With the general election looming on the horizon, this is a critical time for the trade union movement and the six million workers we represent. Although growth has returned, the vast majority of workers have yet to benefit from the recovery: stagnant wages, austerity and the casualisation of our labour market are all undermining living standards.

The problems are particularly acute for Britain’s vast army of low-paid workers. The explosion of zero hours contracts, cynical exploitation of agency working loopholes and rapid growth of self employment have all made the world of work yet more insecure. Today, one in six workers is paid less than the living wage. No other country in the OECD has such a long tail of low-quality jobs.

As ordinary working people struggle to get by, those at the top continue to prosper regardless. The typical CEO now earns 162 times more than the average worker. City bankers are raking it in as the government refuses to support an EU bonus cap. And as profitability returns, big business is sitting on a record cash pile.

This winner-takes-all turbo-capitalism is as unsustainable as it is undesirable. Inequality on this grotesque scale means rising household debt, suppressed demand and footloose capital looking for ever-greater, and riskier, returns – not a recipe for long-term economic success. What the great American economist J K Galbraith called “the bad distribution of income” was one of the root causes of the 1929 Wall Street Crash and underpinned the financial meltdown of 2008. We simply cannot allow it to happen again.

That’s why the TUC is pressing politicians of all stripes for change. We want to build a completely new economic model that works for ordinary people: fairer, stronger, more equal. Decent jobs, good wages and better work need to become explicit goals of public policy. Wealth, opportunity and economic power need to be spread more widely. And the relationships between market and state, employers and unions, and capital and labour all need to be reconfigured.

None of this is going to happen overnight. But a smart mix of legislation, regulation, taxation and incentives could certainly deliver positive change by the end of this decade. For the TUC, the status quo cannot be an option. And there are four key areas where change is imperative.

Firstly, we need to rebalance our economy, so we provide those good jobs in the regions that need them most. Rather than allowing financial and property speculation to dominate, we need to nurture the growth industries of the future – aerospace, biotech, pharmaceuticals, renewables, electric vehicles and carbon capture and storage. And we need an intelligent industrial strategy to make it happen and a new state investment bank to fund it.

Secondly, we need to deliver dignity at work. In place of the coalition government’s attacks on basic employment and union rights, we need a fair labour market that provides decency and security for working people. As well as a more extensive framework of workplace rights, we need to promote collective bargaining and stronger unions, because history has consistently shown that workers do best when they are organised. Even the IMF recognises that the relationship between workers and companies has become dangerously lopsided, and is now urging corrective action: a warning we ignore at our peril.

Thirdly, we need fair shares for all. Instead of the proceeds of growth being hoovered up by the super rich and large corporates, we need measures to promote higher pay for ordinary workers. A more generous minimum wage, a living wage and modern wages councils able to set higher pay rates in the sectors that can afford them would all make a difference. Putting workers onto company remuneration committees would also help to crack down on the obscene wage differentials that have opened up between top executives and everybody else.

And fourthly, we need to build better companies. Britain already has some world-class firms with high employment standards and productive relations with trade unions. But we don’t have enough of them. A big part of the problem is a shareholder-centric system of corporate governance that simply isn’t fit for purpose. Rather than the power resting with investors – who are increasingly based overseas – we need much more representative decision-making apparatus which empowers other stakeholders such as workers.

There’s a lot we could learn from Germany. Rather like its world-beating national football team, German companies thrive on teamwork, collaboration and intelligent management. Their system of co-determination – with worker representation in the boardroom – has consistently delivered strong financial performance alongside high levels of welfare at work. While we can’t necessarily transplant that philosophy wholesale to the UK, there is absolutely no reason why workers should not play an active role in the upper echelons of our corporate life. Democracy matters just as much industrially and economically as it does politically.

There can be no doubt that Britain needs a completely new kind of workplace architecture. From stronger employment rights to a fairer distribution of reward and a much more powerful voice for workers, the case for fundamental reform is overwhelming. Incrementalism just won’t cut it: we must summon the political will, the collective courage, to make a decisive break with the past. Free-market fundamentalism has failed working people and failed our economy. It’s time for change.

Frances O’Grady, general secretary, TUC