UNI GS in Finland: Growing income inequality leading to populism around the world

In an article originally published by PAM in Finnish, UNI General Secretary, Philip Jennings said, “Worldwide, wages and salaries now make up an ever-decreasing share of economic wealth. The growth of income inequality has contributed to the sense that the economy is not working for people. This feeds a feeling of insecurity which is then exploited by hard-right populists.”

Jennings, who recently visited PAM in Helsinki, warned that the decision of the employers’ organisation to step away from the central structure that negotiated basic wages and conditions was planting the seed of future inequality.

“When social dialogue fails and business leaders are unwilling to negotiate with trade unions, working conditions are weakened and inequality entrenched,” said Jennings. “All over the world, the distribution of income is becoming more unequal, directly impacting the cohesion of societies. Wages and salaries make up a decreasing share of income worldwide and wealth is flooding to the richest ten per cent in the form of capital income.”

“For years, global economic institutions, such as the OECD and the IMF, told us that the benefits of the rich getting richer would “trickle down” to the poorest. However, over the years there has been no evidence to support this claim,” argued Jennings. “Today, they have changed their tune – these same institutions now believe that strong labour organizations are needed to balance out uneven income distribution.”

Regarding Finland’s unsure future, Jennings observed, “There is ample evidence from around the world that the changes to the Finnish negotiating system will not benefit working people. A true and fair democracy must be based on an economic system that works for everyone in society, not just the 1%. Dismantling negotiating structures will lead to an unfair economy rigged in the favour of the wealthy and will undermine people’s confidence that their economy and democratic institutions work for them.

“In the 1970s in the United States, the rate of union density was far higher – the decrease in union density since has meant that the wealth accrued through economic growth has flowed to the hands of the wealthy. Working people grew increasingly disenfranchised and dissatisfied with the status quo, which ultimately culminated in the election of a populist President.

“The work of trade unions in defending democracy, justice and peace is more important than ever,” concluded Jennings.