From 20 to 22 September 2024 took place in Velehrad / Czech Republic a seminar about “Inflation and loss of purchasing power”, organized by KAP (Hnutí „Křesťan a práce“) in cooperation with EZA and funded by the European Union.
The seminar was attended by 65 representatives of workers’ organisations from Poland, Germany, Austria, Slovakia, Ukraine and Czech Republic.
The aim of the seminar was to evaluate growth of society's well-being which is reflected in the long-term growth of people's purchasing power. European countries have long experienced economic development, which led to an increase in the population's purchasing power. However, the current crisis, the accompanying phenomenon of which is the highest inflation in EU countries for many years (some even decades), is leading to a decrease in the purchasing power of a large part of the population - this especially applies to socially weaker groups and employees. At the same time, this development deepens income and wealth disparities between individuals or regions within individual countries. In addition to disparities within individual countries, there is disproportion across EU countries; current inflation affects post-socialist economies more, either because of their higher energy dependence on Russia or because of nominal convergence.
The added value of the seminar was a better understanding of the consequences associated with high and unpredictable inflationary developments. These insights can be used to create a policy that enables workers' rights to be defended, social peace to be ensured, and inflationary pressures in the economy to be reduced through responsible fiscal policy. This seminar contributed to a better understanding of the mentioned consequences within tripartite negotiations and collective bargaining framework.
The discussed topics included:
Causes of inflation.
Effects of inflation on changes in consumer behaviour.
Causes, consequences, and solutions to inflation in the Czech Republic and Slovakia with identification of the impact on households.
The role of inflation expectations and inertial inflation.
The impact of the increase in the minimum wage as a result of valorizations on the competitiveness of enterprises.
Division of labour from the point of view of Catholic social teaching in the context of global challenges.
Causes and consequences of the German inflationary development in the 1920s.
Causes and consequences of the current German inflationary development.
Challenges facing the German economy.
Seminar results included:
High inflation disadvantages the poorest households the most.
Inflation is always and everywhere a monetary phenomenon; this also applies to the recent inflationary episode that has affected a significant part of the world.
The importance of Catholic social teaching in current global trends.
Learning from inflationary developments from a historical and current perspective.
Resolutions and demands:
Economic policies should consider the most vulnerable sections of the population when dealing with the effects of inflation.
Policymakers (central banks and monetary authorities) should focus on creating appropriate inflation expectations.
Resolutions: Catholic social teaching is important for responding to global challenges.
Resolutions: The causes of high and unstable inflation are mostly the same, so policymakers should learn from history.
Consequences for daily work:
Workers’ organizations should be internally interested in the development of the standard of living of their employees.
Workers’ organizations should respond to the development of the price level and prevent a decline in employees' standard of living.
Realizing seminar results in daily work:
The participants should disseminate the information obtained regarding the effects of inflation in their organizations and, through them, open topics related to the standard of living.
Workers’ organizations must pressure economic policymakers to implement policies that will prevent the adverse social effects of inflation.