The broken link: wages & productivity

The broken link: wages & productivity


Sophie Cuvelliez has a job in a Swiss bank, but despite working in one of
the world’s richest, most stable economies, she’s worried about her future. “I don’t think I will be better off
next year at this time. The banking sector in Switzerland
is very uncertain. I am very concerned about keeping my job.” Joao Carlos Cruz works in a bank in Portugal. He’s got the same fears about the future. “Financially speaking,
I’m worse off than 10 years ago.” 5 years ago I managed to save
some money, which I can’t do today.” The International Labour Organization’s
Global Wage Report says workers in richer, developed countries
suffered a double dip in their wages even where there was
a long-term rise in productivity…. “We would expect wages to rise
with productivity but we’ve looked at a number of
countries over the last 20 to 30 years and … we found that there is
sort of a broken link between wages and productivity and the result of that is that the labour income share in GDP
is going down, which essentially means that workers
are getting a smaller share of the pie.” It’s an on-going trend,
aggravated by trade globalization, technological progress,
declining trade union membership and what experts call: the financialization of the real economy. “…which is basically the growing role
of the financial markets on investments, on the behaviours of companies
and what we see here is that a growing part of
the earnings of companies are going into dividends and a
smaller part is left for increasing wages.” Marc-Andre Cartier’s company has
produced chocolates in Geneva for 150 years. The recession’s been hard on business but he prefers to take a long-term
approach with his employees for the sake of their future and the company. “We’ve were able to make a
slight increase in our staff’s wages, around 3 to 5 percent,
in order to motivate them and above all to keep them with us. For us, that’s important. We’ve been here a long time and
the most important thing is loyalty, to keep our people with us.”   Some regions like Asia,
parts of Africa and Latin America have seen stronger economic growth
and workers are earning more. You can hear the sense of optimism
in emerging economies like Brazil. Onézimo Eloi da Silva
is a factory worker there and will build a house on land he bought. “My life is much better
than five years ago. And I strongly believe that
five years from now me and my family will be much,
much better off than we are today. At Cartier chocolates,
the hope is much the same… “The point is not to make money, necessarily…. we’re not millionaires. We’re here because
we love our work and we want to perpetuate the company
and our vision in the long term.  I think that in 5 years things will be better
…”

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