4 th September 2017 Final conference of the research project. Paolo Tomassetti, ADAPT Research Fellow

Transcription

1 4 th September 2017 Final conference of the research project Collective Bargaining and Labour Productivity in Germany, Italy, the Netherlands, Poland, Spain and the UK: A Comparative Analysis to Unravel the Productivity Puzzle Paolo Tomassetti, ADAPT Research Fellow Bargaining for Productivity is led by ADAPT and co-funded by the European Commission The Institut für Arbeitsforschung und Transfer

2 Background Many EU and non-eu countries have experienced a labour productivity stagnation or slowdown over the last decade. Labour productivity is the ultimate engine of growth in the global economy (OECD, 2015). As the working population is projected to decline with the ageing population, labour productivity growth becomes the sole source for potential average output growth in Europe starting from 2028 (European Commission, 2014).

3 Assumptions and ideas of the project Investments in technological innovation, research and skills are key drivers for labour productivity Beside these factors, work organisation plays an important role in enhancing labour productivity and making growth sustainable Productivity figures (GDP/GVA per hour worked and GDP/GVA per number of employees) are linked to the output of production and the input of labour Collective bargaining and other aspects of labour and employment relations play a major role in these figures.

4 Objectives Shedding light on the reasons behind labour productivity slowdown or weak growth in some countries Explaining public policies on labour productivity and their (in)effectiveness Analysing views and strategies of social partners in relation to labour productivity Analysing the potential and effective implication of collective bargaining on labour productivity in different contexts

5 Unit of analysis Automotive Tourism Retail Health care

6 Country characteristics Source: ICTWSS, 2016 Collective bargaining coverage Collective bargaining coordination (1-5 scale) Union density Employer density Germany Italy Netherlands Spain Poland UK

7 Country characteristics Variety of capitalism Model of regulation (Boyer, 2005) Germany CME Meso-corporatist Italy MME Meso-corporatist Netherlands CME Meso-corporatist Spain MME Meso-corporatist Poland LME Market oriented UK LME Market oriented

8 Methodology Literature review Semi-structured interviews with social partners Analysis of public policies Content analysis of collective agreements Company case studies

9 Hypothesis Dialogue on productivity issues is important both in terms of consensual labour-management cooperation and as a regulator of wages and conditions of work. Bargaining coordination has a positive impact on economic performance, because it impedes wage competition and enforces companies to increase productivity in order to being able to pay the given wages. At the company level, productivity agreements can result in innovation and enhance performance through compensation and benefits, working time flexibility, WorkLife Balance, skills improvements, workers involvement.

10 Hypothesis VOICE Collective bargaining as a means to create social norms and design policies, practices, institutions, etc. to balance efficiency, equity, and voice and create employment relations with a human face (Budd, 2004). High-road to labour productivity Sustainable growth EFFICIENCY EQUITY

11 Hourly productivity (OECD 2017) Germany Italy Netherlands Poland Spain UK

12 Nominal labour productivity per hour worked in Europe Percentage of EU28 total (based on million PPS), current prices Germany Spain Italy Netherlands United Kingdom ADAPT on Eurostat 2016

13 Nominal labour productivity per hour worked in UK Percentage of EU28 total (based on million PPS), current prices United Kingdom ADAPT on Eurostat 2016

14 Nominal labour productivity per hour worked in Poland Percentage of EU28 total (based on million PPS), current prices Poland ADAPT on Eurostat 2016

15 Labour productivity performances Absolute labour productivity levels Labour productivity growth rate High-level performers Mid-level performers Low-level performers

16 A focus on two aspects of labour regulation 1. Compensation: The relation between labour productivity and compensation is a key indicator of competitiveness, but also an indicator of sustainability, depending on how wide the gap between the two factors is 2. Working time: Working hours affect directly hourly productivity figures and are also an indicator of both efficiency and sustainability of work organisation

17 GVA per hour worked Compensation per hour worked

18 Labour productivity and compensation Productivity/wages gap Wideness of the gap Productivity is higher than wages Counter-cyclical relations between productivity and wages Wages are higher than productivity Sustainable in Germany and the Netherlands Unsustainable in Poland Data are affected by sectoral composition of the economy and by wage inequality

19 Labour productivity and unit labour cost Unit labour cost Hourly productivity ADAPT on Eurostat 2016

20 Firm-level bargaining coverage (%) ,6 65, ,8 31,9 12, Totale Fondazione Di Vittorio (FDV) on Cardinaleschi e De Santis (2016), ISTAT-CNEL

21 Wage share and labour productivity Wage share Hourly productivity ADAPT on Eurostat 2016

22 Average annual hours worked per worker (OECD 2017) Germany Italy Netherlands Poland Spain UK

23 Labour productivity and working hours Average hours worked Productivity performances High sustainability (less working hours) Mid sustainability Low sustainability (more working hours)

24 Discussion: Poland and the UK LMEs and market-oriented models of labour regulation; HRM > IR Individualism and decentralization Lack of coordination and weak industrial relations institutions tend to result in an unbalanced combination between efficiency, equity and voice in labour-management relations and employment regulation, with the first variable prevailing over the others Such unbalance seems to be unsustainable in the long-run

25 Discussion: Italy and Spain MMEs: relatively strong labour market institutions and mesocorporatist form of labour regulation, which takes place at different levels Bargaining governability is relatively weak due to informality of labour-management relations and localism Confrontational IR tend to prevail, thus resulting in less integrative bargaining outcomes Sustainable compromise between efficiency and equity in NCLAs do not necessarily translate into sustainable HRM or industrial relations practices at a firm-level, or that high and low roads to productivity coexist across sectors and companies (dualism)

26 Discussion: Germany and the Netherlands CMEs and the meso-corporatist models of labour regulation: relatively strong industrial relations institutions and good capacity of coordination between and within sectors Cooperative IR tend to reflect into integrative bargaining and sustainable compromise between efficiency, equity and voice However, these countries are facing many challenges and coordination between industries is much weaker today than it has been twenty years ago. Wage coordination still works, but it works only for some industries and for a shrinking share of employees

27 Conclusions Bargaining coordination has a positive impact on performances: it impedes wage competition and enforces companies to increase productivity in order to being able to pay the given wages State intervention plays an important role to the extent that it mediates the effects of collective bargaining and can support or hinder social partners policies in regulating the labour market In addition to State promotion of trade unions rights at workplace, regulatory spaces that the law leaves to collective bargaining are relevant too

28 Conclusions Contents of collective agreements are generally the result of a compromise between efficiency, equity and voice. Such compromise is fundamental to make labour regulation functional to economic interests in a sustainable way In LMEs collective bargaining can be a means to foster a sustainable model of growth In CMEs collective bargaining, especially at a firm level, has been used to deregulate and/or re-regulate working conditions. These practices are, however, limited and, in any case, they still result in a relatively good compromise between efficiency, equity and voice