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ISSUE 75 page 2

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Even central banks want to strengthen TU bargaining
SINCE THE REVERSAL IN EU POLICY in 2010 the European Central Bank (ECB) and Member State governments have largely used austerity as their preferred method for fixing the economic slump that followed the financial crash of 2008. This usually involved encouragement of ‘more flexible’ or ‘more decentralised’ wage bargaining as a means of reducing pay rises or even causing pay cuts. The supposed justification for this was a fear that increased wages would cause inflation. This always seemed unlikely in the deepest depression since the thirties but now, faced with months of near-zero price rises, and even deflation in some countries, even central bank minds seem to be changing. Following figures such as German Bundesbank head Jens Weidmann (see issue 68), Andrew Haldane, chief economist of the Bank of England, admitted that they had systematically over-estimated the growth of wages. ECB boss Mario Draghi referred in a recent speech to ‘weaker than anticipated growth in wages’ which helped to feed expectations of low inflation, or even deflation, in the future. This is bad because companies put off investment in new products, factories etc. hoping that the prices they pay and the interest on loans will be smaller the longer they leave it. Existing debt, on the other hand, appears to be greater as it, and usually the interest rate charged on it, stays the same. Employers in this situation will offer very low wage rises or reductions on the basis that workers do not have to cope with price increases. Thus a ‘downward wage-price spiral’ forms of the kind that has gripped Japan for about fifteen years. The way to break this vicious circle in the view of experts like IMF’s ex-chief economist, Olivier Blanchard, is through co-ordinated trade union collective bargaining. If unions can achieve 2-3% wage rises annually companies and governments will change their plans accordingly and the lagging economies could be kick-started. So far Sgr. Draghi has confined himself to trumpeting the printing of cash but most of the €500 billion already added having ended up on struggling banks’ balance sheets, it seems that more concrete action will be needed. A start could be made by reversing recommendations which have led to the near-destruction of national and industry-wide pay negotiations in countries like Greece and Portugal and encouraging co-ordination instead.
Bargaining round-up

POLAND’S RETAIL SECTOR HAS BEEN THE SCENE of many industrial disputes in recent years. The continuing Europe-wide campaign against unfair practices at U.S. online giant Amazon (see issue 68) has surfaced in the East as the company has tried to move jobs to lower-paid countries. Now the Polish supermarket chain Biedronka has joined the roll of shame with the Solidarity union drawing attention to union-unfriendly tactics at the Portuguese-owned firm by holding protests outside their shops and the office of the Prime Minister. As at Amazon, management refuses to talk to union representatives: ‘We have repeatedly stressed and emphasised our wish for dialogue in order to develop joint solutions with the employer, but they refuse to recognise us’ said Grzegorz Cison, chair of the Wroclaw Amazon branch.
THE ONLINE TAXI COMPANY UBER, which uses a web app to book cabs, has sparked demonstrations and government bans across Europe but now in France a new trade union has been formed to pursue the interests of the drivers. The SCP-VTC which is linked to the independent union federation UNSA, will try to solve problems such as the employment status of drivers who Uber regards as ‘partners’ rather than employees. The Secretary General of the new union, Sayah Baaroun, is a former restaurant worker and crane operator who had to pay €1,200 to the company for training and now earns €2,000 per month working 60-70 hours a week.
ROMANIAN TRADE UNIONS HAVE HAD TO ENDURE the sharpest fall in collective bargaining since the financial crash according to International Labour Organisation (ILO) figures. The number of workers covered by agreements fell by 60% compared to an average decline of 4.6% among 50 ILO-monitored countries. Now unions have succeeded in persuading the government to bring forward a measure that should help to reverse this trend. The amendment to the Social Dialogue Act allows trade union federations to negotiate with managements of companies where a union exists but does not have suffficient membership density to qualify as ‘representative’.
A DEAL BETWEEN THE GOVERNMENT AND Civil Service trade unions in Italy should presage pay rises according to union leaders. Prime Minister Matteo Renzi’s administration has reached agreement on reducing the number of departments in the service from eleven to four: central functions, local functions, health, and education and research. Leaders Susanna Camusso, Annamaria Furlan and Carmelo Barbagallo, of the CGIL, CISL and UIL federations respectively, said that Renzi had ‘no more alibis’ to prevent a new contract being negotiated for public sector workers. Since the last one in 2010 they have effectively endured a pay freeze which was found to be illegal by




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