Strengthening collective labor rights can help reduce economic inequality – The Conversation

 

Report on the Impact of Collective Labor Rights on Economic Inequality and Sustainable Development Goals

Introduction: The Challenge of Rising Inequality

Despite indicators of economic strength in nations such as the United States, a significant and growing disparity in wealth distribution poses a critical challenge to sustainable development. This trend directly contravenes the objectives of the United Nations’ Sustainable Development Goals (SDGs), particularly SDG 10 (Reduced Inequalities). Current data reveals a stark contrast in economic realities:

• In the U.S., the wealthiest 1% possess over five times the wealth of the bottom 50%, an increase from a four-fold difference in 2000.
• A 2024 report indicated a single-year wealth increase of US$1 trillion for the 19 wealthiest families.
• Conversely, a majority of the population (59%) lacks sufficient savings for a minor financial emergency, undermining progress toward SDG 1 (No Poverty).

A 2023 study of 145 countries, including the U.S., investigated the causal relationship between the protection of labor rights and the reduction of economic inequality, offering critical insights for achieving the 2030 Agenda.

Advancing SDG 8: The Role of Collective Labor Rights

Defining Decent Work and Worker Empowerment

Collective labor rights are fundamental to achieving SDG 8 (Decent Work and Economic Growth). These rights are essential for creating fair and secure working environments and include:

1. The right to form and join trade unions.
2. The right to engage in collective bargaining for wages and working conditions.
3. The right to strike as a means of negotiation.
4. Access to justice and protection against employer retaliation for union activities.

Through these mechanisms, unions can effectively pressure employers to provide equitable compensation and benefits, thereby promoting decent work. In the U.S., union members consistently earn higher wages than their non-union counterparts, demonstrating the tangible economic benefits of exercising these rights.

Global Analysis of Labor Rights and Inequality

The study utilized the CIRIGHTS dataset, which measures governmental respect for human rights, to create a four-point scale for collective labor rights. This analysis revealed a concerning global trend:

• Declining Labor Rights: Between 1994 and 2022, global respect for collective labor rights declined by 50%, from an average score of 2.06 to 1.03.
• Increasing Inequality: Concurrently, the share of income held by the top 1% globally increased by 11%, according to the World Inequality Dataset.

This inverse relationship highlights a critical policy area for nations committed to the SDGs. Countries with strong protections, such as Canada and Sweden (scoring 4), demonstrate a viable path forward, while the U.S. (scoring 2) has significant room for improvement to align with SDG 8 and SDG 16 (Peace, Justice and Strong Institutions).

Findings: Linking Labor Rights to SDG 10 (Reduced Inequalities)

Statistical analysis confirmed that strengthening collective labor rights is a direct and effective mechanism for reducing multiple dimensions of inequality, aligning with the core targets of SDG 10.

Impact on Vertical Inequality (Rich vs. Poor)

Vertical inequality, the income gap between the richest and poorest individuals within a country, was measured using the Gini index. The research found that a one-point increase on the four-point collective labor rights scale leads to a substantial reduction in vertical inequality. For a country like the U.S., such an improvement would be sufficient to reverse the rise in inequality experienced during the Great Recession, directly contributing to Target 10.1 of the SDGs, which aims to sustain income growth for the bottom 40 percent of the population.

Impact on Horizontal Inequality (Between Ethnic Groups)

Horizontal inequality, which measures income disparities between different ethnic or racial groups, is a key focus of SDG Target 10.2 (promoting the inclusion of all). The study found that stronger labor rights reduce both forms of horizontal inequality:

• Negative Horizontal Inequality: By empowering all workers, strong labor rights help raise the income floor, particularly benefiting the poorest ethnic groups in a society.
• Positive Horizontal Inequality: Collective bargaining can also moderate the income growth of the highest-earning ethnic groups, narrowing the overall gap and fostering greater social cohesion.

These findings suggest that promoting the freedom of association and collective bargaining is not only a matter of workers’ rights but a comprehensive strategy for building a more equitable society. By ensuring workers can advocate for themselves, governments can advance the broader societal benefits of reduced poverty, decent work for all, and significantly diminished inequalities, fulfilling the central promise of the 2030 Agenda to “leave no one behind.”

Analysis of SDGs, Targets, and Indicators

1. Which SDGs are addressed or connected to the issues highlighted in the article?

SDG 10: Reduced Inequalities

• The article’s central theme is the widening economic gap between the rich and poor in the U.S. and globally. It explicitly discusses “vertical inequality” (the gap between what people earn within a country) and “horizontal inequality” (income inequality between ethnic groups), which are the core concerns of SDG 10.

SDG 8: Decent Work and Economic Growth

• The article proposes strengthening “collective labor rights” as a solution to inequality. It defines these rights as the right to form unions, bargain collectively, and strike. This directly relates to the “Decent Work” aspect of SDG 8, which emphasizes protecting labor rights and promoting fair wages and safe working environments.

SDG 1: No Poverty

• The article highlights the economic vulnerability of a large portion of the population by stating that “59% of Americans don’t have enough money saved up to cover an unexpected $1,000 expense.” This points to a lack of economic security and resilience, which is a key dimension of poverty addressed by SDG 1.

SDG 16: Peace, Justice and Strong Institutions

• The analysis is framed within a human rights context, using the CIRIGHTS dataset to measure government respect for human rights. The article mentions the right to “get justice if employers punish workers who exercise these rights,” which connects to the goal of ensuring access to justice for all, a key component of SDG 16.

2. What specific targets under those SDGs can be identified based on the article’s content?

SDG 10: Reduced Inequalities

1. Target 10.1: By 2030, progressively achieve and sustain income growth of the bottom 40 per cent of the population at a rate higher than the national average.
   • The article directly addresses this by noting the wealth of the top 1% has grown significantly faster than that of the bottom 50%. It states, “The wealthiest 1% of Americans have more than five times as much wealth as the bottom 50%… That’s up from four times as much in the year 2000.”
2. Target 10.2: By 2030, empower and promote the social, economic and political inclusion of all, irrespective of… race, ethnicity… or economic or other status.
   • The article analyzes “horizontal inequality,” which it defines as income inequality between ethnic groups. It specifically mentions the income disparity affecting Black Americans, who “have the lowest median income of any racial or ethnic group,” thereby highlighting the need for greater economic inclusion.
3. Target 10.4: Adopt policies, especially fiscal, wage and social protection policies, and progressively achieve greater equality.
   • The article’s main argument is that strengthening collective labor rights is a policy that can reduce inequality. It concludes that “stronger collective labor rights… reduce both types of horizontal inequality.”

SDG 8: Decent Work and Economic Growth

1. Target 8.8: Protect labour rights and promote safe and secure working environments for all workers.
   • This is the core solution proposed in the article. It explicitly defines and advocates for “collective labor rights,” including “the rights to form and join a union, bargain collectively for higher pay and better working conditions, [and] go on strike.” The study’s methodology is based on measuring the strength of these rights.
2. Target 8.5: By 2030, achieve full and productive employment and decent work for all… and equal pay for work of equal value.
   • The article supports this target by showing how unions lead to better outcomes for workers, stating that “union members typically earn higher wages than their nonunion counterparts” and that strikes can win “better benefits and higher wages.”

SDG 1: No Poverty

1. Target 1.4: By 2030, ensure that all men and women, in particular the poor and the vulnerable, have equal rights to economic resources…
   • The article points to the economic vulnerability of a majority of Americans, noting that “59% of Americans don’t have enough money saved up to cover an unexpected $1,000 expense.” This lack of financial savings represents a lack of access to economic resources for security and resilience.

SDG 16: Peace, Justice and Strong Institutions

1. Target 16.3: Promote the rule of law at the national and international levels and ensure equal access to justice for all.
   • The article mentions the right to “get justice if employers punish workers who exercise these rights” as a component of collective labor rights, directly linking to the principle of access to justice.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

Indicators for SDG 10

1. Gini index: The article explicitly states it used the “Gini index, a commonly used indicator of economic inequality” to measure “vertical inequality.” This is a primary indicator for SDG 10.
2. Income/Wealth Share of Population Quintiles: The article measures inequality by comparing the wealth of the “wealthiest 1% of Americans” to the “bottom 50%.” It also references the “World Inequality Dataset” and the “share of income earned by the 1%.” This aligns with indicator 10.1.1, which tracks income growth of the bottom 40%.
3. Measures of Horizontal Inequality: The article describes its method for measuring income inequality between ethnic groups, specifically “the amount of a country’s income held by the poorest ethnic group” and “the income earned by the richest ethnic group.” This serves as a direct indicator for Target 10.2.

Indicators for SDG 8

1. Measure of Collective Labor Rights: The article details a specific indicator it created by using the CIRIGHTS dataset to score countries on “the right to workplace association and the right to collective bargaining.” This score, ranging from zero to four, is a direct measurement of compliance with labor rights, which is the focus of indicator 8.8.2.
2. Union Density Rate: The article mentions that in the U.S., “less than 10% of workers belong to unions.” The percentage of the workforce that is unionized is a common indicator used to measure the strength of collective bargaining.

Indicators for SDG 1

1. Proportion of Population with Emergency Savings: The statistic that “59% of Americans don’t have enough money saved up to cover an unexpected $1,000 expense” is an implied indicator of economic vulnerability and lack of financial resilience, relevant to measuring progress on Target 1.4.

Indicators for SDG 16

1. Human Rights Violation Score: The CIRIGHTS dataset’s scoring system (0, 1, or 2) for government respect for human rights, including the right to justice for workers, serves as a quantitative indicator for measuring access to justice as per Target 16.3.

4. Summary Table of SDGs, Targets, and Indicators

SDGs	Targets	Indicators Identified in the Article
SDG 10: Reduced Inequalities	10.1: Sustain income growth of the bottom 40%. 10.2: Empower and promote inclusion of all. 10.4: Adopt policies for greater equality.	– Gini index to measure vertical inequality. – Share of wealth held by the top 1% vs. the bottom 50%. – Share of income earned by the richest ethnic group vs. the poorest ethnic group (horizontal inequality).
SDG 8: Decent Work and Economic Growth	8.5: Achieve decent work and equal pay. 8.8: Protect labour rights.	– CIRIGHTS dataset score (0-4) for collective labor rights (workplace association and collective bargaining). – Union density rate (percentage of workers in unions). – Wage differences between union and non-union workers.
SDG 1: No Poverty	1.4: Ensure equal rights to economic resources for the poor and vulnerable.	– Percentage of the population unable to cover a $1,000 unexpected expense.
SDG 16: Peace, Justice and Strong Institutions	16.3: Ensure equal access to justice for all.	– CIRIGHTS dataset score (0, 1, or 2) measuring government respect for human rights, including workers’ right to justice.

Source: theconversation.com