Home » » Jobs Versus Cash: Higher Wages Or Job Security?

Jobs Versus Cash: Higher Wages Or Job Security?

Staff Reporter | 2:03 PM |
With jobs becoming scarce, workers all over the world are being forced to decide between higher wages and job security. For most people, it is better to have a job and accept a lower standard of living than to seek wage increases.

The September 18-24 2004 edition of The Economist contained an article entitled Higher wages or more job security? It discussed the plight of Volkswagen, a German car manufacturer, and its workforce. The company had been facing stiff competition from other car manufacturers like General Motors, Toyota, Daimler-Chrysler and BMW. It was therefore considering a wage freeze for two years and a labour cost reduction of 30% by 2011, saying that if it did not do this, it would be forced to lay off 30,000 of its German workers. The workers’ union on the other hand was demanding a 4% wage increase and a 10-year job security.

The article said that management was negotiating with the workers to opt for jobs rather than more money. The choice the workers were being given was “jobs or cash”, and the article concluded that the workers might decide to keep their jobs for less pay, rather than continue pushing for increased pay and risk losing jobs.