marginal tax rates.- And Enda Curran and Simon Kennedy highlight how even governments which face little democratic opposition are responding somewhat to the public's demand to reduce inequality.
The authors also found that reductions in country’s minimum wages have increased inequality “considerably.”
Why would lower unionization rates have such an impact? The authors explain it in two different ways. Lower union density reduces workers’ bargaining power, which means corporate managers and shareholders stand to see higher returns if workers don’t have the power to ask for a bigger share. A lack of bargaining power may also mean that workers have less influence on corporate decisions, which could led to policies that better benefit top earners like higher executive pay. Unions also play a political role and can push parties to pass policies that would better redistribute income, but if they are weakened they don’t have the same influence.
- But sadly, we're seeing little on that front in the places which can most afford it. On that front, CBC reports on the massive and growing problems of poverty and inequality in Toronto, while Sara Mojtehedzadeh surveys some much-needed solutions. And David Ottewell and Owen Bennett discuss the clear connection between cuts to housing programs, and rapidly increasing homelessness in the UK.
- Eric Reguly comments on the effect of monetary policy in exacerbating inequality - but while Reguly is right to note that we'd be far better off fighting recessions through helicopter drops than quantitative easing, it's the lack of the former which puts central banks in the position of having to use the tools at their disposal. And Andrew MacLeod looks at the kid-glove treatment of mortgage insurance providers in B.C. as just another example of the financial sector receiving a perpetual get-out-of-consequences-free card.
- Ben White reports on Elizabeth Warren's important challenge to the TPP and other corporate power agreements.
- And finally, Mark Hooghe, Sofie Marien, and Jennifer Oser argue that we shouldn't take hashtag activism and other online communications tools as a substitute for direct representation in decision-making, particularly since they may only perpetuate existing disparities in reach and power.