The Running Commentary

Strike Action causes the rest deeper sadness..

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Plenty of strike action appears to be on the cards, in what many commentators are calling “The Strike Season”. The effectiveness of these actions will forever remain a point of discussion around which no agreement will ever be reached.

The “workers” withhold their labour (without pay in most instances) in an attempt to extract the maximum increase percentage. The employer knows that they are going to have to contend with this so make contingencies. These contingencies include the fact that they now budget for poorer production. Officially of course this would never be admitted.

In the end both parties end up compromising. You will know from my last post on this subject that I think strike action does not level the field at all but rather creates division.

Both parties claim that the other side does not understand and both will say that they are willing to discuss and compromise. My view remains that clever negotiation is required. unfortunately there are few genuine success stories around this.

This post though is more about the fact that there are many millions of people who are unable to strike. They live with the constant fear that there jobs are on the line. These people are the one’s that are most effected by above inflationary wage settlements. When any agreement is an increase above inflation this impact is “straight off the bottom line”.

The effect is that employers raise their prices and further drive the inflationary pressure, this in turns causes those businesses on the margin to tilt and close. This further drives unemployment. Government cannot expect to create jobs when jobs are being lost. You are a fool if you believe that they can.

My view is that government should set the example, no increase above inflation should ever be given, barring merit increases for individuals who perform above par. The argument that this will forever keep certain people in poverty is nonsense. When you start your employment anywhere you need to negotiate your starting salary. This salary, for the time you are in this position, should never be increased by more than inflation. The theory being that your position, in life does not change.

Advancement, through your life stage comes from progress. Progress comes from you performing your tasks above expectation, which in turn gives you the opportunity to rise through the ranks. This is how you should progress in business.

So in short if you think that striking will improve you life standards your are off the mark, all that this does is revise the base level. So it is my contention that it is a wage settlement above inflation that in fact makes the poor get poorer and the rich get richer.

Inflationpoorrichsettlementsstrike actionWage

Mike • July 24, 2009


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