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SALARIES AND COMPETITIVENESS: DIFFICULT EUROPEAN EQUATION : DECELERATION THE TREND IN MOST OF EU, STATS SHOW.

The economic and financial crisis has heightened pressure on workers' pay in most European Union member states, according to recent studies by Eurofound. The European Foundation for the Improvement of Living and Working Conditions (Eurofound) points out that this tendency has led to wage deceleration as well as freezes and even cuts. It suggests that the trend is likely to continue in 2012.

Wages and working conditions in the crisis', published on 26 July 2012, shows that wage deceleration - ie average nominal wage growth lower than the year before - occurred in almost all the EU member states in 2009, except Denmark, France and Greece. In 2010, the pace of wage growth continued to decline in around one third of the states (Bulgaria, the Czech Republic, Denmark, Greece, Finland, Hungary, Ireland, Luxembourg, Poland, Romania, Slovakia, Sweden and the United Kingdom).

Pay developments 2011', published on 9 October 2012, reveals that, in 2011, nominal wage increases were also very modest and did not compensate for rising prices. Available figures show that nominal wages grew in Austria, the Netherlands, Norway, Slovakia and Spain in 2011, remained unchanged in Belgium, Germany and the United Kingdom, and declined in the Czech Republic, Italy, Malta, Portugal and Sweden.

Eurofound considers that the phenomenon of wage deceleration is likely to continue in 2012, both for collectively agreed pay increases - at national or sector level - and national minimum wages. It backs up its projections with examples: in Spain, public servants' salaries were frozen in 2012 and the minimum wage will not be increased; Cyprus is expected to make further cuts in the salaries and benefits of civil servants; in Greece, the social partners have agreed on a limited wage increase of 1.6% for the private sector; in Hungary, the government announced that it would no longer consult unions on setting minimum wages as from 1 January 2012; etc. The austerity cure being imposed by many member states therefore seems likely to continue taking its toll.

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Publication:European Report
Date:Nov 15, 2012
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