Menu

Get the facts

EUROPE NEEDS A PAY RISE
It’s time for OUR recovery

A pay rise would be good for the economy, for business, for growth, for jobs and for workers. Europe needs stronger economic demand to drive growth, as well as more investment.

With more money in their pockets, workers will buy goods and services that will boost business and create growth and jobs.

For too long European economic policy has treated wages only as a labour ‘cost’, and ignored its role as an engine of growth. ‘Trickle-down’ economics does not work, but increased wages certainly do trickle-UP the economy.


The wage crisis

Many workers have yet to feel any improvement from Europe’s slow recovery. In 2016, workers in 7 EU countries earned less in real terms than they did 8 years ago!  Real wage growth was lower 2009-2016 than in the years 2001-2008 in 18 EU countries. Only in 3 EU member states was it higher 2009-16 than in 2001-8.

Benchmarking Working Europe 2017, ETUI and ETUC

Development of real wages 2001-2016

Source: Author’s calculation based on AMECO (January 2017)

 


Wages & productivity

Wages need to follow productivity employers rightly argue. What they do not say is that productivity has been rising faster than wages for more than 30 years. From 1997 productivity has increased 30%, but wages by only 20%.

Trends in growth in average real wages and labour productivity in developed economies, 1999-2015

Note. Wage growth is calculated as a weighted average of year-on-year growth in average monthly real wage in 36 economies. The base year is set in 1999 for reason of data availability. Source: ILO Global Wage Database; ILO Global Employment Trends (GET).

Wages have been declining as a proportion of wealth – leading to greater inequality, and undermining social cohesion – the costs of which are all too apparent today.

Change in wages as proportion of national wealth 1980-2016

Useful links