Unions: The economy's treading water
30. 11. 2015 | Source: BusinessInfo.cz
The Czech Republic, a low cost economy that is merely stagnating. Is that how macroeconomic observers will be typically describing the country not too long from now? According to trade union chiefs, it is looking rather likely.
If policies are not changed, they warn, the Czechs will find their nation is lagging behind in the technology stakes, with the manufacturing industry descending to a lower grade of processing with less added value, slumping productivity and skimpier wages. All in all, they say, it will amount to a poverty trap.
"Right now, the Czech Republic is just hovering in the same place in the rankings. More developed states are pulling away from us and, on the other hand, previously less developed states are drawing nearer at every mile," declared Josef Středula, chairman of the Czech-Moravian Confederation of the Trade Unions [ČMKOS].
According to experts who work for the headquarters of ČMKOS, the strongest Czech grouping of trade unions, there is a pressing need to radically alter economic policy in the coming years. The industry focus, they say, should be on specialised fields of work, innovation and products with added value. The shift in priorities should see workers' earnings quickly approach the levels enjoyed in more developed states, they add. However, meeting that goal would clearly also require a strengthening of the Czech crown by around 20 percent, the experts assert.
ČMKOS released its latest manifesto, entitled Vision for Change. In the document, it criticises the economic approach taken by governments of recent times and outlines possibilities to produce a turnaround. "In the Czech Republic over the long term, and not only during times of right-leaning governments, a sole correct line of economic policy has been, and in actual fact, is still being, pushed - that of fiscal consolidation. The contours of the state's actual economic policy stay firmly in the background or they are absolutely unclear," states the manifesto.
The fate of the country would be changed by large-scale projects which would markedly shift economic performance, such as networks of fast rail links that would securely link the main Czech hubs with the European system of high-speed rail, it adds.
The trade unions' confederation has repeatedly criticised wage policies. According to trade unionists, by undervaluing due pay companies can avoid having to pursue radical measures, such as the restructuring of production, the reorganisation of management and the replacement of 'obsolete' old managers with modern-minded technicians.
Originally published in E15 weekly, economic and business newsmagazine. Author: Jana Havligerová