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Wednesday 23 June 2021
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Are we ready to work more in the aftermath of wage increase?

Indisputably, the global  crisis as well as  Tunisia’s one , will last more than  a year at least. The collapse of the U.S. economy, the difficulties of European economies and protectionism (despite Sarkozy’s remarks before the European Commission), are here to remind it  to us every day. Even at the risk to act as Cassandra, we can only say that “the worst is yet to come.”

So far, the Tunisian exports fell by 12.5% in almost all groups of products, imports fell by 17.6% and 14.3% mainly for raw materials and semi-finished products. Undeniably, the Tunisian industrial production is moving downwards. The index of industrial production, had already ended the year 2008, with a 2.7% deceleration  against 9.6% during the year 2007.
Tunisian forecasters already evoke the «industrial recession” phenomenon and note that “being already and  clearly declining for several months, industrial production fell heavily in late 2008. The very sharp slowdown in global demand and especially the entry into recession of our major trading partners bears in part upon the prospects of industrial production in Tunisia. ”

Inflation falls and wages rise.

In front, inflation in late January 2009, was declining despite the important part of inflation inherited from 2008. As a result, the purchasing power of the Tunisian catches up. In January 2009, in fact, inflation stood at only 3.5 against 5.8%  in January 2008. Between December 2007 and January 2008, prices were even involved in a downward trend in almost all components of the Tunisian shopping basket and even in energy (-2%).

The year 2008 ended with an average inflation rate of 5%. However, the annual year-end slide stood at “only” 4.1% after posting 6% in April. The first months of this year confirmed this through a sharp deceleration of inflation which fell to 3.5%. However, core inflation recorded a very slight decline from 4.2% in December to 4.1% in January. It remains around an average of 4.2% since March 2008, reflecting the increased acceleration of the production costs which got  expensive, in particular, the non-food prices . This dissemination effect is more generally visible on inflation excluding food and energy that rose from 2.8% in September to 3.9% in January. This trend should not continue beyond the first quarter of 2009.

Wages are rising too!

At the same time, wage negotiations launched amid international financial crisis and a national situation affected by rising oil and all raw materials prices, end through wage increase at least consistent and any way, larger than those of the previous rounds.

The inflation decline somewhat revived the purchasing power of the Tunisian, who no longer complain about prices as reported by local press . Prices going downwards,, the average rate of these wage increases stands around 4.5%, ie well beyond inflation rate.

Work more; produce more and better, the only lifeline.

As far as enterprises are concerned, they don’t create wealth from nowhere. Basically, all wealth is created by the difference between production and costs. Production include physical capital, human capital and technology. The relationship between these three elements is undeniable and irrevocable. If one of them fails, the balance between production and expenses is quickly broken, especially under conditions of competition and search for the cheapest cost for all components of this diptych. To maximize this diptych, economists have so far found more than productivity, or the ability to reduce costs by increasing the efficiency of human resources, ie produce more and better for the same cost.

In Tunisia, this issue was never raised. The salary is linked to production by the sole cost of living, and only as far as the consumer or employee is concerned, but never from the viewpoint of the company or with regard to the vital link between production quantity and cost of human resource used. With the profound changes in global economy, the recession that has arisen among Tunisia partners and the instability of international prices of raw materials and semi-products, this link is growing essential, if not vital to the economy where the export is a major pillar of growth and wealth creation to distribute through wages..

The Tunisian trade union never accepted this link. However, economists agree on the importance and the imperative necessity of increasing, if not improving the productivity of human resources in Tunisia. In short, the Tunisian needs, in order to save the sources of his revenues, to work more and better, with the same pay, at least in proportion to his salary.
It is still true, as started last week in Tunis, the work of a national commission for the preparation of a national consultation on productivity, that productivity is not only dependent on the duration of labour, but also on  upgrading  the production facilities as evidenced by  the low level of  intangible investment in the upgrade process of the Tunisian companies. Productivity means also upgrading the production processes and more importantly the processes of human resource management.


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