Prof. Dr. Gerhard Bosch Universität Duisburg Essen Institut Arbeit und Qualifikation Forsthausweg 2, LE, 47057 Duisburg Telefon: +49 (0)203 / 379-1339; Fax: +49 (0)203 / 379-1809 Email: gerhard.bosch@uni-due.de; www.iaq.uni-due.de

Ins

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Gerhard Bosch

Dares “Understanding wage dynamism since the crisis of 2008” Paris December 13, 2017

Intersection between minimum wages and collective bargaining to increase pay equity

Structure of presentation

1. High impact of collective bargaining on income distribution

2. Architecture of national wage systems 3. Intersection between MW‘s and CA‘s 4. Meaning of opening clauses in CA‘s

1.1 Rate of coverage by collective agreements and share of low-wage work (2014)

Source: Visser 2015, Eurostat, own calculations

Diagramm1

22.48

11.94

15.08

14.76

2.64

5.28

8.81

3.79

24.4

21.26

17.75

22.76

23.56

8.61

23.96

25.46

18.52

19.21

12.03

9.44

18.69

21.56

18.47

14.59

18.19

19.33

adjcov: Adjusted bargaining (or union) coverage rate

share of low wage earners in %

Coverage by collective agreements in %

Correlation: - 0,82

DE

LU

MT

AT

SE

FI

FR

BE

RO

UK

HU

EE

PL

DK

LT

LV

NL

SK

PT

IT

CZ

IE

SI

ES

BG

CY

57.6

59

62.79

98

89

93

98

96

35

11.92

23

23

14.67

84

9.89

15

84.84

24.9

67

80

47.29

40.49

65

77.58

29

45.19

Data

Niedriglohnempfänger als Prozentsatz der gesamten Angestellten (ohne Auszubildenden) nach Geschlecht [earn_ses_pub1s]

Letzte Aktualisierung07.12.16

Exportierte Daten19.02.17

Quelle der DatenEurostat

UNITProzent

SEXInsgesamt

SIZECLAS10 Arbeitnehmer und mehr

GEO/TIME200620102014Niedriglohnempfänger als Prozentsatz der gesamten Angestellten (ohne Auszubildenden) nach Geschlechtadjcov: Adjusted bargaining (or union) coverage rateKorr

Europäische Union (28 Länder):16.9617.15DE22.4857.6-0.82

Europäische Union (27 Länder)16.6916.9317.15LU11.9459

Euroraum (19 Länder)::15.88MT15.0862.79

Euroraum (17 Länder)14.2714.7815.7AT14.7698

Belgien6,82+B34B16:B406.373.79SE2.6489

Bulgarien18.922.0118.19FI5.2893

Tschechische Republik17.0518.1918.69FR8.8198

Dänemark8.318.178.61BE3.7996

Deutschland (bis 1990 früheres Gebiet der BRD)20.322.2422.48RO24.435

Estland23.1923.7622.76UK21.2611.92

Irland21.4120.6621.56HU17.7523

Griechenland15.7312.82:EE22.7623

Spanien13.3714.6614.59PL23.5614.67

Frankreich7.136.088.81DK8.6184

Kroatien:21.35:LT23.969.89

Italien10.2712.369.44LV25.4615

Zypern22.6522.6219.33NL18.5284.84

Lettland30.927.8125.46SK19.2124.9

Litauen29.1227.2423.96PT12.0367

Luxemburg13.1813.0611.94IT9.4480

Ungarn21.8719.5117.75CZ18.6947.29

Malta14.4317.6115.08IE21.5640.49

Niederlande17.7417.4618.52SI18.4765

Österreich14.1915.0214.76ES14.5977.58

Polen24.7224.1623.56BG18.1929

Portugal20.7216.0812.03CY19.3345.19

Rumänien26.8525.8224.4

Slowenien19.2417.1418.47

Slowakei18.319.0319.21

Finnland4.755.855.28

Schweden1.772.512.64

Vereinigtes Königreich21.7722.0621.26

Island11.248.997.54

Norwegen6.487.278.29

Schweiz:11.039.37

Montenegro::27.25

Die ehemalige jugoslawische Republik Mazedonien:28.2525.13

Serbien::22.91

Türkei0.240.40.46

Sonderzeichen:

:nicht verfügbar

Data

adjcov: Adjusted bargaining (or union) coverage rate

Share of low wage earners

Coverage by collective agreements

Korrelation: - 0,82

DE

LU

MT

AT

SE

FI

FR

BE

RO

UK

HU

EE

PL

DK

LT

LV

NL

SK

PT

IT

CZ

IE

SI

ES

BG

CY

1.2 Wage distribution in a liberal market economy with MW and in coordinated market economy with high coverage by collective agreements

:

1.3 Two real cases: UK 2014 and Germany 1995

Source: : SOEP 2012, own calculations; Dickens (2015): The Low Pay Commission and the National Minimum Wage. Presentation to NEDLAC

belo

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€

3,00

unt

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4,00

4,00

unt

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5,00

5,00

unt

il <

6,00

6,00

unt

il <

7,00

7,00

unt

il <

8,00

8,00

unt

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9,00

9,00

unt

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until

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12,

0012

,00

until

< 1

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0014

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until

< 1

5,00

15,0

0 un

til <

16,

0016

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until

< 1

7,00

17,0

0 un

til <

18,

0018

,00

until

< 1

9,00

19,0

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til <

20,

0020

,00

until

< 2

1,00

21,0

0 un

til <

22,

0022

,00

until

< 2

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23,0

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til <

24,

0024

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until

< 2

5,00

25,0

0 un

til <

30,

0030

,00

and

mor

e

Germany

1995

2.1 Wage setting systems based on different combinations of labor standards

- „Shadow of the law“ over all wage setting systems

- Support of the state needed for institutional stability of CB)

- Two kinds of standards (Sengenberger 1994): - Protective standards: state directly establishes

employment conditions like MW’s. - Participative standards: enablement of social

partners to negotiate employment conditions through consultation or codetermination rights and resources (time and money).

Source: Bernaciak et al. 2014; Bezzina 2012 (share of low-wage workers 2010); Visser 2015, own compilation * From 2007 with the introduction of industry minimum wages 2015 with the statutory national minimum wage ** 2009 State-imposed standards: - none, X weak, XX moderate, XXX strong

Germany Sweden UK France Belgium Greece Spain

Statutory standards

- protective

- participative

(X)*

XX

-

XXX

X

-

XXX

X

XXX

XXX

XX

-

XXX

X

Trade union density 19% 68% 27% 8% 52% 24% 20%

Rate of coverage by

collective agreement

(employees) 61% 91% 31% 92% 96%

64%

82%**

Share of low wage workers

(>2/3 of median wage) 2010 22.2% 2.5% 22.1% 6.1% 6.4%

n.a.

14.7

2.2 Statutory protective and participative labour standards in seven national wage setting systems (2010)

3.1 Intersection between MW and CA‘s

Ripple effects of MW vary between countries: • Up to the 40th percile in the US (Wicks-Lim 2008) • No effects in the UK (Stewart 2011; Dickens/Manning 2004) • Negative ripple effects in UK (Grimshaw 2010) • Up to twice the MW in France (Koubi/Lhommeau 2007) • Up to 10 € in Germany (Mindestlohnkommission 2016)

Ripple effects not only market driven but in some countries institutionalized Compression effects also depend on institutions – example weak CB in East-Germany

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8.86 € 8.65 €

10.80 €

9.25 €

5.93 £

FR NL DE UK

12. 0 € 11.83 €

8.90 €

13.25 €

14.92 €

18.61 €

16.69 €

10.30 £

7.75 £

W O

Legal MW

Collective agreements

Minimum Wages

Collective agreements

Extended collective agreements

3.3 Wages of construction workers in DE, FR, NL, UK 2010/11

Source: Bosch, Weinkopf, Worthmann, 2011

Source: Bispinck 2006, own presentation

1299 1305 1453 1562 1554 1686 1711 1773

2509 2255 2127

[WERT]

0

1000

2000

3000

4000

5000

6000

7000

3.4 Minimum Wage and collective agreements in selected German industries (Euros end 2016)

Blank Values CA

3285 3680

4712

3207 3258

4816

3280

6332 5879

5470

6002

*Monthly salary with a working week of 38 hours and the Minimum Wage of 8,50 € = 1400 €, with the MW of 8,84 € = 1449 €

4.1 Meaning of opening clauses in CA‘s

Depend the conditions: 1. Temporary vs permanent derogations 2. Negotiated derogations vs unilateral opt-out 3. Employees bargaining power at plant level: high vs low

Greece:

- easy opt-out through „association of persons“ – model change to unilateral decision

Germany: - Strong bargaining power through participative standards - Opt-out threat – weakens bargaining power - Union unity and pro-active strategies (quid pro quo) –

strengthening bargaining power - Temporary derogations often became permanent

Haipeter, Thomas 2011: 'Unbound' employers' associations and derogations: erosion and renewal of collective bargaining in the German metalworking industry. In: Industrial Relations Journal 42 (2), pp. 174-194

13

Analysis of 800 Deviant CA‘s in the German metall industry Topics of Material Concessions, Shares of all DCBA

62,30%

70,10%

66% 67,30% 66,50% 67,20%

72,30% 68,70%

22,10%

35,20%

48,00%

36,70%

6,60% 5,10% 4,80% 5,20%

0,00%

10,00%

20,00%

30,00%

40,00%

50,00%

60,00%

70,00%

80,00%

2004 2005 2006 Total

Working Time Wages Framework Agreement Miscellaneous

Haipeter, Thomas 2011: 'Unbound' employers' associations and derogations: erosion and renewal of collective bargaining in the German metalworking industry. In: Industrial Relations Journal 42 (2), pp. 174-194

14

Analysis of 800 Deviant CA‘s in the German metall-industry Shares of Concessions by Enterprises, Shares in all DCBA

61,7

16,8

10,2 8,4 12

4,8

31,1

9

41,3

73,8

21,1 24,8

9,5

21,4

8,3

33,5

7,7

49,3

79,7

31,4 33,9

15,1

28

16,6

40,5

5,9

59,8

0

10

20

30

40

50

60

70

80

90

2004

2005

2006

Conclusions for France

• Wage setting based on strong protective standards

• Direct interaction between MW and CA‘s • Through extension of CA‘s less opt-out possibilities • Weak participative rights • Lack of trade union unity weakening employee‘s

voice at plant level • Introduction of opening clauses - danger of

deterioration of labor standards

Literature

Bosch, Gerhard / Lehndorff, Steffen 2017: Autonomous bargaining in the shadow of the law: from an enabling towards a disabling state? In: Grimshaw, Damian / Fagan, Colette / Hebson, Gail / Tavora, Isabel (eds.): Making work more equal. A new labour market segmentation approach. Manchester: Manchester University Press, pp. 35-51 Bosch, Gerhard 2015: Baisse du taux de couverture de la négociation collective et creusement des inégalités de revenus: une comparaison entre cinq pays de l’Union européenne. En: Revue internationale du Travail 154 (1), pp. 65-75 Grimshaw, Damian / Bosch, Gerhard 2013: The intersections between minimum wage and collective bargaining institutions. In: Grimshaw, Damian (ed.): Minimum wages, pay equity, and comparative industrial relations. New York, London: Routledge, pp. 50-80 Bosch, Gerhard / Weinkopf, Claudia 2013: Transnational labour markets and national wage setting systems in the EU. In: Industrial Relations Journal 44 (1), pp. 2–19 Bosch, Gerhard / Weinkopf, Claudia 2013: Wechselwirkungen zwischen Mindest- und Tariflöhnen. In: WSI-Mitteilungen 66 (6), S. 393-403

Intersection between minimum wages and collective bargaining to increase pay equity�Structure of presentation1.1 Rate of coverage by collective agreements and share of low-wage work (2014)1.2 Wage distribution in a liberal market economy with MW and in coordinated market economy with high coverage by collective agreements1.3 Two real cases: UK 2014 and Germany 19952.1 Wage setting systems based on different combinations of labor standardsDiapositive numéro 73.1 Intersection between MW and CA‘sDiapositive numéro 9Diapositive numéro 10Diapositive numéro 114.1 Meaning of opening clauses in CA‘sAnalysis of 800 Deviant CA‘s in the German metall industry�Topics of Material Concessions, Shares of all DCBAAnalysis of 800 Deviant CA‘s in the German metall-industry��Shares of Concessions by Enterprises, Shares in all DCBAConclusions for FranceLiterature