Year: 2021
Social policy

European, National and Transnational Industrial Relations: Visible and Invisible Hands in European and National Wage Setting

The development and governance of wages has always been of fundamental importance for the functioning of economies and societies. Even though there is wide agreement in academic and political debates that industrial relations structures and mechanisms, i.e. industrial relations systems, are key for the governance of wages, there is less agreement which systems are able to govern wages in today’s complex and highly changing economies. The question on which systems are needed to govern wages is especially difficult in the European Union (EU) since the European Single Market is characterized by the presence of multiple and highly diverse industrial relations systems in the different member states. 

One main characteristics of the European Industrial relations system is that it consists of many nationally shaped industrial relations systems with different actors. In fact, the European industrial relations systems consists of a myriad of heterogeneous industrial relations actors embedded in different structures which makes it highly complex to govern wage developments from a European perspective. Over time, the complexity and number of industrial relations actors increased since industrial relations structures became increasingly decentralized. This trend towards decentralization also implied that the governance of wages was given to a myriad of different actors and therefore wages developed differently for different workers in different companies, sectors, countries and regions. Although wage setting and therefore the governance of wages became increasingly decentralized, different and complex in recent decades a common and transnationally coordinated governance of wages became increasingly important in recent years at the European and national level. Changes in economic governance, in particular within the European Semester, prompted discussions on more coordinated and European wage policies. 

In this research report the results of the research project are outlined and discussed accordingly. The structure of the report is as follows: in the next section the methodology and empirical strategy is explained in detail. This presentation of the methodology explains the idea behind the use of both a qualitative and a quantitative approach and how both approaches are combined. In addition to the presentation of the empirical approach used, a critical reflection on the data and information is included as well even though the quality of the data can be considered to be exceptionally high. Since the idea of the project is to outline ways on how wages can be governed in the EU, we then given an overview of the development of wages in the EU and will discuss both actual wages and collectively agreed wages. This section is followed by the presentation and discussion of the development of the industrial relations and collective bargaining structures and institutions in the EU. Within this section various relevant dimensions and aspects with respect to the governance of wages are portrayed. On basis of the former sections, then the governance of wages and the relationship between industrial relations and wages is explained both from a theoretical perspective as well as from a public policy making perspective. Hence, in this section different aspects and the complexity of the relationship between industrial relations and wages are outlined and what the implications for the governance of the EU labour market are. This section is then followed by a detailed discussion on European governance of the labour market and the European Semester in particular. We then present the results of the study and show the analysis of different ways and policy options to govern wages in the EU. In this section the results of the quantitative and qualitative analysis are integrated and explained. This section also includes five country case studies which are examples of different ways of how the labour market and wages can be governed. Of course, since all these different cases also show that different ways of governance have different advantages and disadvantages, a critical reflection upon these differences is included. The report ends by giving a summary of the research project and the results as well as provides conclusions and an outlook.


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