Reform labour laws to tackle inequality in America, urges Celine McNicholas

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Reform labour laws to tackle inequality in America, urges Celine McNicholas
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  • 📰 TheEconomist
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Writing in The Economist, CmMcNich argues that workers’ right to a union is critical to a functioning economy and a thriving democracy

grown rapidly in America’s economy over the past five decades. Wage growth has been uneven and has failed to keep pace with productivity, even as those at the top captured a greater share of income. The result? Measured by the Gini coefficient, inequality in America reached its highest ever in 2019, according to theCensus Bureau. In 1967, when the bureau started studying income inequality, the Gini coefficient was 0.397 before tax. By 2019 it had climbed to 0.489.

The National Labour Relations Act of 1935 gave most private-sector workers in America the right to organise and bargain collectively. In the 87 years since the law was enacted, however, those rights have become increasingly theoretical for the overwhelming majority of American workers. TheThose amendments permitted employers to interfere with organising efforts by letting them compel workers to attend so-called “captive audience” meetings.

A wealth of research points to the positive effects unions have for workers and on reducing inequality and, as a result, for strengthening the broader economy. On average a worker covered by a union contract earns 10.2% more than a peer with similar education, occupation and experience in a non-unionised workplace in the same industry, according to the Economic Policy Institute, where I work. Further, unions help to reduce gender, racial and ethnic wage-gaps.

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