July 29, 2024
Source: Originally published by Z. Feel free to share widely.
"Labor Solidarity has no Borders." This mural by Mike Alewitz was painted in Los Angles in 1992 to advocate for immigrant worker's rights. The green monster- "the green monster of capitalism" was also seen in a 1985 mural for Hormel strikers painted by the same artist.
In terms of recent collective bargaining successes, the situation of workers in Europe can be summed up as: real wages still need to catch up after the severe income losses during the recent “crises of high inflation” hitting European workers. In short, it is more than likely that more strikes will be needed in the near future.
The latest upwards shift on high inflation in the Eurozone’s 20 member states of Austria, Belgium, Croatia, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain was caused by the tightening of energy markets that had been privatised in recent decades.
This was secured under Hayek’s neoliberal belief-system when a corner-shop daughter with limited understanding (Thatcher) married a third-class US actor with an equally limited intellectual capacity (Reagan) in the 1980s.
Guided by neo-liberalism, politicians kickstarted a relentless drive towards “the privatisation of everything” that was flanked by the all-encompassing ideology.
Unsurprisingly, the ideology of neo-liberalism and privatisation has spread through European politics like the plague that swiped through Europe.
All of this has converted energy delivery into a tradeable good exposed to the whims of “high-octane” energy speculations of markets – as shown by Enron. This assisted the recent crises of high inflation that impacted on European workers.
Despite some recent successes in collective bargaining, real wages throughout the European Union continued to fall between late 2022 and 2023. This came, notwithstanding the fact that inflation started to drop around October 2022.
Yet, a very slow recovery of wages is emerging for the current year of 2024. Still, this sluggish growth in wages might have the capacity to stabilise the already rather unequal distribution of income between labour and capital in favour of capital.
Europe’s corporate media will sell a “modest” or even “no” wage increases as “look, the system is working” and “wages are growing”.
Never mind that any wage increase will only asphyxiate the structural asymmetries between labour and capital. This is important for capitalism’s drive towards stability – with trade unions, as long as unions are not eliminated altogether.
This, of course, is never openly admitted. The idea of “incorporating” (read: using, manipulating, and moulding) unions into the apparatus of capitalism is commonly sold as “social partnership”.
Meanwhile, any upswing in wages will, almost by definition, strengthen the domestic demand side of capitalism’s consumerism. This assists consumer capitalism on the “spending side” by providing disposable income that translates into shopping and consumerism.
Yet, this does not work on the “expenses side” where companies seek to push wages down. These two out of the 17 unsolvable contradictions of capitalism are conflicting forces. In short, “high wages” conflicts with “cost-cutting”.
From a workers’ point of view, the current crisis “again” shows that workers have been made to cover the vast amount of the real income losses associated with what became known as “the energy price shock”.
The ideological message is that it is just a “shock”, a distress, a disturbance, and something that “came out of the blue” like an earthquake. It is all natural and has nothing to do with capitalism.
The second ideology that camouflages the usual crisis of capitalism is to associate high inflation with the Russian war against the Ukraine – everything will do, except capitalism.
As a result of these factors and the ideological smokescreen, workers suffered a reduction in real wage levels. This forces trade unions into catching-up in order to contribute to a “fairer” burden sharing between labour and capital.
Ever since the arrival of capitalism, there has never been a “fair burden sharing” between labour and capital. Once unions have caught up in wages increases, they – most likely – will be blamed for “cranking up inflation” by those who seeks to hide those that really crank up inflation: companies and corporations.
As a consequence of a workable ideology, we are frequently told about “the inflation shock of 2022”. Yet, it forces the hand of trade unions.
Overall, there will be more trade union engagements into collective bargaining and more strikes. We could also see what might be called a “normalisation of European collective bargaining policy”.
With more strikes on the horizon, trade unions might balance out the power asymmetries of capitalism. Of course, on all of this, corporate media will focus on the impact of strikes – causing “travel chaos” and “strike madness”, etc. Explaining the causes of strikes to the public can be dangerous.
It might make people support trade unions more and that is something corporate mass media (that are businesses themselves) do not want.
Meanwhile, inflation is slowly declining and thanks to rising nominal wages, the purchasing power of European workers is slowly “stabilising” (read: not really increasing). However, much of this has “not yet” offset the drop in real wages since “Russia’s invasion of the Ukraine”.
This was not caused by Russia (a country) but by companies and corporations cranking up prices. It is known as “price-gouging”. Blaming Russia for ‘providing’ the ideological cover for Uber-profitmaking. In the manageralisitic language of a CEO, it becomes as Kimberly-Clark’s CEO said,
the company has “a lot of opportunity” to expand margins over time.
Expanding “margins” is the managerialist codeword for “profits”. For the corporate apparatchiks who run corporations, the word “profit” remains a dirty word that must be avoided. Instead, it is way better for the apostles of neo-liberalism and Managerialism to speak of “margins”, “shareholder value” etc.
Meanwhile, on the workers’ side of the equation, the jacking up of prices by companies and the resulting inflation led to deep cuts in the available income of workers. This has far-reaching consequences for the “functional” (read: unequal) distribution of income between labour and capital.
Overall, collective bargaining continues to face the task of correcting the undesirable developments of recent years, and thereby, contributes to easing the burdens on workers. Yet, for almost half a decade, collective bargaining has been domesticated by calling it a “crisis” and “chaos”.
Meanwhile, the idea of “rapidly changing economic conditions” is also used to house-train and tame trade unions. Much of this is done to push trade unions into the defensive.
The short phase of economic recovery at the end of the Corona pandemic was abruptly ended by the inflation crisis in the wake of the Russian’s attack on Ukraine.
Terms like “economic recovery” are staunchly avoided by the apostles of neo-liberalism and adjacent pro-business writers as this might give unions “ideas” like we demand our share of the cake. The apostles of neoliberal capitalism seek to avoid this.
Meanwhile, the corporate jacking up of energy and consumer prices has put pressure on private consumption. It also increased production costs in energy-intensive industries.
At the same time, many companies have been able to increase their profits by rising prices, which in turn has contributed significantly to domestic inflation.
As in almost any crisis, this time too, an upward redistribution of wealth at the expense of wage earners and in favour of capital and profits was the result.
It works under one of the more cynical mottos of neo-liberalism: “never let a crisis go to waste” – in short, use it to extract even more wealth from the working class. The not-so-socialist RAND corporation estimates this to be in the vicinity of $2.5tr.
Worse, stagnating private consumption and an increase in private savings that was driven by uncertainties and was paired with a restrictive monetary policy of the European Central Bank (ECB) have sharpened the edges of economics in recent years. In other words, it has made life for workers harder.
Notwithstanding, GDP in EU countries grew by an average of 3.5% in 2022. It came in the wake of re-opening of businesses after the easing of Corona restrictions.
Yet, growth slumped significantly to 0.4% in 2023. Worse, the increase in interest rates by the ECB that reached a spike in September 2023 at 4.5% – lowered to 4.25% in June 2024 – also contributed to the economic slowdown.
Meanwhile, in Ireland’s strongly cyclical economy, GDP shrunk by a full 3.2%. This was caused by the weak development in some sectors dominated by multinational corporations.
In Germany and Austria, GDP decreased by 0.3 and 0.8%, respectively. Yet, Belgium’s economy grew slightly by 1.4%. France largely stagnated with a small increase of 0.7%, as restrained investments slowed growth down.
All of this continues to impact on the labour market in the EU-27. Despite all this, it was still characterised by, albeit slow, employment “growth” particularly in the service sector. In the last quarter of 2023, the EU documented a new record with an “employment rate” of a whopping 75.3% among 20-64-year-olds.
Despite weak orders, many EU companies keep their current workforce to secure and ensure availability of required workforce in the event of an economic upturn.
With an unemployment rated in Poland (2.8%), the Czech Republic (2.6%), and Germany (3.1%), these EU countries had “almost” full employment in 2023 – on “official” (read: cleaned up / manipulated) statistics.
Overall, the EU expects Europe’s unemployment rate to remain as low as 6.1% in the EU-27 countries for 2023 and 2024.
This alone should significantly strengthen the collective bargaining position of trade unions. However, some also expect a slight increase in unemployment in 2024 – particularly in some northern and Western European industrialised countries.
Against this background, European collective bargaining is set to move towards “at least rudimentarily fair” (read: less unfavourable to workers) outcomes in the near future.
The previous rather sharp increases in corporate profits will serve as a corporate buffer in case wage gains are made by trade unions.
Meanwhile, workers and trade unions are set to “make up” for previous losses in the form of rising real wages by achieving improved collective bargaining outcomes.
At the same time, it is to be expected that this will be blamed by the corporate press on the so-called “wage-price spiral” that insinuates that trade unions – and not corporate bosses cranking up prices – are responsible for inflation.
In any case, further wage growth is strongly required in the current phase of economic recovery. This is the only way to – at least partially! – compensate for the sharp slump in real wages during the recent crises of high inflation that put wages on a downward spiral.
Those who have dared to forecast what might happen during the second half of the current year, agreed that a modest wage rise with next to no compensation for capitalism’s recent high inflation is what is likely to occur.
Meanwhile, the neoliberal and anti-union European Commission expect wages to grow by a measly 2.0% for the Eurozone.
Worse, there is currently absolutely “no sign” of wages growth to be “re”-coupled to productivity. Perhaps, the “decoupling” of wages from productivity was one of the most significant feats achieved by neo-liberalism.
It permanently made workers poorer and poorer while corporate profits rose and rose. Workers worked hard and others cashed in, big time!
Until the year 2025, productivity is set to grow by 1.2% while wage growth is expected to slow down. In other words, the gap between “productivity / profits” and “wages” will grow.
Despite unions achieving wage gains, the decoupling of wages from productivity is set to continue. And this will make corporations – in the long run – much richer and workers comparatively much poorer.
At first glance, it seems that Europe has, as presented by corporate media, taken a “just” way out of the crisis. On closer inspection however, the situation is more complex than the ideologues of the pro-business press want us to believe.
For example, real wages will continue to be well below the 2021 level even in the optimistic scenario outlined above with unions achieving significant wages increases.
A return to 2021 wage levels is “not” expected to be reached again until 2025 – at the earliest.
Worse, real wages in the EU-27 in 2023 were each around 7% below the value that could have been expected if a “normal” development had occurred, i.e. without the high inflation crisis caused by the cranking up of prices by companies and corporations and by exposing energy to the whims of a privatised market.
From this perspective, too, a catch-up movement in wages is therefore bitterly needed. In other words, European trade unions will have to fight even more rigorously to get workers back to that level of wages enjoyed before the “inflation crisis”.
This needs to be done with or without re-linking wages to the classical three demands for higher wages: Inflation: At least, wages levels need to be able to compensate for capitalism’s inflation that is caused by capital – not workers and trade unions.
Productivity: trade unions need to re-link wages to productivity so that workers can enjoy – at least parts – of the fruits they themselves have made possible.
Wealth-redistribution: this is the “returning” some of the Uber-wealth companies and corporations have made under neo-liberalism.
ZNetwork is funded solely through the generosity of its readers. Donate
Thomas Klikauer
Thomas Klikauer has over 800 publications (including 12 books) and writes regularly for BraveNewEurope (Western Europe), the Barricades (Eastern Europe), Buzzflash (USA), Counterpunch (USA), Countercurrents (India), Tikkun (USA), and ZNet (USA). One of his books is on Managerialism (2013)
"Labor Solidarity has no Borders." This mural by Mike Alewitz was painted in Los Angles in 1992 to advocate for immigrant worker's rights. The green monster- "the green monster of capitalism" was also seen in a 1985 mural for Hormel strikers painted by the same artist.
In terms of recent collective bargaining successes, the situation of workers in Europe can be summed up as: real wages still need to catch up after the severe income losses during the recent “crises of high inflation” hitting European workers. In short, it is more than likely that more strikes will be needed in the near future.
The latest upwards shift on high inflation in the Eurozone’s 20 member states of Austria, Belgium, Croatia, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain was caused by the tightening of energy markets that had been privatised in recent decades.
This was secured under Hayek’s neoliberal belief-system when a corner-shop daughter with limited understanding (Thatcher) married a third-class US actor with an equally limited intellectual capacity (Reagan) in the 1980s.
Guided by neo-liberalism, politicians kickstarted a relentless drive towards “the privatisation of everything” that was flanked by the all-encompassing ideology.
Unsurprisingly, the ideology of neo-liberalism and privatisation has spread through European politics like the plague that swiped through Europe.
All of this has converted energy delivery into a tradeable good exposed to the whims of “high-octane” energy speculations of markets – as shown by Enron. This assisted the recent crises of high inflation that impacted on European workers.
Despite some recent successes in collective bargaining, real wages throughout the European Union continued to fall between late 2022 and 2023. This came, notwithstanding the fact that inflation started to drop around October 2022.
Yet, a very slow recovery of wages is emerging for the current year of 2024. Still, this sluggish growth in wages might have the capacity to stabilise the already rather unequal distribution of income between labour and capital in favour of capital.
Europe’s corporate media will sell a “modest” or even “no” wage increases as “look, the system is working” and “wages are growing”.
Never mind that any wage increase will only asphyxiate the structural asymmetries between labour and capital. This is important for capitalism’s drive towards stability – with trade unions, as long as unions are not eliminated altogether.
This, of course, is never openly admitted. The idea of “incorporating” (read: using, manipulating, and moulding) unions into the apparatus of capitalism is commonly sold as “social partnership”.
Meanwhile, any upswing in wages will, almost by definition, strengthen the domestic demand side of capitalism’s consumerism. This assists consumer capitalism on the “spending side” by providing disposable income that translates into shopping and consumerism.
Yet, this does not work on the “expenses side” where companies seek to push wages down. These two out of the 17 unsolvable contradictions of capitalism are conflicting forces. In short, “high wages” conflicts with “cost-cutting”.
From a workers’ point of view, the current crisis “again” shows that workers have been made to cover the vast amount of the real income losses associated with what became known as “the energy price shock”.
The ideological message is that it is just a “shock”, a distress, a disturbance, and something that “came out of the blue” like an earthquake. It is all natural and has nothing to do with capitalism.
The second ideology that camouflages the usual crisis of capitalism is to associate high inflation with the Russian war against the Ukraine – everything will do, except capitalism.
As a result of these factors and the ideological smokescreen, workers suffered a reduction in real wage levels. This forces trade unions into catching-up in order to contribute to a “fairer” burden sharing between labour and capital.
Ever since the arrival of capitalism, there has never been a “fair burden sharing” between labour and capital. Once unions have caught up in wages increases, they – most likely – will be blamed for “cranking up inflation” by those who seeks to hide those that really crank up inflation: companies and corporations.
As a consequence of a workable ideology, we are frequently told about “the inflation shock of 2022”. Yet, it forces the hand of trade unions.
Overall, there will be more trade union engagements into collective bargaining and more strikes. We could also see what might be called a “normalisation of European collective bargaining policy”.
With more strikes on the horizon, trade unions might balance out the power asymmetries of capitalism. Of course, on all of this, corporate media will focus on the impact of strikes – causing “travel chaos” and “strike madness”, etc. Explaining the causes of strikes to the public can be dangerous.
It might make people support trade unions more and that is something corporate mass media (that are businesses themselves) do not want.
Meanwhile, inflation is slowly declining and thanks to rising nominal wages, the purchasing power of European workers is slowly “stabilising” (read: not really increasing). However, much of this has “not yet” offset the drop in real wages since “Russia’s invasion of the Ukraine”.
This was not caused by Russia (a country) but by companies and corporations cranking up prices. It is known as “price-gouging”. Blaming Russia for ‘providing’ the ideological cover for Uber-profitmaking. In the manageralisitic language of a CEO, it becomes as Kimberly-Clark’s CEO said,
the company has “a lot of opportunity” to expand margins over time.
Expanding “margins” is the managerialist codeword for “profits”. For the corporate apparatchiks who run corporations, the word “profit” remains a dirty word that must be avoided. Instead, it is way better for the apostles of neo-liberalism and Managerialism to speak of “margins”, “shareholder value” etc.
Meanwhile, on the workers’ side of the equation, the jacking up of prices by companies and the resulting inflation led to deep cuts in the available income of workers. This has far-reaching consequences for the “functional” (read: unequal) distribution of income between labour and capital.
Overall, collective bargaining continues to face the task of correcting the undesirable developments of recent years, and thereby, contributes to easing the burdens on workers. Yet, for almost half a decade, collective bargaining has been domesticated by calling it a “crisis” and “chaos”.
Meanwhile, the idea of “rapidly changing economic conditions” is also used to house-train and tame trade unions. Much of this is done to push trade unions into the defensive.
The short phase of economic recovery at the end of the Corona pandemic was abruptly ended by the inflation crisis in the wake of the Russian’s attack on Ukraine.
Terms like “economic recovery” are staunchly avoided by the apostles of neo-liberalism and adjacent pro-business writers as this might give unions “ideas” like we demand our share of the cake. The apostles of neoliberal capitalism seek to avoid this.
Meanwhile, the corporate jacking up of energy and consumer prices has put pressure on private consumption. It also increased production costs in energy-intensive industries.
At the same time, many companies have been able to increase their profits by rising prices, which in turn has contributed significantly to domestic inflation.
As in almost any crisis, this time too, an upward redistribution of wealth at the expense of wage earners and in favour of capital and profits was the result.
It works under one of the more cynical mottos of neo-liberalism: “never let a crisis go to waste” – in short, use it to extract even more wealth from the working class. The not-so-socialist RAND corporation estimates this to be in the vicinity of $2.5tr.
Worse, stagnating private consumption and an increase in private savings that was driven by uncertainties and was paired with a restrictive monetary policy of the European Central Bank (ECB) have sharpened the edges of economics in recent years. In other words, it has made life for workers harder.
Notwithstanding, GDP in EU countries grew by an average of 3.5% in 2022. It came in the wake of re-opening of businesses after the easing of Corona restrictions.
Yet, growth slumped significantly to 0.4% in 2023. Worse, the increase in interest rates by the ECB that reached a spike in September 2023 at 4.5% – lowered to 4.25% in June 2024 – also contributed to the economic slowdown.
Meanwhile, in Ireland’s strongly cyclical economy, GDP shrunk by a full 3.2%. This was caused by the weak development in some sectors dominated by multinational corporations.
In Germany and Austria, GDP decreased by 0.3 and 0.8%, respectively. Yet, Belgium’s economy grew slightly by 1.4%. France largely stagnated with a small increase of 0.7%, as restrained investments slowed growth down.
All of this continues to impact on the labour market in the EU-27. Despite all this, it was still characterised by, albeit slow, employment “growth” particularly in the service sector. In the last quarter of 2023, the EU documented a new record with an “employment rate” of a whopping 75.3% among 20-64-year-olds.
Despite weak orders, many EU companies keep their current workforce to secure and ensure availability of required workforce in the event of an economic upturn.
With an unemployment rated in Poland (2.8%), the Czech Republic (2.6%), and Germany (3.1%), these EU countries had “almost” full employment in 2023 – on “official” (read: cleaned up / manipulated) statistics.
Overall, the EU expects Europe’s unemployment rate to remain as low as 6.1% in the EU-27 countries for 2023 and 2024.
This alone should significantly strengthen the collective bargaining position of trade unions. However, some also expect a slight increase in unemployment in 2024 – particularly in some northern and Western European industrialised countries.
Against this background, European collective bargaining is set to move towards “at least rudimentarily fair” (read: less unfavourable to workers) outcomes in the near future.
The previous rather sharp increases in corporate profits will serve as a corporate buffer in case wage gains are made by trade unions.
Meanwhile, workers and trade unions are set to “make up” for previous losses in the form of rising real wages by achieving improved collective bargaining outcomes.
At the same time, it is to be expected that this will be blamed by the corporate press on the so-called “wage-price spiral” that insinuates that trade unions – and not corporate bosses cranking up prices – are responsible for inflation.
In any case, further wage growth is strongly required in the current phase of economic recovery. This is the only way to – at least partially! – compensate for the sharp slump in real wages during the recent crises of high inflation that put wages on a downward spiral.
Those who have dared to forecast what might happen during the second half of the current year, agreed that a modest wage rise with next to no compensation for capitalism’s recent high inflation is what is likely to occur.
Meanwhile, the neoliberal and anti-union European Commission expect wages to grow by a measly 2.0% for the Eurozone.
Worse, there is currently absolutely “no sign” of wages growth to be “re”-coupled to productivity. Perhaps, the “decoupling” of wages from productivity was one of the most significant feats achieved by neo-liberalism.
It permanently made workers poorer and poorer while corporate profits rose and rose. Workers worked hard and others cashed in, big time!
Until the year 2025, productivity is set to grow by 1.2% while wage growth is expected to slow down. In other words, the gap between “productivity / profits” and “wages” will grow.
Despite unions achieving wage gains, the decoupling of wages from productivity is set to continue. And this will make corporations – in the long run – much richer and workers comparatively much poorer.
At first glance, it seems that Europe has, as presented by corporate media, taken a “just” way out of the crisis. On closer inspection however, the situation is more complex than the ideologues of the pro-business press want us to believe.
For example, real wages will continue to be well below the 2021 level even in the optimistic scenario outlined above with unions achieving significant wages increases.
A return to 2021 wage levels is “not” expected to be reached again until 2025 – at the earliest.
Worse, real wages in the EU-27 in 2023 were each around 7% below the value that could have been expected if a “normal” development had occurred, i.e. without the high inflation crisis caused by the cranking up of prices by companies and corporations and by exposing energy to the whims of a privatised market.
From this perspective, too, a catch-up movement in wages is therefore bitterly needed. In other words, European trade unions will have to fight even more rigorously to get workers back to that level of wages enjoyed before the “inflation crisis”.
This needs to be done with or without re-linking wages to the classical three demands for higher wages: Inflation: At least, wages levels need to be able to compensate for capitalism’s inflation that is caused by capital – not workers and trade unions.
Productivity: trade unions need to re-link wages to productivity so that workers can enjoy – at least parts – of the fruits they themselves have made possible.
Wealth-redistribution: this is the “returning” some of the Uber-wealth companies and corporations have made under neo-liberalism.
ZNetwork is funded solely through the generosity of its readers. Donate
Thomas Klikauer
Thomas Klikauer has over 800 publications (including 12 books) and writes regularly for BraveNewEurope (Western Europe), the Barricades (Eastern Europe), Buzzflash (USA), Counterpunch (USA), Countercurrents (India), Tikkun (USA), and ZNet (USA). One of his books is on Managerialism (2013)
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