European Work and Employment Research Centre

Project summary

The aim of this project is to investigate the complex relationships between collective bargaining and diverse country systems for setting minimum wages.

Existing studies highlight the substantial variation in systems for setting minimum wages across the EU, including use of statutory provision or collective bargaining, use of single or multiple rates and differences in trends in the relative level of the minimum wage. This project aims to extend existing knowledge by focusing on the specific roles of social partner organisations (employers and unions) in shaping minimum wage systems. Through collaboration with a sample of trade unions and employers the project will draw relevant recommendations for social dialogue policy and practice.

Five countries are investigated in this project -

  • Croatia
  • Germany
  • Spain
  • Hungary
  • the UK

Executive summaries


The selection includes both old and new EU member states and candidate countries. It also includes countries where developments in minimum wages and the role of social partner organisations highlight important issues for investigation, with possible multiplier effects for our understanding of industrial relations more generally. Fieldwork will involve selected case studies of sectoral and organisational collective agreements and include interviews with social partner representatives. Secondary data will be collected on pay, collective agreements and union membership at national, sectoral and organisational levels.

Additional contextual research includes state-of-the-art reviews of an additional four EU member states, drawing on published data. The four chosen countries are Sweden, France, Estonia and Ireland. These countries provide valuable points of comparison to our five core countries. State-of-the-art reviews will be completed during an early phase of this project in order to establish a wider frame of reference both for the case study design and for the identification of policy recommendations drawn from the detailed findings for the five core countries.

The five countries selected for the comparative analysis provide a valuable mix of industrial relations systems against which to explore minimum wages, collective bargaining and social dialogue. Table 1 (below) illustrates three dimensions of variety - the strength of collective bargaining coverage, the type of minimum wage system and the relative level of the minimum, where appropriate.

Table 1. Variety of minimum wage systems in five countries

  Weak << Collective bargaining coverage >> Strong
Statutory national minimum

     
Level relative to average wage:          
30-34% of average     CROATIA   SPAIN
35-39% of average     HUNGARY    
40-44% of average   UK      
45-49% of average          
Collectively agreed minima       GERMANY  

The project is funded by the European Commission DG Employment, Social Affairs and Equal opportunities department from the Budget Heading: 04.03.03.01, Industrial Relations and Social Dialogue Sub-programme II: Improving expertise in the field of industrial relations. Funding for the project has been secured from 1st October 2009 to 30th September 2010.

The objective of this comparative research project is to investigate strategies of trade unions and employers towards minimum wages and to assess the implications for collective bargaining, the changing shape of pay structures and processes of social dialogue. Six specific research questions are proposed:

  1. What are the patterns of minimum wage trends (at national and sector levels where appropriate) and how do these relate to general changes in wage structure, including the incidence of low pay and the gender pay gap?
  2. Is there evidence that statutory minimum wages have an adverse impact upon union membership, collective bargaining coverage and/or number of collective agreements?
  3. What are employer and trade union strategies towards developments in statutory minimum wage provision (whether a national minimum wage or a binding collectively agreed sector minimum wage) and how do their strategies dovetail with other objectives?
  4. What are employer and trade union strategies (at national, sector and organisation levels) towards minimum wage rates in collective agreements that are not binding? How effective are these minima at providing (additional) protection in the (presence) absence of statutory support?
  5. What are the implications of different systems of collective bargaining and minimum wage setting for the protection of vulnerable workers (those on non standard contracts or at risk of discrimination by sex, ethnicity, etc.)?
  6. Is there evidence that the roles of employers and unions in shaping the development of minimum wage systems can improve the mechanisms for, and quality of, social dialogue?

As a result, it is expected the project will deliver the following:

  • Five National Reports, plus a Comparative Report, on systems of minimum wages, collective bargaining and social dialogue. The five countries will include old, new and candidate member states.
  • State-of-the-art review of the academic literature on the complex relationships between collective bargaining and diverse country systems for setting minimum wages and the roles of social partners.
  • In-depth analysis of issues using case studies of collective bargaining in selected sectors. The case studies will be selected to highlight positive and negative aspects of union and employer strategies.
  • Identification of positive synergies among unions and employers regarding minimum wage strategies and recommendations for social dialogue processes.
  • Critical analysis of the relative merits of different country minimum wage systems, including their effectiveness in protecting the low paid and specific groups of vulnerable workers, their strategic fit with union and employer strategies and their capacity to enhance collective bargaining.

In order to meet the research questions, both quantitative and qualitative data will be collected, drawing on parallel and complementary processes.

National expert analysis

Five country teams, each headed by a senior research expert with a strong record of research in the area, have already been identified and are listed below. Each expert has contributed to the ideas and the writing of this proposal and has committed to three components of national data collection and analysis:

  1. A systematic national review of data and research relating to the minimum wage system in the country with the aim of identifying the key questions and challenges facing trade unions and employers and the issues for collective bargaining and social dialogue. A relatively common format will be followed, paying attention to the character of collective bargaining, issues of minimum wage development, trends in low pay and gender pay inequalities, and social partner strategies.
  2. Following discussion and debate among country experts, the undertaking of fieldwork designed to illuminate questions and issues identified in the national review. This will involve detailed case studies of collective bargaining agreements in selected sectors and the roles played by trade unions and employer organisations. Crucially, these social partner organisations will be involved not only in providing information and material, but also in ongoing discussions during the course of the research and as participants at the final international conference in Brussels. While the actual choice of sectors will be determined during the teleconference in November 2009, it is very likely to include the construction sector (due to its relevance in Germany and, very recently, in the UK), retail (given the high share of low wage workers), public hospitals (due its strong bargaining coverage) and cleaning (given the high use of migrant workers). This selection of sectors facilitates a comparison of sectors that are male-dominated and female-dominated, thereby allowing consideration of the links between minimum wage policies and the gender pay gap.
  3. Completion of a National Report (35 pages) that analyses the fieldwork data, along with other relevant national data (quantitative and qualitative), in a format consistent with the above identified research questions.

Comparative assessment

A thorough comparative analysis will inform a comparative report that will:

  1. Assess the wider picture at EU level drawing on secondary data and statistics on minimum wage systems for all EU member states and candidate countries (especially relating to recent work conducted by the ILO, EIRO, ETUI and the EC)
  2. Appraise the academic literature on collective bargaining and minimum wage setting systems
  3. Undertake state-of-the-art reviews of four additional European countries - Sweden, France, Estonia and Ireland - drawing on secondary data and identifying the relevant points of comparison with the five core countries selected for fieldwork study
  4. In the wider context of findings presented for the EU and other European countries, compare and contrast the detailed case-study results from the five selected countries and the selected sectors.
  5. Present a clear assessment of the data in response to the six research questions described above and identify the challenges and opportunities for social partners and processes of social dialogue (also summarised in a 10-page Briefing Paper).

The project duration will be 12 months, starting 1st October 2009 and ending 30th September 2010.

October to December 2009 Each country team collects secondary data and reviews national and international literature for National Report, Part 1 (20 pages). Also agree participation with key social partners for fieldwork.
15-16 October 2009

First Steering Committee in Manchester to agree research questions and format for part one of National Reports.
20 November 2009 Teleconference to discuss and review research issues arising to date. Also agree sectors for research design.
January to June 2010 Organisation and undertaking of fieldwork in each country, followed by the analysis of findings for Part 2 of each National Report.
28-29 January 2010 Second Steering Committee in Essen to compare and contrast country findings with presentations of National Reports. Establish format for case study research. Complete revised National Report Part 1 by end of January and upload to project website. Coordinator team also completes additional state-of-the-art review on Sweden, France, Estonia and Ireland (30 pages).
7 April 2010 Teleconference to review issues arising from ongoing fieldwork in light of diverse country experiences. Prepare issues and materials for third Steering Committee.
June/July 2010 Third Steering Committee in Valencia to present and discuss case study findings for each country. Also debate and agree outline and argument of Comparative Report. Completion of revised National Report Parts 1 and 2 (35 pages) by 16th July 2010. Upload complete National Reports to project website.
May to August 2010 Coordinator and UK team prepare the Comparative Report (35 pages) plus 10-page Briefing Paper for translation to project languages. Upload to project website in late August 2010.
23-24 September 2010 Final international, tripartite conference in Brussels with presentations of findings from the five countries, round-table debates focused on key sectors and a comparative review of issues and recommendations for social dialogue policy and practice at national and EU level. Expected to involve 45-50 participants including trade union, employer and government representatives from each country, EC representatives and academic experts.

The UK introduced a national minimum wage in 1999 in a context of relatively weak and declining collective bargaining coverage (two in three workers were not covered in 2007, and in the private sector the figure was four out of five workers). Rather than simply establish a wage floor, it has been steadily raised relative to the average (from less than 35 percent in 2001 to 40 percent in 2007) in an explicit effort to improve the relative position of the low paid.

However, there is an increasing clustering of wages paid at or slightly above the minimum wage, raising questions about the ability of collective agreements to maintain a differential between collectively agreed minimum rates and the national minimum wage.


Professor Damian Grimshaw

damian.grimshaw@manchester.ac.uk
+44 (0)161 3063457
Manchester Business School, Booth St West, University of Manchester M15 6PB, UK

Damian Grimshaw is Professor of Employment Studies at the University of Manchester and Director of EWERC, the European Work and Employment Research Centre. Research interests cover pay and employment trends in the UK and comparisons with other OECD countries. Specialist themes include employment restructuring, low-wage work, inter-organizational contracting and the gender pay gap.

Recent research projects and publications:

  • UK Department of Health project on 'Recruitment and Retention of a Care Workforce for Older People' (2007-2010);
  • ILO/EC project on 'Minimum Wages in an Enlarged Europe' (2007-8);
  • European Parliament study on ‘Women in Low Skill Work’ (2006-7);
  • Equal Opportunities Commission project on 'The Undervaluation of Women's Work' (2006);
  • ILO funded study on 'Decent Work in the UK' (2006);
  • Russell Sage Foundation project on 'Low Wage Work in Europe' (2005-7); EC-funded study of national employment models (DYNAMO) (2005-7).
  • Grimshaw, D. and Carroll, M. (2008) 'Improving the position of low wage workers through new coordinating institutions: the case of public hospitals', in G. Mason, C. Lloyd and K. Mayhew (eds.) Low Wage Employment in the UK, New York: Russell Sage Foundation (forthcoming).

Professor Jill Rubery

jill.rubery@mbs.ac.uk
Manchester Business School, University of Manchester M15 6PB, UK

Jill Rubery is Professor of Comparative Employment Systems, a deputy director of Manchester Business School, the University of Manchester and founder and co-director of EWERC. Research interests are in comparative employment systems, with specialist expertise in pay, working time and gender. She coordinated the EU’s expert group on gender and employment during 2000-2007. In 2006 she was elected as a fellow of the British Academy.

Recent research projects and publications:

  • UK Department of Health project on 'Recruitment and Retention of a Care Workforce for Older People'(2007-2010);
  • Report for the Equal Opportunities Commission on 'The Undervaluation of Women's Work' (2006);
  • EC-funded comparative study of national employment models (DYNAMO) (2005-7);
  • Coordinator of the EU's expert group on gender, employment and social inclusion 1991-6, 2000-2007;
  • ILO funded study on minimum wages and pay equity (2002)
  • Bosch, G., Lehndorff, S. and Rubery, J. (eds.) (2009 forthcoming) European Employment Models in Flux: A Comparison of Institutional Change in Nine European countries Palgrave: Basingstoke.
  • Grimshaw, D. and Rubery, J. (2007) Undervaluing Women’s Work, Equal Opportunities Commission Working Paper Series No. 53.
  • Rubery, J., Ward, K., Grimshaw, D.  and Beynon, H. (2005) 'Working time, industrial relations and the employment relationship', Time and Society, 14 (1): 89-111.

Claire Shepherd

claire.shepherd@postgrad.manchester.ac.uk
Manchester Business School, Booth St West, University of Manchester M15 6PB, UK

Claire Shepherd is a research assistant for EWERC and has recently completed an MSc. in Sociological Research. With experience of previous contribution to an EC Network of Excellence project investigating women’s representation across the boards of UK listed companies. Research interests are in employment inequalities, specifically with a focus upon the gender pay gap.

Spain witnessed a transformation of its minimum wage setting in 2004 when the government abolished the links with a raft of welfare payments (that previously acted as a considerable constraint on decisions to uprate the minimum wage) and set a target for lifting the relative level from what was one of the lowest levels in Europe. Due to the high coverage of collective bargaining (around 80 percent), for many years the low minimum wage had only a marginal impact on the Spanish wage structure. The new target level is now set higher than collectively agreed minimum rates in several low paying sectors, posing considerable challenges for social partners. One issue for research, therefore, is to assess the change of policy and the response of social partners.


Josep Banyuls

josep.banyuls@uv.es
Universitat de València, Departament d'Economia Aplicada, Avda dels Tarongers s/n, 46022 València

Josep Banyuls is Lecturer in Labour Economics and Employment Policy at València University. Research interests include sector-level employment analysis and international comparisons of employment organisation. Specialist themes include precarious employment, gender and Works Councils.

Recent research projects and publications:

  • Federación Minerometalúrgica CC.OO./Ministerio de Industria 'Análisis de las estrategias de internacionalización en el sector de componentes del automóvil' (2006-7);
  • EC comparative study of national employment models (DYNAMO) (2005-7);
  • Instituto de la Mujer/ Proyectos de Investigación del Plan Nacional de I+D+I on 'Informal and precarious employment among domestic workers' (2002-04).
  • Banyuls, J.; Sánchez, A. (2007), 'La dinàmica del mercat laboral valenciá i les polítiques d'ocupació' in La Comunidad Valenciana en el umbral del Siglo XXI, València, Servei de Publicacions de la Universitat de València
  • Haipeter, Thomas; Banyuls, Josep (2007), 'Arbeit in der Defensive? Globalisierung und die Beziehungen zwischen Arbeit und Kapital in der Automobilindustrie' Leviathan. Berliner Zeitschrift Für Sozialwissenschaft,3:373-399
  • Banyuls, J.; Cano, E.; Pitxer, J.V.; Sánchez, A. (2005), Economia del Treball i Polítiques d'Ocupació, València, Servei de Publicacions de la Universitat de València.

Ernest Cano

ernest.cano@uv.es
Universitat de València, Departament d'Economia Aplicada, Avda dels Tarongers s/n, 46022 València

Ernest Cano is a Lecturer in Labour Studies at València University. Specialist research interests include changes in the Spanish industrial relations model, labour flexibility, new forms of employment and job quality, labour market segmentation and employment policy.

Recent research projects and publications:

  • ISTAS 'Salud precariedad laboral' (Health and labour precariousness) (2007-8);
  • Instituto de la Mujer/ Proyectos de Investigación del Plan Nacional de I+D+I (Woman's institute/ Research project in the R&D&I national programme) on 'Employment informality and precariousness among domestic workers' (2002-04).
  • Recio, A.; Banyuls, J.; Cano, E.; Miguelez, F. (2006), 'Migraciones y mercado laboral', Revista de Economía Mundial 14: 171-193
  • Banyuls, J.; Cano, E.; Picher, JV.; Sánchez, A. (2003), 'Empleo informal y precariedad laboral: las empleadas del hogar' Sociología del Trabajo, n°47, pp. 75-105

Valencia University

Hungary has a national minimum wage and a low-to-medium level (around 40 percent) of collective bargaining coverage. A key issue concerns the large uprating of the minimum wage in 2001 (from around 30 to 40 percent of the average wage) and the subsequent importance of national minimum wage agreements in underpinning bargaining at sector and company levels. A 3-year deal for 2006-08 included the gradual introduction of minimum rates for skilled workers, as well as regular upratings of minimum rates. Issues to investigate include: the impact of higher national minimum wages on collective agreements (eg. the near failure of social partners to reach an agreement in 2006); the impact on sectoral bargaining (will social partners use the possible opt-out through sectoral collective agreements?); the risk that automatic upratings for skilled workers might diminish the importance of company level agreements in low wage industries; and evidence of employers making additional unregistered payments and the prospects for undeclared work among skilled workers.


László Neumann

neumann@mtapti.hu
+36 30 274 9139
Institute for Political Science, Hungarian Academy of Sciences, H-1014 Országház u. 30. Budapest, Hungary

László Neumann is Senior Research Fellow at the Institute for Social Policy and Labour (formerly Research Institute of Labour) and at the Centre for European Employment Studies of the Institute for Political Science, HAS. Research interests embrace labour market policy and industrial relations, including decentralised collective bargaining, employment practices and industrial relations at foreign owned companies.

Recent research projects and publications:

  • EC-funded study of national employment models (DYNAMO) (2005-7);
  • European Industrial Relations Observatory On-line (EIRO);
  • EC/ETUI funded European project on the shift from welfare to 'knowfare' in a knowledge-based society (WELLKNOW);
  • ETUI/Hans Böckler Foundation project on 'Workers' participation at board level in the European Company' (SEEUROPE).
  • Neumann, L. (2008) 'The history of trade unions in Hungary, 1945-2002', in C. Phelan (ed.) Trade Unions since 1945, Peter Lang, Bern, (forthcoming).
  • Neumann, L. (2007) 'European labour standards' impacts on accession countries: the Hungarian case', in P. Leisink, B. Steijn and U. Veersma (eds.) Industrial Relations in the New Europe - Enlargement, Integration and Reform, London: Edward Elgar.
  • Pertti, K., S. Roivas and L. Neumann (2006) 'Policies promoting employment and gender equality in the knowledge-based society', in L. Mósesdóttir, A. Serrano Pascual and C. Remery (eds.) Moving Europe towards the knowledge-based society and gender equality, Brussels: ETUI-REHS.

Institute for Political Science, Hungarian Academy of Sciences

In Germany, minimum wages are established by means of collective bargaining. Statutory provision does play a role, but only in certain sectors through making regional collective agreements generally binding (eg. hairdressing and security) or in the context of the Law on Posting of Workers as in construction and very recently in cleaning and postal services. With the decline of collective bargaining coverage and limited use of extension mechanisms, there is increasing concern among social partners that many low paid workers have no minimum wage protection; the share of workers not covered in 2004 was close to one in three in western Germany and one in two in eastern Germany. Along with other changes, including requiring long-term unemployed workers to accept any offer of a legal job after 12 months and the growth of very low paid jobs, there is now considerable political debate on a new form of statutory minimum wage.


Professor Gerhard Bosch

gerhard.bosch@uni-due.de
+49 209 1707147
Institute for Work, Skills and Training (IAQ), University of Duisburg-Essen, 45117 Essen, Germany

Gerhard Bosch is Professor of Sociology at the University of Duisburg-Essen and Director of IAQ. His research interests involve pay and employment trends in Germany and comparisons with other OECD countries. Specialist themes include low-wage work, minimum wages, working time and training issues.

Recent research projects and publications:

  • Boeckler Foundation project on 'Wage standards in the German construction industry' (2008-9);
  • ILO/EC project on 'Minimum Wages in an Enlarged Europe' (2007-8);
  • Humboldt Foundation project on 'A Comparative Perspective on Vocational Training in Ten Countries' (2005-8);
  • Russell Sage Foundation project on 'Low Wage Work in Europe' (2005-7);
  • EC project on 'Dynamics of National Employment Models' (2004-7).
  • Bosch, G. and Charest, J. (eds.) (2008) Vocational Training. International perspectives, London: Routledge (forthcoming).
  • Bosch, G., Lehndorff, S. and Rubery, J. (eds.) (2008) Towards a European Social Model? National Employment Models in Flux, Palgrave (forthcoming).
  • Bosch, G. and Weinkopf, C. (eds.) (2008) Low-Wage Work in Germany, NY: Russell Sage Foundation.

Dr Claudia Weinkopf

claudia.weinkopf@uni-due.de
+49 209 1707142
Institute for Work, Skills and Training (IAQ), University Duisburg-Essen, 45117 Essen, Germany

Claudia Weinkopf is Deputy Director and Head of the research division, ‘Flexibility and Security’, at IAQ. Research interests cover pay and employment trends in Germany and comparisons with other OECD countries. Specialist themes include low wage work, minimum wages, gender and precarious employment.

Recent research projects and publications:

  • Boeckler Foundation project on 'Wage standards in the German construction industry' (2008-9);
  • German labour ministry project on 'Gender impacts of the implementation of "Hartz V"' (2006-9);
  • European Parliament study on 'Women in Low Skill Work' (2006-7);
  • Russell Sage Foundation project on 'Low Wage Work in Europe' (2005-7).
  • Bosch, G. and Weinkopf, C. (eds.) (2008) Low-Wage Work in Germany. Russell Sage: New York.
  • Weinkopf, C., Hieming, B., Jaehrling, K., Kalina, T., Grimshaw, D., Rubery, J., Shimron, N. and Stupnytskyy, O. (2007) Women in Low-Skill Work. Final report to the European Parliament: DG Policies of the Union, Directorate C (June).
  • Weinkopf, C. (2006) 'A changing role of temporary agency work in the German employment model?', International Employment Relations Review, 12 (1): 77-94.

Institute for Work, Skills and Training (IAQ) University of Duisberg-Essen

In Croatia, current debates centre on how to ensure the new July 2008 Minimum Wage Act complements evolving patterns of collective bargaining (with estimated coverage of 40-60 percent). The new act applies an index for annual uprating that will increase the level relative to the average wage. The new act provides better protection for workers not covered by collective bargaining, but also raises questions about incentives for collective bargaining, especially in low wage industries.


Danijel Nestic

dnestic@eizg.hr
+385 (1)2362200
Institute of Economics Zagreb, Trg J. F. Kennedy 7, HR-10000 Zagreb, Croatia

Danijel Nestic is Research Fellow at the Institute of Economics in Zagreb, Croatia. His research interests include poverty, inequality and wage policy. Specialist themes include the gender wage gap, fiscal implications of ageing population and international comparisons of prices and incomes.

Recent research projects and publications:

  • Ministry of Science, Education and Sport project on 'Socio-economic Aspects of Unemployment, Poverty and Social Exclusion' (2006-2010);
  • World Bank project on 'Montenegro Poverty Study' (2007-8);
  • ILO/EC project on 'The Minimum Wage Fixing Revisited in the Enlarged EU' (2007-8);
  • Co-authored report to the EC (DGV) on 'Social Protection and Social Inclusion in Croatia' (2006).
  • Nestic D. (2007) 'Differing characteristics or differing rewards? What is behind the gender wage gap in Croatia', EIZ Working Paper No. 0704.
  • Nestic D. and G. Vecchi (2007) 'Regional poverty in Croatia', in Lovrincevic et al. (eds.) Social Policy and Regional Development Proceedings, Zagreb: EIZ and FES.
  • Nestic D. (2005) 'Income distribution in Croatia: What do the household budget survey data tell us?' Financial Theory and Practice, No. 1: 39-53.

Institute of Economics, Zagreb

About EWERC

The European Work and Employment Research Centre was established in 1994 to build upon and develop expertise in comparative and inter-disciplinary research in the area of work and employment.

Contact us

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    Booth Street East
    Manchester
    M13 9SS, UK

  • Phone: +44 (0) 161 306 1320