However, the FOI felt the need to advise the MCW that wages can only grow if the country’s economy grows. Productivity increases at firm level is different from a national productivity index.

The FOI assured the MCW that this is not a question of shifting the onus onto employees.

Productivity increases in an enterprise are instigated by management, but it is mostly registered as a result of new investment in plant and machinery in combination with a revision of management techniques and a re-organisation of the work. The initiative to increase productivity is normally a management initiative to be able to face the competition abroad.

However, the NCW seems to have misunderstood the UHM proposal – (supported by the FOI) – in favour of benchmarking national productivity increases through an index for use in conjunction with wage increases. This is a scientific tool that is used in other countries that are very conscious of the harmful effects of linking wage increases to the level of inflation.

The method of awarding wage increases on the basis of inflation was adopted more than 15 years ago in certain countries and was found to fuel inflation and bring a country to economic disaster.

Responsible trade unions in other countries know that this is not adequate. Economies grow or shrink on the basis of wealth they manage to generate or otherwise, the FOI said.