For A Future That Works Make An Action Plan To Deliver The Spirit Level Agenda
The Spirit Level, Unions and an alternative economic policy
Over 100,000 copies of the book “The Spirit Level” have been sold and its authors Professors Richard Wilkinson and Kate Pickett have spoken at over 600 lectures and events all over the world.
Trade unionists are instinctively sympathetic to research that finds the greater the income equality in a country the better it is for everyone. What I have always found to be more fascinating is that the more equal societies tend to have higher densities of trade union membership and influence. Where you have stronger trade unions you find better pay and greater social benefits for the many.
I think the empirical research underpinning the Spirit Level is compelling but a weakness (which its authors’ acknowledge) is how do we actually bring about greater equality?
In the book more equal societies have either smaller differences in pay between the top and bottom earners before tax (like in Japan) or redistribution through taxes and benefits from richer to the poor (like in Sweden).
As a negotiator in the voluntary and community sector I have been able to use the argument that organisations that have excessive pay inequality are not just morally wrong but they suffer from such divisive and destructive behaviour in a similar way. I’ve had mixed results with this approach but it is still well worth pursuing. The High Pay Commission investigation on “Fat cat” excessive remuneration has had some success with even the right wing media clamouring for action to curb it.
Yet I doubt we will be able to turn the UK into another Japan (or would want to). The other route is redistribution by public spending and a truly progressive taxation system. At the same time as allowing trade unions to collectively bargain with employers to raise wages for their members and provide Swedish style equalising social benefits.
Next week we will be marching with the TUC in London, Glasgow and Belfast, not only in opposition to the cuts by the Tory led coalition but we will also be marching for an alternative economic policy: A Future that Works. Austerity is not working, public debt is increasing, and we need an investment policy that will increase demand and confidence. Getting people back into work, building things, selling things and recycling wages back into the local economy. If you give tax cuts to millionaires they tend to save. Put money into the purses and pockets of the poor and they will spend it.
Does this all sound familiar? It’s pretty much an action plan for delivering the Spirit Level agenda. The Labour movement needs to be part of a wider political debate about what sort of society we want to live in and how we can bring about change to our economy to deliver it. This will not be an easy debate. We will have to change the mindset of people. All of us will have to pay more in tax not just the rich. Unions will have to rethink what and how we do things. Employers will have to stop seeing unions as obstacles instead see them as partners. Changes in attitudes have happened before and can happen again.
In the past there was a cultural imperative to seek a society that is better for everyone – there is now an economic imperative as well. The role of the unions in bringing this about will be central.
John Gray writes in a personal capacity.
Future that Works, spirit level