Devilish dilemma: Jobs or wage rises? - November 22, 2009

Trade Unions worldwide face a dilemma: should they mitigate their traditional demands for salary increases, potentially helping their country to become more competitive and increase the number of jobs available. 

Or, should they focus on the interest of their current members and struggle for higher wages? 

The picture is of course not black and white. State officials in the US, facing a bankruptcy of their own state and municipal governments, are losing parts of their salary - depending on the size of the crisis in their state. In California the state is leading with a deficit of 21 billion US dollar and officials see pay cuts in the double digits. Other states like Iowa, also face job losses and pay cuts, although they might stay in the single digits. In the face of bankruptcy, resistance seems futile.

But trade unions in other parts of the world are fighting pay cuts, especially in social services, but not only there. A national strike in Ireland has been deferred because of the flooding, but is still firmly on the agenda. In other parts of the world, like Australia, annual pay increases just go on, although sometimes in a slower pace. 

And some industries, like IT, are just doing fine, despite the financial crisis. 

For trade unions it is a devilish dilemma, although only in exceptional cases the trade unions have taken that choice on to the street. Germany is that exception, where Bundeskanzlerin  Angela Merkel (translation, Sued Deutsche) already thanked the German trade unions for their constructive attitude in the face of the global crisis. Since Germany is facing deflation one of its larger trade unions IG Metal decided to mitigate calls for a higher wage. 

Ms Merkel might have been too early. That "thank you" and IG Metal's decison was too much for the German trade union for telecom workers Verdi. They argued firmly for a wage increase (in translation' Die Welt): ..."[Ver.di head] Bsirske announced a different approach: "Wage Moderation in an age in which we are moving on the brink of deflation, is the wrong way," said Ver.di head Bsirske the newspapers of the WAZ-Essene group. In some industries like the energy sector would also "good profits" made. Ver.di stay for the "offset rising prices and increased production of scale," he said." You do not leave money on the employers' table, is their attitude. 

IG Metall sees an opportunity to get the 28-hour working week on the negotiation table, in exchange for lower salary demands. (translations Geld.de

What do you think? Should unions go for salary increases or for other strategic goals?

 


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