Industrial Relations in Europe 2012 - European Commission - Europa

A core aim of the CAWIE project has also been the analysis of ‘wage drift’, which is the
difference between the average development of collectively-agreed and actual wages. Wage
drift can be seen as an indicator that identifies additional factors that 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 and level of collective bargaining and
the possibility of derogating from national or sectoral standards at company level.
A comparison of the development of collectively-agreed wages and compensation per
employee as measured by national accounts shows that during the 2000s in most countries
there was a more or less pronounced ‘positive’ wage drift, which means that average increase
of actual wages was above that which was concluded in collective agreements. The two
exceptions were Austria and Germany where wage drift was ‘negative’.
Chart 1.8: Nominal collectively agreed wages and nominal compensation per employee,
2010 (2000=100)
Source: TURI-database on Collectively Agreed Wages; AMECO database
In none of the countries considered by the CAWIE project is there any evidence that wage
developments determined by collective agreements have been ‘too expensive’ and have
created problems of competitiveness. The remarkably low wage development in Germany is
nevertheless significant. It is to a large extent the result of a strong negative wage drift, which
indicates a partial erosion of the German collective bargaining system. However, there is a
limit to the extent to which this can serve as a ‘model’ to overcome the economic crisis for all
EU countries, as not all European countries can become surplus countries at the same time.
Instead of promoting a “race to the bottom scenario” in European wage developments, the
COWIE project concludes that it might be economically more reasonable to strengthen
collective bargaining institutions in order to promote adequate wage increases for a more
balanced and sustainable economic development.
Based on a draft by Guy van Gyes (HIVA-KU Leuven) and Thorsten Schulten (WSI
Düsseldorf)
*The CAWIE project is carried out by ten research institutes and has been funded by the
European Commission call for proposals on social dialogue and industrial relations. For more
information see: http://hiva.kuleuven.be/nl/extra/CAWIE.php
31