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UK Postal Dispute – Jun 2007

Yet another postal strike. Ho Hum.

The Royal Mail is suffering from antiquated thinking, from top to bottom of the business. That’s why there are so many disputes. Both management and workforce must share some of the blame though, they never seem to work together. The management see the workforce as a resource to be exploited, rather than be developed, and the workforce see a class divide between themselves and management. This polarisation of positions will only damage the business both groups should be looking for ways to make better if long term survival is to result.

I sympathise with the workers claim for inflation linked salary increases. In times where you need a ten times salary mortgage to buy a house, a 4.5% salary increase doesn’t sound too bad. But I also don’t support their industrial action as it seeks to blackmail the country into pressurising the management into action that may not be in the long term best interests of the business. Meanwhile, UK plc suffers loss of production which adds another advantage to competitor countries around the world.

If the house shortage problem was addressed seriously so that house price inflation was not so rampant, lower paid workers would not need such large increases since inflation would be a lot lower.

This is a structural problem of the UK economy that no government has been able to fix for decades, and which is based on the current strict controls over house building. If houses could be built where the demand for them was highest, prices would not escalate out of the reach of most First Time Buyers.

A lot of people make the mistake of thinking “I don’t need a pension because I have my house” forgetting the house won’t buy them any groceries when they retire. You only make a profit from house prices if you sell your house and go and live in a tent – or rent your house out while you live in the same tent.

Lower paid workers such as Post Office workers also should take some of the blame because IIRC they do not have locally negotiated wages, so Post Office workers living in cheap areas have more disposable income than PO workers living in expensive areas who receive the same wages.

I sympathise with the plight of PO workers though, because CEO Mr Leighton does get rather a lot of money, and none of it seems to trickle down to them.

One of the big problems with Executive Remuneration is that they often get big bonuses that make them millionaires whether they are successful or not. They stay in a job for 2 or 3 years, and can retire comfortably afterwards no matter what they do!

Of course, the committees that award these huge salaries are made up of non-Executive Directors who receive big pay awards back at their own companies for their “real” jobs – decided on by perhaps the same Directors they have just awarded large pay rises to in another company whose remuneration committee they sit on, this time as non-Executives! It’s all rather incestuous.

The annoying thing is that this policy is supported by the pension funds who invest in these companies, and which vote for remuneration packages that drive the share prices up. But it isn’t their fault either.

After all, it is you and me who choose to save and invest our money, our pension funds and our Stakeholder pensions, our AVCs and so on, into those pension funds that have grown the most over time.

So really, it is we ourselves who are responsible for driving up the value of Executive pay, thereby creating the pressure to reduce workers pay/rights or increase productivity, all to enhance the share price.

The system only works if real productivity improvements can be found – and by that I do not necessarily mean by just sacking workers and making the remainder pick up the slack; the system only works if real inventiveness can be used, and accepted by the workforce and management alike. Unfortunately real inventiveness from the workforce is not sufficiently encouraged (if it were there would be more of it and less confrontation).

We need an end to confrontational industrial relations, and a move towards personal responsibility on both sides – management included. In my opinion, any worker who makes a suggestion that aids productivity so much as to make a difference to the share price should be awarded the same kind of bonus that the CEO gets for the same kind of share price movement: we should see more millionaire workers as well as millionaire managers.

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