What Labor Wants, Labor Gets

Widespread unemployment once made Italian workers terrified of their bosses, but terror has turned to testiness. With jobs aplenty in present-day Italy, strikes are as common as wolf calls on the Via Veneto. Last week 800,000 textile and chemical workers struck to back demands that would push labor costs up 70%. Radio and TV employees entered the second month of a bitter dispute with management over higher pay and job reclassifications.

Roman commuters half expect bus drivers to walk out in the middle of the run, and a housewife never knows when she pops a pasta into the oven whether the gas workers will keep the pressure up until it is baked. The agitation for more pay is intense in Italy because wages are lower there than in most of Europe, but European workers in general are demanding increases at a rate that is bringing them slowly but inexorably toward the U.S. scale.

New Spiral. Each collective-bargaining bout tends to produce a labor contract that looks more and more like those in the U.S. One of the sharpest issues in Europe, as in the U.S., is the shorter work week--except that European workers are trying to pull their work time down from about 47 hours to near 40, while U.S. unions argue for a 35-hour week. The trend is also toward U.S.-style two-and three-year contracts that include built-in annual pay hikes. In Britain, 20% of the work force now comes under such long-term agreements, which help to cut down the disruption wrought by yearly battles.

Other European contracts include automatic increases to keep wages in line with living costs; whenever the Italian cost-of-living index gains a point, industry must pay out $52.8 million in added wages--and the index has risen 20 points in two years.

In fringe benefits, European workers already enjoy a system far broader than the best in the U.S. In Italy, fringes often include low-cost housing; in France, a four-week paid vacation for 65% of the work force; and everywhere, liberal retirement pay. Real wages are also increasing fast: last year in France they rose 8%, in Italy 15%, in Germany 6.5%, in Britain 4.2%.. This strategy has already contributed hugely to inflation in France, Italy and the Benelux nations, and rouses fears that a demoralizing new spiral may halt Britain's prosperity.

Unpatriotic Boosts. On the surface, Europe's acute labor shortage hands unions a powerful lever to force management to give ground on wages. European governments hope that labor leaders will consider the overall interests of their national economies and hold demands within limits. German workers, haunted by memories of the worthless inflated marks of the 1920s, already show remarkable restraint, even though they are in one of the tightest of labor markets. The French government is having some success in its campaign to make any wage boost seem unpatriotic. In Britain, Italy and The Netherlands, however, union leaders appear more determined to press their advantage. But even there, they show a growing awareness that pricing their products out of world markets through excessive wage boosts could only result in eventual unemployment.

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