Business case for a New Deal for workers: what is good for workers is good for the economy

Özlem Onaran, Alexander Guschanski and Thomas Rabensteiner

No 47309, Greenwich Papers in Political Economy from University of Greenwich, Greenwich Political Economy Research Centre

Abstract: If the collective bargaining coverage in the UK increases from where it is in 2023 (30%) by 8%-points to 38% (where it was in 1996 when comparable data started), by fully implementing a New Deal for Workers, private investment as a ratio to GDP would increase by 0.3%-points. To put it differently, increasing collective bargaining coverage by 1%-point means 285 thousand more workers will benefit from the outcome of the collective bargaining agreement between the trade union and the employer. This will lead to a £9.2bn increase in the UK GDP (in 2023 prices). Increasing collective bargaining coverage by 1 million workers (3.5%-point increase) will lead to a £32bn increase in the UK GDP (in 2023 prices).

Keywords: wage share; collective bargaining; investment (search for similar items in EconPapers)
Date: 2024-05-31
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