Collectively Agreed Wages in Europe – available statistics Bordeaux

Collectively agreed wages in Europe Introduction on CAWIE Collectively agreed wages in Europe Improving existing data and indicators To support social dialogue and economic governance in the EU Co-Funding 80% Grant Budget heading 04.030301 EC DG Employment and Social Affairs 17-11-2018

Project consortium: TURI Project team Co-ordinators HIVA-KULeuven, BE Contact person: Guy van Gyes Wirtschafts- und Sozialwissenschaftliches Institut in der Hans Böckler Stiftung (WSI), DE Contact person: Thorsten Schulten & Reinhard Bispinck Project partners AT Arbeiterkammer Wien Sepp Zuckerstätter FI Palkansaajien Tutkimuslaitos (Labour Institute for Economic Research)" Pekka Sauramo FR Institut de Recherches Economiques et Sociales (IRES)" Catherine Vincent IT Instituto Ricerche Economiche E Sociali (IRES) Lorenzo Birindelli NL Amsterdams Instituut voor ArbeidsStudies (AIAS) Maarten van Klaveren & Maarten Keune PT Instituto Ruben Rolo Reinhard Naumann ES Fundación 1º de Mayo Nacho Álvarez & Francisco Trillo UK Labour Research Department (LRD) Lewis Emery EU European Trade Union Institute (ETUI) 17-11-2018

From policy context … 17-11-2018

From policy context …. EU economic surveillance Belgian country-specific recommendation 2012: “To boost job creation and competitiveness, take steps to reform, in consultation with the social partners and in accordance with national practice, the system of wage bargaining and wage indexation. As a first step, ensure that wage growth better reflects developments in labour productivity and competitiveness, by (i) ensuring the implementation of ex-post correction mechanisms foreseen in the 'wage norm' and promoting all-in agreements to improve cost-competitiveness and (ii) facilitating the use of opt-out clauses from sectoral collective agreements to better align wage growth and labour productivity developments at local level.” “Looking ahead, a proper understanding of the links between policies, wage dynamics, competitiveness and imbalances will be key for a successful implementation of the Excessive Imbalances Procedure (EIP).” (ECFIN report) 17-11-2018

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To deal with two issues on CAWIE … to project Making abstraction of the fundamental theorems (supply-side; wage growth not above productivity growth) To deal with two issues on CAWIE Assessment of the methodological quality of the used evidence >< simple reasoning on wage setting systems Start with sector approach Small steps? 17-11-2018

Goals & expected results Better understanding of existing data sources 10 national reports 2 EU policy papers Trends in CAW 1995-2010 A harmonised statistical system on CAW: building blocks from a quality-based users’ perspective Dissemination conference Brussels 29 November 2012 17-11-2018

Focus 2: wage drift Macro-economic governance = vertical coordination of wage bargaining >< market ‘coordination’ Key (still) market ideology = simple reasoning = imbalance = excessive wage growth = collective regulation/market distortion = deregulate = problems will be solved A comparison of collectively agreed and “actual” wage developments allows for an analysis of “wage drift” which can be used to identify other factors than collective agreements which influence wage dynamics in Europe. Among them are compositional factors, such as upskilling or growth of the service sector, cyclical factors such as company bonus payments and changes in working time as well as industrial relations factors such as the coverage of collective bargaining and the role of multi-employer agreements. 17-11-2018

Processes: pay bargaining Figure 59: Indices of wage bargaining coverage and centralisation level, by country Combining the figures of coverage and centralisation makes this ‘divide’ between the ‘older’ and ‘newer’ Member States even more visible. Two groups can be distinguished in this graph with the EU-15 countries (except the UK) in the quadrant with a higher centralisation and higher coverage and the new EU-12 almost all in the quadrant with a lower centralisation index of bargaining level and lower coverage rate. The UK can also be found in this group. Slovenia and Croatia are to a certain extent an exception to this finding and are more situated in the first group. Romania and FYROM are outliers in this division by combining a higher centralisation index of bargaining level with a lower coverage rate. Two types dominate: local/company and higher level. Taking all employees into account, the sector/industry agreement is dominant with half of the employees, covered by a wage agreement, having this agreement bargained at this higher level. Without the public sector, both major types keep each other in balance: both score 44%. In a number of countries (IE, DE, NL and LV), the practice of derogation from higher level pay agreements is used more extensively. Wage bargaining coverage, % employees coverend by a collective pay agreeemnt; Index of centralisation level = ((square root of average result on pay agreement level scale) – 1)*100 Source: ECS, 2009, management, weighted data European Establishment Survey 2009 Workplace Social Dialogue Chapter

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Vertical coordination works: examples of North-West Europe: coordination driven by export-led sectors (public sector driven coordination in South during some periods????) Flexibility created by wage cushion (large company; variable pay; white-collars; high educated = Belgian analysis) 17-11-2018

Focus 1: statistical quality 17-11-2018

A measure of the changes over time in the direct outcome of collective bargaining in terms of basic pay (i.e. wages and salaries excluding bonuses) at the euro area level. It refers to the implied average change in monthly wages and salaries. 17-11-2018

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Title complement Euro area 17 (fixed composition) - Indicator of negotiated wage rates, Total; Annual rate of change; European Central Bank; Neither seasonally nor working day adjusted Series Key STS.A.I6.N.INWR.000000.3.ANR Last update 2012-09-25 11:00:00.0 Unit Percentage change Decimals Two (2) Collection indicator Average of observations through period (A) Publication source ECB Calculation Source agency European Central Bank (ECB) (4F0) Publications Monthly Bulletin: Table in chapter 05, section 01 (T0501) Statistics Pocket Book: Table in chapter 05, section 05 (T0505) Frequency Annual Title complement Euro area (changing composition) - Indicator of negotiated wage rates, Total, Annual rate of change, European Central Bank, Neither seasonally nor working day adjusted Series Key STS.A.U2.N.INWR.000000.3.ANR Last update 2012-09-25 11:00:00.0 Unit Percent Decimals One (1) Collection indicator Average of observations through period (A) Publication source ECB Calculation Source agency European Central Bank (ECB) (4F0) Frequency Annual 17-11-2018

National statistical indicators Two approaches Monitoring of average increases in collective agreements FR, PT, ES, DE New agreements Monitoring of collectively agreed increases of average workers BE, IT, AT, NL – FI Zero agreements Outlier: UK: decentralised; union premium 17-11-2018

National statistical indicators Aggregate index FIN NL-AT-DE BE-IT ES PT FR UK 17-11-2018

Quality issues Lapeyre index: starting at 100; because lack of information on pay levels; only percentage increases Weighting problem to obtain ‘average’ Outer: weight of a collective agreements: employment coverage Inner: what is average wage? Wage classification schemes: Middle; median Sample of reference points Survey to obtain: AT, NL, FIN, PT, DE Most important when absolute increases 17-11-2018

Quality issues At a certain base year (revision; 5/10 years) Structural labour changes; composition effects No correction for business cycle (IT) Other accucary problems Company agreements Opting-out Decreases Working time changes Base wage / premium 17-11-2018

Statistical indicators: conclusions Basic wage developments (fast available) To study impact shortcomings Ways for improvement Mixed method: constant workforce (business cycle corrected) composition and without Base wage and other premiums National/sector and lower-levels Selection of (the more the better) Cooperation statistical agency and Ministry of Labour European harmonisation: inclusion in SES (what part of wage and wage increases determined by collective agreements; info on wage classification for individual) International statistical programme needed (ILO-Europe?) 17-11-2018