Bundesbank calls for higher wages across Eurozone

The call follows a raft of recent reports highlighting inequality as a threat to the global economy.

The call follows a raft of recent reports highlighting inequality as a threat to the global economy

Germany’s Bundesbank, Europe’s largest central bank, has backed a call for higher wages to boost the flat-lining Eurozone economy.

Jens Ulbrich, the bank’s chief economist, has joined a growing list of key players calling for widespread pay rises to fend off the crippling effects of failed austerity and low inflation and to crawl back the falling wage share in national wealth.

Ulbrich told Der Speigel that recently agreed pay rises of more than 3 per cent were welcome and that recent wage trends were ‘moderate’ given Germany’s relative economic strength and low unemployment. Germany’s average worker’s wage has hardly risen over the last decade, similar to the UK and USA.

Philip Jennings, the general secretary of the global trade union federation, Union Network International, which covers service, financial, media, communications and graphical workers unions first issued a call for worldwide higher wages at the World Economic Forum in Davos in 2013 with his phrase: “The world needs a pay rise.”

In a letter to the Financial Times, Jennings said:

“The Bundesbank has joined a growing list of the great and the good calling for a pay rise for workers. All of these institutions and leaders, from the Pope to President Obama to the CBI and now the Bundesbank recoginse that if employees’ pockets are empty they are not in a position to spend to pick up the economy. It is time for the Federal Reserve, the Bank of England and the European Central Bank to heed this message.

“The world needs a pay rise if we want to see our way out of the shadow of the crisis and into the light of global growth. After all, the CEOs can take care of themselves, with their pay rises topping 15 per cent.”

The groundswell of support for higher wages follows a raft of recent reports pinpointing economic inequality as a key threat to the global economy.

The OECD has released its predictions for the world economy until 2060. These are that growth will slow to around two-thirds its current rate; that inequality will increase massively.

A recent IMF study concluded that inequality is damaging to economic growth. The report also dismissed outdated ideas that redistributing wealth could make matters worse.

Tony Burke is assistant general secretary of Unite

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4 Responses to “Bundesbank calls for higher wages across Eurozone”

  1. littleoddsandpieces

    The IMF within the Troika demanded wages cut and cut again in indebted nations and continue to demand impossible tax demands on the poor, even demanding that some scrappy useless field out in the hills is taxed, that is where the totally penniless have retreated to grow food to eat.

    In Greece, even someone on a work programme with a total 1000 Euro of income, got a 5000 Euro tax demand.

    Those earning a mere 10,000 Euro a year, got a 5000 Euro tax demand.

    Even worse is coming with the property tax that simply fails to comprehend that a Greek with 3 houses is poor.

    Historically, there was a one off opportunity after the Ottoman Empire’s end in Greece.

    In Athens, if you built walls and a roof overnight, you grabbed the land, free.

    These people came from village homes to Athens to find work.

    Later on, in my lifetime (about half a century) builders came along and promised an apartment to each landholder, if he could build a block of flats with the surplus sold on.

    So this again was free to the landholder.

    Through inheritance, a landholder had his own residence, another apartment he could rent and a village home from ancestors to go on holiday.

    The rent from the apartment means an income if lose a job (in Greece this can be sudden without any pay for that month) and is also an income in retirement.

    The Troika takes away the welfare state, vastly reduces even current pensioners’ pensions from all sources, destroys the economy by taxation, and generated not one job by the massive cut in wages to all, not just the public sector.

    The shops in central Athens are gone. You hardly see a pregnant woman in the city.

    Relatives of mine cannot afford to marry and start a home.

    Young relatives with degrees are leaving in droves, and, like throughout the 20th century, are unlikely to return.

    Without social insurance by being in work, Greeks have no access to social medicine. Even someone who paid stamp all their lives now has to pay more and more for life sustaining medicine.

    The privatisation of the electricity in Greece demanded by the EU government, will have the result in England, of massive rises in energy costs. This kills in winter and in summer.

    This article is amazing.

    Because England is copying the terrible things the EU government is doing to Greece, to the letter, adapted for the UK.

    The cuts in any state pensions is happening by design here in England, using the Flat Rate Pension from 2016, that will leave a great many women and a lot of men, with no money in old age forever.

    Dear Tony Burke, Assistant General Secretary UNITE. Tell women what is to befall them with the Flat Rate Pension from 2016, and see how the Tories cease to be a threat in 2015 general election. But tell Labour to revoke the Pension Bill, Flat Rate Pension and pay the state pension payout denied women turning 60 from 2013, and watch Labour get a landslide victory in 2015.

  2. swatnan

    What is that monstrous piece of metal doing outside? All twisted and in your face. rather like the Bankers in the building that refuse to take responsibility for the Banking Crisis.

  3. Leon Wolfeson

    Modern art is a blight everywhere, tbh. There’s plenty in London.

  4. Guest

    Yea, still spamming that link with some other waffle I see.

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