According to news reports, about two million French workers walked off their jobs yesterday to protest the government plan to increase retirement ages for pension eligibility. The plan that is being proposed is to raise the minimum retirement age from 60 to 62, to take effect in 2018.
The issue for the government is of course money. Back in the good old (French socialist Party) days, there were 7 people working for every pension recipient. By 2018 there will be only 1.1 people working for every collector of pension money. The government rightly recognizes that this is an unsustainable equation.
But the unions are determined to block any reforms. So they are whipping up the masses to make a big show of solidarity against the government by inconveniencing everyone. Another reason to think twice before spending one's travel dollars in a place where trains and planes may or may not be running at any given time.
Workers in Greece recently rebelled with violence at the austerity measures being instituted by the government in the face of financial meltdown. One of the changes involved raising the retirement age to 63.
Recently, we have even seen worker strikes in China. Perhaps the Chinese are allowing textile workers to strike in a shrewd strategy of moving their low-paying jobs out of China to even lower cost countries such as India. The Chinese may see the demand for higher wages as a way to drive away the low-end business and to shift their workforce to work in more lucrative higher tech products, so they can compete for the higher-end markets.
The labor unrest in France and other parts of Europe are probably precursors to future troubles here in the USA. The steady rise in the standard of living for workers in Western economies has set a fairly high bar for wage and benefit expectations. The labor costs were sustainable in a boom period, but as we have seen, the principal response of business to hard times is to slash costs. This is manifested in shifts to lower-cost suppliers (ie, places where workers are paid less lavishly) and reductions in the size of the workforce.
In the USA we have a large overpaid work force. The successes of organized labor in getting generous benefits for the rank and file have raised both expectations and costs to an unsustainable level. Many of the jobs that were lost during the most recent recession will not come back. How long can we afford to pay unemployment benefits to specialized workers whose jobs have permanently gone to China or India ? Can the entitlement promises by progressives be funded by simply taxing the hell out of the rich?
History and a study of human nature shows that you can't take something away without a tough fight. Unfortunately, I fear that there will be blood.
5 comments:
You can hardly blame the unions for driving up costs as they currently represent a small fraction (about 12%)of the total labor force. You ignored in your analysis the real culprit, income inequality. It is only the top 5-10% who are overpaid. The bottom half barely get by, and are continually squeezed by company bigwigs who force them to work more for less - even union workers. If there is blood, it's because the corporate elite "own" our politicians, who are the only peaceful lever to more equitably share the wealth, which is primarily created by low and middle income workers.
Income inequality is the mantra of all armchair socialists. I agree that the fatcats are obscenely overpaid, but so are auto workers and college professors and marketing research analysts.
Don't forget customer service reps.
Without some "fair" distribution of wealth, democracy will fail. And that's government's role. The market will never do it.
Rick,
I want your house and IRA. Fair is fair.
Signed,
Carlton Marks
All reasonable offers on the house will be accepted . . . and I'll throw in my very depleted IRA as a bonus.
Post a Comment