Lufthansa ground staff will be on strike tomorrow, adding to air-travel chaos around the world. Reuters reports that the ground-staff union wants a 9.5 percent raise and will be engaged in a one-day “warning strike” to pursue it.
The ground staff is represented by Verdi (short for Vereinte Dienstleistungsgewerkschaft), the same union representing the Hamburg dockworkers who have been on strike multiple times already this year. The story of what led to the strike is similar to other stories worldwide.
From Reuters:
Verdi last month demanded a 9.5% pay rise, or at least 350 euros ($368) more per month for 12 months, for around 20,000 workers who it says are being squeezed by inflation and have been overworked due to staffing shortages at airports.
Lufthansa had offered an increase of 150 euros per month for the rest of this year and another 100 euros more from the start of 2023, plus a 2% increase from mid-2023 dependent on the company’s financial results.
Verdi rejected the offer, saying it was insufficient to offset soaring inflation, which hit 8.2% in Germany in June.
Inflation is the common denominator. Over the past few decades of low, stable inflation, companies have been accustomed to giving raises in the low single digits. Those raises no longer seem reasonable to workers because they now amount to a wage cut in real terms. But just because inflation is up doesn’t mean companies have enough extra money to give wage increases sufficient to compensate. Their costs have increased as well.
Despite the long-running trend of private-sector workers in the United States away from organized labor, transportation is one of the last sectors that remains heavily unionized. As I wrote late last month and earlier this month, transportation unions have the upper hand around the world right now, and they don’t seem at all ashamed about playing it, no matter the economic consequences.
Others are noticing as well. Augusta Saraiva and Bryce Baschuk wrote on Sunday for Bloomberg:
A surge in strikes and other labor protests is threatening industries all over the world, and especially the ones that involve moving goods, people and energy around. From railway and port workers in the US to natural-gas fields in Australia and truck drivers in Peru, employees are demanding a better deal as inflation eats into their wages.
Precisely because their work is so crucial to the world economy right now — with supply chains still fragile and job markets tight — those workers have leverage at the bargaining table. Any disruptions caused by labor disputes could add to the shortages and soaring prices that threaten to trigger recessions.
Add labor disputes to the list of reasons never to let inflation get out of control. The higher inflation we’ve seen over the past year is causing widespread turmoil in transportation by upsetting expectations about what constitutes a reasonable wage increase. And remember, West Coast dockworkers and freight-rail workers nationwide have yet to come to an agreement with their employers about new labor contracts.