Before the Paris attacks took over the G20 agenda, talk of labor reform was on the table.
Leaders from the world’s major economies agreed at the G20 Summit in Antalya, Turkey this week to work on reducing labor inequalities, tackling stagnant wages, increasing job insecurity and rising involuntary work, unemployment and underemployment.
“This year’s G20 has been particularly encouraging for the world of work. For the first time, the G20 acknowledged the problem of inequality,” International Labour Organization (ILO) director-general Guy Ryder said at the close of the Summit Monday. “Even more importantly, they endorsed a set of policy priorities to make labor markets more inclusive as recommended by their labor and employment ministers. They called for comprehensive and balanced policy packages that include economic, financial, labor, education and social measures to reduce inequalities.”
Few, far between and often not fairly implemented wage hikes have added to the decline in labor income share of GDP, and according to the ILO, targeting issues like this, putting more progressive tax policies in place and strengthening social protection systems can both decrease labor inequality and increase economic growth.
But if these policies remain at the government level alone, they’ll do little to effect change—social dialogue at the national and employer/worker level is vital, too.
In a joint statement following the Summit, G20 leaders said they met “to determine further collective action towards achieving strong, sustainable and balanced growth to raise the prosperity of our people. We are firm in our resolve to ensure growth is robust and inclusive, and delivers more and better quality jobs.”
Rising inequalities in many countries, they said, could hinder social cohesion, citizens’ overall well-being, adversely impact the economy and prevent the potential for growth.
The G20 labor and employment ministers have called for stronger wage-setting mechanisms like minimum wages and collective bargaining so that workers can earn more, spend more and ultimately increase domestic demand. The group will also promote financial inclusion by helping open up access to payments, savings, credit among other services.
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Informal work, unemployment and underemployment naturally also contribute to labor inequality and the leaders agreed to a collective goal of reducing the share of youth at risk for being left behind because of low skills by 15 percent between now and 2025.
The goal now is for the G20 to execute on these labor goals, and according to an ILO statement, “These labor market policies need to be combined with appropriate monetary and fiscal measures to lift the incomes of lower and middle-income households and stimulate demand and growth.”