We take the view that economic equity benefits both society as a whole and each of us as individuals. There is much work to be done here, as social developments have widened the gaps for some time now, and often in a historical perspective where global institutions such as the OECD, IMF the World Bank have led the way. This kind of policy has led to privatisation and deregulation of public services, decreased regulation of financial markets, and widened social gaps and less progressive taxation systems as driving forces of the economy. Today we are witnessing a paradigm shift on the international level within these institutions, in terms of how the economy, society and politics are viewed. Equality, fair economic distribution and preventing poverty are now increasingly stressed as prerequisites for positive economic development among global institutions, sometimes based on the social models of the Nordic countries.
In spite of this, the current situation demonstrates that growing disparities between rich and poor primarily benefit the ten percent with the highest incomes, and especially they wealthiest one percent, whose share of income has increased while other groups have seen a regressive or stagnant development when it comes to real wages. In other words, what we are seeing is that an ever smaller number of people are getting an ever bigger share of our common resources.
This development has been detrimental to trade union organisation and with that, to labour market stability. The regression of the trade union movement in an international perspective has had a negative effect on economic equality and social cohesion in several developed economies, which in turn has led to weakened bargaining power for workers in relation to capital holders. This weakening of the trade union movement has also resulted in less influence over redistribution policies.
This inequality comes at a price: reduced economic growth, which is largely due to reduced consumption, fewer private and public investments because of low demand, and a reduced tax base. Redistribution through collective agreements, taxation and public transfer systems – such as education, social security, active labour market policies and healthcare – has a positive effect not only in terms of equality, equity and social cohesion, but on economic growth too.