PRODUCTIVITY-RELATED PAY POLICY

The Austrian trade unions shape their policy on pay to accord with the long-term trend in productivity, i.e. per capita output. The intention is that over the long term real earnings increase in step with labour productivity in the national economy as a whole, thereby preventing, given constant functional distribution, inflationary processes induced by labour costs. In practice this means that growth and inflation are the factors which dominate long-term pay determination. Over the very long term this has, by and large, been achieved: although during the phase of full employment in the 1970s real earnings rose more steeply than productivity, with the marked rise in unemployment since the early 1980s increases in pay have remained below the growth in productivity. See also pay and incomes policy.))