Davos 2015: World needs new business model
The global economic system isn't working for six billion people, labour leaders at the World Economic Forum in Davos, have warned.
Mass unemployment, mistrust in institutions, rising inequality and extremism are global risks for working people, employers and leaders, maintained the International Trade Union Confederation (ITUC).
“The very nature of corporate incentives to invest in any equal distribution is being undermined by their own business model. It’s a two way street: business needs workers, and workers need fair-minded employers. At the moment, business is letting down its side of the deal,” said Sharan Burrow, general secretary of the ITUC.
John Evans, general secretary of the OECD Trade Union Advisory Committee (TUAC), who is also ITUC Chief Economist, commented: “A central aspect of ‘inclusive growth’ must be reducing income inequality and reversing the decline in the share of wages in output and income.”
Since the 1980s, real wages have failed to grow at the same rate as productivity, and as a result the wage share has drastically fallen. The global wage share has declined from 62% to 54% according to the UN.
“Raising wages and reducing inequality together with public investment are key elements of a recovery plan. Government and business leaders have in their hands the tools to make a measurable difference to the lives of working people. Thirty-three million jobs could be created in G20 countries alone, with co-ordinated increases and investments in infrastructure.
“A minimum wage on which people can live, strengthening collective bargaining, curbing the excesses of CEO pay and respecting ILO standards in global supply chains are actions that leaders can put in place," Evans added.
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