Tuesday 9 May 2000

Pic of the day: Surely the road ahead will have both uphills and downhills, and many a surprising twist and turn.

I read in an old Jewish book of wisdom: "Mourn for the dead, for his lamp has gone out; but mourn more for the fool, for his reason has gone out."

This actually happened in the past to two of my highly valued coworkers. One of them was even the guy who hired me, back in 1979. I think it safe to say that he must have regretted that many a time. What sanity he still retained after working here since his teen years, he lost it when he left to join the ranks of the pensioneers. Turning against his former workplace, he also ran a personal campaign against a few of us younger people at least. Eventually cancer put an end to his haunting, and I think it is safe to say that few of his friends mourned his passing as much as they mourned what had gone before.

This is not why I remember that quote today, however. The strike is over. The good guys lost.

Yes, I am sorry to say that the private sector strike in Norway is already over, and the recommended solution will give the equivalent of a 5% wage hike, on average. Yes, I can sympathize with the companies that saw that a continued strike would harm their reputation abroad, and lead to the loss of future orders. In a world built on just-in-time delivery, even a few days of strike can have a domino effect down the system. Still, the long term consequences of this wage hike will be disruptive for years to come.

For starters, the extra cost of labor will be added to the prices of the various products, be they goods or services. This means inflation, and money will be less worth for the rest of us.

The next thing that happens is that the central bank will need to raise interest rates to keep the valuta stable, as the inflation will press towards a devaluation of the NOK (Norwegian "krone" or crown). Since most all private companies and corporations have more than 50% of their working capital from loans and credits (usually much more), this means another added cost that is bound to appear in the prices eventually.

Next in line is the rather large public sector. In Norway for instance the overwhelming majority of hospitals and schools are public. In addition there are other nifty services such as a free labor marketplace on the Internet (as well as with local offices in most towns and larger villages), and a pensions system that also contains the majority of health insurance in our country. The workers here are already paid less than comparable private services; they will strike to the death for a wage hike at least as large as the one in the private sector, unless (as usual) a law is passed to forbid the strike. These laws are hovering on the border of human rights as we know them, and so the strike will probably go on until lives are at stake.

Given that the public servants will eventually get the same wage rise as the private, more or less, we can safely expect higher taxes to pay for all this.

The end result is that everybody will be left with less. Yes, your monthly pay will show a higher number. But you will have to pay higher taxes, higher interest, and higher prices. There will be fewer chickens in your pot for the work you put in. I would hold the people who went on this strike personally responsible for this, except that they don't know what they do. They are made into fools by acute desire, as happen to most of us in some way some time. I can hardly blame them, but rather pity them and us all. So instead I am left here, alone awake, to mourn the passing of reason.