Addressing the UNCTAD Trade and Development Board, the ITUC shows that better policy choices can lead to better income distribution and reduce inequality
The International Trade Union Confederation (ITUC) delivered a statement to the opening session of the UNCTAD Trade and Development Board on 17 September 2012. In the statement the ITUC said that better income distribution is a matter of policy choice and that income inequality is not the natural outcome of globalization.
Progressive taxation, social protection floors, minimum wage setting, collective bargaining and employment policies all play a role in narrowing the income divide. It also pointed to evidence from the International Labour Organization of the contribution of national and sectoral collective bargaining in lowering wage inequality, as well as contributing to productivity and competitiveness.
Industrial policies that favour industrial development are urgently needed in order to generate employment and decent work. However, significant policy space has been lost to governments as a result of the opening of trade and finances.
Governments are constrained in their policy-making role by trade and investment agreements that constrain their capacity to levy taxes and allow corporations to sue them when legislation passed in the public interest of their citizens impacts on corporate profits.
The ITUC called on UNCTAD to help countries regain this policy space and be a strong global advocate for redistributive mechanisms such as social protection floors, global tax floors, progressive taxation systems, global regulation of the banking sector, universal core labour standards, and universal access to education and health care.
On 18 September the ITUC also sent a strong message to the International Monetary Fund that the financial sector must make a ‘fair and substantial contribution’ towards the costs of resolving financial crises.
At a workshop organized by the IMF fiscal affairs department and attended by experts from the European Commission, the European Parliament, private financial institutions, and national governments, the ITUC called in particular for the imposition of a Financial Transactions Tax (FTT).