Collective Labor Rights and Income Inequality

Abstract

This article examines the relationship between income inequality and collective labor rights, conceptualized as workers' legal and practical ability to engage in collective activity. Although worker organization is central to explaining income inequality in industrialized democracies, worldwide comparative studies have neglected the role of class-based actors. I argue that the repression of labor rights reduces the capacity of worker organizations to effectively challenge income inequality through market and political processes in capitalist societies. Labor rights, however, are unlikely to have uniform effects across regions. This study uses unbalanced panel data for 100 developed and less developed countries from 1985 through 2002. Randomand fixed-effects models find that strong labor rights are tightly linked to lower inequality across a large range of countries, including in the Global South. Interactions between regions and labor rights suggest that the broader context in which class-based actors are embedded shapes worker organizations' ability to reduce inequality. During the period of this study, labor rights were particularly important for mitigating inequality in the West but less so in Eastern Europe.

Income Inequality, Globalization, and the Welfare State: Evidence from 23 Industrial Countries, 1990–2009

“…It is argued that international trade, whether it is among advanced countries or between advanced and less advanced countries, may affect income inequality principally by weakening labor power, thereby increasing the likelihood of job and wage losses. Recent research showing strong organized labor to be associated with low wage dispersion lends support to this argument (Kerrissey 2015). On the other hand, research finds that in the United States, for example, the decline in labor power between 1973 and 2007 is associated with increases in the wage dispersion among workers during this period (Western and Rosenfeld 2011).…”

“…While some scholars disagree on the magnitude of the effect of international trade on income distribution (Krugman and Lawrence ), and others question whether international trade has an effect at all (Babones and Vonada ), some research found international trade to increase inequality in advanced industrial countries (Kerrissey ; Kwon ; Mahutga et al. ).…”

“…However, there is disagreement among scholars regarding the degree to which globalization may be implicated in the increase of income inequality and the role of the welfare state in reducing national income inequality. Some claim that globalization should have no effect on income inequality (Mahler ), while others implicate globalization in these income inequality upswings in many advanced industrial countries (Blanton and Blanton ; Kerrissey ; Kwon ; Mahutga, Anthony, and Kwon ). This paper brings new evidence to this debate by contrasting effects of globalization and welfare state indicators on two measures of income inequality (i.e., pretax‐and‐transfer and posttax‐and‐transfer income inequality).…”

The Relation between Inequality and Intergenerational Class Mobility in 39 Countries

“…Welfare states can reduce inequality of conditions through redistributive strategies such as social transfers, progressive taxation, and social security contributions. They can influence primary market inequalities by implementing labor market policies such as minimum wages, employment protection legislation, and active labor market policies, and by setting the legal framework for bargaining systems (Esping-Andersen 1990, 1999Hall and Soskice 2001;Kerrissey 2015). On the other hand, social and educational policies designed to foster equal opportunities-such as public school systems, affirmative action programs, and antidiscrimination laws-can affect social mobility beyond a state's influence on the equality of material living conditions (DiPrete and Grusky 1990;Hout 2009).…”

Labor Unions, Political Representation, and Economic Inequality

“…Christensen & Wibbels (2014) find a positive relationship between inequality and more extensive collective labor rights among laborabundant developing countries and the opposite among the labor scarce. Kerrissey (2015) turns up substantial regional heterogeneity using a different inequality data set and modeling strategy, pooling rich and developing countries. No work has yet been done looking at unionization or collective labor rights and top income shares in developing countries.…”