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Wages, collective bargaining and economic governance

Union organisations warn of threats to collective bargaining and pay

(16 September 2011) Representatives of both EPSU and the ETUC took part in yesterday’s conference on wage trends in Europe organized by DG Employment. There were wide-ranging discussions around wage-setting and the link to productivity and competitiveness, levels and trends in collective bargaining, the impact of indexation systems and the causes and results of growing wage inequality.

Both EPSU and the ETUC were keen to alert participants to the fact that, despite commitments from the European Commission, not only did the proposed economic governance system pose a threat to the autonomy of the social partners in collective bargaining, but that threat was already a reality in a number of countries. With the joint intervention of the Commission, the International Monetary Fund and in some cases, the European Central Bank, trade unions in several countries had seen a shift in the collective bargaining terrain.

The other concern for the trade union movement is what appears to be a single-minded focus on wages as a key adjustment mechanism in those countries assessed as suffering from “macroeconomic imbalances.” Andrew Watt, senior researcher at the ETUI, raised the question of the lack of balance in the economic governance proposals. He argued that focusing on what were deemed to be excessive wage increases was unjustifiable and there was a lack of symmetry when it came to the treatment of countries where wage trends were well below developments in productivity.

With the Commission raising major questions around wage indexation systems, Anne Demelenne of the FGTB confederation made a cogent defence of the system in Belgium and how it worked to deliver a stable and equitable process of wage development.

There were over 150 participants from across Europe with many coming from national ministries of labour and/or finance.

Background documents are available here and presentations should also be added to the site shortly.