Pay developments - 2003

  • Observatory: EurWORK
  • Topic:
  • Agreements,
  • Collective bargaining,
  • Relazioni industriali,
  • Retribuzione e reddito,
  • Date of Publication: 28 Aprile 2004



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This review of trends in pay in 2002 and 2003 finds that average collectively agreed nominal wage increases across the EU and Norway fell from 3.5% in 2002 to 3.1% in 2003 - though with major variations between countries. This suggests a deepening trend towards wage moderation in many countries. Taking into account inflation, the rate of real increase rose a little from 2002 to 2003, as a result of falling inflation. In 10 acceding and candidate countries examined, the average agreed nominal pay increase was far higher, rising from 8.1% in 2002 to 9.4% in 2003, and real pay also increased more rapidly than in the current EU. This review also looks at productivity, collectively agreed pay increases in selected sectors, increases in average earnings and minimum wages, and the gender pay gap.

This annual report (or update) from the European Industrial Relations Observatory (EIRO), based on contributions from its national centres, aims to provide a broad, general indication of trends in pay increases over 2002 and 2003 within the EU Member States (plus Norway) and 10 acceding and candidate countries.

Pay setting is arguably the area in which industrial relations and collective bargaining has the most direct effect on broader economic developments, influencing inflation, unemployment and so on. The EU's 2003-5 broad guidelines for the economic policies of the Member States and the Community, adopted by Council in June 2003, state that the maintenance of sound macroeconomic conditions depends on wage developments (as well as on the policies pursued by central banks and governments). Wage developments should contribute to stable macroeconomic conditions and to an 'employment-friendly' policy mix. Member States should promote the right framework conditions for wage negotiations among the social partners. It is regarded as important to ensure that nominal wage increases are consistent with price stability and productivity gains. In particular, labour cost developments should remain moderate in the context of a possible cyclical recovery in productivity or temporary increases in inflation. This would allow companies to increase job-creating investment. Member states should 'foster the macroeconomic dialogue in a context of productivity-oriented wage policies'. The guidelines also stress a perceived need to allow wages better to reflect productivity, taking into account productivity differences across skills and local labour market conditions.

Wage developments are perhaps of even more importance in the 12 'euro-zone' countries. The progress of Economic and Monetary Union (EMU) means that there is increasing focus on pay as a means of adapting to economic imbalances, as euro-zone countries are no longer able to use exchange and interest rates to make such economic adjustments. The introduction of the euro has also added greater transparency to pay comparisons within Europe. Furthermore, the accession of 10 new Member States to the EU in May 2004 will add a new dimension to the pay issue. Wages in these countries are in general considerably lower than the current EU average, and there will be considerable interest in the effects of: EU membership on pay in the new Member States; and of the addition to the single market of a group of relatively low-wage countries on developments in the current Member States

Across the current EU, nominal pay increases had moderated somewhat in 2002 following a rise in 2001 (TN0303102U). Taking inflation into account, real pay increases had not risen very high in 2001, despite worries about an erosion of wage restraint, and this moderation strengthened slightly in 2002. Adding productivity to the equation, trade unions in most countries were unable to achieve wage rises equal to the sum of inflation and productivity increases in 2001-2. It thus seemed that the EU's key broad economic guidelines on pay - that increases in nominal wages should be consistent with price stability and that increases in real wages should not exceed growth in labour productivity - were largely observed in most Member States. 2003 was a year when economic growth slowed further in most Member States, unemployment rose and inflation fell. This might be expected to a recipe for further wage moderation, as called for by many governments. Below we explore whether or not this was the case (among other issues).

We do not attempt to produce a fully scientific and comparable set of pay comparisons, given that EIRO is not a statistical service and that pay is an area where meaningful international comparisons are especially difficult. Differing national systems of pay formation, industrial relations, taxation and social security, and the divergent ways in which pay-related statistics are collected and presented, mean that comparisons between countries are hard to draw. Nevertheless, given the key importance of pay, we provide these general indications of recent developments while pointing out the problems, caveats and qualifications. The figures provided should be treated with extreme caution, and the various notes and explanations read with care

Average collectively agreed pay increases

Collective bargaining plays a significant role in pay setting in all 26 countries considered here (TN0401101F). In the current EU (and Norway), this role is in most cases a central one: the proportion of workers that have their pay and conditions set, at least to some extent, by collective agreements is two-thirds or more in all countries except Luxembourg and the UK (where only a little over a third of employees have their pay set by collective bargaining), and as high as 90% or more in France, Belgium, Sweden, Finland and Italy. The average bargaining coverage rate in the current EU stands at around three-quarters. Among the countries due to join the EU in May 2004, the bargaining coverage rate is generally lower, averaging about four out of 10, though higher in countries such as Slovenia, Cyprus and Slovakia. Bargaining coverage is at its lowest (around a quarter or less) in Estonia and Latvia. Overall, around two-thirds of the workforce of the expanded EU are covered by collective bargaining.

The nature of bargaining's role in pay setting differs widely between the countries. Notably, the different bargaining levels (intersectoral, sectoral, company etc) play different parts, while the importance of bargaining in pay determination differs considerably between sectors of the economy and groups of workers.

Figure 1 below provides figures for average nominal collectively agreed basic pay increases in each country (or a broadly equivalent indicator, where these are not available). Where possible, the figures cover the whole economy, though there are exceptions (see the notes below the figure). Data are not yet available for the whole of 2003 in a number of cases. Variations in the 2002 figures from those appearing in the EIRO pay update for 2002 (TN0303102U) are explained mainly by the replacement of provisional or partial figures with more reliable ones, plus in some cases changes in the data used, where more appropriate sources have been identified. (In this and subsequent figures, the data are sorted in order of increase [highest to lowest] for 2003. Where there is no 2003 figure, the country is ranked by its 2002 figure in comparison with the 2003 figures for the other countries.)

The large differences in national pay formation and industrial relations systems are illustrated by the varying ways in which the increases referred to in figure 1 are arrived at. Free collective bargaining, primarily (though not wholly in all cases) at sectoral level, plays the main role in Austria, Cyprus, Denmark, France, Germany, Italy, the Netherlands, Norway, Portugal, Slovakia, Spain and Sweden. National intersectoral agreements are responsible for setting the relevant increases, or laying down guidelines for lower-level bargaining in Belgium, Finland, Greece, Ireland, Romania (though see note to figure 1), Slovenia and Spain. In the UK and the majority of the acceding and candidate countries, it is company-level bargaining (or bargaining at lower levels within the company) that is predominant. In several central and eastern European countries - Bulgaria, Estonia, Latvia and Poland - low levels of bargaining coverage and/or lack of systematic data collection make it impossible to produce figures for average collectively agreed pay increases (other indicators are thus used in figure 1). Automatic pay indexation represents a significant proportion of the increases in Belgium and Luxembourg. The role of the increases referred to in the figure also differs: in countries such as Austria, Denmark, France and Italy, the increases referred to are sectoral minima, subject to subsequent lower-level bargaining (or in the case of Austria, the application of actual pay increases agreed at sector level); while in decentralised-bargaining countries such as the UK, the figures are more likely to represent actual increases.

Putting aside these and other caveats, the following points emerge from figure 1. First we consider the 15 EU Member States and Norway (no 2003 data are yet available for France).

  • In 2002, nominal pay increases varied between 5.7% in Norway (though this figure is for total pay increases and includes more than general collectively agreed increases) and 2.1% in Italy. Increases of 4% and over were recorded in four countries, increases of 3%-4% in seven countries, and increases of 2%-3% in five countries. The average increase stood at 3.5%.
  • In 2003, nominal pay increases varied between 4.5% in Norway (see previous point) and 2.2% in Austria (though this refers only to sectoral minima, rather than actual pay increases), Belgium (figure refers to blue-collar workers only and included pay indexation) and Italy. Increases of 4% and over were recorded in three countries, increases of 3%-4% in five countries and increases of 2%-3% in seven countries. The average increase stood at 3.1%.
  • The average increase thus fell by 0.4 percentage points from 2002 to 2003. This followed a fall from 3.8% in 2001 to 3.5% in 2002. There thus appears to be a deepening trend towards wage moderation, which began in 2002. An upward trend had previously been seen since 1999, when the average increase stood at 2.9% (having fallen from 3.1% in 1998), rising to 3.2% in 2000 and 3.8% in 2001.
  • There seems to be some recent convergence between the rates of nominal pay increase in the various European Economic Area (EEA) countries considered. The range between the highest and lowest increases has fallen from 5.4 percentage points in 2001 to 3.6 points in 2002 and 2.3 points in 2003. In 2002, the increases in 10 countries were within 1 percentage point of the overall average rise, while in 2003 this was true of all countries for which information is available, apart from Norway.
  • Averaging the annual increases over the five-year period 1999-2003, the 16 countries can be divided into: 'low' nominal pay-increase countries - those where pay increases have averaged 2%-3% (Austria, Denmark, Finland, France, Germany and Italy); 'medium' nominal pay-increase countries - those where pay increases have averaged 3%-4% (Belgium, the Netherlands, Portugal, Spain, Sweden and the UK); and 'high' nominal pay-increase countries - those where pay increases have averaged over 4% (Greece, Ireland, Luxembourg and Norway). The overall average annual pay increase over the five-year period was 3.3%.
  • There are divergent trends in pay increases in the various countries. While the average increase fell from 2002 to 2003 in 10 of the 15 countries for which figures are available for both years (with pay moderation appearing most evident in Greece, Belgium, Ireland, the Netherlands and Portugal), following the overall downward trend, the rate of increase rose in four countries (most notably Finland and Spain) and remained stable in one. Looking at the five-year period starting in 1999, the average overall trend - for increases to rise from 1999 to 2001 before dropping off in 2002 and 2003 - has been mirrored to varying extents in Austria, Belgium, France, Ireland, Luxembourg and the Netherlands This was also true of Finland, Italy, Spain and the UK until 2002, but all four of these countries bucked the overall downward trend in 2003. Sweden is alone in maintaining virtual stability over the whole period. Germany has for most of the period followed an opposite trend to the average. Otherwise, few countries have displayed a clear trend in nominal pay increases, with most varying up and down from year to year. In terms of the size of the variations in annual increases over 1999-2003, it seems that the countries with the greatest stability are Sweden, Denmark, the UK, Austria, Italy, Luxembourg and Germany (in all cases the variation between the highest and lowest annual increases is lower than 1 percentage point), while the least stable are Ireland, France and Greece.

Taking only the 12 countries of the euro-zone (no data are available for France for 2003), the following picture emerges.

  • In 2002, nominal pay increases varied between 5.4% (the increase in minimum rates set by a national agreement) in Greece and 2.1% in Italy. Increases of 4% and over were recorded in three countries, increases of 3%-4% in five countries and increases of 2%-3% in four countries. The average increase stood at 3.4%.
  • In 2003, nominal pay increases varied between 4.0% in Ireland and Luxembourg and 2.2% in Austria, Belgium and Italy. Two countries recorded increases of 4% and over, while increases of 3%-4% were recorded in three countries and increases of 2%-3% in six countries. The average increase stood at 3.0%.
  • These figures indicate that the average nominal pay increase in the euro countries in 2002 and 2003 was slightly lower (by 0.1 point) than in the EU/EEA more widely. There was no overall difference between the two groups of countries in terms of the general downward average trend from 2002 to 2003, or in the general convergence in pay increases.

Turning to the full group of 10 acceding and candidate countries examined, the key points are as follows.

  • In 2002, nominal pay increases varied between 16.2% in Romania (the increase in the minimum basic rate set by a national agreement - though see note to figure 1) and 2.5% in Cyprus and Malta. Increases of 10% and over were recorded in four countries, increases of 5%-10% in three countries and increases of 2%-5% in three countries. The average increase stood at 8.1%.
  • In 2003, nominal pay increases varied between 41.5% in Romania (the increase in the minimum rate set by a national agreement - though see note to figure 1) and 1.5% in Cyprus. Increases of 10% and over were recorded in two countries, increases of 5%-10% in five countries and increases of 2%-5% in three countries. The average increase stood at 9.4%
  • The average pay increase in the 10 acceding and candidate countries thus considerably exceeded that in the current EU (plus Norway) in both 2002 and 2003. In 2002, it was 2.3 times higher and in 2003 it was 3 times higher.
  • Despite the 1.3-point rise in the average wage increase in the acceding and candidate countries between 2002 and 2003, the rate of increase actually fell in six out of 10 of the countries, most notably in Bulgaria, Estonia, Hungary and Slovenia. The overall increase is due mainly to the massive rise (of 25.3 points) recorded in Romania (though this figure does not reflect actual average pay increases in this country - see note to figure 1).

Bulgaria and Romania are not expected to join the EU until 2007, and their pay trends seem to be somewhat out of step with those in the eight countries examined which will join in May 2004, distorting the average figures (especially in the case of Romania, where the figure used is in any case somewhat misleading). Excluding these two countries and looking only at Cyprus, Estonia, Hungary, Latvia, Malta, Poland, Slovakia and Slovenia produces the following findings.

  • In 2002, nominal pay increases varied between 11.5% in Estonia and 2.5% in Cyprus and Malta. Increases of 10% and over were recorded in two countries, increases of 5%-10% in three countries and increases of 2%-5% in three countries. The average increase stood at 6.5%.
  • In 2003, nominal pay increases varied between 10.9% in Latvia and 1.5% in Cyprus. Increases of 10% and over were recorded in one country, increases of 5%-10% in four countries and increases of 2%-5% in three countries. The average increase stood at 5.8%
  • The average pay increase in the eight new Member States was substantially higher than that in the current EU (plus Norway) in 2002 and 2003. The differential narrowed slightly between 2002 and 2003, possibly suggesting that pay trends in the new Member States may to some extent be converging downwards towards those in the current EU as their accession approaches.
  • Although the average increases in the new Member States are higher then in the current EU, this disguises a wide range of variation. In both 2002 and 2003, increases in Cyprus, Malta and Poland were around or below the EU average.

Adding the eight new countries joining the EU in 2004 to the 15 present Member States produces average agreed pay increases of 4.4% in 2002 and 4.0% in 2003. The inclusion of the new Member States thus pushes the Union's average increase upwards, but this differential narrowed very slightly from 1.1 percentage points in 2002 to 1.0 points in 2003, suggesting that the effect may become less pronounced and even disappear over time.

Finally, the average increases for all countries examined (26 in 2002 and 25 in 2003) stood at 5.2% in 2002, rising to 5.6% in 2003 (though 4.8% falling to 4.1% if Romania is excluded).

Figure 1. Average collectively agreed pay increases, 2002 and 2003 (%)

Figure 1. Average collectively agreed pay increases, 2002 and 2003 (%)

Notes on averages: overall average is of 26 countries in 2002 and 25 in 2002; EU and Norway average is of 16 countries in 2002 and 15 in 2003; EU average is of 15 countries in 2002 and 14 in 2003; Euro-zone average is of 12 countries in 2002 and 11 in 2003; acceding/candidate countries average is of 10 countries in both years; new Member States 2004 average (countries joining EU in May 2004) is of 8 countries in both years; expanded EU average is of 23 countries in 2002 and 22 in 2003.

Source: EIRO.

The statistics in figure 1 should be read in conjunction with the following notes.

  • Austria: 2002 figure from Statistik Austria index of agreed minimum wages; 2003 figure is an EIRO estimate based on the provisions of most important collective agreements.
  • Belgium: figures cover blue-collar workers only (equivalent figures for white-collar workers were 2.9% in 2002 and 1.9% in 2003); figures represent total of collectively agreed pay increases - 1.5% in 2002 and 0.4% in 2003 for blue-collar workers (1.2% in 2002 and 0.1% in 2003 for white-collar workers) - plus automatic pay indexation and effects of reduction of working time; figures, from Federal Public Service for Employment, Labour and Social Dialogue (SPF Emploi, Travail et Concertation sociale/FOD Werkgelegenheid, Arbeid en Sociaal Overleg), are for years to September.
  • Bulgaria: no figures available for average collectively agreed pay increase (bargaining coverage is patchy); the statistics provided, from the National Statistics Institute (NSI), are for the average increase in earnings; 2003 figure is the increase in first two quarters, compared with first two quarters of 2002.
  • Cyprus: figures from Pancyprian Federation of Labour (PEO).
  • Denmark: no general figures available, and figures used relate to the key industry sector agreement, which operates the 'minimum-wage' system, whereby sectoral agreements set only minimum rates, with subsequent local bargaining producing further increases; the figure for 2002 represents the increase from March 2002 and the 2003 figure the increase from March 2003.
  • Estonia: no figures available for average collectively agreed pay increases (data collection is still being developed, and bargaining coverage is low); the statistics provided are the increases recorded in a wages survey by the Statistical Office of Estonia (Statistikaamet, ESA); 2003 figure is the increase in first three quarters, compared with first three quarters of 2002.
  • Finland: 2002 figure refers to the average annual increase in wage costs under the 2001-2 central incomes policy agreement (which provided in 2002 for a general pay rise of FIM 1.07 per hour or FIM 179 per month from March, with a minimum increase of 1.9%, plus an additional 0.3% for sector-level distribution); 2003 figure refers to the average annual increase in wage costs under the 2003-4 central incomes policy agreement (which provided in 2003 for a general pay rise of EUR 0.17 per hour or EUR 28.39 per month from March, with a minimum increase of 1.8%, plus an additional 0.8% for sectoral distribution and an 'equality item' of 0.3%, payable according to the gender balance in each sector).
  • France: figure, from the Ministry of Employment's Office for Research and Statistics (Direction de l'animation de la recherche, des études et des statistiques du ministère de l'Emploi, DARES), refers to the weighted average increase in sectoral collective agreements' pay scales (the equivalent figure for 2001 was 3.9%); the median increase in sectoral collective agreements' pay scales in 2002 was 2.6% (3.6 % in 2001).
  • Germany: figures, from the Institute for Economics and Social Science (Wirtschafts- und Sozialwissenschaftliches Institut, WSI) collective agreement archive, represent the annual average increase in collectively agreed pay per employee.
  • Greece: figures refer to increases in minimum rates as set out in 2002-3 National General Collective Agreement; if, at the end of the year, increases in 2002 were not at least 1 percentage point above the inflation rate, wages were to be adjusted upwards to this level.
  • Hungary: 2002 figure is weighted average of increases in company collective agreements - EIRO calculation based on Ministry of Employment and Labour database; 2003 figure from Ministry of Employment and Labour.
  • Ireland: the 2002 figure represents the third-phase (final) payment of 4% for both private and public sectors under the Programme for Prosperity and Fairness (PPF) national pay agreement, plus a 1% lump sum under a revision of the PPF to compensate workers for high inflation - the third phase applied up to 31 December 2002 in the private sector and 30 June 2003 in the public sector; the 2003 figure refers only to the private sector and represents the first 3% increase under the 18-month Sustaining Progress national wage agreement, (2003-4) covering the first nine months of the deal, plus half of the 2% increase for the next six months of the deal; different, and more complex, pay arrangements apply in the public sector, where there was a six-month pay pause between July 2003 and the end of December 2003, following the expiry of the PPF in the public sector, with the first 3% of the Sustaining Progress not paid until 1 January 2004 (however, the 250,000 or so public sector workers have benefited from additional pay increases over and above the provisions of national agreements, in the form of 'benchmarking' pay increases which average 8.9%, paid in three instalments of 25% [backdated to 1 December 2001], 50% [from 1 January 2004] and 25% [from 1 June 2005]).
  • Italy: figures from National Institute of Statistics (Istituto Nazionale di Statistica, Istat) monthly pay index.
  • Latvia: no figures available for average collectively agreed pay increase; the statistics provided, from the Central Statistical Bureau (Centrālā statistikas pārvalde, CSP), are for average increases in the net wages and salaries of employees.
  • Luxembourg: no official statistics available; figures represent average of estimated range of pay increases, plus 2.5% automatic pay indexation in each year.
  • Malta: figures, from the Economic Survey by the government's Economic Policy Division, refer to the 12 months to September in each year.
  • Netherlands: figures from Central Statistical Office (Centraal Bureau voor de Statistiek, CBS); 2003 figure is an estimate based on collective agreements covering 80% of employees.
  • Norway: there are no reliable figures on collectively agreed basic pay increases for all employees; the figures given, from the Technical Calculation Committee for Income Settlements (Teknisk Beregningsutvalg, TBU), represent the total annual pay increase (including wage drift and 'carryover' effects from previous years); 2003 figure expressed by TBU as 4½%.
  • Poland: no figures available for average collectively agreed pay increase; figures provided, from the Central Statistical Office of Poland (Główny Urząd Statystyczny, GUS), refer to increases in average earnings; 2003 figure is for year to November.
  • Portugal: figures from Ministry of Social Security and Labour's Directorate General for Employment and Labour Relations (Direcção Geral do Emprego e das Relações de Trabalho, DGERT); 2003 figure for year to September.
  • Romania: figures refer to the increases set out in the tripartite 'single national collective agreement', which provides a minimum basic framework for employment conditions; collective agreements provide only for a basic minimum collectively agreed wage in cash terms, which may not have a major effect on average wages, depending on the relationship between basic agreed minimum and the pay of various groups of workers; thus, the major increases in basic minimum collectively agreed wage set out in the table for 2002 and 2003 will not have been reflected in actual pay for most workers.
  • Slovakia: figures are EIRO estimates.
  • Slovenia: figures refer to private sector only, and represent the increases in minimum and starting pay rates set out in the tripartite private sector pay policy agreement for 2002-4; a similar agreement in the public sector provided for increases of 3.4% in 2002 and 5.0% in 2003.
  • Spain: figures, from Ministry of Labour and Social Affairs (MTAS) labour statistics publications, refer to the weighted average agreed pay increase in the 10 first months of each year.
  • Sweden: no figures available for average collectively agreed pay increases, and figures represent an estimate based on the three-year agreements concluded in industry in the spring 2001 bargaining round, including 0.5% as estimated effect of working time reduction in each year.
  • UK: figures from Labour Research Department (LRD) Workplace Report 8, November 2003; figures are medians, by agreements; 2003 figure is for the 12 months to October.

Real pay increases

Figure 1 above refers to nominal pay increases. To produce an indication of real pay increases, figure 2 below adjusts the increases for inflation, subtracting the annual rates of inflation for December 2001-December 2002 and December 2002-December 2003 respectively, as calculated in line with Eurostat's Harmonised Index of Consumer Prices (HICP). Similar inflation figures are not available for Bulgaria (National Statistic Institute), Malta (Central Office of Statistics) and Romania (Institute of National Statistics), so national sources are used (also for Norway in 2003). For the EU 15 as a whole, 2002 saw inflation continue to fall, from an average of 2.2% over December 2001-December 2002 to an average of 1.8% over December 2002-December 2003.

Figure 2. Average collectively agreed pay increases, adjusted for inflation, 2002 and 2003 (%)

Figure 2. Average collectively agreed pay increases, adjusted for inflation, 2002 and 2003 (%)

Notes on averages: overall average is of 26 countries in 2002 and 25 in 2002; EU and Norway average is of 16 countries in 2002 and 15 in 2003; EU average is of 15 countries in 2002 and 14 in 2003; Euro-zone average is of 12 countries in 2002 and 11 in 2003; acceding/candidate countries average is of 10 countries in both years; new Member States 2004 average (countries joining EU in May 2004) is of 8 countries in both years; expanded EU average is of 23 countries in 2002 and 22 in 2003.

Source: EIRO.

Looking first at the current EU and Norway, figure 2 indicates the following trends.

  • The workers concerned received real pay increases in 12 countries in 2002, but in four countries (Denmark, Italy, Portugal and Spain) they saw their nominal pay increase swallowed up by inflation (although in some cases, the pay increase figures used represent minima, built on by subsequent bargaining). In 2003, the number of countries where inflation outstripped the nominal pay rise fell to only one (Italy, the only country where workers lost out in both years).
  • In 2002, the range of real pay increases was between 3.1% in Norway (though it should be noted that this figure is for total pay increases and includes more than general collectively agreed increases) and -1.0% in Spain - a slightly wider range than found for nominal increases. Increases of 2% and over were recorded in two countries, increases of 1%-2% in five countries, increases of under 1% in five countries and decreases of up to -1% in four countries. The average increase stood at 0.9% (but at 0.7% if non-EU Norway, which had a particularly high increase in 2002, is excluded).
  • In 2003, the range of real pay increases was between 2.0% in Norway (see previous point) and -0.3% in Italy - a rather narrower range than in 2002 and the same as that found for nominal increases in 2003. One country recorded an increase of 2% and over, eight countries recorded increases of 1%-2%, five recorded increases of 0%-1% and one had a decrease of up to -1%. There was thus rather more convergence than in 2002. The average increase stood at 1.1%.
  • The average real increase thus rose by 0.2 percentage points from 2002 to 2003, compared with a fall of 0.5 points in nominal pay increases - presumably largely as a result of falling inflation. The rate of real increase had risen slightly between 2001 and 2002, following a rise of 0.3 points between 2000 and 2001, which had been preceded by a fall of 0.9 points between 1999 and 2000. The rate of real pay increase rose from 2002 to 2003 in 10 countries (most notably in Spain, Portugal, Finland and Denmark), but fell in five (most notably in Belgium, Norway and Greece). Over the five-year period 1999-2003, there are few discernible trends in real pay increases across the countries considered. In terms of the size of the variations in annual increases over 1999-2003 - which tend to be considerably larger than for nominal pay increases - it seems that the countries with the greatest stability are Italy and the UK (where the variation between the highest and lowest annual increases is 1 percentage point), while the least stable are Germany, Ireland and Belgium.
  • Averaging the annual real pay increases over the five-year period 1999-2003, the 16 countries can be divided into: 'negative' real pay-increase countries - those where pay increases have averaged below zero (Italy and Spain); 'low' real pay-increase countries - those where pay increases have averaged under 1% (Austria, Denmark, Finland, the Netherlands and Portugal); 'medium' real pay-increase countries - those where pay increases have averaged 1%-2% (Belgium, France, Germany, Greece, Ireland, Luxembourg, Sweden and the UK); and 'high' real pay-increase countries - those where pay increases have averaged 2% or over (Norway).

Taking only the countries of the euro-zone, the following points can be made.

  • In 2002, real pay increases varied between 2.3% in Belgium and -1.0% in Spain. Increases of 2% and over were recorded in one country, increases of 1%-2% in three countries, increases of under 1% in five countries and decreases of up to -1% in three countries. The average increase stood at 0.7% - slightly lower than the overall EU/EEA average of 0.9%.
  • In 2003, real pay increases varied between 1.7% in Finland and -0.3% in Italy. Increases of 2% and over were recorded in no countries, increases of 1%-2% in five countries, increases of under 1% in five countries, and a decrease of up to -1% in one country. The average increase stood at 1.0%, slightly below the overall EU/EEA average of 1.1%.
  • The average real increase thus rose by 0.3 percentage points from 2002 to 2003 (a slightly greater rise than the overall EU/EEA average), compared with a fall of 0.4 points in nominal pay increases (0.5 for all EU/EEA countries examined).
  • These figures indicate that in 2002 and 2003 (as over 1998-2001) real pay increases were lower in the euro countries than in the EU/EEA more widely.

Considering the full group of 10 acceding and candidate countries examined, the main features are as follows.

  • In 2002, real pay increases varied between 8.8% in Estonia and -5.1% in Romania. Increases of 5% and over were recorded in four countries, increases of 2%-5% in two countries, increases of up to 2% in two countries and decreases in two countries. The average increase stood at 2.8%.
  • In 2003, real pay increases varied between 25.1% in Romania and -2.0% in Slovakia. An increase of 10% and over was recorded in one country, increases of 5%-10% in three countries, increases of 2%-5% in one country, increases of up to 2% in three countries, and decreases in two countries. The average increase stood at 4.7%
  • The average real pay increase in the 10 acceding and candidate countries thus considerably exceeded that in the current EU (plus Norway) in both 2002 and 2003. In 2002, it was 3.1 times higher and in 2003 it was 4.3 times higher.
  • Despite the 1.9-point rise in the average real wage increase in the acceding and candidate countries between 2002 and 2003, the rate of increase actually fell in six out of 10 of the countries. The overall increase is due mainly to the major change (of 30.2 points between a -5.1% fall in 2002 and a 25.1% rise in 2003 - though see note to figure 1 for the meaning of the pay increase figures used) recorded in Romania.

Excluding Bulgaria and Romania and looking only at the eight countries examined which will join the EU in May 2004 produces the following findings.

  • In 2002, real pay increases varied between 8.8% in Estonia and -0.6% in Cyprus. An increase of 5% and over was recorded in three countries, increases of 2%-5% in two countries, increases of up to 2% in two countries, and a decrease in one country. The average increase stood at 3.3%.
  • In 2003, real pay increases varied between 7.4% in Latvia and -2.0% in Slovakia. Increases of over 5% were recorded in two countries, an increase of 2%-5% in one country, increases of up to 2% in three countries, and decreases in two countries. The average increase stood at 2.1%
  • The average real pay increase in the eight new Member States was substantially higher than that in the current EU (plus Norway) in 2002, but rather nearer in 2003. As with nominal pay, it appears that real pay trends in the new Member States may be converging downwards towards those in the current EU as their accession approaches. In both 2002 and 2003, real increases in Cyprus and Slovenia were around or below the EU average.

Adding the eight new Member States joining the EU in 2004 to the current 15 produces average agreed real pay increases of 1.6% in 2002 and 1.4% in 2003. The inclusion of the new Member States thus pushed the Union's average increase upwards by 0.9 points in 2002 but by only 0.3 points in 2003, suggesting that real pay increase convergence may be ahead of nominal pay increase convergence.

Finally, the average real increases for all countries examined (26 in 2002 and 25 in 2003) stood at 1.6% in 2002, rising to 2.6% in 2003 (though 1.9% falling to 1.5% if Romania is excluded).

Use of distributive margin

For some years, a number of trade unions have taken an increasing interest in the extent to which collective bargaining outcomes use up the 'distributive margin' of the total sum of inflation and productivity growth. For example, the 'Doorn group' of trade unions from Belgium, Germany, Luxembourg and the Netherlands (DE9810278F) have agreed to seek 'collective bargaining settlements that correspond to the sum total of the evolution of prices and the increase in labour productivity', and they assess each year the extent to which they have used up this full 'distributive margin'. It is accounted a success for trade unions if pay rises equal or exceed the total of the increase in inflation and productivity.

There are many methodological and statistical difficulties in comparing pay developments in this way and that bargaining has other non-pay outcomes which can be difficult to calculate in terms of their cost effects. However, this measure does provide a useful indication in evaluating bargaining outcomes, as it takes into account productivity as well as inflation, and other European bargaining coordination efforts by trade unions take a similar approach. For example, the European Trade Union Confederation (ETUC) has adopted a coordination guideline which includes a pay claims formula whereby 'nominal wage increases should at least exceed inflation, while maximising the proportion of productivity allocated to the rise in gross wages in order to secure a better balance between profits and wages' (EU0101291N). A sector-level example is the European Metalworkers' Federation (EMF) 'European coordination rule' whereby 'the key point of reference and criterion for trade union wage policy in all countries must be to offset the rate of inflation and to ensure that workers' incomes retain a balanced participation in productivity gains' (EU0108241F). Similarly, the European Federation of Trade Unions in Food, Agriculture, Tourism and Allied Branches (EFFAT) 'principles for coordinating collective bargaining policy at European level ' state that: 'the central orientation and yardstick of trade union wages policy must always at least be the sum of: keeping up with the inflation rate; and an equal share for the workers of productivity improvements.'

Table 1 below assesses pay bargaining outcomes in 2002 and 2003 in the light of the distributive margin formula. It should be treated with extreme care, given the often disparate, partial and hard-to-compare nature of the statistics, and the notes should be read carefully.

Table 1. Pay bargaining outcomes in the EU, Norway and 10 acceding and candidate countries, 2002 and 2003 (%)
Country Year Inflation (A)* Productivity (B)** Distributive margin (A B = C) Pay rise (D)*** Utilisation of margin (D - C = E)
Austria 2002 1.7 1.4 3.1 2.5 -0.6
2003 1.3 0.9 2.2 2.2 0.0
2002/3 3.0 2.3 5.3 4.7 -0.6
Belgium 2002 1.3 1.5 2.8 3.6 0.8
2003 1.7 0.3 2.0 2.2 0.2
2002/3 3.0 1.8 4.8 5.8 1.0
Bulgaria 2002 3.8 4.0 7.8 12.9 5.1
2003 5.6 1.7 7.3 6.1 -1.2
2002/3 9.4 5.7 15.1 19.0 3.9
Cyprus 2002 3.1 0.8 3.9 2.5 -1.4
2003 2.2 1.5 3.7 1.5 -2.2
2002/3 5.3 2.3 7.6 4.0 -3.6
Denmark 2002 2.6 1.6 4.2 2.4 -1.8
2003 1.2 2.4 3.6 2.3 -1.3
2002/3 3.8 4.0 7.8 4.7 -3.1
Estonia 2002 2.7 4.1 6.8 11.5 4.7
2003 1.2 4.4 5.6 6.8 1.2
2002/3 3.9 8.5 12.4 18.3 5.9
Finland 2002 1.7 2.4 4.1 2.3 -1.8
2003 1.2 3.1 4.3 2.9 -1.4
2002/3 2.9 5.5 8.4 5.2 -3.2
France 2002 2.2 1.4 3.6 3.1 -0.5
2003 2.4 0.1 2.5 na na
2002/3 4.6 1.5 6.1 - -
Germany 2002 1.1 1.3 2.4 2.7 0.3
2003 1.1 1.8 2.9 2.5 -0.4
2002/3 2.2 3.1 5.3 5.2 -0.1
Greece 2002 3.5 3.5 7.0 5.4 -1.6
2003 3.1 3.3 6.4 3.9 -2.5
2002/3 6.6 6.8 13.4 9.3 -4.1
Hungary 2002 4.9 3.2 8.1 10.0 1.9
2003 5.6 1.3 6.9 8.2 1.3
2002/3 10.5 4.5 15.0 18.2 3.2
Ireland 2002 4.6 4.6 9.2 5.0 -4.2
2003 2.9 2.9 5.8 4.0 -1.8
2002/3 7.5 7.5 15.0 9.0 -6.0
Italy 2002 3.0 -0.5 2.5 2.1 -0.4
2003 2.5 -0.4 2.1 2.2 0.1
2002/3 5.5 -0.9 4.6 4.3 -0.3
Latvia 2002 1.5 4.8 6.3 8.0 1.7
2003 3.5 5.2 8.7 10.9 2.2
2002/3 5.0 10.0 15.0 18.9 3.9
Luxembourg 2002 2.8 1.3 4.1 4.3 0.2
2003 2.4 2.2 4.6 4.0 -0.6
2002/3 5.2 3.5 8.7 8.3 -0.4
Malta 2002 2.2 0.9 3.1 2.5 -0.6
2003 1.3 2.7 4.0 3.0 -1.0
2002/3 3.5 3.6 7.1 5.5 -1.6
Netherlands 2002 3.2 0.2 3.4 3.6 0.2
2003 1.6 0.9 2.5 2.8 0.3
2002/3 4.8 1.1 5.9 6.4 0.5
Norway 2002 2.6 2.3 4.9 5.7 0.8
2003 2.5 1.6 4.1 4.5 0.4
2002/3 5.1 3.9 9.0 10.2 1.2
Poland 2002 0.8 8.0 8.8 3.4 -5.4
2003 1.6 12.0 13.6 2.6 -11.0
2002/3 2.4 20.0 22.4 6.0 -16.4
Portugal 2002 4.0 0.2 4.2 3.7 -0.5
2003 2.3 0.8 3.1 3.2 0.1
2002/3 6.3 1.0 7.3 6.9 -0.4
Romania 2002 21.3 14.8 36.1 16.2 -19.9
2003 16.4 5.1 21.5 41.5 20.0
2002/3 37.7 19.9 57.6 57.7 0.1
Slovakia 2002 3.4 4.3 7.7 6.5 -1.2
2003 9.5 3.4 12.9 7.5 -5.4
2002/3 12.9 7.7 20.6 14.0 -6.6
Slovenia 2002 7.1 3.8 10.9 7.3 -3.6
2003 4.7 3.4 8.1 5.8 -2.3
2002/3 11.8 7.2 19.0 13.1 -5.9
Spain 2002 4.0 0.6 4.6 3.0 -1.6
2003 2.7 0.5 3.2 3.5 0.3
2002/3 6.7 1.1 7.8 6.5 -1.3
Sweden 2002 1.7 1.9 3.6 3.0 -0.6
2003 1.8 2.0 3.8 3.0 -0.8
2002/3 3.5 3.9 7.4 6.0 -1.4
UK 2002 1.7 1.4 3.1 3.0 -0.1
2003 1.3 1.9 3.2 3.2 0.0
2002/3 3.0 3.3 6.3 6.2 -0.1
Average all countries 2002 . . . . -1.2
2003 . . . . -0.2†
2002/3 . . . . - 1.4†
Average EU and Norway 2002 . . . . -0.7
2003 . . . . -0.5††
2002/3 . . . . -1.2††
Average EU 2002 . . . . -0.8
2003 . . . . -0.6†††
2002/3 . . . . -1.4†††
Average euro-zone 2002 . . . . -0.8
2003 . . . . -0.5††††
2002/3 . . . . -1.4††††
Average all acceding and candidate countries 2002 . . . . -1.9
2003 . . . . 0.2
2002/3 . . . . -1.7
Average of 8 new Member States joining EU in 2004 2002 . . . . -0.5
2003 . . . . -2.2
2002/3 . . . . -2.6
Average expanded EU (23 Member States) 2002 . . . . -0.7
2003 . . . . -1.1†††††
2002/3 . . . . -1.8†††††

* Eurostat average rates, December 2001-December 2002 and December 2002-December 2003, except for Bulgaria, Malta, Norway (2003) and Romania (national sources)

** Notes on productivity figures: Austria - source Österreichische Nationalbank; Belgium - source National Bank of Belgium, figure for hourly productivity in private sector; Bulgaria - source National Statistics Institute, figure for average real increase in productivity, 2003 figure for first two quarters, compared with first two quarters of previous year; Cyprus - source National Accounts, 2003 figure provisional; Denmark - source Ministry of Finance; Estonia - source European Commission; Finland - source Statistics Finland; France - source Liaisons Sociales; Germany - source Federal Statistical Office, figure for labour productivity per hour worked; Greece - source 2002 National Stability and Growth Programme, source 2003 European Commission (estimate); Hungary - own estimate based on Central Statistical Office GDP and employed workforce figures; Ireland - source European Commission; Italy - source National Accounts, 2003 figure unofficial estimate; Latvia - source Monthly Bulletin of Latvian Statistics, 2003 figure own forecast based on first three quarters; Luxembourg - source STATEC, 2003 figure estimate; Malta - source European Commission; Netherlands - source 2002 Central Statistical Office, source 2003 European Commission; Norway - source National Budget 2004, 2003 figure estimate; Poland - source Polish Official Statistics, figure for volume of production sold per paid employee in industry, to November each year; Portugal - source 2002 Banco de Portugal, source 2003 European Commission; Romania - source European Commission; Slovakia - source National Employment Action Plan 2003, figure for increases in constant prices, 2003 figure estimate; Slovenia - source Institute of Macroeconomic Analysis and Development, 2003 figure estimate; Spain - source Bank of Spain; Sweden - source Statistics Sweden, figures years to third quarter; UK - source ONS (output per filled job, whole economy), 2003 figure year to second quarter.

*** See notes to figure 1 above.

† Average of 25 countries; †† average of 15 countries; ††† average of 14 countries; †††† average of 11 countries; ††††† average of 22 countries

Table 1 indicates that trade unions across Europe have continued to face difficulties in achieving bargaining settlements that use up the full distribution margin. Figures are available for 24 of the countries over the whole 2002-3 period, and these show an average total shortfall of 1.4 percentage points between pay rises and the sum of inflation and productivity increases. The gap narrowed from 1.2 points in 2002 to 0.2 points in 2003.

Looking only at the current EU, plus Norway, the overall gap over 2002-3 is smaller, at 1.2 points, falling from 0.7 in 2002 to 0.5 in 2003 (the gap was slightly wider for the EU only and for the euro-zone). This compares with gaps of 0.7 points in 1999, 2.4 points in 2000 and 0.5 in 2001, so there appears to be a trend, albeit somewhat uneven, moving closer to achieving the unions' target. With regard to the four countries where unions operate the 'Doorn formula', on average they exceeded the distribution margin by 1 point over 2002-3 (though they fell a little short in 2003).

Taking all 10 acceding and candidate countries considered, the average total shortfall between wage rises and the sum of inflation and productivity increases stood at 1.7 points over 2002-3. However, while there was a shortfall of 1.9 points in 2002, the margin was actually exceeded by 0.2 points in 2003. However, excluding Bulgaria and Romania (where again it should be noted that the pay figures used are somewhat misleading), the gap stood at 2.6 points in total over 2002-3, increasing from 0.5 in 2002 to 2.2 in 2003 (with Poland and Slovakia in particular contributing to the increased shortfall). Finally, in the expanded post-May 2004 EU, the total gap over 2002-3 stood at 1.8 points, rising from 0.7 in 2002 to 1.1 in 2003.

Over the full two-year period, bargaining outcomes in Belgium, Bulgaria, Estonia, Hungary, Latvia, the Netherlands, Norway and Romania managed to exceed the distributive margin, by as much as 5.9 points in the case of Estonia. The biggest shortfalls were registered in Greece, Ireland, Poland, Slovakia and Slovenia. This extremely varied picture in the acceding and candidate countries is particularly notable. Overall, in 2002, nine countries met or exceeded the margin, while 12 did so in 2003.

Conclusion

Overall, considering only the EU and Norway, the figures suggest that the moderation in nominal pay increases that began in 2002 deepened in 2003. However, taking inflation into account, the rate of real pay increase rose slightly in 2003, presumably largely as a result of falling inflation, having remained virtually stable between 2001 and 2002. Adding productivity into the equation, unions have been experiencing greater success in achieving nominal wage rises equal to the sum of inflation and productivity increases in recent years, and especially in 2003. However, there was still a shortfall on average and in the great majority of countries. The evidence suggests that the EU's key broad economic guidelines on pay - that increases in nominal wages should be consistent with price stability and productivity gains- are still largely being observed in most Member States.

Looking at the eight countries considered which are to join the EU in 2004, the average nominal pay increase was substantially higher than that in the current EU in 2002 and 2003, but the gap was narrowing. Adjusting for inflation, the average real pay increase in the eight new Member States was substantially higher than that in the current EU in 2002, but the distance narrowed in 2003. When productivity is taken into account, on average there was a considerable gap between nominal wage rises and the sum of inflation and productivity increases over 2002-3, and especially in the latter year. Pay developments in most of these countries, too, seem to be generally in line with the EU's broad economic guidelines.

Collectively agreed pay increases by sector

Turning from the whole economy to individual sectors, we provide figures below for collectively agreed pay increases in sectors selected to represent manufacturing industry (metalworking), services (banking), and the public sector (local government). While these more specific figures are probably more accurate than the overall average increases given in the previous section, extreme caution is again advised in their use, and the notes under each table should be read carefully.

Factors which should be borne in mind when comparing the sectoral pay increase figures, often reflecting differences in national industrial relations systems, include the following:

  • the figures have been arrived at in a number of ways - usually the basic increase provided for in the most recent relevant sectoral agreement, but also in some cases through producing an average of a number of settlements at company level (eg the UK, or Dutch and Romanian banking);
  • the definitions of sectors, and the structure of sectoral bargaining, vary considerably from country to country, so it is not always sure that like is being compared with exact like;
  • the extent to which actual pay reflects the collectively agreed increases referred to varies, with bonuses and additional payments of various sorts featuring more strongly in some countries than others;
  • pay rises are not always fully consolidated, with the use of one-off payments featuring in cases such as Austrian banking and Dutch local government;
  • automatic pay indexation may account for a considerable part of the pay increases recorded (as in Belgium and Luxembourg);
  • the relative roles of sectoral and company bargaining are again an important factor, with the sectoral agreements referred to in countries like France, Italy and Denmark generally providing only for minima, with subsequent lower-level bargaining;
  • the dates when the various collective agreements, and the relevant pay increases, come into force vary considerably and rarely run from the beginning of the calendar year;
  • in some countries, multi-year agreements apply (as in Belgium, Cyprus, Denmark, Finland, Ireland, Italy, the Netherlands and Sweden) with the pay increases not always being paid in equal tranches, distorting the annual figures;
  • only one category of workers may be referred to in the tables where bargaining occurs separately for blue- and white-collar workers; and
  • in local government, the increases referred to in the tables are in some cases not bargaining outcomes but imposed by law, as in Austria, Bulgaria, Portugal, Romania and Spain.

Comparing the three sectors, in 2002, the average nominal increase across the current EU and Norway stood at 3.5% in metalworking (the same as the whole-economy average), 3.4% in banking and 3.0% in local government. In 2003, the average increase fell in all three cases, to 2.9% in both metalworking and banking and 2.6% in local government (the whole-economy average stood at 3.1%). Over the six-year period 1998-2003, the average annual increase stood at 3.2% in metalworking, 3.1% in banking and 2.9% in local government. It might be expected that pay increases in local government would be pushed downwards by the increased pressure on public sector finances owing to the EMU convergence criteria, and the fact that this sector has had the lowest overall pay increases since 1998 may support such a view.

In all three sectors, average nominal increases in the acceding and candidate countries are substantially higher than in the current EU and Norway. In 2002, the average increase stood at 11.2% in metalworking, 10.3% in local government and 9.3% in banking . In 2003, the averages were 13.8% in banking, 9.9% in metalworking and 7.3% in local government. However, the nominal increases in Romania are extremely high in most cases and distort the figures. Removing this country produces average increases in 2002 of 7.6% in local government, 6.7% in banking and 6.1% in metalworking, and in 2003 of 5.4% of metalworking, 5.3% in local government and 3.4% in banking.

Metalworking

In 2002, the range of nominal pay increases awarded in the metalworking sector across the current EU and Norway was between 5.5% in Norway (though this figure includes more than collectively agreed increases) and 1.3% in the Netherlands - see figure 3 below. In 2003, the range of increases narrowed, with the highest pay rise being found in Luxembourg, at 4.5%, and the lowest in Belgium at 1.2%. The average pay increase fell from 3.5% in 2002 - the same level as the whole-economy average figures (see figure 1 above) - to 2.9% in 2003 - slightly below the whole-economy average. The rate of increase fell between 2002 and 2003 in nine countries, rose in four and remained unchanged in two.

In 2001, the increase in metalworking was equal to the national average increase for all sectors in five countries, higher in six countries (most notably in Germany and Spain) and lower in five countries (most notably in the Netherlands and Luxembourg). In 2002, the increase in metalworking was equal to the national average increase for all sectors in four countries, higher in only two countries (Germany and Luxembourg) and lower in nine countries (most notably in Belgium and Norway).

The average metalworking increases of 3.5% in 2002 and 2.9% in 2003 compare with increases of 3.6% in 2001, 3.4% in 2000 and 2.9% in both 1999 and 1998.

With regard to the acceding and candidate countries, no data are available for Bulgaria, Latvia, Malta and Poland, or for Hungary in 2002 or Estonia in 2003. The average nominal increase in metalworking stood at 11.2% in 2002 and 9.9% in 2003 - far above the current EU/Norway averages. However, the figures are distorted by the huge increases in Romania, and excluding this country from the calculations produces average increases of 6.1% in 2002 and 5.4% in 2003 - rather nearer to the current EU figures.

The average pay increase in metalworking in all the countries considered fell from 5.3% in 2002 to 4.6% in 2003 (or from 3.7% to 3.3% if Romania is excluded).

Figure 3. Average collectively agreed pay increases in metalworking, 2002 and 2003 (%)

Figure 3. Average collectively agreed pay increases in metalworking, 2002 and 2003 (%)

Notes on averages: overall average is of 21 countries in both years; EU and Norway average is of 16 countries in both years; acceding/candidate countries average is of 5 countries in both years.

Source: EIRO.

The figures in figure 3 should be read in conjunction with the following notes.

  • Austria: figures relate to sectoral collective agreement; increases applied from November 2002 and November 2003 respectively; 2003 increase subject to minimum cash rise of EUR 35 per month.
  • Belgium: figures refer to metalworking industry (joint committee 111.01) and include automatic pay indexation; increases applied from July 2002 and July 2003.
  • Cyprus: 2001-3 sectoral agreement provided for 9.18% increase equally distributed over three years; data from Cyprus Metalworkers Mechanics and Electricians Trade Union (SEMMHK-PEO).
  • Denmark: figures relate to the industry sector agreement (for 2000-3), which operates the 'minimum-wage' system, whereby sectoral agreements set only minimum rates, with subsequent local bargaining producing further increases.
  • Estonia: figure, from Statistical Office of Estonia (Statistikaamet), is for annual increase in average wages in metalworking; no data on collectively agreed increases.
  • Finland: 2002 figure refers to provisions of 2001-2 central incomes policy agreement, which provided in 2002 for a general pay rise of FIM 1.07 per hour or FIM 179 per month from March, with a minimum increase of 1.9%, plus an additional 0.3% for sector-level distribution; 2003 figure refers to the 2003-4 central incomes policy agreement, which provided in 2003 for a general pay rise of EUR 0.17 per hour or EUR 28.39 per month from March, with a minimum increase of 1.8%, plus an additional 0.8% for sectoral distribution (the figure excludes an 'equality item' of 0.3%, payable according to the gender balance in each sector).
  • France: figures from Liaisons Sociales; 2002 figure represents average increase between June 2001 and June 2002, and 2003 figure average increases between June 2002 and June 2003.
  • Germany: figures, from the WSI collective agreement archive, refer only to increases in basic pay and exclude flat-rate payments and special bonuses; increases applied from June 2002 and June 2003.
  • Greece: figures refer to increases in minimum rates as set out in 2002-3 National General Collective Agreement; under main agreement for metalworking, increases depend on individual employee's length of service and skills.
  • Hungary: figure represents mid-range of annual pay increase recommendations of 4%-7% set out in relevant sectoral collective agreement.
  • Ireland: figures represent pay increases under national agreements - see note to figure 1 above.
  • Italy: figures relate to sectoral collective agreement.
  • Luxembourg: figures are for blue-collar workers and represent increases of 0.5% in 2002 and 2% in 2003 (rises for white-collar workers were 0% and 2%), plus automatic indexation-related increase of 2.5% in each year.
  • Netherlands: figures relate to sectoral collective agreement running from July 2002 to July 2004; 2002 increase applied from November and 2003 increase from January; 2002 figure is misleading - most of the increases for 2000-2 set out in the previous two-year agreement were introduced before 2002.
  • Norway: figures, from TBU, include more than collectively agreed pay increases (eg wage drift and 'carryover' effects); 2003 figure is for blue-collar workers in NHO area.
  • Portugal: figures, from Inter-Union Federation for Metalworking, Metal-Mechanics, Mines, Chemicals, Pharmaceuticals, Petrol and Gas (Federação Intersindical da Metalurgia, Metalomecânica, Minas, Química, Farmacêutica, Petróleo e Gás, FEQUIMETAL), relate to sectoral collective agreements; 2002 figure is an estimate.
  • Romania: figures relate to increases negotiated in June 2002 and May 2003 under terms of 2001-4 national sectoral agreement for metalworking
  • Slovakia: figure is average of increases set out in relevant sectoral collective agreements.
  • Slovenia: total increases over the two years equal the increases in minimum and starting pay rates set out in the tripartite private sector pay policy agreement for 2002-4; 2002 figure represents total of 2.7% increase in January, 4.2% increase in August and 2.0% increases in December; 2003 figure represents total of 3.2% increase in August and 1.0% increase in December.
  • Spain: figures from MTAS and CONFEMETAL employers' organisation; 2003 figure for period up until August.
  • Sweden: figures refer to 2001-4 national metalworking agreements for blue-collar workers, white-collar workers and civil engineers, which provided for a total pay increase of 7% over a little more than three years; the figures include 0.5 percentage points per year representing the effect of working time reduction.
  • UK: figures from LRD Bargaining Report September 2002 and Workplace Report September 2003; they represent an average of agreements.

Banking

The range of nominal pay increases in the banking sector in the current EU and Norway in 2002 was between 6.1% in Norway (though this figure includes more than collectively agreed increases) and 2.0% in Spain and Sweden - see figure 4 below. In 2003, the range of increases narrowed slightly, with Norway still heading the list at 4.5% and France bringing up the rear with 1.7%. The average fell from 3.4% in 2002 to 2.9% in 2003, with the rate of increase rising in five countries, falling in 10 and remaining stable in one. Banking pay increases were slightly below the whole-economy average in both 2002 and 2003.

In 2002, the increase in banking was equal to the national average increase for all sectors in one country, higher in six countries (most notably in France and Denmark) and lower in nine countries (most notably in Greece and the UK). In 2003, the increase in banking was equal to the national average increase for all sectors in three countries, higher in four countries (most notably in Belgium and Denmark) and lower in eight countries (most notably in Spain and the UK).

The average increases of 3.4% in 2002 and 2.9% in 2003 compare with increases of 3.6% in 2001, 3.3% in 2000, 2.6% in 1999 and 2.8% in 1998.

With regard to the acceding and candidate countries, no data are available for Bulgaria, Hungary, Latvia and Poland, or for Estonia in 2003. The average nominal increase in banking stood at 9.3% in 2002 and 13.8% in 2003 - very much above the current EU/Norway averages. Again, though, the figures are distorted by the huge increases in Romania especially in 2003), and excluding this country from the calculations produces average increases of 6.7% in 2002 and 3.4% in 2003 - approaching the current EU average in the second year.

The average pay increase in banking in all the countries considered rose from 5.0% in 2002 to 5.5% in 2003 (but fell from 4.2% to 3.0% if Romania is excluded).

Figure 4. Average collectively agreed pay increases in banking, 2002 and 2003 (%)

Figure 4. Average collectively agreed pay increases in banking, 2002 and 2003 (%)

Notes on averages: overall average is of 22 countries in 2002 and 21 in 2003; EU and Norway average is of 16 countries in both years; acceding/candidate countries average is of 6 countries in 2002 and 5 countries in 2003.

Source: EIRO.

The figures in figure 4 should be read in conjunction with the following notes.

  • Austria: figures relate to sectoral collective agreement; monthly flat-rate cash payment of EUR 6 also awarded in 2002; 2003 increase applied from February; monthly flat-rate cash payment of EUR 6 also awarded in 2003.
  • Belgium: figures refer to sectoral collective agreement and include automatic pay indexation; increases applied from July 2002 and July 2003.
  • Cyprus: figures from Cyprus Union of Bank Employees (ETYK).
  • Denmark: figures, from Danish Employers’ Association for the Financial Sector (Finanssektorens Arbejdsgiverforening, FA), relate to sectoral collective agreement; increases applied from July each year.
  • Estonia: figure, from Statistical Office of Estonia, is for annual increase in average wages in financial intermediation; no data on collectively agreed increases.
  • Finland: figures refer to provisions of central incomes policy agreements - see note to figure 3 above; the 2003 figure includes an 'equality item' of 0.3%, payable according to the gender balance in each sector, as this is likely to be significant in banking.
  • France: figures from Liaisons Sociales; 2002 figure represents average increase between June 2001 and June 2002, and 2003 figure average increases between June 2002 and June 2003.
  • Germany: figures, from WSI collective agreement archive, refer only to increases in basic pay and exclude flat-rate payments and special bonuses; increases applied from July each year.
  • Greece: figures relate to sectoral collective agreement.
  • Hungary: figure represents mid-range of annual pay increase recommendations set out in relevant sectoral collective agreements.
  • Ireland: figures represent pay increases under national agreements - see note to figure 1 above.
  • Italy: figures relate to sectoral collective agreement.
  • Luxembourg: 2002 figure made up of a basic pay increase of 1.05%, plus a 0.55% 'performance bonus' and automatic indexation-related increase of 2.5%; 2003 figure is for agreed increase in total paybill, plus automatic indexation-related increase of 2.5%.
  • Malta: figures from Malta Union of Bank Employees; current company agreements have a duration of three years and provide for total increases of 7.5%-9%, with an estimated average yearly increase of nearly 3%.
  • Netherlands: figures are average of a sample of major collective agreements.
  • Norway: figures, from TBU, include more than collectively agreed pay increases (eg wage drift and 'carryover' effects); 2003 figure expressed by TBU as 4½%.
  • Portugal: figures from Southern and Islands Bank Workers' Union (Sindicato dos Bancários Sul - Ilhas).
  • Romania: figures based on the collective agreements in the five most important banks.
  • Slovakia: figure is average of increases set out in relevant sectoral collective agreements.
  • Slovenia: total increases over the two years equal the increases in minimum and starting pay rates set out in the tripartite private sector pay policy agreement for 2002-4 - see note to figure 3 above.
  • Spain: figures, from COMFIA trade union, refer to sectoral collective agreements; 2003 figure is provisional.
  • Sweden: figures refer to 2000-3 finance sector collective agreement, which provides for a total 5.8% increase over the three-year period; additional increases may be agreed individually.
  • UK: figures, from LRD Bargaining Report September 2002 and Workplace Report September 2003, are for 'banking and finance'; they represent an average of agreements.

Local government

In 2002, nominal pay increases in the local government sector in the current EU and Norway ranged from 6.0% in Norway (though this figure includes more than collectively agreed increases) to 1.3% in France - see figure 5 below (no data are available for Greece, or for 2003 for the UK). In 2003, the range of increases remained similar, with Denmark heading the list at 4.8% and France at the bottom with zero. The average increase fell from 3.0% in 2002 to 2.6% in 2003, with the rate of increase rising in three countries, falling in six and remaining stable in five. Local government pay increases were below the whole-economy average by 0.5 percentage points in both years.

In 2002, the increase in local government was higher than the national average increase for all sectors in six countries (most notably in Italy and the UK) and lower in nine countries (most notably in Austria, France and Ireland). In 2003, the increase in local government was equal to the national average increase for all sectors in one country, higher in three countries (most notably in Denmark) and lower in eight countries (most notably in Portugal in Spain).

The average increases of 3.0% in 2002 and 2.6% compare with increases of 3.6% in 2001, 3.0% in 2000, 2.5% in 1999 and 2.6% in 1998.

Turning to the acceding and candidate countries, no data are available for Hungary, Latvia, Malta and Poland, or for Slovakia in 2002 and Estonia in 2003. The average nominal increase in local government stood at 10.3% in 2002 and 7.3% in 2003 - far above the current EU/Norway averages. As with other sectors, the figures are distorted by the increases in Romania (though they are not so far above the rises in other countries in local government as they are in other sectors), and excluding this country from the calculations produces average increases of 7.6% in 2002 and 5.3% in 2003.

The average pay increase in local government in all the countries considered fell from 4.9% in 2002 to 3.9% in 2003 (from 4.0% to 3.2% if Romania is excluded).

Figure 5. Average collectively agreed pay increases in local government, 2002 and 2003 (%)

Figure 5. Average collectively agreed pay increases in local government, 2002 and 2003 (%)

Notes on averages: overall average is of 20 countries in 2002 and 19 in 2003; EU and Norway average is of 15 countries in 2002 and 14 in 2002; acceding/candidate countries average is of 5 countries in both years.

Source: EIRO.

The figures in figure 5 should be read in conjunction with the following notes.

  • Austria: pay increases fixed by law; in 2002, additional payments were also negotiated at regional (Länder) level; 2003 figure is an estimate.
  • Belgium: figures refer to automatic indexation only in both years, awarded in January 2002 and December 2003.
  • Bulgaria: figures represent forecast increase in average wages of civil servants as proposed by the Ministry of Finance in the state budget law; 2002 figure is total of increases of 5% in January and 5% in July 2002; 2003 figure is total of increases of 3.5% in January and 3.5% in July 2002.
  • Cyprus: figures from Semi-government, Municipal and Local Authority Workers’ and Employees’ Trade Union Cyprus (SIDIKEK-PEO).
  • Denmark: figures from the Joint Municipal Wage Data Bank (Den Fælleskommunale Løndatabank).
  • Estonia: figure, from Statistical Office of Estonia, is for annual increase in average wages in public administration; no data on collectively agreed increases.
  • Finland: figures refer to provisions of central incomes policy agreements - see note to figure 3 above; the 2003 figure includes an 'equality item' of 0.3%, payable according to the gender balance in each sector, as this is likely to be significant in local government.
  • France: figures from Liaisons Sociales; 2002 figure represents average increase between June 2001 and June 2002, and 2003 figure average increases between June 2002 and June 2003.
  • Germany: figures, from WSI collective agreement archive, refer to west Germany only; figures refer only to increases in basic pay and exclude flat-rate payments and special bonuses.
  • Ireland: the figure for each year represents half of the 'third-phase' award of 5% under the PPF national pay agreement (the third phase applied up to 30 June 2003 in the public sector), plus a quarter of a 'benchmarking' pay increase, which ranges from 4%-13.8% for local government groups (mid range used in calculation); after the expiry of the PPF, there was a six-month pay pause in the remainder of 2003..
  • Italy: local government collective agreement for 2002-3 was not signed until the end of 2003; it provided for a backdated total pay increase of an estimated 5.66%.
  • Luxembourg: the figures for each year includes an automatic indexation-related increase of 2.5%.
  • Netherlands: in 2003, a one-off bonus of EUR 200 was also paid in October and the year-end bonus was increased by 0.25 percentage points to 3% of yearly income.
  • Norway: figures, from TBU, include more than collectively agreed pay increases (eg wage drift and 'carryover' effects).
  • Portugal: increases are set by governmental orders, following consultation.
  • Romania: pay increases set by state budget law rather than collective bargaining; figures include pay indexation, figure for 2003 is provisional
  • Slovakia: there was no collective bargaining in local government prior to 2003, with pay increases set by law.
  • Slovenia: figures refer to minimum pay and starting pay increases as set out in pay policy agreement for the public sector; 2002 figure is total of increases of 2.3% in January and 2.6% in August.
  • Spain: as established by the state budget law.
  • Sweden: figure is average of increases awarded under four agreements for main categories of local government employees.
  • UK: figure from report of the Local Government Pay Commission, October 2003.

Average earnings

The above analysis examines collectively agreed pay increases, based mainly on the contents of agreements. A clearer indication of the actual development of workers' incomes is provided by earnings figures, usually based on a survey of individuals' earnings and including elements such as bonuses and overtime pay. Figure 6 below provides data on increases in average earnings in 2002 and 2003 (figures are not available for 2003 for Portugal, and some 2003 figures are only partial).

Once again, extreme caution is advised and the notes below the table should be read closely. The nature of the statistics and the definitions of earnings vary considerably from country to country, and in some cases (such as Belgium), the figures cover only particular groups of workers.

In the current EU and Norway, the range of average earnings increases in 2002 was between 7.0% in Greece and 1.5% in Germany, while in 2003 the extremes were Ireland, at 8.4% (though this figure covers only the year to June), and again Germany, at 1.2%. The average rate of increase across these countries fell from 3.9% in 2002 to 3.5% in 2003, thus continuing a downward trend (the average stood at 4.3% in 2001, having risen since 1998). This appears to confirm the tendency already noted for average collectively agreed pay. The average earnings increase fell from 2002 to 2003 in all countries (most notably in the Netherlands, Greece and Belgium) apart from Ireland, the UK and Italy.

When compared with the data for collectively agreed pay increases, the earnings figures help to iron out to some extent the distortions caused by, for example, the fact that the relevant collective agreements in some countries provide only for minima. Increases in earnings are thus appreciably higher than agreed pay increases in Denmark, Greece, Ireland, Italy, Portugal and the UK (though lower in countries such as Germany, Austria and the Netherlands). Overall, the average increases in earnings are greater than agreed pay increases.

In the countries of the euro-zone, the average increase in earnings, was the same as that in the whole current EU and Norway in both 2002 and 2003.

In the 10 acceding and candidate countries considered, the range of average earnings increases in 2002 was between 25.4% in Romania and 2.9% in Malta, while in 2003 the range was much narrower, between 12.9% in Hungary and 2.6% in Poland. The average rate of increase across these countries fell from 10.7% in 2002 to 6.6% in 2003, and dropped in all countries (most notably Romania, Bulgaria and Hungary) except Malta. The average increase was 2.7 times higher than that in the current EU and Norway in 2002 but only 1.9 times higher in 2003. Looking only at the eight new Member States joining the EU in May 2004 (ie excluding Bulgaria and Romania), the average increase in earnings was lower, at 8.6% in 2002 and 6.3% in 2003 - 2.2 and 1.8 times higher than the current EU and Norway average respectively.

Adding the eight new countries joining the EU in 2004 to the 15 present Member States produces average earnings increases of 5.4% in 2002 and 4.5% in 2003. The inclusion of the new Member States thus pushes the Union's average increase upwards, but this differential narrowed from 1.6 percentage points in 2002 to 1.1 points in 2003.

Figure 6. Increases in average earnings, 2002 and 2003 (%)

Figure 6. Increases in average earnings, 2002 and 2003 (%)

Notes on averages: overall average is of 26 countries in 2002 and 25 in 2002; EU and Norway average is of 16 countries in 2002 and 15 in 2003; EU average is of 15 countries in 2002 and 14 in 2003; Euro-zone average is of 12 countries in 2002 and 11 in 2003; acceding/candidate countries average is of 10 countries in both years; new Member States 2004 average (countries joining EU in May 2004) is of 8 countries in both years; expanded EU average is of 23 countries in 2002 and 22 in 2003.

Source: EIRO.

The figures in figure 6 should be read in conjunction with the following notes.

  • Austria: figures from Austrian National Bank (Österreichische Nationalbank, ÖNB),
  • Belgium: figures cover blue-collar workers only (equivalent figures for white-collar workers were 2.9% in 2002 and 1.9% in 2003); figures represent total of collectively agreed pay increases, plus automatic pay indexation and effects of reduction of working time; figures, from Federal Public Service for Employment, Labour and Social Dialogue, are for years to September.
  • Bulgaria: figures from NSI; 2003 figure is the increase in first two quarters, compared with first two quarters of 2002.
  • Cyprus: figures from Statistical Service of Cyprus; 2003 figure is provisional.
  • Denmark: figures, from Ministry of Finance, for increase in hourly pay, private sector.
  • Estonia: figures from Statistical Office of Estonia (Statistikaamet, ESA) wages survey; 2003 figure is the increase in first three quarters, compared with first three quarters of 2002.
  • Finland: figures from Statistics Finland; 2003 figure is an estimate.
  • France: figures from Liaisons Sociales.
  • Germany: figures, from Federal Statistical Office (Statistisches Bundesamt Deutschland), refer to annual increase in gross wages and salaries per employee.
  • Greece: estimates from Bank of Greece.
  • Hungary: figures from Central Statistical Office (Központi Statisztikai Hivatal, KSH); 2003 figure is for January to October.
  • Ireland: figures, from the Central Statistical Office, refer to average weekly earnings for all employees (industrial, clerical and managerial); 2003 figure is for year to June.
  • Italy: figures from national accounts; 2003 figure is an unofficial estimate.
  • Latvia: figures, from CSP, are for average increases in the net wages and salaries of employees.
  • Luxembourg: figures are estimates and include automatic pay indexation of 2.5% in each year.
  • Malta: figures, from government Economic Policy Division, is for increase in nominal average weekly earnings; figures for year to September.
  • Netherlands: figures, from CBS, refer to hourly wage rates, including bonuses, in areas covered by collective agreements; 2002 figure is for year to January 2003; 2003 figure is for year to January 2004.
  • Norway: figures, from the Technical Calculation Committee for Income Settlements (Teknisk Beregningsutvalg, TBU), represent the total annual pay increase (including wage drift and 'carryover' effects from previous years); 2003 figure expressed by TBU as 4½%.
  • Poland: figures, from GUS, refer to increases in average earnings; 2002 figure is for year to November.
  • Portugal: figure from Banco de Portugal.
  • Romania: figures based on INS data; 2003 figure refers to first 10 months of year.
  • Slovakia: 2002 figure from Ministry of Labour, Social Affairs and Family; 2003 figure is forecast from Slovak Statistical Office (Štatistický úrad Slovenskej republiky, ŠÚ SR).
  • Slovenia: figures from Institute of Macroeconomic Analysis and Development (Urad RS za makroekonomske analize in razvoj, UMAR), based on Statistical Office of the Republic of Slovenia (Statistični urad Republike Slovenije, SURS) data; 2003
  • Spain: figures, from National Statistical Institute (Instituto Nacional de Estadística, INE), refer to the increase in monthly wage costs per worker for the year to the last quarter of each year.
  • Sweden: figures from Sweden Statistics.
  • UK: figures, from Office for National Statistics new earnings survey, represent average of earnings increases for latest three months compared with a year earlier; 2003 figure is provisional and relates to the period to September.

Minimum wages

Eighteen of the 26 countries considered have a national minimum wage, set either by law or by a national intersectoral agreement. Figure 7 below provides data on the increases in the minimum wage in 2002 and 2003 for these countries. These minimum wages are generally increased through some kind of indexation mechanism, plus in some countries through political decisions.

Taking the nine EU Member States concerned, minimum wage increases ranged from 6.4% in Ireland to 2.0% in Belgium and Spain in 2002, and from 7.1% in the UK to 2.0% in Belgium and Spain in 2003. The overall average rate of increase rose from to 3.5% in 2002 to 4.2% in 2003 (the average was 4.9% in 2001, 2.8% in 2000, 2.9% in 1999 and 2.6% in 1998). The average increase in minimum wages was thus around the same level as the average increase in collectively agreed wages in 2002, but markedly higher in 2003, and displayed an upward trend (particularly notable in the UK, France and Luxembourg) in contrast to the downward move in agreed wages. At national level, increases in the minimum wage lagged behind the average collectively agreed increases in pay in 2002 in France, the Netherlands and the UK and - more notably - in Luxembourg, Belgium and Spain, while they exceeded the agreed increase in Ireland and Portugal. In 2003, the increase in the minimum wages lagged behind average increases in Belgium, the Netherlands, Portugal and Spain (notably) and exceeded them in Ireland, Luxembourg and the UK (very notably).

All the acceding and candidate countries considered, apart from Cyprus, have a national minimum wage. In 2002 and 2003, the increases in this minimum varied widely from year to year and between countries. In 2002, the highest increase at 40.9% was found in Hungary, while the minimum wage was frozen in Latvia and Poland. In 2003, the greatest rise was in Romania, at 47.8%, while there was no increase in Hungary. The minimum wage rises in many cases diverged widely from the collectively agreed increases in these countries, usually being considerably higher. The average increase fell slightly from 14% in 2002 to 13.5% in 2003. The differential between the EU on one hand and the acceding and candidate countries on the other is considerably higher for minimum wage increases than for collectively agreed wage increases. Removing Bulgaria and Romania from the figures reduces the average minimum wage increase in the new Member States to 12% in 2002 and 9.1% in 2003.

Figure 7. Increase in national minimum wage, 2002 and 2003 (%)

Figure 7. Increase in national minimum wage, 2002 and 2003 (%)

Notes on averages: overall average is of 18 countries in both years; EU average is of 9 countries in both years; acceding/candidate countries average is of 9 countries in both years.

Source: EIRO.

The statistics in figure 7 should be read in conjunction with the following notes.

  • Belgium: increases reflect indexation only, increase for 2002 applied from February; increase for 2003 applied from June
  • Bulgaria: 2002 increase based on cabinet decree of 10 October 2001; 2003 increase based on cabinet decree of 10 October 2003.
  • France: increases applied from July each year; increases given refer to hourly minimum wage.
  • Greece: figures refer to increases in minimum rates as set out in 2002-3 National General Collective Agreement.
  • Hungary; 2002 figure includes a 25% increase awarded in January and a 15.9% increase awarded in September (latter increase refers to rise in net minimum wage due to income tax changes); no increase in 2003.
  • Ireland: increases applied from October each year.
  • Latvia: no increase in 2003; 2003 increase applied from January 2003.
  • Luxembourg; the 2002 figure represents only an automatic indexation increase awarded in June 2002; the 2003 figure includes a 3.5% increase awarded by law in January 2003, plus an automatic indexation increase of 2.5% awarded in August 2003.
  • Malta: increases applied from January each year.
  • Netherlands: the 2002 figure includes a 2.22% increase awarded on 1 January and a 2.09% increase awarded on 1 July; the 2003 figure includes a 1.41% increase awarded on 1 January and a 1.25% increase awarded on 1 July.
  • Poland: no increase awarded in 2002.
  • Portugal: increases applied by law in December of each year.
  • Romania: figures refer to annual average increases.
  • Slovakia: increases awarded in October of each year.
  • Spain: increases applied by law in January of each year.
  • UK: figures refer to adult hourly rate; increases awarded in October of each year.

Gender pay differentials

The explicit pay terms of the collective agreements and minimum wage laws considered above are presumably gender neutral - they do not provide for differing pay rates or increases for women and for men (to do so would, of course, breach EU and national equal pay law). However, the fact remains that women in all the countries covered here earn, on average, less than men. Figure 8 below indicates this gender pay gap by showing women's average pay as a percentage of men's.

In the current EU and Norway, the gender wage gap is widest in Austria (at 32%) and narrowest in Luxembourg (at 11%). Other countries with a notably narrow gender wage differential include France, Ireland, Norway and Denmark, while those with a comparatively wide gap include Germany, Spain and Portugal. The gender wage gap averages 18.6% across the EU and Norway - a slight reduction from the 19.2% found in our 2002 review of the data and the 20.4% found in our 2001 review. Year on year upward and downward variations seem to be a feature of gender pay statistics, and the fall is unlikely to be significant over such a short period, while some variations in the figures are explained by changes in the source/nature of the data used. Nevertheless, where individual country data are available for several years over 1999-2003, these often show small decreases in the gender pay gap - as in Denmark (though not for central state employees), Germany, Portugal, Sweden and the UK

In the acceding and candidate countries, the gender wage gap is widest in Slovakia (at 28.3%) and narrowest in Slovenia (at 9.6%). Other countries with a notably narrow gender wage differential include Poland, Malta and Hungary, while those with a comparatively wide gap include Estonia and Cyprus. With the caveats noted above, the gap appears to be narrowing at present in Cyprus, Romania, Slovakia and Slovenia, and particularly in Bulgaria and Malta. The average differential in the acceding and candidate countries stands at 17.7% - nearly one percentage point smaller than in the current EU and Norway.

The average gender wage gap in all the countries examined stands at 18.3%.

While the above figures provide a broad picture of the situation, differences in calculation methods between countries highlighted in the notes below should be noted. The considerable problems in compiling and comparing gender pay statistics are examined in a 2001 EIRO comparative study - TN0201101S. (Mark Carley, SPIRE Associates)

Figure 8. Women's average pay as % of men's, latest figures

Figure 8. Women's average pay as % of men's, latest figures

Notes: figures are for 2002 except * 2000, ** 2003, *** 1998, **** 2001. Figures refer to average hourly pay unless indicated otherwise in the notes below.

Notes on averages: overall average is of 26 countries in both years; EU and Norway average is of 16 countries in both years; acceding/candidate countries average is of 10 countries in both years.

Source: EIRO.

The figures in figure 8 should be read in conjunction with the following notes.

  • Austria: figure from Chamber of Labour and Federal Ministry of Economy and Labour Affairs.
  • Belgium: figure, from Federal Public Service of Employment, Labour and Social Dialogue, refers to the private sector and to full-time workers - equivalent figure for private sector part-timers was 99.8%, and equivalent figures for the public sector were 92.6% for full-timers and 87.6% for part-timers.
  • Bulgaria: figure from NSI.
  • Cyprus: approximate figure from Statistical Service of Cyprus.
  • Denmark: figure, from Statistics Denmark, refers to private sector - equivalent figure for state sector was 89.0% and for local government 86.9%.
  • Estonia: figure based on data from Statistical Office of Estonia hourly wages and salaries survey.
  • Finland: figure, from Statistics Finland, is for average hourly earnings.
  • France: figure from National Institute of Statistics and Economic Studies (Institut national de la statistique et des études économiques, INSEE) employment survey.
  • Germany: figure, from Federal Statistical Office, refers to blue-collar workers in manufacturing only - equivalent figure for white-collar workers in manufacturing was 70.7%.
  • Greece: figure is Eurostat estimate.
  • Hungary: figure is average of various estimates.
  • Ireland: figure, from CSO, refers to average hourly earnings
  • Italy: figure, from Bank of Italy, refers to annual income.
  • Latvia: figure from CSP.
  • Luxembourg: figure from Centre d'Etudes de Populations, de Pauvreté et de Politiques Socio-Economiques/International Networks for Studies in Technology, Environment, Alternatives, Development (CEPS/INSTEAD).
  • Malta: figure based on data from National Statistics Office.
  • Netherlands: figure is estimate based on various sources.
  • Norway: figure is average for full-time employees in most sectors, based on wage statistics from Statistics Norway.
  • Poland: figure from GUS.
  • Portugal: figure from DETEFP.
  • Romania: figure, from INS, refers to the monthly average gross wage in October.
  • Slovakia: figure from Slovak Statistical Office wage structure data.
  • Slovenia: figure, from UMAR based on SURS data, refers to women’s average monthly earnings (gross) as a % of men’s.
  • Spain: figure, from INE pay survey, refers to average hourly earnings (including overtime) as percentage of total pay.
  • Sweden: figure, from Sweden Statistics, refers to monthly pay.
  • UK: figure, from ONS new earnings survey, refers to hourly earnings, excluding overtime, full-time workers on adult rates.
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