Saturday, March 8, 2008

German Union Talks

I know a few weeks ago I wrote about the South African Union talks with miners not going well.  In another part of the world unions are having problems.  

The Verdi, the union for public workers in Germany, wants an 8% raise for two million government employees.  The union has made noises of a possible strike. The European Central Bank is warning governments about paying these inflation causing pay raises.  

What the heck?  Pay raises cause the rise of inflation, that is a new one for me.  

From my understanding, inflation has several factors, and the rise in wages is not one of those factors.  The highest cause of inflation is the cost of raw materials, manufacturing of those materials, plus shipping those materials .  If a worker can not consume those goods, quite frankly, then the worker needs a raise.  

But I am only a blogger.  What do I know of business? 

Side note- The train operators got an 11% raise in Germany this past January.

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