Andrew WhiteOne article in the Economist last week, “Love of Labour”, highlighted how the change in leadership in the Whitehouse has changed the government’s relationship with unions. One particular negotiation with the union representing the air traffic controllers was re-launched by President Obama. He promptly reversed President Bush’s directive and gave the workers a 3% pay increase.
My experiences with unions are mostly from afar – but I certainly watched the wretched organizations help ruin British competitiveness in the 70’s and 80’s with their national bargaining, disregard for reality, and restrictive practices. I won’t go on about this here – but wanted to highlight the shift in the ease with which a 3% pay increase was given. This is a dangerous sign: with long term seeds being sown for inflation, the setting of pay levels like this creates the view in the public mind that inflation is going to rise and, as a consequence, they start to plan for their own request for more money – in order to keep up with everyone else.
This is what causes a classic wage-price spiral; all very reminiscent of the 70s. We need to be on our guard. Worse, our governments need to be intelligent and remember their history.
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1 response so far ↓
1 Paul LaBelle November 18, 2009 at 5:06 pm
In the abstract, I understand your point. But these air traffic controllers are the people who prevent airliner collisions. They should be treated well and recognized for their services, probably more so than UAW members on assembly lines.