collective bargaining and labour productivity in germany...
TRANSCRIPT
4th September 2017Final conference of the research project
TheInstitutfürArbeitsforschungundTransfer
Paolo Tomassetti, ADAPT Research Fellow
Collective Bargaining and Labour Productivity in Germany, Italy, the Netherlands, Poland, Spain and the UK: A Comparative
Analysis to Unravel the “Productivity Puzzle”
Bargaining for Productivity is led by ADAPT and co-funded by the European Commission
Background•ManyEUandnon-EUcountrieshaveexperiencedalabourproductivitystagnationorslowdownoverthelastdecade.
• “Labourproductivityistheultimateengineofgrowthintheglobaleconomy”(OECD,2015).
• “Astheworkingpopulationisprojectedtodeclinewiththeageingpopulation,labourproductivitygrowthbecomesthesolesourceforpotentialaverageoutputgrowthinEuropestartingfrom2028”(EuropeanCommission,2014).
Assumptionsandideasoftheproject
• Investmentsintechnologicalinnovation,researchandskillsarekeydriversforlabourproductivity
• Besidethesefactors,workorganisationplaysanimportantroleinenhancinglabourproductivityandmakinggrowthsustainable
• Productivityfigures(GDP/GVAperhourworkedandGDP/GVApernumberofemployees)arelinkedtotheoutputofproductionandtheinputoflabour
• Collectivebargainingandotheraspectsoflabourandemploymentrelationsplayamajorroleinthesefigures.
Objectives
• Sheddinglightonthereasonsbehindlabourproductivityslowdownorweakgrowthinsomecountries
• Explainingpublicpoliciesonlabourproductivityandtheir(in)effectiveness
•Analysingviewsandstrategiesofsocialpartnersinrelationtolabourproductivity
•Analysingthepotentialandeffectiveimplicationofcollectivebargainingonlabourproductivityindifferentcontexts
Unitofanalysis
Automotive Tourism Retail Healthcare
Source:ICTWSS, 2016 Collectivebargainingcoverage
Collectivebargainingcoordination(1-5scale)
Uniondensity
Employerdensity
Germany 57.6 4 17.1 58.0
Italy 80.0 3 37.3 56.0
Netherlands 84.8 4 18 85.0
Spain 79.8 3 16.8 75.0
Poland 10 1 12.7 20
UK 29.5 1 25.7 35.0
Countrycharacteristics
Varietyofcapitalism Modelofregulation(Boyer,2005)
Germany CME Meso-corporatist
Italy MME Meso-corporatist
Netherlands CME Meso-corporatist
Spain MME Meso-corporatist
Poland LME Marketoriented
UK LME Marketoriented
Countrycharacteristics
Methodology
• Literaturereview• Semi-structuredinterviewswithsocialpartners•Analysisofpublicpolicies•Contentanalysisofcollectiveagreements•Companycasestudies
Hypothesis
• Dialogueonproductivityissuesisimportantbothintermsofconsensuallabour-managementcooperationandasaregulatorofwagesandconditionsofwork.
• Bargainingcoordinationhasapositiveimpactoneconomicperformance,becauseitimpedeswagecompetitionandenforcescompaniestoincreaseproductivityinordertobeingabletopaythegivenwages.
• Atthecompanylevel,productivityagreementscanresultininnovationandenhanceperformancethroughcompensationandbenefits,workingtimeflexibility,WorkLife Balance,skillsimprovements,workers’involvement.
Hypothesis
EFFICIENCY EQUITY
VOICE
High-roadtolabourproductivity
Sustainablegrowth
Collectivebargainingasameanstocreatesocialnormsanddesignpolicies,practices,institutions,etc.tobalanceefficiency,equity,andvoiceandcreateemploymentrelationswithahuman face(Budd,2004).
10
20
30
40
50
60
70
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Hourlyproductivity(OECD2017)
Germany Italy Netherlands Poland Spain UK
90
100
110
120
130
140
2000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
NominallabourproductivityperhourworkedinEuropePercentageofEU28total(basedonmillionPPS),currentprices
Germany Spain Italy Netherlands UnitedKingdom
ADAPT on Eurostat 2016
95
105
115
125
2000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
NominallabourproductivityperhourworkedinUKPercentageofEU28total(basedonmillionPPS),currentprices
UnitedKingdom
ADAPT on Eurostat 2016
40
45
50
55
60
2000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
NominallabourproductivityperhourworkedinPolandPercentageofEU28total(basedonmillionPPS),currentprices
Poland
ADAPT on Eurostat 2016
Absolutelabourproductivitylevels
Labourproductivitygrowthrate
High-levelperformers
Mid-levelperformers
Low-levelperformers
Labourproductivityperformances
Afocusontwoaspectsoflabourregulation
1. Compensation:Therelationbetweenlabourproductivityandcompensationisakeyindicatorofcompetitiveness,butalsoanindicatorofsustainability,dependingonhowwidethegapbetweenthetwofactorsis
2. Workingtime:Workinghoursaffectdirectlyhourlyproductivityfiguresandarealsoanindicatorofbothefficiency andsustainability ofworkorganisation
90
95
100
105
110
115
120
125
130
135
140
1995 1998 2001 2004 2007 2010 2013 201690
92
94
96
98
100
102
104
106
108
110
1995 1998 2001 2004 2007 2010 2013 201690
95
100
105
110
115
120
125
130
1995 1998 2001 2004 2007 2010 2013 2016
90
110
130
150
170
190
210
1995 1998 2001 2004 2007 2010 2013 201690
95
100
105
110
115
120
1995 1998 2001 2004 2007 2010 2013 201690
100
110
120
130
140
150
1995 1998 2001 2004 2007 2010 2013 2016
___ GVA per hour worked___ Compensation per hour worked
Productivity/wagesgap Widenessofthegap
Productivityishigherthanwages
Sustainable inGermanyandtheNetherlandsUnsustainable inPoland
Counter-cyclicalrelationsbetweenproductivityandwagesWagesarehigherthanproductivity
Dataare affectedbysectoralcompositionoftheeconomyandbywageinequality
Labourproductivityandcompensation
95
105
115
125
135
145
155
165
Labour productivity and unit labour cost
Unit labour cost Hourly productivity___ ___
ADAPT on Eurostat 2016
8,8
31,9
56,665,5
12,9
0
10
20
30
40
50
60
70
80
90
100
10-49 50-199 200-499 500+ Totale
Firm-level bargaining coverage (%)
Fondazione Di Vittorio (FDV) on Cardinaleschi e De Santis (2016), ISTAT-CNEL
94
96
98
100
102
104
106
Wage share Hourly productivity___ ___
Wage share and labour productivity
ADAPT on Eurostat 2016
1250
1350
1450
1550
1650
1750
1850
1950
2050
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Averageannualhoursworkedperworker(OECD2017)
Germany Italy Netherlands Poland Spain UK
Averagehoursworked Productivityperformances
Highsustainability(lessworkinghours)
Midsustainability
Lowsustainability(moreworkinghours)
Labourproductivityandworkinghours
Discussion:PolandandtheUK
• LMEsandmarket-orientedmodelsoflabourregulation;HRM>IR
• Individualismanddecentralization• Lackofcoordinationandweakindustrialrelationsinstitutionstendtoresultinanunbalancedcombinationbetweenefficiency,equityandvoiceinlabour-managementrelationsandemploymentregulation,withthefirstvariableprevailingovertheothers
• Suchunbalanceseemstobeunsustainable inthelong-run
Discussion:ItalyandSpain
• MMEs:relativelystronglabourmarketinstitutionsandmeso-corporatistformoflabourregulation,whichtakesplaceatdifferentlevels
• Bargaininggovernabilityisrelativelyweakduetoinformalityoflabour-managementrelationsandlocalism
• ConfrontationalIRtendtoprevail,thusresultinginlessintegrativebargainingoutcomes
• SustainablecompromisebetweenefficiencyandequityinNCLAsdonotnecessarilytranslateintosustainableHRMorindustrialrelationspracticesatafirm-level,orthathighandlowroadstoproductivitycoexistacrosssectorsandcompanies (dualism)
Discussion:GermanyandtheNetherlands
• CMEsandthemeso-corporatistmodelsoflabourregulation:relativelystrongindustrialrelationsinstitutionsandgoodcapacityofcoordinationbetweenandwithinsectors
• CooperativeIRtendtoreflectintointegrativebargainingandsustainablecompromisebetweenefficiency,equityandvoice
• However,thesecountriesarefacingmanychallengesandcoordinationbetweenindustriesismuchweakertodaythanithasbeentwentyyearsago.Wagecoordinationstillworks,butitworksonlyforsomeindustriesandforashrinkingshareofemployees
Conclusions• Bargainingcoordinationhasapositiveimpactonperformances:itimpedeswagecompetitionandenforcescompaniestoincreaseproductivityinordertobeingabletopaythegivenwages
• Stateinterventionplaysanimportantroletotheextentthatitmediatestheeffectsofcollectivebargainingandcansupportorhindersocialpartnerspoliciesinregulatingthelabourmarket
• InadditiontoStatepromotionoftradeunionsrightsatworkplace,regulatoryspacesthatthelawleavestocollectivebargainingarerelevanttoo
Conclusions
• Contentsofcollectiveagreementsaregenerallytheresultofacompromisebetweenefficiency,equityandvoice.Suchcompromiseisfundamentaltomakelabourregulationfunctionaltoeconomicinterestsinasustainableway
• InLMEscollectivebargainingcanbeameanstofosterasustainablemodelofgrowth
• InCMEscollectivebargaining,especiallyatafirmlevel,hasbeenusedtoderegulateand/orre-regulateworkingconditions.Thesepracticesare,however,limitedand,inanycase,theystillresultinarelativelygoodcompromisebetweenefficiency,equityandvoice