UNI General Secretary Philip Jennings has told the Financial Times that higher wages are key to global growth.
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Responding to news that Germany's Bundesbank has backed unions to bargain for higher wages (see further news item below), Jennings called on other European Central Banks to follow suit.
In a letter to the financial broadsheet, the UNI chief wrote:
"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.
Thr world needs a pay rise if wee 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."
Bundesbank backs union calls for higher wages
Germany's Bundesbank, Europe's largest central bank, has sensationally changed tact and backed the push for higher wages to boost the flat-lining Eurozone economy.
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Jens Ulbrich, the bank's Chief Economist, joins an ever-growing list of global leaders 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 percent 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. It's a similar story in other major economies such as the United States and United Kingdom.
UNI General Secretary Philip Jennings first issued his call for worldwide higher wages at the World Economic Forum in Davos in 2013 with his phrase "The world needs a pay rise." The call has since been repeated by the likes of the Pope, President Obama, and CBI UK.
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, from the Pope to the U.S. President, recognise that if employees' pockets are empty they are not in a position to spend to pick up the economy.
"It's 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 sustainable growth. After all, it is clear that stock market CEOs around the world have been giving themselves double digit salary increases."
The groundswell of support for higher wages follows a raft of recent reports pinpointing economic inequality as a key threat to the global economy.
This month, the OECD 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 what unions have been saying for years – that inequality is damaging to economic growth. The report also dismissed outdated ideas that redistributing wealth could make matters worse.
Thomas Picketty's bestselling "Capital in the 21st Century," showed income inequality increased sharply since the late 1970s, with a huge share of total income going to the very highest earners. 60% of the increase in U.S. national income in the 30 years after 1977, Picketty said, went to just the top 1 per cent of earners.