Intention to Action: How recovering from COVID-19 can propel us toward a more equitable working future

American trade union leader Liz Shuler argues that we need a different growth model—one that puts workers at the center of the global economic policy. Banner image: Shutterstock/M_AgencyFrom
Intention to Action: How recovering from COVID-19 can propel us toward a more equitable working future

This article is part of a series in which OECD experts and thought leaders — from around the world and all parts of society — address the COVID-19 crisis, discussing and developing solutions now and for the future. Aiming to foster the fruitful exchange of expertise and perspectives across fields to help us rise to this critical challenge, opinions expressed do not necessarily represent the views of the OECD.

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This past May, the Organisation for Economic Co-operation and Development (OECD) acknowledged that this would not be an ordinary recovery. It will be one tightly linked to single countries’ capacity to deploy effective and quick vaccination campaigns in the battle against COVID-19.

While gross domestic product and employment figures for 2021 have been positively revised for many OECD countries, we cannot overlook the fact that the current economic recovery is precarious and undermined by rising inequalities and the climate emergency. In fact, the OECD’s latest Interim Economic Outlook warns that despite the recovery of global GDP to its pre-pandemic level, it is still well below past growth projections. Thus, the COVID-19 crisis is still costing the equivalent of a real income loss of above USD 4.5 trillion (in 2015 purchasing power parities), risking long-term scars in terms of jobs and household incomes.

It is precarious because flaws in the labour markets existing prior to COVID-19 remain. The decade that followed the global financial crisis of 2008–2010 was characterised by rising job instability, stagnating wages and cuts in public expenditure programmes. Even under such detrimental conditions for job quality, which put working people under considerable pressure, it took years for aggregate employment figures to recover to pre-2008 levels.

The heroic front-line workers who continue to navigate the COVID-19 pandemic —doctors, nurses, hospital personnel and transit workers—are the same who were hit by austerity cuts or deregulation reforms. These changes also significantly impacted nursing home workers, warehouse workers, cleaners, cashiers, and food and meat processing workers. In many OECD countries, the most exposed jobs matched to the most vulnerable categories, from nonstandard workers and minorities to women and young workers. We cannot forget this as the recovery gains momentum.

While the short-term priority was to preserve the economy and protect human lives, countries must now quickly increase their efforts to meet long-term challenges. Timely government support helped protect working households and businesses in the darkest hours of the crisis; public expenditure is what preserved our economy from a total meltdown. It proved not only resilient to the crisis, but also reminded us of the importance of counter-cyclical fiscal policy, particularly during a strong economic downturn. To this end, the OECD is correct in calling for continued and sustained fiscal support as long as the threat posed by COVID-19 persists. 

Read more on the Forum Network: The Haves and Have-Nots: The geopolitical dilemma of COVID vaccine equity, by Dr. Ayoade Olatunbosun-Alakija, Member, African Union's African Vaccine Delivery Alliance; Global Advisory Board Member for WomenLift Health; Chief Strategist, CONVINCE Africa

This is not the time for our governments to let working people down, retrenching once again behind austerity lines or being quick to assume victory while millions still wait to return to work. A true recovery is possible only if we embrace a different growth model. Unless we tackle the challenge of rising inequality now, with all the tools at our disposal including labour, investment, tax and education policy, we cannot make the ambition of our goals a reality. This is a moment for us to build an equitable future and put workers’ rights at the centre of our global economic policies and trade practices. Everyone deserves to have a decent, sustainable job.

As economic activity gains pace, rather than trimming down fiscal expenditure, it should be expanded but more targeted. Building back better means above all seizing the political opportunity provided by the current crisis, initiating a just transition toward a more sustainable and equitable growth model while preserving the planet. Social partners must be involved in defining the priorities and strategies for achieving this ambitious goal, with a close eye to the many needs of workers, including reallocation from polluting to green industries and technological shifts that cause displacement or providing reskilling and training opportunities. But it also means learning the importance of a strong safety net, with income and job support schemes for the workers who are affected most.

The time has come for actions to match intentions, starting with a drastic shift from the policies of the global financial crisis that allowed companies to push the cost of their risks onto individuals. By presenting them as supply-side structural reforms, firms reduced their own losses while contributing nothing to macroeconomic stability. This time around, the pandemic has put these costs squarely on the doorstep of governments: those of insuring incomes and health from economic shocks. Strengthening job quality and workers’ rights is equal to reducing inequality and protecting macroeconomic resiliency. As the Trade Union Advisory Committee (TUAC) recently noted, “Governments should change the prevailing approach to labour, strengthening the role of labour institutions and re-affirming their centrality in guaranteeing decent living conditions for all”.

We also need a new deal on corporate responsibility. Having shifted the costs of risks to society, rising income shares in most OECD countries go to profit shares. We need momentum on a global minimum corporate tax. Austerity and cutting public budgets even further will not add to our resilience. We saw how “underinsured” society is. Now is not the time to make our health care systems more fragile or our safety nets more porous. In the face of rising climate challenges, now is not the time to cut back on strengthening our infrastructure. This can only be tackled by multilateral agreements on corporate taxes. These new investments will ensure a push toward high-value added jobs and away from the growth of precarious and low-wage work. 

Multilateral institutions, such as the OECD, represent key fora for advancing the reform agenda we look for, co-ordinating international efforts on policies that can tilt the global playing field back and affect workers and households worldwide. Let this crisis be different from the previous one; let it not just be a wasted opportunity, but mark the turn towards a better and greener future for all workers. 

Find more about labour market and employment in the OECD's Employment database

Read the OECD Employment Outlook 2021 Navigating the COVID-19 Crisis and Recovery

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