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As if on cue: Toxo y Méndez ofrecen más años de moderación salarial (ElPais.com)
Los sindicatos piden por carta a Zapatero medidas para contener beneficios y una regulación temporal de precios
[The leaders of the Communist CCOO union,] Toxo and [Socialist Union UGT] Méndez offer more years of wage restraint
The [two largest] unions in a letter to ZP ast for measures to contain profits and a temporary regulation of prices


Economics is politics by other means
by Migeru (migeru at eurotrib dot com) on Fri Aug 19th, 2011 at 06:44:55 AM EST
[ Parent ]
These reminds me of a policy taken by the soc dems here in Sweden back in 1990. All salaries, prices, dividends and so on were frozen. It wasn't very popular or successful back then. But the wage restraint of the responsible labour unions during the crisis made certain sense then, during a national fiscal crisis, austerity, floating exchange rate and an export boom. Today it makes no sense at all... except in the periphery countries which do not have competitive wages compared to either the core or RoW! So I actually applaud periphery labour unions in showing wage restraint. The periphery countries had wage inflation much faster than productivity growth, which taken together with the fixed exchange rate of the euro, is what got us here in the first place.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Aug 19th, 2011 at 11:46:11 AM EST
[ Parent ]
Actually they didn't. They had profit inflation, and the core had wage deflation.

talos dug out some stats on that subject back when.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Aug 19th, 2011 at 11:48:43 AM EST
[ Parent ]
If that's correct, the periphery countries should be able to export themselves out of their problems. Well, they can't.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Aug 19th, 2011 at 11:58:08 AM EST
[ Parent ]
the periphery countries which do not have competitive wages compared to either the core or RoW!

But that is because of competitive wage deflation in the core and the RoW, not because of wage inflation.

Though this begs the question, wage deflation/inflation relative to what?

Economics is politics by other means

by Migeru (migeru at eurotrib dot com) on Fri Aug 19th, 2011 at 12:05:37 PM EST
[ Parent ]
Relative to productivity, of course.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Aug 19th, 2011 at 12:16:40 PM EST
[ Parent ]
The periphery countries had wage inflation much faster than productivity growth, which taken together with the fixed exchange rate of the euro, is what got us here in the first place.

Um, what got us here in the first place was that the periphery financed its consumption though lending from the core. There was a massive private debt and asset price bubble, not a gross increase in profits and wages in the periphery. And a lot of inflation, with all this debt and asset price money slushing around.

Economics is politics by other means

by Migeru (migeru at eurotrib dot com) on Fri Aug 19th, 2011 at 12:09:00 PM EST
[ Parent ]

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