The decoupling of wages from productivity is a great cause for concern. The relationship between productivity and wages is central to a fair distribution between labour and capital. Today wage growth is lagging behind productivity growth - we cannot allow this to continue.
Working people in many EU countries are still earning less today than before the crisis. This is the result of the dismantling of collective bargaining and the number of precarious jobs that are slowly bringing down the level of unemployment.
On 1 May, the ETUC has issued an unprecedented ‘emergency alert’ that highlights countries and situations where the opportunity for working people in Europe to achieve decent wages and working conditions is under threat.
New figures calculated by the European Trade Union Institute (ETUI) and European Trade Union Confederation (ETUC) show that wage increases in the European Union over the last 16 years would have been four times higher if they had fully reflected productivity increases.
It is standard economic theory that wage increases should follow productivity increases. But in Europe productivity has increased far more than wages. From 2000 to 2016 productivity increased three times more than wages in Germany and Croatia, and two times more than wages in Poland and Belgium. Meanwhile in Hungary, Romania, Portugal and Greece real wages went down in the last 16 years, while productivity increased.
| Country | % Increase in productivity, 2000-2016 | % Increase in wages, 2000-2016 |
|---|---|---|
| EU 28 | 10 | 2.5 |
| Croatia | 42 | 11 |
| Germany | 13 | 4 |
| Belgium | 14 | 7 |
| Poland | 64 | 32 |
| Austria | 11 | 6 |
| Spain | 16 | 10 |
| Netherlands | 15 | 12 |
| Hungary | 19 | -5 |
| Portugal | 18 | -3 |
| Romania | 10 | -15 |
| Greece | 2 | -10 |
Better wages also must be achieved by promoting and reinforcing collective bargaining structures as these are the only tool to ensure a more equal distribution of income and all-round higher wage levels. This ought to be combined, where necessary, with the implementation of a minimum wage, which would guarantee a decent living for every worker in the EU.
The ongoing Pay Rise Campaign is a crucial element in our trade union’s efforts to bridge the productivity pay gap and achieve better wages and greater purchasing power for all.
The recent most Eurofound Quality of Life Survey showed that in 11 European countries, more than half of the population are having difficulties making ends meet every month. A pay rise is justifiable way to tackle rising inequality and in-work poverty, and to generate growth and recovery for the many, not the few.
Through its Collective Bargaining EU Project, industriAll Europe is working hard to defend the autonomy of the social partners in collective bargaining, to maintain multi-employer bargaining and to promote quality employment and high social standards and combat social dumping. Strong Collective Bargaining requires strong trade unions – this is in line with our Building Trade Union Power political priority.
As part of the ETUC Pay Rise campaign, industriAll Europe is also organising a special Workplace Week from 7-11 May with worker testimonies from across Europe with country-specific examples of how industriAll Europe affiliated organisations use collective bargaining as a means to achieve wage increases.
“The decoupling of wages from productivity is a great cause for concern. The relationship between productivity and wages is central to a fair distribution between labour and capital. Today wage growth is lagging behind productivity growth - we cannot allow this to continue”, said Luc Triangle, General Secretary of industriAll Europe. “Workers deserve their share of the recovery. Wage increases have the potential to boost purchasing power and maintain economic growth in the EU. Collective bargaining must be strengthened, only through this fundamental tool can workers achieve a well-deserved pay rise”.