Tue. Jan 18th, 2022

It is often more difficult to identify tipping points while this is happening than after the fact. But that has not stopped people from questioning whether a lasting shift in the labor market is in progress. After 40 years in which capital had the whip to hand over labor, labor force rising?

If so, it will be a profound change of economic direction for much of the rich world. Since 1985, trade union membership has halved on average in OECD countries, while coverage of collective agreements signed at national, sectoral or company level has decreased by a third. At the same time, workers took a smaller portion of the pie. Real median wage growth has not been able to keep pace with productivity growth averaging over 24 OECD countries over the past two decades.

But the pandemic has a shortage of workers in many countries that have caught employers off guard. Migrants returned to their homelands, older people retired early, and childcare or health problems led to others leaving the labor market.

Workers tried to capitalize on their sudden scarcity value. In the US, union workers have launched a series of strikes, from John Deere to Kellogg. Workers also began trying to organize in low-paid sectors without a history of union presence, from Starbucks to Amazon. In the UK, the percentage of unionized workers has started to climb higher after decades of decline. Workers are also finding new ways to fight for what they want. Organize, a UK-based workers’ campaign platform, now has more than 1 million members after growing rapidly through the pandemic.

Policymakers in some countries are trying to help tip the balance. U.S. President Joe Biden has vowed to be “the most pro-union president you’ve ever seen” and wants to pass legislation to make it easier for them to organize. The European Commission has published draft legislation that he says will put an end to businesses in the economy that mistakenly classify people as “self-employed” to prevent them from giving workers’ rights and protection.

Move slowly demographic factors can also contribute. Some economists believe that a global influx of workers will end in recent decades as population growth slows and the global share of working-age people begins to shrink. This can boost wage growth by making staff relatively harder to find.

Alternatively, workers may find that their moment of leverage is short-lived. More jobs and tasks are likely to become susceptible to automation as robotics and artificial intelligence improve. The rise of remote work and crowd platforms, which divide work into small tasks, could lead to a new wave of globalization hitting white-collar workers in the industrialized world.

Increase use of algorithms hiring, assessing and monitoring workers is already beginning to feel disempowering for those on the receiving end. Gig workers driven by algorithms told this news organization how frustrating it is to be disciplined by machines that cannot be appealed to or questioned.

Whether the balance of power between capital and labor changed for good or not, the pandemic was instructive for both sides. Employers have discovered that staff availability is not a given, but a business risk to reduce against. Many pay more attention to recruitment and retention, and not just in the professional world. And a new generation of workers, from shelf stackers to delivery managers, have learned how essential they really are.

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