Full disclosure – I’m no economist. You wouldn’t have to know me long to realize that fact. However, our local Pioneer Press offers a quick read business article with a potpourri of short articles – Labor could reap rewards of political shifts.
From the 1st story:
Political shifts in the U.S., Europe and Asia increase the chances that 2007 will bring labor higher pay and stronger job protection after five years in which its share of economic gains fell….Wages in the dozen nations sharing the euro barely shifted last year even as the region, which expanded last week to include Slovenia, enjoyed its strongest growth in six years. “Economic data is so good that employees must have a share in the success they’ve helped to bring about,” says Juergen Peters, head of IG Metall, Germany’s largest labor union.
And the next story in the same article:
Employers are spending much more on employee benefits than they used to.A study released Wednesday by the nonprofit Employee Benefit Research Institute in Washington, D.C., found that of the $7 trillion employers spent on workers in 2005, 80.6 percent went to wages and salaries and 19.4 percent went to benefits.
In 1960, wages and salaries accounted for about 92 percent of employer spending for total compensation, EBRI said.
I wonder if Mr. Peters (from the first story) has taken an account of the exploding healthcare costs that businesses are absorbing for their “workers.” I guess the pay-for-performance model is thoroughly engrained in my psyche. I don’t see unions being eager to take a significant pay cut when the company is struggling. Funny that the editor chose to sequence the two stories this way. Perhaps it was an oversight? Or perhaps not. Either way, the article does close with a humorous story:
Sharper Image said its recently departed founder and CEO Richard Thalheimer agreed to pay the company $10,000 to keep two of his office decorations sculptures of Superman and “Star Wars” character C-3PO. The specialty retailer said all future management hires would be done under a strict policy of “no mega-dorks.”