April 30, 2004

DON'T FEED THE ANIMALS:

Strikes in France and the Netherlands; A Comparison of Labour Market Institutions (Professors den Butter and Koppes, Faculty of Economics, Vrije Universiteit Amsterdam)

Abstract: Strikes as a consequence of labour conflicts occur about 28 times as much in France as in the Netherlands.... Our empirical analysis shows that strike activity is high in France if workers were successful in obtaining relatively high wage increases in collective labour agreements in the previous year, whereas strike activity is high in the Netherlands if, in the preceding year, real wage increases were relatively low as compared to productivity increases.

Yet more evidence that appeasing the wicked escalates conflict.

Posted by Paul Jaminet at April 30, 2004 7:24 PM
Comments

Oh, so now firms giving out wage increases is "appeasing the wicked"?

Posted by: Brandon at April 30, 2004 10:39 PM

Don't you think it's wicked in a cooperative relationship to reply to generosity by damaging the other side?

And it's an old principle of morality that one should not tempt others into wicked acts, by doing the things that precipitate wickedness.

Giving out wage increases is a good thing in and of itself, but one has to know to whom one is giving.

Posted by: pj at April 30, 2004 11:00 PM

Basically, a unions' job is to maximize the welfare of its members. Wage demands in the absence of underlying productivity and profit increases are shortsighted, even given that goal. However, it's not a union's job, necessarily, to look at the bigger picture of a country's economic health.

The political system sets the rules that determine relative bargaining power between unions and employers. Bargaining success in France has been de-linked from real-world considerations of affordability, probably in part because their public sector unions are so powerful. When the government caves to unreasonable demands for political benefit, other unions logically jump on the "what about us?" bandwagon.

Both France and the Netherlands have made the conscious decision to trade away economic growth and jobs for labor peace, but in France, union demands are going to bring the economy to its knees.

Posted by: Dave Sheridan at May 1, 2004 12:52 AM

Dave - Yes, except one point: France has not traded economic growth for labor peace, it has traded economic growth for labor militancy. 28 times as many strikes as a normal country is not peace.

Rather like the way Neville Chamberlain traded for peace ... and got war.

Posted by: pj at May 1, 2004 7:06 AM
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