Strengthening collective labor rights can help reduce economic inequality

Despite the strength of the U.S. economy^[1], the gap between rich and poor Americans^[2] is increasing^[3].

The wealthiest 1% of Americans have more than five times as much wealth^[4] as the bottom 50%, according to the U.S. Federal Reserve. That’s up from four times as much in the year 2000. In 2024 alone, the wealthiest 19 families got a total of US$1 trillion richer^[5] – the largest one-year increase on record.

And yet 59% of Americans don’t have enough money saved up^[6] to cover an unexpected $1,000 expense.

We are political scientists^[7] who study human rights^[8] and political economy.

In a 2023 study, our team looked at 145 countries, including the U.S., to understand the link between labor rights and inequality^[9]. We found evidence that strengthening collective labor rights may reduce economic inequality.

Empowering workers

Collective labor rights^[10] include the rights to form and join a union, bargain collectively for higher pay and better working conditions, go on strike, and get justice if employers punish workers who exercise these rights.

In the U.S., where less than 10% of workers^[11] belong to unions, union members typically earn higher wages^[12] than their nonunion counterparts.

Through negotiations on behalf of their members, unions can pressure employers to provide fair wages and benefits. If negotiations break down, the union can call for a strike – sometimes winning better benefits and higher wages^[13] as a result.

Some U.S. unions don’t have the right to strike^[14], including air traffic controllers, teachers and those working on national security issues. But most unions have some ability to implement work stoppages and impose costs on employers to negotiate for raises and better benefits and conditions.

Reducing inequality

For our study, we analyzed the human rights in the CIRIGHTS^[15] dataset, which uses human rights reports from the U.S. State Department, Amnesty International and other sources to measure government respect for 24 human rights, including the rights to unionize and bargain collectively. The dataset is produced by the University of Rhode Island, Binghamton University and the University of Connecticut. One of us, Skip Mark, serves as a co-director of the project.

Using a scoring guide, a team of researchers reads human rights reports^[16] and gives each country a score of zero if they have widespread violations, one point if they have some violations, or two if they have no evidence of violations. The team has assigned scores for all 24 rights from 1994 through 2022.

Using this data, we created a measure of collective labor rights by adding scores for the right to workplace association and the right to collective bargaining. The resulting collective labor rights score ranges from zero to four.

Countries where workers’ rights are routinely violated, such as Afghanistan, China and Saudi Arabia, scored a zero. The United States, Macedonia and Zambia, three countries with little in common, were among those that tended to get two points, placing them in the middle. Countries with no reported violations of the rights to workplace association and collective bargaining, including Canada, Sweden and France, got four points.

According to the CIRIGHTS dataset, the strength of respect for collective labor rights around the world declined by 50%, from 2.06 in 1994 to 1.03 in 2022.

At the same time, according to the World Inequality Dataset^[17], the share of income earned by the 1% with the biggest paychecks increased by 11%.

We used advanced statistical methods to figure out whether better worker protections actually reduce inequality or are just associated with it.

Gaps between individuals and ethnic groups

We also measured what’s been happening to economic inequality, using two common ways to track it.

One of them is vertical inequality^[18], the gap between what people earn within a country – the rich versus the poor. The more unequal a society becomes, the higher its vertical inequality score gets. We measured it using the disposable income measure from the Gini index^[19], a commonly used indicator of economic inequality^[20] that captures how much money individuals have to spend after taxes and government transfers.

We found that a one-point increase in collective labor rights on our four-point scale reduces vertical inequality by 10 times the average change in inequality. For the U.S., a one-point increase in collective labor rights would be about enough to undo the increase in inequality that occurred between 2008 and 2010 due to the Great Recession and its aftermath^[21]. It would also likely help stem the growing wealth gap between Black and white Americans^[22]. That’s because income disparities compound over time to create wealth gaps.