24/10/2006 5:36:21 pm
The Cause or the Effect? Opposite my hotel in Bratislava, a new house was being built. Hardly any machinery was used and the efficiency seemed rather low. But this is not strange at all. The productivity of the construction workers was in all likeliness low. They did probably not know how to use advanced machinery - even if it had been present. Thus, their wages was probably rather low as well.

But the argument also goes the other way: Since they have these very low wages, it is no great loss to have them working there for such a long time. It is a situation where growth in wealth might be delayed. If the wages are lifted and productivity is not, they lose the job. It all has to start with lifting the productivity, which, in turn, creates a possibility to have higher wages.

Usually, companies benefit from investing in new competence. But perhaps not that qucikly or for everyone. Some of these workers seemed to be at least 60. The investments will probably be directed to their younger colleagues. They still suffer from 40 years of Communist rule, while the young will benefit from the current improvements.