Where I work, the company has made a final offer for this year's pay which is a three-year deal of about 2.75% this year and then increased by inflation for the subsequent two years (with maximum and minimum levels specified so we are stuffed if inflation goes higher than that maximum level).  The hilarious thing is that for many staff the actual amount is dependent on ratings from annual appraisals.

Anyone getting a score of 'meets expectations' will get 2.65% while anyone getting marked as 'needs improvement' or 'poor' gets anything between 0% and 2.65% (I think). Meanwhile the high-performers who get exceeds expectations' or (and this is very rare) 'excellent' will get 2.75%.

Lets get this straight: for performing above and beyond the call of duty you will get an extra 0.1%.  For someone earning £36,000 a year it would be an extra three quid a month – before tax.  That really does give an incentive for people to try harder doesn't it?

Meanwhile, I discovered today the details of the pay offer which the RMT was saying was an insult to their signalmen members. It was something like 3.25% this year and then RPI for two years. My sympathy for them dropped even further from its low starting point.

One quote from the commuters' favourite man, Bob Crow, was that this would amount to a 3-year pay freeze. How does he work that out? 3.25% is above inflation so at every point they will be better off than if just inflation was acounted for.

But where did this assumption come from that having wages rise every year, above the rate of inflation is a fundamental right?  I do not think it is right for someone to do the same work to the same standard continuously and then have their rewards drop but having it increase in real terms is not a given. The way to get more pay is to get promoted isn't it?

Anyway, the latest news is that Tuesday's strike is now off.  Network Rail have come up with a new offer. The RMT's press release says:

"Network Rail's new offer would mean a combined increase in basic rates totalling eleven per cent between April this year and April 2007," RMT general secretary Bob Crow said today.

Depending on how you interpret it that is either an 11% increase for one year or 11% over two years. Either way it is a lot more than most other workers are getting, and then on top of that:

Implementation of the 35-hour week would also mean an extra six days' annual leave for signalling members, with no strings now attached.

How did they manage that? Railway workers already have a minimum of something like 29 days' leave, plus public holidays. When we moved from 37.5 hours to 35 hours per week I can't recall getting any extra days' leave and our reduction in hours was in lieu of pay increases, not in addition to them.

OK, maybe there is a bit of sour grapes, but I can't see this going down well with the travelling public. This is the main reason why I really want to move to a local job and not get wound up by my season ticket cost going up by enough to account for all my pay increase every year.

On the other hand…  isn't RPI a terrible measure for inflation when negotiating pay increases?

The index includes all sorts of things like cars and holidays which not everyone buys every year, but which are dropping in price and masking the large increases in petrol, gas, electricity and water (and rail fares?) which most people have no choice about consuming. In fact anyone on a lower wage will not notice a decrease in holiday prices or car prices. They will have a fixed budget and spend up to that so it might just mean getting a slightly newer car or travelling a bit further on holiday. It is only the higher earners who can decide exactly what they want and then find it costs less this year.

When I look at the amount my council tax, gas, rail, water and electricity have gone up this year I really can't see how the official inflation figures come out so low. The settlement for the RMT probably reflects the real increases in outgoings better than the official RPI figure. In that sense, their settlement is fair, but its mine which isn't!

(The extra 6 days holiday is taking the piss though)

Don't get me wrong, I am not anti-unions. We need trade unions to protect workers from things like this – a timely reminder of just what employers would do if they could get away with it – but every time a union manages to force a settlement which appears to be too generous it erodes their popularity just a bit more.  We have been there before: widespread anti-union feeling enabled Thatcher to remove a lot of rights and create a situation where many employers ceased recognising unions.