Monday, March 07, 2011

Some have it better than others

In capitalism it would seem obvious that some people have it better than others. After all greed is good (to an extent of course) and the whole system in principle is based on a reward-penalty mechanism.

Thus, when you stumble upon such an article in Rzeczpospolita daily (translation here) it should not raise many eyebrows. After all wage negotiations are something natural. But not in the case of Polish utilities. Not by a long shot.

Utilities' employees already enjoy 8-10 year job guarantees until something like 2017. They get various non-salary benefits...and bonuses...and it is estimated that there is some 30 percent over-employment in the sector, where just the major state-owned companies employ some 90,000 people (job data for Polish utilities is surprisingly hard to find on the web).

It is clear that the word "efficiency" for these people has no meaning when it comes to jobs. Example. The Belchatow power plant employs over 4,000 people whereas a similar sized British power plant would employ 670. Even if you take into account differences in technologies the gap is stunning.

To add insult to injury, the industry believes that competition will not lead to lower power prices because these are dependent on technology and fuel costs. Yeah, right. So, a 30 percent overhang in employment as compared to peers in other countries costs nothing?!

The bottom line? There are a few. First, we do not have pure capitalism in Poland. The trend would be absolutely the opposite if that were the case. Second, the wage demands are just a plain robbery of taxes...I mean energy users, mainly businesses.

Third, it is no surprise therefore that labour unions in utilties hate the word "privatisation" since obviously to their ears it sounds very much like "job cuts" or "margins" or "efficiency."

Unless, of course, it is KGHM-style privatisation: sell over 50 percent of the company to a large number of financial investors, have the state maintain a 30 percent stake and let the unions run the firm.

It seems like the perfect solution, but unfortunately the utilities sector is a tad harder to operate in at the moment than copper mining, which with copper prices in some wonderland of nearly $10,000 per tonne, let's be frank, makes it a pretty darn simple money machine.

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