FRANKFURT, Dec 23 (Reuters) - Wage deals in the euro zone have moderated recently, as business profitability has taken a hit from lower demand.
Euro-zone unemployment has been rising as employers have shed workers and was 9.8 percent in October. Consumer price inflation across the euro zone was 0.5 percent in December.
Following is a look at major wage agreements in each euro zone country, including a summary of how widespread collective wage bargaining agreements and automatic indexation of wages to inflation are.
Unless otherwise stated, inflation rates are November annual HICP inflation rates, unemployment is October adjusted unemployment and labour costs are Q3 adjusted annual rises.
AUSTRIA
Inflation: 0.6 pct
Unemployment: 4.7 pct
Labour costs: 4.4 pct
- Wages for 520,000 retail workers and merchants will rise on average by 1.6 percent from Jan. 1, 2010.
- Austria's 170,000 metal workers and miners will have an average 1.45 percent wage rise backdated to Nov. 1, 2009.
* Scope of collective bargaining:
- Most of Austria's 3.3 million employees are covered by collective bargaining, with around 500 separate deals generally negotiated between major unions and employers' associations.
BELGIUM
Inflation: 0.0 pct
Unemployment: 8.1 pct
Labour costs: +5.0 (Q2)
* Recent deals and demands:
- The Belgian government will offer employees who are made redundant a 1,666 euro 'crisis bonus' after trade unions and employers failed to agree on the extension of crisis measures. Employers will be expected to pay one third of the bonus. The bonus applies only to companies who have not yet taken anti-crisis measures, such as temporary unemployment.
-The government has decided to extend existing measures intended to combat the economic crisis, such as temporary layoffs for white-collar workers, the collective reduction of working hours and time credits until mid-June next year.
- Sector-wide collective bargaining deals concluded at the end of 2008 agreed an extra annual bonus of 125 euros for 2009 and 250 euros for 2010. There was no scope for a general rise in wages for 2009-2010.
- Given slowing inflation, another automatic wage hike will not apply to 2010. Some employers may even lower wages slightly as a result of automatic wage indexation.
- The employers' union has protested against the 1,666 euro crisis bonus, arguing it unfairly penalises companies who are are already suffering and laying off staff to remain in business.
* Scope of collective bargaining - About 65 percent of the Belgian workforce is unionised.
CYPRUS
Inflation: 1.0 pct
Unemployment: 6.0 pct
Labour costs: 3.3 pct
* Recent deals and demands:
- Salary reviews of some 60,000 civil servants will start in early 2010 in a consultative process involving the state and labour unions. The process is launched every three years and salary reviews take into account the increase in the rate of growth of staff productivity.
Civil servants had received a 0.3 percent increase in benefits in 2007, a 2.0 percent pay increase in 2008 and 1.5 percent in January 2009. In the semi-government sector, where about 14,000 people are employed, labour unions will seek pay rises equivalent to the average increase in productivity over the past three years.
FINLAND
Inflation: 1.3 pct
Unemployment: 8.7 pct)
Labour costs: 6.2 pct
* Recent deals and demands:
- The Federation of Finnish Technologies and the Metalworkers' Union struck a three-year pay deal in August, calling for a 0.5 percent pay rise in late 2009. Possible raises for 2010 and 2011 would be negotiated later.
- The country's top trade union confederation, SAK, told Reuters some 840,000 public and private sector workers will be touched by upcoming pay deal negotiations in early 2010.
- There has been rising labour unrest in Finland in late 2009, and on Dec. 10 top industry lobby EK said it had broken off talks on a possible framework pay deal with unions citing the unrest and pay raise demands.
- SAK has said it could accept a 2-3 year framework pay deal that protected purchasing power.
- National wage talks collapsed in May 2007 and negotiations for more than a hundred separate deals between unions and employers' organisations started.
* Scope of collective bargaining: - More than 2 million workers, or 80 percent of all employees, are organised in trade unions. This is one of the highest rates of union membership in the world. Most non-union members are also covered by pay deals.
FRANCE
Inflation: +0.5 pct
Unemployment: 10.1 pct
Labour costs: 1.1 pct
* Recent wage developments:
- The government has recommended a 0.5 percent rise in the minimum wage as of January 1, 2010 following a 0.9 percent rise in July. The minimum wage will therefore rise to 8.86 euros an hour. The minimum wage is linked to consumer price inflation excluding tobacco.
- Monthly wages rose 0.5 percent in the third quarter of 2009 compared with the previous three months and rose 2.0 percent from the same period a year earlier.
- Scope of collective bargaining: Trade union membership, split across four main unions, is low compared with other countries at 8 percent of the workforce, but unions take the lead in collective bargaining .
GERMANY
Inflation: 0.4 pct
Unemployment: 8.1 pct
Labour costs: 4.8 pct
Recent deals and demands:
- Trade unions said on Dec. 15 they would seek a 5 percent pay rise for some 2 million public sector workers.
- Finance Minister Wolfgang Schaeuble said he was appalled at the public sector demand as the government had no financial leeway.
- The printing industry agreed a new wage deal giving the sector's 170,000 workers a 2 percent pay rise from April 2010. The contract is due to run until March. 31, 2011.
- German steel workers earlier this year agreed a 2 percent wage rise from 2010 and a one-off payment of 350 euros for 2009.
* Hourly labour costs in Germany were up 4.8 percent in the third quarter from the same period a year earlier, the second highest rise in the euro zone, Eurostat data showed.
* Scope of collective bargaining: - Around 70 percent of employees work in firms covered by collective bargaining
GREECE
Inflation: 2.1 pct
Unemployment: 9.2 pct (June 09)
Labour costs: 6.6 pct (Q2)
* Recent deals and demands: - Under a two-year 2008-2009 wage deal, Greek private sector workers got an average 3.8 pct wage increase in 2009. for 2010, they demand 8.1 percent wage increase for minimum wage and 'about 2 percent' for all the rest.
* Scope of collective bargaining:
- Umbrella trade union GSEE represents about 2 million workers, but its wage agreements are by law recognised as a floor for all other sectoral wage agreements, even for workers it does not necessarily represent.
IRELAND
Inflation: -2.8 pct
Unemployment: 12.8 pct
Labour costs: +8.6 pct y/y (in industry, Q2, partly due to higher redundancy costs), -9.5 pct y/y (in financial sector, Q2)
* Recent deals and demands: - Irish government, employers and unions agreed a deal in September 2008 offering workers pay rises of 6 percent over 21 months.
Under the terms for public sector workers there would have been a pay pause of 11 months followed by a 3.5 percent increase for 9 months and then 2.5 percent for the remainder of the agreement.
Private sector workers would have had a pay freeze of 3 months and then a 3.5 percent wage increase for 6 months followed by a further 2.5 percent rise for the next 12.
In February the government suspended the deal in the public sector, froze pay and brought in a levy on public sector pensions which effectively cut their pay by 7 percent.
The budget for 2010 presented on Dec. 9 proposed cutting the total public service pay bill by 6 percent to save 1 billion euros. The lower house of parliament was due to approve the cut later on Wednesday (Dec. 16).
Public sector unions held a one-day strike on Nov. 24 against the plans to cut pay and have promised a further prolonged campaign of protest and industrial action.
Wages have been cut in many areas of the private sector, with one substantial strike, by electricians, in July.
* Scope of collective bargaining:
- In 1987 Ireland adopted a system of 'Social Partnership' where government, unions and employers agree deals of up to three years covering areas such as tax, labour law and social policy as well as wages. Deals struck influence wages for non-unionised workers too.
The social partnership process has been breaking down this year as the government imposed February's pension levy and December's pay cuts over opposition from unions.
Keywords: EUROZONE/WAGE DEALS
COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Euro-zone unemployment has been rising as employers have shed workers and was 9.8 percent in October. Consumer price inflation across the euro zone was 0.5 percent in December.
Following is a look at major wage agreements in each euro zone country, including a summary of how widespread collective wage bargaining agreements and automatic indexation of wages to inflation are.
Unless otherwise stated, inflation rates are November annual HICP inflation rates, unemployment is October adjusted unemployment and labour costs are Q3 adjusted annual rises.
AUSTRIA
Inflation: 0.6 pct
Unemployment: 4.7 pct
Labour costs: 4.4 pct
- Wages for 520,000 retail workers and merchants will rise on average by 1.6 percent from Jan. 1, 2010.
- Austria's 170,000 metal workers and miners will have an average 1.45 percent wage rise backdated to Nov. 1, 2009.
* Scope of collective bargaining:
- Most of Austria's 3.3 million employees are covered by collective bargaining, with around 500 separate deals generally negotiated between major unions and employers' associations.
BELGIUM
Inflation: 0.0 pct
Unemployment: 8.1 pct
Labour costs: +5.0 (Q2)
* Recent deals and demands:
- The Belgian government will offer employees who are made redundant a 1,666 euro 'crisis bonus' after trade unions and employers failed to agree on the extension of crisis measures. Employers will be expected to pay one third of the bonus. The bonus applies only to companies who have not yet taken anti-crisis measures, such as temporary unemployment.
-The government has decided to extend existing measures intended to combat the economic crisis, such as temporary layoffs for white-collar workers, the collective reduction of working hours and time credits until mid-June next year.
- Sector-wide collective bargaining deals concluded at the end of 2008 agreed an extra annual bonus of 125 euros for 2009 and 250 euros for 2010. There was no scope for a general rise in wages for 2009-2010.
- Given slowing inflation, another automatic wage hike will not apply to 2010. Some employers may even lower wages slightly as a result of automatic wage indexation.
- The employers' union has protested against the 1,666 euro crisis bonus, arguing it unfairly penalises companies who are are already suffering and laying off staff to remain in business.
* Scope of collective bargaining - About 65 percent of the Belgian workforce is unionised.
CYPRUS
Inflation: 1.0 pct
Unemployment: 6.0 pct
Labour costs: 3.3 pct
* Recent deals and demands:
- Salary reviews of some 60,000 civil servants will start in early 2010 in a consultative process involving the state and labour unions. The process is launched every three years and salary reviews take into account the increase in the rate of growth of staff productivity.
Civil servants had received a 0.3 percent increase in benefits in 2007, a 2.0 percent pay increase in 2008 and 1.5 percent in January 2009. In the semi-government sector, where about 14,000 people are employed, labour unions will seek pay rises equivalent to the average increase in productivity over the past three years.
FINLAND
Inflation: 1.3 pct
Unemployment: 8.7 pct)
Labour costs: 6.2 pct
* Recent deals and demands:
- The Federation of Finnish Technologies and the Metalworkers' Union struck a three-year pay deal in August, calling for a 0.5 percent pay rise in late 2009. Possible raises for 2010 and 2011 would be negotiated later.
- The country's top trade union confederation, SAK, told Reuters some 840,000 public and private sector workers will be touched by upcoming pay deal negotiations in early 2010.
- There has been rising labour unrest in Finland in late 2009, and on Dec. 10 top industry lobby EK said it had broken off talks on a possible framework pay deal with unions citing the unrest and pay raise demands.
- SAK has said it could accept a 2-3 year framework pay deal that protected purchasing power.
- National wage talks collapsed in May 2007 and negotiations for more than a hundred separate deals between unions and employers' organisations started.
* Scope of collective bargaining: - More than 2 million workers, or 80 percent of all employees, are organised in trade unions. This is one of the highest rates of union membership in the world. Most non-union members are also covered by pay deals.
FRANCE
Inflation: +0.5 pct
Unemployment: 10.1 pct
Labour costs: 1.1 pct
* Recent wage developments:
- The government has recommended a 0.5 percent rise in the minimum wage as of January 1, 2010 following a 0.9 percent rise in July. The minimum wage will therefore rise to 8.86 euros an hour. The minimum wage is linked to consumer price inflation excluding tobacco.
- Monthly wages rose 0.5 percent in the third quarter of 2009 compared with the previous three months and rose 2.0 percent from the same period a year earlier.
- Scope of collective bargaining: Trade union membership, split across four main unions, is low compared with other countries at 8 percent of the workforce, but unions take the lead in collective bargaining .
GERMANY
Inflation: 0.4 pct
Unemployment: 8.1 pct
Labour costs: 4.8 pct
Recent deals and demands:
- Trade unions said on Dec. 15 they would seek a 5 percent pay rise for some 2 million public sector workers.
- Finance Minister Wolfgang Schaeuble said he was appalled at the public sector demand as the government had no financial leeway.
- The printing industry agreed a new wage deal giving the sector's 170,000 workers a 2 percent pay rise from April 2010. The contract is due to run until March. 31, 2011.
- German steel workers earlier this year agreed a 2 percent wage rise from 2010 and a one-off payment of 350 euros for 2009.
* Hourly labour costs in Germany were up 4.8 percent in the third quarter from the same period a year earlier, the second highest rise in the euro zone, Eurostat data showed.
* Scope of collective bargaining: - Around 70 percent of employees work in firms covered by collective bargaining
GREECE
Inflation: 2.1 pct
Unemployment: 9.2 pct (June 09)
Labour costs: 6.6 pct (Q2)
* Recent deals and demands: - Under a two-year 2008-2009 wage deal, Greek private sector workers got an average 3.8 pct wage increase in 2009. for 2010, they demand 8.1 percent wage increase for minimum wage and 'about 2 percent' for all the rest.
* Scope of collective bargaining:
- Umbrella trade union GSEE represents about 2 million workers, but its wage agreements are by law recognised as a floor for all other sectoral wage agreements, even for workers it does not necessarily represent.
IRELAND
Inflation: -2.8 pct
Unemployment: 12.8 pct
Labour costs: +8.6 pct y/y (in industry, Q2, partly due to higher redundancy costs), -9.5 pct y/y (in financial sector, Q2)
* Recent deals and demands: - Irish government, employers and unions agreed a deal in September 2008 offering workers pay rises of 6 percent over 21 months.
Under the terms for public sector workers there would have been a pay pause of 11 months followed by a 3.5 percent increase for 9 months and then 2.5 percent for the remainder of the agreement.
Private sector workers would have had a pay freeze of 3 months and then a 3.5 percent wage increase for 6 months followed by a further 2.5 percent rise for the next 12.
In February the government suspended the deal in the public sector, froze pay and brought in a levy on public sector pensions which effectively cut their pay by 7 percent.
The budget for 2010 presented on Dec. 9 proposed cutting the total public service pay bill by 6 percent to save 1 billion euros. The lower house of parliament was due to approve the cut later on Wednesday (Dec. 16).
Public sector unions held a one-day strike on Nov. 24 against the plans to cut pay and have promised a further prolonged campaign of protest and industrial action.
Wages have been cut in many areas of the private sector, with one substantial strike, by electricians, in July.
* Scope of collective bargaining:
- In 1987 Ireland adopted a system of 'Social Partnership' where government, unions and employers agree deals of up to three years covering areas such as tax, labour law and social policy as well as wages. Deals struck influence wages for non-unionised workers too.
The social partnership process has been breaking down this year as the government imposed February's pension levy and December's pay cuts over opposition from unions.
Keywords: EUROZONE/WAGE DEALS
COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
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