Misdiagnosed labour pains

The Economist has highlighted the continued drop in the `labour share’ of national income around the world - a drop from 66% to 62% - and it is going to continue to curve down according to the OECD. This is consistent with a decline in union power across the world and the continued race to the bottom between global companies. But the house journal of big business presents this as a natural and unavoidable state of the world economy. It claims it is down to immigrant labour, to technology and to deregulation:
http://www.economist.com/news/finance-and-economics/21588900-all-around-world-labour-losing-out-capital-labour-pains

The article presents a sample of evidence that shows that the impact of these factors has been detrimental. Technology even in high density labour services such as cleaning and security will still replace jobs in the current tight margin competition. Immigrant labour exploited by employers is a factor in all continents.

But from a labour and union perspective it is more about two other major factors.

The collapse in the scope of workers covered by collective bargaining is extremely significant - in the UK it has collapsed from 64% in 1964 to 32% in 2012 - as workers wages are no longer subject to bargaining by trade unions. Even in the public sector the growth of privatisation will press this figure downwards. Coupled with this is the decline in trade union density, in the UK now down to 24% across the economy and just below 50% in local government for example.

The two factors go hand in hand and the decline of union power is significant. But as unions we are still capable of reversing these trends. These trends are not so pronounced in the Nordic states nor in Belgium where trade union density and collective bargaining coverage is high. Whilst it is obvious that The Economist will not call for trade union revival to rescue living standards for workers, it is guilty of denying the critical factor for workers in the global and national economies - the absence of powerful unions.