The salary question
This observation from the Comedian (the infiltrator of the Chinese ecologist-industrial complex: there's nothing missing here…):
The Comedian left a new comment on your post " One day they will pay our pensions… ":
I'll only mention a couple of articles (if you explain to me how to post the links I'll post those too). unfortunately the time available to me is limited: I would like to go to the various sites (OECD, ISTAT, EUROSTAT) and do an even more detailed fact checking, but at the moment these two excerpts are enough to say what I want to say:
Real wages, in 2024 Italy is (still) the country with the greatest decline: -6.9% compared to pre-pandemic. by Diana Cavalcoli (Corriere.it, July 2024)
In the first quarter of 2024, real wages were still 6.9% lower than before the pandemic. «Inflation was at record levels in the OECD and wages in all countries took some time to react – explained Andea Garnero, economist at the Organization for Economic Co-operation and Development. In Italy not only did the reaction start late, but it is also decidedly slow. A loss of purchasing power has been created which will take time to fill."
"According to the OECD report, real wage growth is expected to remain contained in the next two years in Italy. Nominal wages (compensation per employee) in Italy are expected to increase by 2.7% in 2024 and by 2.5% in 2025. Although these increases are "significantly lower than those of most other OECD countries", they will still allow a recovery of some of the lost purchasing power, given that inflation is forecast at 1.1% in 2024 and 2% in 2024." by Giorgio Pogliotti, sole24ore, 07/27/2024
"In September, after three months of growth, employment decreased (0.3%, equal to -63 thousand units)" (…) "The employment level (calculated on the basis of provisional monthly data) is however, increasing in the third quarter (+0.4% compared to the second, a growth of 84 thousand employed); this trend is associated with a decrease in people looking for work (-8.5%, equal to -147 thousand units) and an increase in the inactive (+1.1%, equal to +138 thousand units).
source: State budget forecast for the financial year 2025 and multi-year budget for the three-year period 2025-2027 (C. 2112-bis) Hearing of the President of the National Institute of Statistics Prof. Francesco Maria Chelli
So: it may be that wages are not at a standstill, but we are still below pre-covid levels. We are trumpeting the process of adjusting wages to inflation as a success, which also arrived late.
I close:
There is no doubt that immigration is a phenomenon that must be managed, as it brings with it problematic consequences. He is neither right nor left. It's just reasonable. Does this mean that it should be favored? Absolutely not.
What was said before remains: this government is further criminalizing immigration, laying the foundations for the exploitation of migrants and the reduction of workers' rights (so much so that, as if further proof were needed, those who protest and strike are ridiculed) . And, while everyone is distractedly talking about a ship sailing towards Albania, no one notices the fact that real wages are still at pre-covid levels.
I repeat the appeal to intellectual honesty
Published by Il Comico on Goofynomics on Nov 22, 2024, 1.12pm
which, in accordance with our philological scruple, I return to you in its dysgraphia (it must also be said that the interface of this blog is not very easy to use…), and which I do not have time to analyze in detail (not today, obviously: but we'll get back to it), made me want to revisit a very old post, the one on the competitive devaluation of German wages . Because if things are as LVI said to La Hulpe:
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(and as Luciano Barca said to the PCI leadership , moreover), then we must admit that the Germans were really smart. As I have explained to you over and over again, in the blog and in the books, the strategy for recovering competitiveness based on wage compression considered sic et simpliciter is not necessarily destined for success. Let me explain: let's suppose that in a hypothetical "before" world, Germany managed to contain the cost of labor by offering products at a relatively accessible price compared to the quality of the products themselves. This would obviously have boosted German exports. In the "before" world, however, the demand for German goods (i.e. German exports) was essentially primarily demand for German currency, and therefore caused an appreciation of the exchange rate. As I explained to you, it was not Italy that was devaluing: it was Germany that was revaluing and the data shows this clearly :
In order for its particular model of industrial relations to give it a definitive advantage, Germany therefore needed to block this compensatory mechanism. Hitting someone smaller than you is relatively easy, but in case you are German, to make this exercise more fun you should also tie his hands behind his back…
The temporal sequence was perfect, so apt that it led me to exclude, after years of experience in active politics, that there was any strategic thought behind it: first they tied the other countries' hands behind their backs by fixing their exchange rate in a irrevocable, and then a very heavy internal competitive devaluation was practiced (cutting real wages), gaining an advantage that only one thing could compensate for at this point: the failure of competitors. In fact, a 6% wage cut in a country where things are not terrible is more sustainable than in a relatively backward country. So it goes like this: first you, relatively rich, cut wages; then the others cannot follow you (under penalty of street riots) and therefore they begin to buy your goods; to do so they get into debt (with you); at the first financial crisis you want your money back and waste it; at this point, and only at this point, you realize that you no longer have anyone to sell your goods to; attack the Anglo-Saxon market; you are repelled with losses; you collapse and take everyone else with you.
Isn't it wonderful?
However: as you will remember, twelve years ago there was some imbecile who denied the statistical data of the wage cut in Germany, despite the fact that it had boasted of none other than an important Merkel consultant , Roland Berger, praising the "lower" wage growth to that of productivity" (another thing that no one believed and which I then documented for you here) and the creation of a low-wage segment of the labor market (the infamous minijobs ). So I did the calculations in this post :
and today I spent the afternoon redoing them to see if that physiological rewriting of history that we call harmonization or adaptation of the databases had somehow altered the situation. I then went to the same sources on the OECD and IMF databases (the details on the variables are in the 2012 post and I repeated the calculations not only for Germany, but also for the other three large member states of the Eurozone. I will therefore spare you the table (which would not fit on the page: but if you wish I will try to put it on Telegram or in another accessible place) and I will show you the graphic results. Obviously this work is not a mere Amarcord , but is prodromal to go into the merits of what our friend the Comedian tells us ( de relato ).
Let's start then with the sad story of Alamanni salaries (and not only) twelve years later. You see it here:
So: for Italy Excel chose grey, because the situation was quite grey, in fact, characterized by that flat electrosalariogram that we talked about several times ( last night also on TV ). But the engine of the mess we are struggling in is, for a change, Germany (in orange). It is very clear that from 2003 to 2008 the average annual salary in real terms (i.e. expressed in terms of actual purchasing power) fell by 8.8%. When the crisis arrives, to compensate, first Spain, and then Italy, must play the game described by LVI, bringing down real wages by 9.9% and 6.7% respectively. There was no other way to revive foreign demand other than destroying domestic demand by amputating wages.
The operation was successful, the surgeon died.
I'll quickly show you the same data expressed as an index, so that the dynamics are clear, abstracting from the scale of the phenomenon (which is obviously different in the various countries, because German salaries were not and are not Spanish ones, for example):
The story is the same, but some details are better appreciated (for example, the fact that Zapatero was a bankrupt – or a fool – of considerable dimensions: it is no coincidence that he was the idol of our left-wing crocodile).
To accommodate the Comedian (he is a dear boy) we must, however, move from the annual to the quarterly data, given that this is commented on in the sources that our friend cites us. But before doing so, I would like one point to be clear: in a monetary union, the wage growth rate is not dictated by productivity (cha cha cha), but by the wage growth of the strongest country: if he cuts, the others must cut, before or after a foreign debt crisis (usually after). So, if you want to pick on a woman whose name begins with "M", perhaps Merkel is a more suitable candidate than Meloni ( whom we have loved here for a long time ).
Clear?
Are you sure?
And then let's look at the quarterly data:
who then tell us the same story, "spread" over the quarters. Be careful though: there is a difference. Here the consumer price index does not come from the IMF, but from Eurostat (it is the HIPC, the harmonized index of consumer prices). The other variables ( compensation of employees and total employees ) are always from OECD sources, although, to be honest, I have not seen whether they are congruent with the annual data (i.e. whether, in the case of the salary flow, the sum of the quarterly data return the annual data: but at first sight I would say yes and it would be more of their problem than mine, given that if two different databases say the same thing – and they do – my reasoning is strengthened).
And that's it: we can also show the same data in index form:
useful operation because it allows us to understand who is really feeling bad, bad, bad…
(… a little help for the otherwise perceptive:
Do you see it now? Because it was something that had been going on since 2017, and the most attentive people know well why …)
But I feel that the Comedian is trembling and urgent: he lives in the future, in the world of Chinese pinwheels, and this idle tracing back to the causes annoys him. So let's get to his concern, which must really destabilize him psychologically, if it leads him to accuse me of "government propaganda" and "intellectual dishonesty". Poor thing: let's help him in his anguish.
So, in the meantime, the OECD data cited by the information operator ("Real wages, in 2024 Italy is still the country with the greatest decline"), comes from the OECD Employment Outlook 2024 , of which I recommend above all the subtitle, and specifically from page 31, where you find this nice graph:
from which, in fact, it can be seen that, comparing the latest data available to the latest data for 2019, Italy is in a bad way. With the data from our graphs, in fact, in spring 2024 France is 3% below autumn 2019, Germany 2.7%, Italy 4.2%. It's not the -6.9% this publication talks about, but it's still a disappointing result. The difference between our reconstruction and that provided by the Employment Outlook could depend on various factors relating to the definition and measurement of the variables, which I will not dwell on, because they are certainly less decisive than the macroscopic data, which I believe you will see and which However I highlight:
Well, yes, we are now (slightly) below France and Germany, but the problem is that LVI, the best one, pulled us over there. We hit rock bottom in the autumn of 2022, when we shook it off, and since then we have started to grow again, returning towards France and Germany.
On the other hand, how do you want someone who told you to your face that the aim of the game is to cut wages to be able to play a different game?
My educated guess is that this Government (if we really want to talk about politics) likes this game less than LVI. So who does propaganda? Who tells us that from autumn 2022 to spring 2024 Italian real wages have recovered 4.2% (German ones have lost 0.8%), or who doesn't tell us that from winter 2021 to autumn 2022 had they lost 8.3% (in Germany 4.6%)?
(… but why, why, why?… )
(… I have to run, I'll leave the typos to you …)
This is a machine translation of a post (in Italian) written by Alberto Bagnai and published on Goofynomics at the URL https://goofynomics.blogspot.com/2024/11/la-kuestione-salariale.html on Sat, 23 Nov 2024 17:59:00 +0000. Some rights reserved under CC BY-NC-ND 3.0 license.