Labor Power in Decline: The Political Economy of the Post-Worker Society

theconvergencys
Nov 20, 2025
4 min read

By Priya Verma Oct. 21, 2024

I – Introduction

Across much of the developed world, the very notion of “labor power” — the ability of workers to influence their wages, hours, and conditions — is eroding. Union membership has fallen to historic lows; collective bargaining coverage in the OECD dropped from 45 percent in 1985 to just 15 percent in 2025 (OECD Labor Statistics, 2025). Real wage growth stagnates even as corporate profits surge. And in emerging economies, informal work and gig employment dominate, creating a labor force that is both indispensable and disposable.

This article examines how globalization, automation, and financialization have jointly dismantled traditional labor power. It argues that this decline is not inevitable but the product of deliberate political and institutional choices that privilege capital over work. As the balance of power between employers and employees fractures, societies risk entering what economists term the post-worker economy — one in which productivity rises but participation, security, and dignity collapse.

II – Globalization and the Erosion of Collective Bargaining

The first blow to labor power came with the liberalization of global trade. From the 1980s onward, transnational supply chains allowed firms to offshore production to lower-wage countries, undermining unions’ ability to bargain collectively. The World Bank Global Value Chain Report (2024) shows that global manufacturing wages have converged downward, not upward: between 1995 and 2020, median real manufacturing wages rose only 12 percent globally, while productivity increased 62 percent.

This divergence created a world where capital could move freely, but workers could not. Employers gained the threat of exit — relocating production if labor demanded too much. In the United States, union density fell from 20 percent in 1983 to 9 percent in 2024; in South Korea, from 19 percent in 1990 to 12 percent today. The ability to strike lost its leverage in an economy where factories and call centers could simply relocate.

Moreover, global competition reframed labor as a cost variable rather than a social institution. Labor market “flexibility” became synonymous with deregulation — temporary contracts, outsourcing, and self-employment replacing stable, long-term jobs.

III – Automation and the Fragmentation of Work

If globalization weakened labor’s geography, automation weakened its necessity. Advances in robotics, logistics, and artificial intelligence have replaced not only routine manufacturing but also white-collar tasks. The McKinsey Future of Work Report (2025) estimates that 30 percent of current work activities could be automated by 2030, with middle-skill occupations hardest hit.

But automation’s impact is not simply technological; it is political. Firms deploy automation as a bargaining weapon. Studies from the MIT Work and Employment Research Center (2025) show that automation threats — not actual implementation — suppress wage growth by up to 7 percent in manufacturing sectors. The possibility of being replaced disciplines labor behavior more effectively than any management reform.

This trend fragments solidarity. The rise of platform-based gig work — from delivery to freelance programming — redefines workers as “independent contractors,” stripping them of benefits, minimum wage protections, and collective rights. ILO Global Employment Trends (2025) finds that 16 percent of the global labor force now earns income through digital platforms, yet fewer than 2 percent are covered by social protection. The result is a paradox: rising productivity coexists with growing precarity.

IV – Financialization and the Rise of the Shareholder Economy

The decline of labor bargaining power has been compounded by the financialization of corporate governance. Since the 1990s, companies have increasingly prioritized shareholder value over wage stability or reinvestment. The Bank for International Settlements (BIS, 2025) notes that corporate profits as a share of GDP reached 15 percent globally, the highest level since records began — yet labor’s share fell to 50 percent, its lowest.

Stock buybacks and dividend payouts replace wage growth as the main channel of income distribution. In the U.S., firms spent $1.3 trillion on share repurchases in 2024, compared with $250 billion on wage increases. When markets reward downsizing, labor ceases to be a productive asset and becomes a liability.

This logic extends to public policy. Central banks, focused on inflation control, suppress wage growth in the name of price stability; fiscal rules constrain public-sector hiring. The cumulative result is a political economy in which wage suppression becomes an unspoken goal — a condition for global competitiveness rather than a social failure.

V – Rebuilding Worker Power in the Post-Industrial Age

Restoring labor power requires reimagining collective action for a fragmented economy. Three strategies stand out:

1. Sectoral Bargaining and Wage Floors Instead of firm-by-firm negotiations, governments can set minimum industry-wide standards that cover gig and contract workers. Denmark’s sectoral model — extended to digital platform workers in 2024 — now guarantees minimum hourly pay and paid leave to over 70 percent of gig employees.

2. Worker Representation on Corporate Boards Germany’s Mitbestimmung system offers a template. Research from the London School of Economics (2024) found that firms with co-determined boards had 11 percent higher productivity and lower wage inequality, refuting the idea that worker representation stifles efficiency.

3. Portable Benefits and Digital Unions In a world where employment is fluid, social protection must follow the worker, not the job. Estonia’s “E-Benefit” platform ties healthcare, pension, and unemployment insurance to digital IDs, allowing gig workers to retain benefits across employers. Similarly, digital-first unions such as Spain’s Riders x Derechos have shown that collective bargaining can evolve online, even without traditional workplaces.

VI – Conclusion

The weakening of labor power is not a technological inevitability but a political outcome. Globalization, automation, and financialization were each justified as engines of efficiency; collectively, they hollowed out the social contract that once tied growth to fairness.

If societies fail to restore balance, the consequences will be not only economic but civic: stagnant wages breed populism, inequality undermines trust, and precarity erodes democratic participation. The future of capitalism will depend on whether it can once again make work — not capital — the foundation of prosperity. The post-worker economy is not yet inevitable, but time is running out to rebuild the institutions that can prevent it.

Works Cited (MLA)

OECD Labor Statistics 2025. Organisation for Economic Co-operation and Development, 2025.
World Bank Global Value Chain Report 2024. World Bank, 2024.
McKinsey Future of Work Report 2025. McKinsey & Company, 2025.
MIT Work and Employment Research Center Report 2025. Massachusetts Institute of Technology, 2025.
ILO Global Employment Trends 2025. International Labour Organization, 2025.
Bank for International Settlements Annual Review 2025. BIS, 2025.
London School of Economics Comparative Industrial Relations Study 2024. LSE, 2024.