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6 October 2014

Wages and collective bargaining during the European economic crisis – developments in the European manufacturing industry

wages, collective bargaining, industriall

In a recent study produced for industriAll – European Trade Union, Thorsten Schulten (WSI) and Torsten Müller (ETUI) analyse collective bargaining developments in the European manufacturing industry.

The study consists of two parts. The first part provides a quantitative analysis of the development of wages, employment and working hours in metalworking, chemicals and textiles and their main sub-sectors covered by industriAll – European Trade Union. The second part focuses on the impact of the crisis on collective bargaining both in terms of collectively agreed wages as well as in terms of bargaining arrangements.

As regards the quantitative developments, the study shows the decline of employment in the European manufacturing industry since the turn of the century. While in 2011, the number of employees in the metalworking industry and the chemicals industry was 10% and 15% respectively lower than it had been in 2000, the most dramatic decline took place in the textiles sector where employment between 2000 and 2011 almost halved. The fact that since the beginning of the crisis in 2009 the number of working hours dropped significantly faster than the number of employees illustrates that short-time working schemes and other forms of temporary working time reductions was the preferred tool in the European manufacturing industry to cope with the crisis. The study furthermore illustrates the moderate overall development of real wages in the European manufacturing industry which stayed far behind the development of productivity.

With respect to the development of bargaining arrangements, the study shows that the crisis reinforced already existing decentralisation processes so that company-level bargaining became more and more important. Overall, two key developments can be distinguished. Developments in many northern European countries were characterised by a process of controlled decentralisation which means that the transfer of bargaining competences from the (inter-)sectoral level to the company level has been defined by central collective agreements conclude by trade unions and employers’ associations. By contrast developments in many southern European countries are characterised by a politically driven process of disorganised decentralisation by which multi-employer bargaining at central level is increasingly replaced by single-employer bargaining as the dominant mode of determining wages and terms and conditions. This applies in particular to those countries which the Troika forced to implement “structural reforms” in return for financial assistance.

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