Colborn’s Corner: Pay and benefits – will they ever be the same again?

This month Quentin Colborn addresses the issue of the employee relations legacy that is being built for the future. In the news this week, we read of BA staff apparently rejecting a deal that would have resulted in pay cuts as part of the plan to get BA onto a firmer financial footing. They are not the first to do so, many motor manufactures and the like have already gone down this road. But where will this lead to in the future? What is likely to happen when (if?) the upturn comes? Understandably, pay and conditions is a very emotive issue. Any prospect of a diminution is met with horror – understandably in some situations. However doesn’t this reflect our unrealism on many occasions? You poll 100 people and ask them if they think that price reductions are a good thing and probably at least 95 will say ‘yes’ – the remaining 5 may be economists! However rephrase the question and ask if the individual’s price (i.e. their pay rate) should fall and the figures are likely to be reversed. So why is it built into our culture that wages (and associated conditions) should only ever increase? As far as individuals are concerned surely what should matter is their purchasing ability – although I grant that different individuals have differing spending patterns. Incidentally we have a similar approach to housing, any decrease in value is ‘a bad thing’ as we see houses as investments, probably more than their value as some where to live.