We will assess how different paradigms in economics explain wage dispersion, and conduct case studies on the GLU host countries. The first set of case studies will chart the macroeconomic development in these countries since the 1990s, taking into account demand drivers, trade openness, and wage policies – as well as the connections of these factors to national economic development paths. They will identify strengths and shortcomings of the dominant strategies in macroeconomic policy in the countries in question. The overall aim is to find opportunities for macroeconomic reform. The second set of case studies will examine the development of minimum wages, the informal sector, and the low wage sectors. They will deal with institutional changes and changes in the composition of the population and will explain how developments concerning the wage bargaining process, minimum wages, cash transfers as well as the unprotected sector have contributed to inequality. Based on the papers produced in this area, we will make detailed policy recommendations on how to redress inequality by targeting labour markets.

Financial System
(Coordinator: Prof Trevor Evans, Berlin School of Economics and Law)

Since the 1980s financial institutions and financial markets have significantly strengthened their position in many economies as a result of financial innovation, deregulation and privatisation. This has been accompanied by an increasing internationalisation of major banks, a major growth of the foreign exchange markets and an end of capital controls. One result of these developments has been that in the financial sector employment has risen and incomes have increased strongly, with exceptionally big increases for those at the top. The financial sector has also put pressure on non-financial sectors to raise their rate of return. This has meant that industrial and commercial companies have themselves invested in financial assets rather than in activities which create jobs and incomes; and it has led to a constant pressure to rationalise jobs, thereby weakening the bargaining position of workers and leading to stagnant or even falling wages in some countries. This part of the project on combating inequality will examine the impact of developments in the financial sector on inequality in Brazil, Germany, India and South Africa, and assess policy proposals that have been put forward to counter such tendencies.

Redistributive Policies
OECD countries
(Coordinator: Prof Achim Truger, Berlin School of Economics and Law)

Over the past two decades tax policies have contributed to a considerable degree to the marked increase in income and wealth inequality in the OECD countries. Due to increasing international capital mobility and tax competition, governments assumed that it was necessary to decrease tax rates on high incomes, capital income and corporate profits. Against this background, our researchers will identify the most recent trends in taxation and the tax debate and will determine what the room for manoeuvre for progressively redistributive taxation is. For that purpose, they will provide a critical evaluation of the standard arguments against progressive taxation. They will complement the standard approaches in the field by taking a macroeconomic perspective, which is focussed on redistribution, (balanced budget) multipliers, macroeconomic imbalances and the effects of inequality. Finally, we will draw some economic policy conclusions for more equitable taxation.

Non-OECD countries

(Coordinators: Prof Hans-Jürgen Burchardt, University of Kassel & Dr Karin Fischer, University of Linz)

We follow a broad definition of redistribution that it is focused on government interventions aimed at altering the distribution of incomes. Accordingly, we will analyze the two main vehicles for fiscal redistribution: tax systems and social policies. Our case studies will examine the design and the redistributive impact of tax systems, public social expenditures and transfers. Furthermore, we will look at forms of social welfare beyond the state – most importantly the family – and we will discuss how gender informs welfare provision and receipt. A careful analysis of existing measures, and of the political, social and economic conditions that are likely to explain variation between the countries under examination, will allow us to assess countermeasures to inequality and implementation strategies.

Conceptions of a ‘Socially and Environmentally Sustainable Economy’
(Coordinator: Prof Birgit Mahnkopf, Berlin School of Economics and Law)

The concept of “inclusive green growth” (ILO, ITUC) aims to reconcile economic growth with environmental sustainability without neglecting the social dimension. But it is a highly controversial issue whether policies fostering “green growth” are a panacea for overcoming the structural shortcomings of countries in the global south. Against this backdrop, we want to find out (1) to which extent “public investment for a sustainable and socially just future" could contribute to reducing social inequality; (2) which political steps can be taken to address economic and social inequalities; and (3) what kind of alliances are needed for the mobilization for a different type of policy. The purpose of the research in this thematic area is to summarise and discuss studies on the employment and welfare effects of public policies in the areas of agriculture, water services and/or waste management. The goal is to go beyond employment numbers and focus on the quality of ‘green jobs’. Our assumption is that only decent jobs have the potential to reduce inequality. In light of this, we will deal with the impact of public policies in these areas on employment, income, gender equality etc. in both qualitative and quantitative terms. Furthermore, we will take into account the role of the different actors (national/local governments, civil society organisations, trade unions, employers’ associations, businesses etc.) involved in discussing and implementing “green” policies.

Gender Mainstreaming 
(Coordinator: Dr Akua Britwum, University of Cape Coast)

Existing literature underscore the centrality of gender power relations as structuring inequalities within labour and financial markets as well as governance institutions. Despite the multiplicity of strategies patriarchal norms shape policy discourses calling for an explicit analysis of the social, political and economic processes involved in the production and reproduction of gendered inequality. Researchers in this group will map the extent and dynamics of gender and economic inequality and in addition unpack forms of social exclusion that breed inequality in the labour market and trade unions. We will in addition outline discourses that legitimate gender inequality and undertake a gender analysis of forms, trends and related strengths of existing strategies targeting gender inequality in the labour market, workplace and trade unions. We will use our discussions on gender mainstreaming strategies to invite researchers across the 6 thematic areas to incorporate gender dimension into their respective data gathering and analysis. 

Countermeasures
(Coordinator: Prof Christoph Scherrer, University of Kassel)

This thematic area is about analysing political measures aimed at combating inequality. We will draw upon the research findings of thematic areas (1) to (4), and discuss in how far countermeasures are based on an adequate problem diagnosis and whether existing best practice strategies are successful. In so doing, we will take into account the specificity of the social conditions in the respective national states and the effects of existing measures on other policy fields, and identify political opportunity structures and sources of workers' power.

Implementation Strategies
(Coordinator: Prof Michelle Williams, University of the Witwatersrand)

Thematic area six will focus on concrete implementation strategies by building off the work of the other working packages, especially working package five. This package attempts to move from the obstacles in overcoming inequality to focus on some successful experiences in India, Brazil, South Africa and Germany. In particular we look at union campaigns in that have in some way contributed to reducing inequality. In this process, we go beyond the campaigns and analyze political strategies, particularly from trade unions and civil society organizations, that aim at reducing inequality.

GLU Alumni Report
(Coordinator: Dr Edlira Xhafa, University of Jena)

We will produce a report providing an overview of the most successful trade union policies and strategies aimed at addressing social and economic inequality. It will be based on a survey on policies and strategies of trade unions based in the native countries of the GLU alumni. The survey will provide the basis for a deeper analysis identifying both the main factors that determine whether these policies will be successful and the most effective alliances for their implementation.