Collective wage bargaining is a core exercise of national social partners and according to the Treaty on the functioning of the European Union, it lies within their autonomy. Outcomes of collective bargaining are a major determinant of wage developments and they therefore influence not only the competitiveness of nations, sectors, regions and companies but also employees’ income and thus aggregate consumer demand, which is in turn another determining factor of economic growth. There is a range of approaches for negotiating pay collectively throughout Europe, whereby social partners aim to arrive at a mutually agreed increase that satisfies both sides of industry. Pay can be negotiated at national, sectoral, regional or company level and these levels can be interlinked in quite sophisticated ways. This annual process is often supported by the state through setting the rules of the game, extending agreements to non-affiliated parties, setting the pace for agreements to follow, and other mechanisms.
Eurofound has reported on developments in collectively agreed pay across Europe for almost two decades. This year’s annual update on pay reports on average increases of collectively agreed pay stemming from national databases, outcomes of pay indexation mechanisms, pace-setting agreements and national or cross-sectoral agreements. It explains these in relation to the national bargaining context and debate. The report also covers the outcomes of negotiations in three sectors: the chemical industry, the retail sector and the civil service. It also reports on the developments of and debates on statutory minimum wages. (Relevant research in this area includes a 2014 study on changes to wagesetting mechanisms in the context of the crisis).