Addressing the Falling Labour Share in the UK and Beyond: Labour Law's Call to Arms

Abstract

Economic studies jointly carried out by the ILO and the OECD, as well as the work of the economist Thomas Piketty has heightened public attention to the fact that the share of GDP in G20 (and other developed and developing) countries paid out as earned income has dropped since the early 1980s, with a corresponding increase in the share going to capital. To what extent can Labour Law contribute to the reversal of this decline in the labour share? Some commentators argue that reforms designed to strengthen trade unions and encourage broader collective bargaining coverage in the working population will lead to a correction. Others have recommended corporate governance reforms that prioritise more worker representational participation on the boards of corporations to promote the interests of labour. This paper will consider both of these suggestions, alongside others, and advance the proposition that inventive modes of regulatory thinking and new labour law solutions are required, which are tailored to the economic and social exigencies of the prevailing system of liberal meritocratic capitalist market exchange. The claim is that careful analysis of the current incarnation of capitalism (liberal meritocratic) can help us to identify the appropriate nature, scope and content of any labour law reforms that are motivated by a desire to resist the labour share decline. This paper will provide a preliminary basic sketch of how those adaptations of the rules of labour law should be configured.