It's that time of the year again, when Germany's trade unions traditionally put their wage demands on the table for the opening rounds of the annual ritual that is called "collective wage bargaining". And, with the economy growing at a robust pace still and with corporate profits on the rise, the voice of the unions is getting louder again. We've already had some taste of strike this season. Is there more to come?
Yesterday, European Central Bank President Jean-Claude Trichet once again warned about inflationary pressures and called on "all parties" involved for wage moderation - as central bankers have done since the dawn of monetary times. And it got me thinking...
Right now, we are staring down the barrel of rather hefty pay demands from the German unions, in virtually every sector from the civil service to steel and engineering; and with corporate profits at record levels and politicians wanting to win elections, it's likely we're going to see higher payouts than we have seen this millennium so far. Good news for consumer demand, bad news for inflation. But fear not, such trivial macro-economic matters I don't want to talk about here. I'm sure there are morning notes aplenty by learned economists to do just that and they don't need me to add to the chorus!
No, I want to take you somewhere else entirely...
Now I have been working - on and off - in financial/business journalism for more than 20 years (yes, I am as old as I look!... LOL) and, like you, I got used to such evergreen popular slogans as "the labor market needs to become more flexible" and workers should exercise "wage moderation" and naturally accept longer working hours. Sounds perfectly reasonable from a business economic point of view, of course. But have you ever stopped to think and asked: Why?
I mean: Why should anybody accept lower wages willingly? Why should anybody be forced to work longer hours for less money? Why should anybody be forced to make ends meet by working his butt off in three low-paid jobs, simply because "the free market" allows companies to actually hire a trained plumber for 2.35 euros an hour (as can be seen in parts of Eastern Germany, whereas the normal hour wage for a plumber in the west would be around 20 euros!)?
Hey there, Wadhwa, what's all this dark socialist talk? - You might ask. Bear with me for a second! ... Of course, for the likes of Siemens or BMW or GM or Mittal, or Mitsubishi for that matter, it is perfectly legitimate - nay, important - to maximize their profits. But we, as a society, why should we simply buy the line of industry, banking and business - hook, line and sinker? Why should we not ask the question: What can industry do for us, rather than what can we do for industry?
I mean why should we all be recruited for the noble cause of maximizing shareholder value, corporate profits and advancing globalization? Have you ever stopped and asked yourself that question? Are we, as a society, just facilitators for industry and banking? Or should it be the other way around?
Just asking ... not promoting dusty, revolutionary Socialist ideas here. Honest. But I feel sometimes we simply copy/paste well-known slogans we've heard so often that we don't question them anymore ... And maybe, just maybe we should.
Think about it the next time a sensible central banker calls for "wage moderation", an equally sensible CEO asks for longer working hours or an (almost as sensible ...LOL) economist asks for more flexibility in the labor market. Or when steel workers, train drivers, garbage collectors march in the streets demanding more money to pay their bills...
No need to buy their slogans hook, line and sinker either. But at least listen to them and think about it.
Ciao for now. Have a great weekend.
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