European Commission publishes progress report on equitable wages

The findings of a recent Commission study show that most member states have the basic legislative framework in place, aimed at achieving an equitable wage. Direct intervention in wage policy is, however, regarded as being undesirable by the majority of member state governments.

The European Commission has recently published its report on progress made in the implementation of equitable wage policies since 1993. The aim of providing all employees with an equitable wage was enshrined in the Charter of the Fundamental Social Rights of Workers, which was adopted by 11 member states (with the exception of the UK) in 1989. In accordance with the 1989 social Action Programme, the Commission published an Opinion in 1993, which stated that the pursuit of an equitable wage must be seen as part of the general drive to achieve higher productivity and employment creation, and to foster good relations between the two sides of industry. The member states were encouraged to give substance to their commitment made in adopting the Social Charter, by working towards the establishment of an equitable wages policy. This was to be achieved through greater labour market transparency with regard to wages. The social partners were also called upon to contribute to the achievement of this aim.

The 1993 Opinion also included the Commission's pledge to conduct further research, in order to promote the convergence of equitable wage policies. This research was primarily carried out on the basis of a questionnaire sent out to all member state governments, requesting information on progress in equitable wage policy since 1993. The new report, published in February 1997, draws on the replies to these questionnaires and concludes the following:

  • as many policies related to the achievement of an equitable wage for all employees are linked to equal opportunities policies, which have been an important area of EU legislation for over 20 years, most member states already have the basic framework legislation in place;
  • the indications are that few member states have viewed the Commission Opinion as a catalyst for action;
  • the majority of member states view direct intervention in wage policy as being undesirable and prefer to keep wage determination within the realm of collective bargaining or individual negotiation between employer and employee;
  • labour market developments such as the growth of temporary and part-time employment have restricted governments' capacity to influence wages policy;
  • data available from seven member states (Austria,France,Germany,Italy, the Netherlands, Portugal and theUK) show that the distribution of wages has become wider over time, with the partial exception of the Netherlands in recent years;
  • wage inequalities have widened in a number of member states in recent years; and
  • transparency of wage information remains a problem area for all member states.

Based on the findings of its research, the Commission identified a number of areas for future activity:

  • the dissemination of good practice on wages and employment conditions at enterprise level;
  • monitoring the development of continuous training and its impact on wages; and
  • encouraging improvements in reliable and up-to-date information on wage determination in the member states and a number of selected competitor countries
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