12 April 2001 Edition
Profiting from wages
BY ROBBIE MacGABHANN
What do the London Stock Exchange, the Economic and Social Research Institute (ESRI) Aer Lingus and Guinness all have in common? Well in recent weeks they have all shown that they don't really value workers. They don't want workers to get wage increases. Workers are a cost. Forgot that it is workers who create products and services that are sold and profits are made from. This is silly talk. Workers are cost, a deduction from revenue and profits.
A prime example of this attitude is to be found at Guinness Ireland. Guinness is a hugely profitable company. In the 12 months to the end of June 2000, the company had sales of £985 million, and profits of £208 million. The profits were up 11% on the previous year.
This hugely profitable company wants to close a packaging plant in Dundalk and move its work to Belfast leaving 150 people unemployed.
For at least the last two decades Guinness has been culling its Irish workforce while making ever greater profits. So many jobs have been shed there is now open speculation that Guinness will in the long term shut down all of their Irish operations.
Aer Lingus have been using industrial disputes at the company over low wages as a means to claim the company was facing insolvency because of the difficult trading conditions. Even public Enterprise minister Mary O'Rourke joined in the calls ``sense and restraint'' at the company which is a not so subtle way of pressurising workers to back off a legitimate wage claim.
However 16 hours of negotiations has brought about a possible settlement of the strike with union leaders at the airline believing that ``85% to 90%of our demands'' had been met. So there was no real crisis at all. Yes the company is suffering because of Foot and Mouth but otherwise is still a profitable business.
The ESRI were also in the wage restraint business this week. Their quarterly report claims that the biggest danger to the economy is ``large rises in wages''. However an EU report showed this week that when adjusted for inflation wage rises in Ireland are only half the EU average.
The key to understanding the wages conundrum is found in the London Stock Exchange where a number of British and Scottish teams are listed. The share prices of even the most successful such as Manchester United have been falling over the last year. The core problem for the city analysts is the high proportions of wages and salaries paid to players. Surely in the business of football more than any other it is clear the importance of footballers to the production of end product. Not if you are buying shares. Even in soccer the world of business thinks the game could go on without players.
There is one obvious solution being overlooked by the stock exchange, business, economists and even politicians. Give our workers a real share in the profits of the companies they work in, then we wouldn't have these silly wage problems.
What do the London Stock Exchange, the Economic and Social Research Institute (ESRI) Aer Lingus and Guinness all have in common? Well in recent weeks they have all shown that they don't really value workers. They don't want workers to get wage increases. Workers are a cost. Forgot that it is workers who create products and services that are sold and profits are made from. This is silly talk. Workers are cost, a deduction from revenue and profits.
A prime example of this attitude is to be found at Guinness Ireland. Guinness is a hugely profitable company. In the 12 months to the end of June 2000, the company had sales of £985 million, and profits of £208 million. The profits were up 11% on the previous year.
This hugely profitable company wants to close a packaging plant in Dundalk and move its work to Belfast leaving 150 people unemployed.
For at least the last two decades Guinness has been culling its Irish workforce while making ever greater profits. So many jobs have been shed there is now open speculation that Guinness will in the long term shut down all of their Irish operations.
Aer Lingus have been using industrial disputes at the company over low wages as a means to claim the company was facing insolvency because of the difficult trading conditions. Even public Enterprise minister Mary O'Rourke joined in the calls ``sense and restraint'' at the company which is a not so subtle way of pressurising workers to back off a legitimate wage claim.
However 16 hours of negotiations has brought about a possible settlement of the strike with union leaders at the airline believing that ``85% to 90%of our demands'' had been met. So there was no real crisis at all. Yes the company is suffering because of Foot and Mouth but otherwise is still a profitable business.
The ESRI were also in the wage restraint business this week. Their quarterly report claims that the biggest danger to the economy is ``large rises in wages''. However an EU report showed this week that when adjusted for inflation wage rises in Ireland are only half the EU average.
The key to understanding the wages conundrum is found in the London Stock Exchange where a number of British and Scottish teams are listed. The share prices of even the most successful such as Manchester United have been falling over the last year. The core problem for the city analysts is the high proportions of wages and salaries paid to players. Surely in the business of football more than any other it is clear the importance of footballers to the production of end product. Not if you are buying shares. Even in soccer the world of business thinks the game could go on without players.
There is one obvious solution being overlooked by the stock exchange, business, economists and even politicians. Give our workers a real share in the profits of the companies they work in, then we wouldn't have these silly wage problems.