Salaries and redistribution

Rodolfo Erostegui writes in Pagina Siete:

Salaries and redistribution

Rodolfo ErosteguiThe negotiation on wages should become a pretext of the three social partners on the creation of decent jobs and the equitable distribution of national income. But generally they only end up discussing over the amount they have to increase on the wage. This year seems to be no different.

In recent weeks, the positions of the three stakeholders on what should be the salary increase, were known over the media. If we summarize, we would point out that the Central Obrera Boliviana (COB, the worker’s central union) is willing to discuss or negotiate a wage policy. Thinking  that a starting point should be the position of the wages of workers in the countries of the region.

The Confederation of Entrepreneurs expressed their fear that the COB and the government sign a political rather than a technical agreement and that 7% would be an appropriate increase. The Confederation of Factory Workers believes that wages should rise by 20% and the minimum wage must move from Bs1,200 to Bs2,000 per month.

For its part, the National Chamber of Industries (CNI ) thinks that one should not think of an excessive wage increases because it is threatening to job creation. However, the industry ratify their willingness that the salary increase would be defined in a tripartite negotiation table.

The Government, statements of Minister of Economy, said the amount of wage increase is not yet defined. He also mentioned that he is coordinating with the Ministry of Labor to design a strategy to talk to the COB and entrepreneurs.

In the past two decades, the labor movement has fought the government to set the new salary in excess of the inflation amount. Generally managed to agree a similar records of inflation growth, sometimes achieved increases somewhat higher than the level reached by the Consumer Price Index. But the result has been that workers failed to see improvements in the purchasing power of their wages. In this way, the process of concentration of wealth was staying at the end of the richest.

This is because workers, employers and the various governments did not focus the debate on redistribution and the creation of decent jobs. Thus, the three actors alluded lost sight of that salary is primarily a redistributive act and not an act of replenishing what the wages had lost.

It is therefore important to introduce into the discussion the issue of productivity. Through this concept the contribution of labor and capital in the growth of GDP is determined.

Thus, the best way to raise wages is to increase labor productivity. If the country’s productivity goes up from 3 to 4% per capita, should be able to duplicate the general level of wages in a relatively short time.

This policy would help to close the gap on the concentration of wealth in few hands. But productivity growth does not occur because a worker to move more during the workday.

The productivity growth is the result of the economic policy of encouraging production, investment in new machinery, improved production methods and especially more effective management of enterprises. But also to increase productivity must promote a higher level of education and training of manpower and especially that workers are increasingly efficient.

So I think it’s not a bad idea to discuss how we produce and how we distribute the result of economic activity.

Rodolfo T. Erostegui is expert on labor issues.

I like this article, made me reaffirm that politicians [ochlocratic] of this kind [masistas] and union leaders, both socialists, do only think over the short-run, it doesn’t matter to them to achieve or improve productivity, competitiveness, sustainability. Crystal clear!!! So I urge you, dear reader, to cast your vote against this line of thinking against this demagogue mediocrity.

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