Labour Research April 2016


Wage bargaining under the new European economic governance

Alternative strategies for inclusive growth

Guy van Gyes and Thorsten Schulten (eds), European Trade Union Institute, 417 pages, €20 or free download

The case for “downward flexibility” in pay, more decentralised bargaining, wage cuts or limited rises, and competitiveness based on cost became part of post-crisis European Union economic orthodoxy, writes Lewis Emery. But that perspective is tested in evidence compiled by a network of trade union-related research institutes working with the European Trade Union Institute.

The book deals with broad themes, including the strengths and weaknesses of available data on wages in Europe, the influence of collective bargaining on what people actually earn and European minimum wage policies. That’s backed up by case studies and statistical analysis from across Europe. 

The obsession with austerity and “internal devaluation” in Italy, Spain and Portugal contrasts with the Nordic countries, where bargaining systems were “intact, but changed” by earlier trends. Inequality in Hungary, Slovakia and the Czech Republic is traced back to government policies over which the social partners have little influence. 

And here in the UK, where decentralisation and union decline are long-term trends, the impulse towards a more collective approach has not disappeared.